Updated daily, InsiderOnline (insideronline.org) is a compilation of publication abstracts, how-to essays, events, news, and analysis from around the conservative movement. The current edition of The INSIDER quarterly magazine is also on the site.
August 31, 2012
Latest Studies: 27 new items, including an NCPA assessment of the real unemployment situation, and a Heritage Foundation examination of what game theory can tell us about the federal budget process
Notes on the Week: No celebrating drudgery, “reform” of welfare reform sets the wrong goal, Sweden’s free markets, and more
To Do: Get up to date on school choice, federalism, and the need for the classics
Budget & Taxation
• How Arms Controllers Would Reach a Budget Agreement – The Heritage Foundation
• Preventing Bankruptcy in State and Local Pension Plans in Colorado – Independence Institute
• The Amazon Tax That Was Not: North Carolina’s Attempt to Expand Sales Taxation Beyond Its Borders – John Locke Foundation
• Connecticut’s 2012 Policy Road Map – Yankee Institute for Public Policy
Crime, Justice & the Law
• Congressional Report on Operation Fast and Furious: The Buck Stops…Well…Somewhere Else – The Heritage Foundation
Economic and Political Thought
• Hostile Takeover: Resisting Centralized Government’s Stranglehold on America – Harper Collins
• City, Empire, Church, Nation: How the West Created Modernity – Manhattan Institute
Economic Growth
• Measuring Labour Markets in Canada and the United States – Fraser Institute
• The Surprising Ingredients of Swedish Success – Free Markets and Social Cohesion – Institute of Economic Affairs
• A Better Way to Track Unemployment – National Center for Policy Analysis
Education
• Putting the Punch in Parent Power – American Enterprise Institute
• The Impact of Charter Schools on Public and Private School Enrollments – Cato Institute
• Unlearning Liberty: Campus Censorship and the End of the American Debate – Encounter Books
• The Massachusetts Exception – Manhattan Institute
Family, Culture & Community
• Family Intactness: Influence on Major State Social Policy Outcomes – Marriage & Religion Research Institute
Health Care
• The Moral Case for Romneycare 2.0 – Hoover Institution
• The Real Cost of ObamaCare: The End of Reforms Promising Personal, Private, Portable, Affordable Health Care – Independence Institute
• The Health Care Dirty Dozen: Twelve Things (Still) Wrong with ObamaCare – Institute for Policy Innovation
Immigration
• CASA de Maryland and the Corrupting Influence of Illegal Immigration – Capital Research Center
• 10 Immigration Agents Challenge ICE's Non Deportation Policy – The Heritage Foundation
Labor
• Unelected Unions: Why Workers Should Be Allowed to Choose Their Representatives – The Heritage Foundation
Monetary Policy/Financial Regulation
• Shadow Banking System Emerges Unscathed – Economics 21
• Boom and Bust Banking: The Causes and Cures of the Great Recession – Independent Institute
Natural Resources, Energy, Environment, & Science
• Hydraulic Fracturing: Critical for Energy Production, Jobs, and Economic Growth – The Heritage Foundation
Regulation & Deregulation
• Midnight Regulation: Decisions in the Dark? – Mercatus Center
Welfare
• Ending Work for Welfare: Bogus Measures of Success – The Heritage Foundation
• Obama Administration Ends Welfare Reform as We Know It – The Heritage Foundation
Is Sweden really an example of a successful social welfare state? A new paper by Nima Sanandaji takes on this question, finding that free markets have played a much bigger role in Sweden’s success than people typically realize. The paper concludes in part:
Sweden shifted to radical social democratic policies in the 1960s and 1970s, with a gradual reversal beginning in the mid 1980s. The social democratic period was not successful, as it led to much lower entrepreneurship, the crowding out of private sector job production and an erosion of previously strong work and benefit norms. The move towards high taxes, relatively generous government benefits and a regulated labour market preceded a situation in which Swedish society has had difficulty integrating even highly-educated immigrants, and where a fifth of the population of working age are supported by various forms of government welfare payments.
It is also important to remember that Sweden, like other Scandinavian nations, has compensated for policies of high taxes and welfare benefits by improving economic liberty in other fields. Some reforms, such as the partial privatisation of the mandatory pensions system and voucher systems in schools and healthcare surpass reforms in most developed nations. Since these reforms, and the reduction in taxes from the very-high levels of the 1970s to mid 1980s, Swedish relative economic performance has improved. [Institute of Economic Affairs, August 2012]
PolitiFact doesn’t understand what a fact is. It continues to blow calls in ways that reveal liberal bias, notes National Review’s editors, including this big one:
PolitiFact said that Romney’s comment that Obama had “robbed” Medicare of $716 billion to pay for Obamacare was “mostly false.” Among its reasons: “The money was not robbed in any literal sense of the word.” So if Romney led anyone to believe that Obama had held Medicare at gunpoint and ordered it to hand over its wallet, they can now rest easy, because PolitiFact is on the case.
