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.
September 28, 2012
Latest Studies: 52 new items, including a Tax Foundation report putting a face on America’s tax returns, and a Manhattan Institute report on more misguided federal meddling in the classroom
Notes on the Week: Why AARP really likes ObamaCare, Obama’s misguided free speech defense, recession coming, and more
To Do: See Won’t Back Down
Budget & Taxation
• Corporate Tax Competitiveness Rankings for 2012 – Cato Institute
• Starving the Beast Revisited – Cato Institute
• Approaches to Property Tax Reform – Commonwealth Foundation for Public Policy Alternatives
• Tax Cuts, Spending Multipliers, and Economic Growth – e-21: Economic Policies for the 21st Century
• A New Tax Plan for a New Economy: How Eliminating the Income Tax Can Create Jobs – Goldwater Institute
• Obama Could Prevent a Made-in-Washington Recession – The Heritage Foundation
• Tax Policy Center’s Skewed Analysis of Governor Romney’s Tax Plan – The Heritage Foundation
• Who Pays the Tax? Theoretical and Empirical Considerations of Tax Incidence – Mercatus Center
• Putting a Face on America’s Tax Returns: A Chart Book – Tax Foundation
• The Fiscal Costs of Nonpayers – Tax Foundation
Crime, Justice & the Law
• Showstopper: Department of Justice Report on Operation Fast and Furious – The Heritage Foundation
• SEC’s View of “Supervisory Liability” May Deter Vigilant Corporate Compliance – Washington Legal Foundation
• State High Court Solidifies Tort Liability Law’s “Component Part Supplier” Doctrine – Washington Legal Foundation
Economic and Political Thought
• Decisionmaking, Risk, and Uncertainty: An Analysis of Climate Change Policy – Cato Institute
• The Keynesian Path to Fiscal Irresponsibility – Cato Institute
• The Scope of Government in a Free Society – Cato Institute
• Theodore Roosevelt: Progressive Crusader – The Heritage Foundation
Economic Growth
• Boom, Bust, and Beyond. A Look at Housing Market Data in California – American Action Forum
• Asset Bubbles and Supply Failures: Where Are the Qualified Sellers? – Cato Institute
• Is the Washington Consensus Dead? – Cato Institute
• Growing Pennsylvania’s Economy – Commonwealth Foundation for Public Policy Alternatives
• Brazil: Restoring Economic Growth Through Economic Freedom – The Heritage Foundation
• The Great California Exodus: A Closer Look – Manhattan Institute
• 2012-2013 Virginia Economic Forecast – Expanding Broadband: Jobs, Innovation, and Rural Development – Thomas Jefferson Institute for Public Policy
Education
• School Choice and Achievement: The Ohio Charter School Experience – Cato Institute
• Visa Mills, Diploma Mills, and Other For-Profit Colleges: Sorting Out Some of the Controversies in Higher Education – Center for Immigration Studies
• Is the U.S. Catching Up? – Education Next
• Accreditation: Removing the Barrier to Higher Education Reform – The Heritage Foundation
• Undisciplined – Manhattan Institute
• How to Grade Teachers – National Affairs
• Virtual Blended With Traditional Learning Can Cut Costs and Help Students – Show-Me Institute
Foreign Policy/International Affairs
• Israel’s Iron Dome: Why America Is Investing Hundreds of Millions of Dollars – American Enterprise Institute
• Alternative Political and Economic Futures for Europe – Cato Institute
• Getting the Philippines Air Force Flying Again: The Role of the U.S.–Philippines Alliance – The Heritage Foundation
• Time Is Ripe for U.S. Policy to Address Anti-Americanism in Latin America – The Heritage Foundation
• Top Five Statements Obama Should Make to U.N. – The Heritage Foundation
• Washington Should Urge Greater South Korean–Japanese Military and Diplomatic Cooperation – The Heritage Foundation
Health Care
• The Affordable Care Act: Pennsylvania’s Costs – Commonwealth Foundation for Public Policy Alternatives
• How Block Grants Can Make Medicaid Work – Manhattan Institute
• Real Medicare Reform – National Affairs
• The Health-Insurance Solution – National Affairs
• Dental Service Organizations: A Comparative Review – Pacific Research Institute
Labor
• The Behavior of the Labor Market Between Schechter (1935) and Jones & Laughlin (1937) – Cato Institute
• Should Missouri Raise Its Minimum Wage? – Show-Me Institute
Monetary Policy/Financial Regulation
• The Fed Takes a Gamble – American Enterprise Institute
• The New Monetary Economics Revisited – Cato Institute
