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.
October 19, 2012
Latest Studies: 45 new items, including a Just Facts report on taxes, and a report from the Goldwater Institute finding no relationship between higher spending and student achievement
Notes on the Week: Welfare spending reaches a new high, pay gap still a myth, lobbyists aren’t the problem, and more
To Do: Learn from Bell, California
Budget & Taxation
• The Ryan Budget vs. the Obama Budget – Heartland Institute
• Attacks on Tax Reform Miss the Mark – The Heritage Foundation
• Tax Basics – Just Facts Foundation
• The Merits of a Territorial Tax System – Manhattan Institute
• The Nays Have It: When Public Sector Unions Win in California – Manhattan Institute
• Government Streamlining Commissions: A Methodology for Measuring Effectiveness – Mercatus Center
• Tax Gimmicks – Mercatus Center
• Orascom or OraScam? Corporate Income and Property Tax Reform Needed – Public Interest Institute
• The Impact of Romney’s Proposed $17,000 Deduction Cap – Tax Foundation
Crime, Justice & the Law
• Southern Poverty Law Center: Wellspring of Manufactured Hate – Capital Research Center
Economic and Political Thought
• Friedrich Hayek: The Ideas and Influence of the Libertarian Economist – Harriman House
• Is America Exceptional? – Hillsdale College
• Government Cronyism and the Erosion of the Public’s Trust: An Exploratory and Cautionary Essay – Mercatus Center
• Cadres for Conservatism: Young Americans for Freedom and the Rise of the Contemporary Right – NYU Press
Economic Growth
• Obama’s Death by Jobs – Hoover Institution
• The Economic Future of Venezuela – Hoover Institution
• An Economic Analysis of the Proposed Expansion of Gaming in Maryland – Maryland Public Policy Institute
• Creating Economic Prosperity on Indian Reservations – PERC – The Property and Environment Research Center
• Why Are Indian Reservations So Poor? – PERC – The Property and Environment Research Center
Education
• Left Out of No Child Left Behind: Teach for America’s Outsized Influence on Alternative Certification – American Enterprise Institute
• The Myth of Education Cuts and Why Money Can’t Buy an A+ – Goldwater Institute
• A Model of Success: Chicago’s Charter Schools Hold the Top Nine Spots for 2012 ACT Scores – Illinois Policy Institute
Foreign Policy/International Affairs
• China’s New Aircraft Carrier Joins the Fleet – The Heritage Foundation
Government Reform
• Taking Down the Tea Party Ten – Capital Research Center
• Fixing Mali: Stabilized Governance Should Be the Priority – The Heritage Foundation
• Judicial Politics – Public Interest Institute
Health Care
• The Affordable Care Act’s Rulemaking Process: What the Research Shows – The Heritage Foundation
• Options for Florida Going Forward under the PPACA –James Madison Institute
• The Benefits Created by Dental Service Organizations – Pacific Research Institute
• Impact of the Federal Health Law’s “Cadillac Insurance Tax” in Massachusetts – Pioneer Institute for Public Policy Research
Information Technology
• AllVid Regulation Risks Harm to Next-Generation Video Innovation – Free State Foundation
• The Federal Trade Commission’s Investigation of Google – Public Interest Institute
Monetary Policy/Financial Regulation
• How to Think about QE3 – American Enterprise Institute
National Security
• Fifty-Third Terror Plot Foiled Since 9/11: Bombing Targets U.S. Financial Hub – The Heritage Foundation
• Full-Spectrum Air Power: Building the Air Force America Needs – The Heritage Foundation
Natural Resources, Energy, Environment, & Science
• Laying the Groundwork for BC LNG Exports to Asia – Fraser Institute
• Time to Allow Uranium Mining in Virginia – The Heritage Foundation
• Stemming New Zealand’s Ocean Conflict: Reducing Conflicts with Tradable Occupation Rights – PERC – The Property and Environment Research Center
Philanthropy
• The Bloomberg Family Foundation – Capital Research Center
Regulation & Deregulation
• Risk Assessment, Safety Assessment, and the Estimation of Regulatory Benefits – Mercatus Center
• The Industry-Specific Regulatory Constraint Database (IRCD): A Numerical Database on Industry-Specific Regulations for All U.S. Industries and Federal Regulations, 1997-2010 – Mercatus Center
• The JOBS Act: Reducing the Regulatory Burden on Small Businesses – National Center for Policy Analysis
Retirement/Social Security
• The End of Social Security Self-Financing: What Does It Portend for Social Security’s Future? – Mercatus Center