PolitiFact’s other arguments are that Medicare spending will continue to rise and that Obama’s spending reductions are “mainly aimed at insurers and hospitals, not beneficiaries.” Leave aside the economic naïveté of that argument, and focus instead on the irrelevance. Romney said that Obama had taken money that was going to be spent on Medicare and instead spend it on Obamacare, and suggested that this was a bad thing. In other words: an absolutely true claim, and an opinion based on it. If PolitiFact disagrees with that opinion, let it publish its views under a different name. [National Review, August 28]
University of Texas cancels the inquisition. Mark Regnerus’s study looking at how household structure (i.e., whether a family is headed by a heterosexual or a homosexual couple) affects children will not be investigated further for scientific misconduct, says the University of Texas at Austin:
Whether the research designed and conducted by Professor Regnerus and reported in Social Science Research possessed significant limitations or was even perhaps seriously flawed is a determination that should be left to debates that are currently underway in the academy and future research that validates or invalidates his findings. Professor Regnerus has stated that the data on which the research at issue was based will soon be made publicly available. At that time scholars can examine the data themselves and arrive at their own conclusions.
Since no evidence was provided to indicate that the behavior at issue rose to a level of scientific misconduct, no formal investigation is warranted. The issues raised […] fall within that portion of the University’s definition of scientific misconduct that states, “ordinary errors, good faith differences in interpretations or judgments of data, scholarly or political disagreements, good faith personal or professional opinions, or private moral or ethical behavior or views are not misconduct.” [Memorandum on the Regnus Inquiry Report by Robert A. Peterson, Research Integrity Officer, University of Texas at Austin, August 24]
In a Hole: Wall Street Journal:
New income data from the Census Bureau, tabulated by former Census income specialists at the nonpartisan economic consulting firm Sentier Research, reveal that the three-and-a-half years of the Obama Presidency have done enormous harm to middle-class households.
In January 2009, the month President Obama entered the Oval Office and shortly before he signed his stimulus spending bill, median household income was $54,983. By June 2012, it had tumbled to $50,964, adjusted for inflation. […] That’s $4,019 in lost real income, a little less than a month’s income every year.
Unfair, you say, because Mr. Obama inherited a recession? Well, even if you start the analysis when the recession ended in June 2009, the numbers are dismal. Three years after the economy hit its trough, median household income is down $2,544, or nearly 5%.
Add the authors: “The overall decline since June 2009 was larger than the 2.6 percent decline that occurred” during the recession from December 2007 to June 2009. For household income, in other words, the Obama recovery has been worse than the Bush recession. [Wall Street Journal, August 24]
Freedom of Men under Government is, to have a standing Rule to live by, common to every one of that Society, and made by the Legislative Power erected in it; a Liberty to follow my own Will in all things, where the Rule prescribes not; and not to be subject to the inconstant, uncertain, unknown, Arbitrary Will of another Man: as Freedom of Nature is, to be under no other restraint but the Law of Nature.
John Locke was born this week in the year 1632. Happy 380th, Mr. Locke!
Promoting mediocrity: Using federal funding to encourage states to adopt national education standards has actually weakened standards in one state, say James Stergios, Charles Chieppo, and Jamie Gass. In August 2010, Massachusetts decided to ditch its own standards and adopt those of the so-called Common Core in order to obtain a $250 million grant from the Obama administration’s Race to the Top Initiative. Stergios, Chieppo, and Gass, all of the Pioneer Institute in Massachusetts, write in City Journal that the state’s previous set of standards, developed in the mid-1990s, had helped the state’s students become the first to score best in the nation in all four categories of the National Assessment of Education Progress test, a feat repeated four consecutive times, most recently in 2011. But:
The Pioneer Institute has published four independent, peer-reviewed studies comparing various drafts of the national standards with Massachusetts’s existing English and math standards. Pioneer’s findings were not kind to the national standards. Though each subsequent draft showed improvement, the studies found them far less rigorous than the previous Massachusetts standards.