National Security
• National Terrorism Threat Level: Color-Coded System Not Missed – The Heritage Foundation
• Cybersecurity: The Latest Research and Analysis – The Heritage Foundation
Regulation & Deregulation
• The Impact of Federal Regulations on U.S. Manufacturing – American Action Forum
The Constitution/Civil Liberties
• Drones in U.S. Airspace: Principles for Governance – The Heritage Foundation
• The Most Dangerous Branch – National Affairs
Welfare
• Restoring a True Safety Net – National Affairs
How big a burden are government regulations on manufacturers? Some details from a new study commissioned by the Manufacturers Alliance for Productivity and Innovation, as summed up by Thomas Hemphill:
[S]ince 1998, the costs of major federal regulations have far exceeded manufacturing sector growth, with the cumulative inflation-adjusted cost of compliance for major regulations growing by an annualized rate of 7.6 percent. Furthermore, the cost of major regulations has also significantly exceeded overall economic growth, as annual growth in the physical volume of manufacturing sector output averaged only 0.4 percent since 1998, while U.S. inflation adjusted GDP growth averaged 2.2 percent annually. […] [S]uch major regulations could reduce the manufacturing sector’s output by up to 6.0 percent over the next decade. In 2012, the cost of major regulations could reduce the total value of shipments from U.S. manufacturers by up to $500 billion in constant 2010 dollars and lower manufacturing exports by 17 percent.
[…] U.S. manufacturers are subject to an estimated 2,183 unique regulations between 1981 and April 2012, and that because 95 percent of the regulations are non-major (having estimated costs of less than $100 million) and not accounted for in the study (since the federal government does not track their costs or those of independent agencies), the aggregate burden of these non-major regulations could be equal to the cost of the major regulations. [American Action Forum, September 24]
It’s almost as if the government wants you to keep your money in a mattress. The Dodd-Frank financial regulations have increased banks’ costs, and one result seems to be that free checking is going away. The Wall Street Journal has the details of a new survey by Bankrate Inc.:
To avoid a monthly fee, bank customers in the U.S. must keep an average minimum balance of $723 in checking accounts that pay no interest—up 23% over last year, according to a new survey from data provider Bankrate Inc., which analyzed 477 checking accounts at 247 banks and thrifts. The average monthly fee on noninterest checking accounts rose 25% to $5.48, also a record. […]
The fees come as the banking industry looks to lose more than $10 billion a year in revenue through federal restrictions on debit cards and overdraft policies, according to bank consultants. […]
Banks began imposing fees for checking accounts in the early 1980s to offset higher interest rates paid on savings accounts. The trend reversed in the late 1980s, when small banks began wooing customers with free checking. Other banks followed, and free checking became standard by the late 1990s.
Not any longer. The Bankrate survey found that 39% of noninterest checking accounts are free to all customers, down from 45% in 2011 and a peak of 76% in 2009. [Wall Street Journal, September 24]
It doesn’t help that the Federal Reserve has pushed interest rates so low that having a bank account earns you next to zero interest.
Indeed, there have been some bumps in the road.
Morgan Lorraine Roach:
The only success the Administration can claim is the killing of Osama bin Laden. Yet, as tragically witnessed in the deaths of four Americans in Benghazi, the threat of terrorism and Islamic extremism remains. For this, the U.S. needs strong leadership, not complacent wishful thinking that is reminiscent of Jimmy Carter. [The Foundry, September 26]
The party never got started. On Thursday, the Commerce Department revised GDP growth for the second-quarter downward to 1.25 percent, which suggests a recession is coming, says James Pethokoukis:
[R]esearch from the Fed […] finds that since 1947, when two-quarter annualized real GDP growth falls below 2%, recession follows within a year 48% of the time. And when year-over-year real GDP growth falls below 2%, recession follows within a year 70% of the time.