Welfare
• Dependency on Government – Independent Women’s Forum
• The Welfare Waivers: How They Really Do Water Down Work Requirements – Manhattan Institute
Remember when government was worried about private companies blocking information on the Internet? Minnesota wins this week’s grand prize for “most creative use of government to stifle innovation” reports Will Oremus:
The Chronicle of Higher Education reports that the state has decided to crack down on free education, notifying California-based startup Coursera that it is not allowed to offer its online courses to the state’s residents. Coursera, founded by Stanford computer science professors Daphne Koller and Andrew Ng, partners with top-tier universities around the world to offer certain classes online for free to anyone who wants to take them. You know, unless they happen to be from Minnesota.
A policy analyst for the state’s Office of Higher Education told The Chronicle that Minnesota is simply enforcing a longstanding state law requiring colleges to get the government’s permission to offer instruction within its borders. She couldn’t say whether other online education startups like edX and Udacity were also told to stay out.
As the Chronicle notes, with admirable restraint, “It’s unclear how the law could be enforced when the content is freely available on the Web.” And keep in mind, Coursera isn’t offering degrees—just free classes. [Slate, October 18]
Welfare spending is reaching new highs under Obama, finds a new analysis from the Congressional Research Service. Robert Rector and Amy Payne summarize:
Roughly 100 million people—one-third of the U.S. population—receive aid from at least one means-tested welfare program each month. Average benefits come to around $9,000 per recipient. If converted to cash, means-tested welfare spending is more than five times the amount needed to eliminate all poverty in the United States.
Despite the fact that welfare spending was already at record levels when he took office, President Obama has increased federal means-tested welfare spending by more than a third.
And the increase in welfare spending is not caused just by a down economy (which is also probably related to policy choices, by the way):
At the beginning of this year, only four of the 80-plus federal welfare programs had work requirements; the Obama Administration has now suspended the work requirements in two of these. After the Obama Administration suspended the work requirement from the food stamp program in 2009, the number of people on food stamps doubled. […]
According to the President’s budget plans for fiscal year 2013, means-tested welfare will not decline as the recession ends, but will continue to grow rapidly for the next decade. Overall, President Obama plans to spend $12.7 trillion on means-tested welfare over the next decade. [The Foundry, October 18]
The pay gap is a myth. And it didn’t get corrected by either candidate Tuesday night when Katherine Fenton asked them: “In what new ways do you intend to rectify the inequalities in the workplace, specifically regarding females making only 72 percent of what their male counterparts earn?”
The problem with that statistic, as Diana Furchtgott-Roth explains, is that it “comes from comparing the earnings of all full-time male employees with all full-time female employees,” a calculation that “averages together women who work as social workers with men who work as investment bankers; female English-literature majors with male engineers; and male loggers with female administrative assistants.” Furchtgott-Roth continues:
Part of the gap is differences in hours worked, because full-time means any number of hours above 35 hours, and full-time women work fewer hours than men, on average. When comparisons are made between men and women who work 40 hours per week, women make 87 percent of men’s earnings. […]
When economists compare men and women in the same job with the same experience, they earn about the same. Studies by former Congressional Budget Office director June O’Neill, University of Chicago economics professor Marianne Bertrand, and the research firm Consad all found that women are paid practically the same as men. […]
President Obama says he’s in favor of equal pay, but women staffers in his White House are paid 90 cents on a man’s dollar — if one calculates the figure, incorrectly, based on simple averages.