In English, the national standards contain less than half as much classic literature as the Massachusetts framework. In math, they delay Algebra I from eighth until ninth grade and use an experimental method of teaching geometry that has not succeeded anywhere. There is no better authority on math than the National Mathematics Advisory Panel, which reviewed 16,000 research studies before issuing its final report in 2008. The NMAP found that algebra was the key to higher math study and that more students should get to Algebra I by eighth grade. In testimony submitted to the Texas state legislature, Stanford University professor emeritus of mathematics R. James Milgram, who conducted one of the Pioneer reviews, described “a number of extremely serious failings” in the national math standards, noting that they reflected “very low expectations.” [City Journal, Summer 2012]
Wrong goal: Contrary to much media “fact checking,” the Obama administration’s rewriting of the 1996 welfare does amount to gutting the work standards, explains Robert Rector:
President Obama’s HHS will exempt states from the federal work requirements if they increase by 20 percent the number of TANF cases that lose eligibility due to increases in earnings, a measure called “employment exits.” […]
An increase in employment exits is almost always a reverse indicator of reducing welfare dependence. There is actually a strong positive correlation between an increase in employment exits and an increase in caseloads. In other words, the number of the employment exits generally rises when the size of the welfare caseload rises, and it falls when the caseload falls.
How can this be? The answer lies in routine caseload turnover. Even before the 1996 welfare reform, a modest number of households would regularly exit the AFDC rolls each month while a similar number would enter the rolls. Because of routine turnover, increased caseloads were generally accompanied by higher numbers of employment exits. […]
According to the Obama Administration’s preferred measure of welfare performance, the pre-reform AFDC system was a stunning success: Employment exits nearly doubled. By contrast, the post-reform TANF program was a failure because employment exits declined. [The Heritage Foundation, August 24]
The current program is still not working. The numbers tell of a weak recover, says Bill Beach:
[Wednesday] morning’s update from the Department of Commerce on economic activity in the second quarter shows that the economy grew at an anemic 1.7 percent annual rate. This follows a nearly equally weak first quarter growth rate of 2.0 percent.
How weak is this? In terms of economic output, the current recovery is the weakest of any since 1945: Total output is only 6.8 percent higher than when the recession ended in 2009, which was about 12 quarters ago. Compare that to the other really big post-war recession: 1981. After 12 quarters, economic output stood 18.5 percent higher than the end of that recession. Even the really slow recovery from the 2001 recession outdoes the current one: By 12 quarters following the end of the 2001 recession, economic output was 8.9 percent higher. [The Foundry, August 29]
“Ballooning national debt, ineffective fiscal and monetary policies, and a $500 billion tax increase in 2013,” explains Beach, have “made the entrepreneurial spirit of American enterprise dive for cover.”
Hooray for drudgery? No. Ever notice that we celebrate Labor Day by not working? And you know what helps you get more done with less work? More capital. So, as Lawrence Reed suggests, maybe we should celebrate Capital Day, too:
Capital without labor means machines with no operators, or financial resources without the manpower to invest in. Labor without capital looks like Haiti or North Korea: plenty of people working but doing it with sticks instead of bulldozers, or starting a small enterprise with pocket change instead of a bank loan.
Capital can refer to either the tools of production or the funds that finance them. There may be no place in the world where there’s a shortage of labor but every inch of the planet is short of capital. There is no worker who couldn’t become more productive and better himself and society in the process if he had a more powerful labor-saving machine or a little more venture funding behind him. It ought to be abundantly clear that the vast improvement in standards of living over the past century is not explained by physical labor (we actually do less of that), but rather to the application of capital. […]
Don’t think of capital as something possessed and deployed only by bankers, the college-educated, the rich, or the elite. We workers of all income levels are “capital-ists” too—every time we save and invest, buy a share of stock, fix a machine, or start a business. [Foundation for Economic Education, August 27]
• An addendum to our back-to-school roundups: Definitely check out the new school choice programs that have been created around the country for the 2012-2013 school year. The August School Choice Advocate, published by the Friedman Foundation, provides a rundown.
• Find out whether state sovereignty can be preserved from an expanding federal government. The Heritage Foundation will host a discussion with the Attorney Generals of Alabama, Georgia, Indiana, and Oklahoma on September 14. The event runs from 11 a.m. to 12:30 p.m.
• Celebrate Constitution Day on September 18 by attending the Cato Institute’s conference examining the Supreme Court’s recent terms. The all-day program begins at 10:30 a.m. at the Cato Institute.
• Learn why classic literature matters, how it was emphasized by Massachusetts’s education standards, and how national education standards threaten that commitment. The Pioneer Institute will host authors Jocelyn Chadwick and Ron Powers on September 19. The event begins at 8 a.m. at the Omni Parker House in Boston.
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