Citigroup has also taken a shot at determining the stall speed: “Specifically, when U.S. growth has cut below 1½ percent on a rolling four-quarter basis, it has tended to fall by nearly 3 percentage points over the following four quarters, and the economy has typically entered recession.” [AEIdeas, September 27]
Why did AARP boo when Paul Ryan talked about repealing ObamaCare? Because, explains Avik Roy, the group benefits financially from ending Medicare Advantage:
According to an analysis by Representatives Wally Herger (R., Calif.) and Dave Reichert (R., Wash.), Obamacare’s cuts to the Medicare Advantage program, by driving seniors out of that program and back into traditional Medicare, could earn AARP over $1 billion over the next ten years, because AARP makes nearly half a billion dollars per year collecting royalties from supplemental Medigap policies sold by private insurers. Those Medigap policies are primarily sold to seniors in the traditional, government-run Medicare program.
In other words, AARP is poised to make billions thanks to Obamacare’s cuts to Medicare Advantage. As it is, the interest group makes almost twice from its Medigap royalties what it gets in membership dues. So it’s no wonder that AARP supported Medicare cuts that would be unpopular with seniors: Its own financial interests won out. [National Review, September 24]
Childhood hunger is up, and it’s the government’s fault. Kids around the country are complaining that their school lunches are leaving them hungry, according to reports from both the Daily Caller [September 22] and Reason magazine [September 22]. There’s no mystery here: In January, the U.S. Department of Agriculture unveiled new rules for USDA-provided school lunches that limit calories, salt, and fat; and require more whole grains, fruits, and vegetables. The rules were put in place to implement the “Healthy, Hunger-Free Kids Act of 2010.”
Reason’s Baylen Linnekin reports some of the backlash:
Seventy percent of students at one Wisconsin high school boycotted USDA school lunches. As one student at the school told the Milwaukee Journal Sentinel, the changes have meant the food is “worse tasting, smaller sized and higher priced.”
Across the country in Connecticut, a student petition protesting the smaller portion sizes resulted in the school district abandoning the rules after “only a few days.”
Different calorie limits apply to elementary schools, middle schools, and high schools; but schools have no flexibility to tailor meals to different students’ caloric needs. That means athletes with a high-metabolism get the same as amount of food as all other students. Nor do the new rules take into account that not all students have a weight problem.
Michelle Obama endorsed the new rules back in January, claiming that they would help prevent the hard work parents do giving their kids a balanced diet from being undermined in the school cafeteria. But according to both the Daily Caller and Reason articles, many parents are giving their kids a brown bag lunch to take to school so that they don’t have to eat the school-provided lunch.
Another problem: Many schools still offer chips and cookies a la cart, which means hungry students can supplement their USDA-approved lunch by loading up on junk food. That alone pretty much guarantees that the project will make absolutely zero contribution to fixing the obesity problem.
If speech is never supposed to offend, then it isn’t really free. “The future must not belong to those who slander the prophet of Islam,”said the leader of the free world on Tuesday at the United Nations in a speech that was partly an attempt to explain why free speech is an important American value.
President Obama also said, in reference to the film The Innocence of Muslims, which the administration has variously claimed provoked a mob to attack the U.S. consulate in Benghazi on 9/11/12: “I have made it clear that the United States government had nothing to do with this video, and I believe its message must be rejected by all who respect our common humanity.”
The value of free speech, in case the leader of the free world doesn’t know it, is not that it’s the best way to make everyone feel good about himself. The value of free speech, as Justice Oliver Wendell Holmes explained, is that it’s the best way of discovering truth:
If you have no doubt of your premises or your power and want a certain result with all your heart you naturally express your wishes in law and sweep away all opposition […] But when men have realized that time has upset many fighting faiths, they may come to believe even more than they believe the very foundations of their own conduct that the ultimate good desired is better reached by free trade in ideas.
By suggesting that certain belief systems should be beyond criticism or that it’s anyone’s responsibility to reject certain movies, the President failed in his defense of free speech.