Women have unparalleled freedom to choose their fields of study and careers. But many prefer to work part-time in order to combine work and family. Family-friendly jobs with flexible hours pay less than jobs with longer, inflexible hours. [National Review Online, October 17]
The lobbyists never went away; but why would they? Reporter Anna Palmer tells Politico readers that the denizens of K Street are salivating over the possibility of a Mitt Romney presidency because they expect Romney to lift Barack Obama’s bar on lobbyists in the White House. About that bar, she claims: “President Barack Obama’s gone further than any president to keep lobbyists out of the White House — even signing executive orders to do it.” [Politico, October 15]
Timothy Carney, a far less credulous reporter, explains that those orders were a complete sham that didn’t prevent the administration from hiring any ex-lobbyist it wanted—55 by Carney’s count. He then names all 55 of them, revealing Palmer’s reporting to be the journalistic equivalent of a face plant. [The Examiner, October 16]
But the problem isn’t lobbyists; the problem is the incentives for lobbying created by the size and scope of government. Two graphs from a new Mercatus Center report:
[John Garen, “Government Cronyism and The Erosion of the Public’s Trust: An Exploratory and Cautionary Essay,” Mercatus Center, October 11, 2012]
A big, active government isn’t just wasteful and inefficient in the things that it does; as the graphs above show, it destroys social capital. The more powerful government is, the more people have to gain from controlling government or to lose from not controlling it. As government does more, people mistrust it more and compete even harder to influence it. The way to fix that problem is not to restrict lobbying, but to restrict government.
Obama’s protectionism hits consumers hard. President Obama, Tuesday night:
When I said that we had to make sure that China was not flooding our domestic market with cheap tires, Governor Romney said I was being protectionist; that it wouldn’t be helpful to American workers. Well, in fact we saved 1,000 jobs. And that’s the kind of tough trade actions that are required.
Economist Gary Clyde Hufbauer:
[T]he total cost to American consumers from higher prices resulting from safeguard tariffs on Chinese tires was around $1.1 billion in 2011. The cost per job saved (a maximum of 1,200 jobs by our calculations) was at least $900,000 in that year. Only a very small fraction of this bloated figure reached the pockets of tire workers. Instead, most of the money landed in the coffers of tire companies, mainly abroad but also at home. [Peterson Institute for International Economics, April 2012] [H/t: Patrick Brennan, National Review Online, October 17]
Tax Foundation: Romney’s tax cut numbers are about right. How can Mitt Romney cut tax rates across the board, keep his plan revenue neutral, and avoid raising other taxes that increase the tax burden on the middle class? It’s not that hard at all, according to the Tax Foundation, which has modeled the economic effects of the Romney plan.
Stephin Entin and William McBride calculate that the government will get back 60 percent of the value of the tax cut in higher collections from the economic growth that the tax cut will generate. [Tax Foundation, October 3] Meanwhile, Romney’s latest suggestion to cap deductions at $17,000 would nearly account for the other 40 percent, says Entin. Entin cautions, though, that a deductions cap “is a bit of a blunt instrument which does not address the merits or demerits of the different types of deductions.” Entin calculates that Romney’s plan without a deductions cap would yield GDP growth of 7.4 percent, while the Romney plan with the cap would yield growth of 6.9 percent. But the proposal, he says, “illustrates that the tax package can indeed be made to work without raising taxes on middle income families (except in rare cases).” [Tax Foundation, October 11]
What if there was no capitalism?
In short, life would be nasty, brutish, and short; and we’d all probably be hungrier than even Michelle Obama wants us to be.