Cutting government spending needs to be part of the program for getting the economy going. E-21 explains why:
A 2006 Treasury paper found that a permanent extension of current (2012) tax rates would result in a 2.3% larger capital stock if those tax reductions were financed by corresponding cuts in spending. With the exception of lower taxes on dividends and capital gains, which increase growth even when deficit-financed, all other tax components of the “fiscal cliff” would actually reduce long-run growth unless they are financed by spending restraint. Higher marginal income tax rates reduce work, effort, savings, and investment by reducing the household or business’ share of the incremental income generated by these activities. This is the same channel through which debt overhang operates, as the implied higher future tax rates generated by large deficits reduce work, savings, and investment. Indeed, because no one is sure who will pay the ultimate costs of the looming fiscal adjustment, persistently large deficits could be worse than higher taxes if households and businesses overestimate their likely share of the future tax burden.
U.S. effective marginal tax rates are also uncompetitive. Since earlier this year, the United States has had the highest statutory corporate tax rate in the world, with an average federal-state rate of 39.2 percent [Tax Foundation, April 1]. That’s about 50 percent higher than the average for countries in the Organisation for Economic Cooperation and Development. The picture of an uncompetitive tax rate actually gets worse when you calculate marginal effective corporate tax rates, according to a new Cato Institute report. The marginal effective tax rate reflects the amount of tax actually paid after accounting for deductions. The United States has only the fourth highest marginal effective tax rate on new corporate investment, but that rate is almost double the OECD average, says Cato:
The U.S. [marginal effective corporate tax rate] is 35.6 percent in 2012, or almost twice the 90-country average of 18.2 percent. The average rate for the 34 Organization for Economic Cooperation and Development (OECD) nations is just 19.4 percent. [“Corporate Tax Competitiveness Rankings for 2012” by Duanjie Chen and Jack Mintz, Cato Institute, September 2012.]
Too good for government work: The Government Accountability Office doesn’t just identify waste, fraud, and abuse in government; it wins literature prizes on the side. Last Thursday, the 2012 Ig Nobel Prize Committee announced that the GAO had won the 2012 Ig Nobel Prize in Literature for its report “Actions Needed to Evaluate the Impact of Efforts to Estimate Costs of Reports and Studies.” The Ig Nobels, sponsored by the Annals of Improbable Research, are awarded annually to recognize “achievements that first make people laugh, then make them think.”
The GAO report was a review of a Department of Defense effort to estimate how much money DOD spends writing reports for Congress. GAO concluded that DOD’s estimation was not fully consistent with the relevant accounting standards. The agency then recommended that the Secretary of Defense “take steps to evaluate DOD’s effort to estimate costs […] .”
To sum up: the reports about reports were not so good, but the report about reports about reports that recommends another report was award-winning. That makes us wonder: How good can the next report be?
• Check out the new movie Won’t Back Down, a drama starring Maggie Gyllenhall and Viola Davis about what happens when so-called “parent trigger” laws empower parents to intervene in failing schools.
• Enjoy the best and most hilarious in liberal media bias by checking out the highlights of the Media Research Center’s Annual Dishonors Awards. And congratulations to Brent Bozell and the MRC on 25 years of holding the mainstream media accountable.
• Find out why the country needs more free trade, not less. The Heritage Foundation will host a panel assessing the political challenges to open trade, and what is at stake for consumers and American workers. The program begins at 1 p.m. on October 4.
• Hear a talk on free speech and tolerance from Jacob Mchangama. The Heartland Institute will host Mchangama, a human rights lawyer with the Danish think tank CEPOS, on October 11. The program begins at 11:30 a.m.
Have a tip for InsiderOnline? Send us an e-mail at insider@heritage.org with "For Insider" in the subject line.
Follow us on Twitter: http://twitter.com/InsiderOnline.
Looking for an expert? Visit PolicyExperts.org.
The Heritage Foundation
214 Massachusetts Avenue, NE
Washington, DC 20002-4999
phone 202.546.4400 | fax 202.546.8328
No comments:
Post a Comment