Comes the handicapper general: Last week, French President François Hollande proposed banning homework because it gives some kids an unfair advantage:
“Education is priority,” Hollande said at Paris’s Sorbonne University on Wednesday. “An education programme is, by definition, a societal programme. Work should be done at school, rather than at home,” in order to foster educational equality for those students who do not have support at home., he added. [sic] [France 24, October 10]
Later, in the year 2081:
“All of a sudden you look so tired,” said Hazel. “Why don’t you stretch out on the sofa, so’s you can rest your handicap bag on the pillows, honeybunch.” She was referring to the forty-seven pounds of birdshot in a canvas bag which was padlocked around George’s neck. “Go on and rest the bag for a little while,” she said. “I don’t care if you’re not equal to me for a while.”
George weighed the bag with his hands. “I don’t mind it,” he said. “I don’t notice it anymore. It’s just a part of me.”
“You been so tired lately—kind of wore out,” said Hazel. “If there was just some way we could make a little hole in the bottom of the bag, and just take out a few of them lead balls. Just a few.”
“Two years in prison and two thousand dollars fine for every ball I took out,” said George. “I don’t call that a bargain.”
“If you could just take a few out when you came home from work,” said Hazel. “I mean—you don’t compete with anybody around here. You just set around.”
“If I tried to get away with it,” said George, “then other people’d get away with it—and pretty soon we’d be right back to the Dark Ages again, with everybody competing against everybody else. You wouldn’t like that, would you?” [Kurt Vonnegut, Jr., “Harrison Bergeron,” 1961]
Biofuel costs developing countries billions in higher food prices. The Environmental Protection Agency is making food more expensive—especially for those in developing countries. Requiring motor fuel to blended with a minimum of biofuel content means less grain is available for food and feed. Researchers Timothy Wise and Marie Brill find:
Biofuels expansion, with its direct diversion of food and feed crops and its indirect impact through competition for land and other food-producing resources, has contributed significantly to the rise in food prices over the last six years. The expansion of US corn ethanol has had particularly strong effects, contributing to food insecurity in import-dependent developing countries. In an earlier report, we estimated the six-and-a-half year cost to Mexico of US ethanol expansion at $1.5 billion, a heavy cost for a country in which corn is a staple food crop and tortilla prices have risen 69% since 2005.
Here that methodology is extended to all net corn importing countries, estimating the costs of US ethanol expansion to developing countries at $6.6 billion over six years. The particularly vulnerable group of NFIDCs suffered ethanol-related costs of $2.1 billion. For all net corn-importing countries, the costs were $11.6 billion.
While one might assume that Mexico, a large corn importer, would suffer high losses, when scaled to population the impacts were on the same order of magnitude or greater in 13 additional countries. Impacts were strong in Central America, and among those Latin American countries that have trade agreements with the United States. A number of the Arab and North African countries that have experienced social unrest in recent years – Egypt, Syria, Tunisia, Libya – also experienced high ethanol-related costs, perhaps an indicator of the contribution of rising food prices to political instability. [“Fueling the Food Crisis: The Cost to Developing Countries of U.S. Corn Ethanol Expansion,” ActionAid International USA, October 2012]
Possibly the most pointless subsidy ever: Nashville—AKA, the Music Capital of the World—has a housing subsidy program just for artists, reports Christopher Butler. Really, non-artists need not apply. [Tennessee Watchdog, October 15]
The policy of not supporting the bad guys would work great … if the bad guys would stop messing it up. Vice President Joe Biden during last week’s vice-presidential debate:
We are working hand and glove with the Turks, with the Jordanians, with the Saudis, and with all the people in the region attempting to identify the people who deserve the help so that when Assad goes — and he will go — there will be a legitimate government that follows on, not an al-Qaeda-sponsored government that follows on. [Quoted by Marc Thiessen, Washington Post, October 15]
David Sanger reports:
Most of the arms shipped at the behest of Saudi Arabia and Qatar to supply Syrian rebel groups fighting the government of Bashar al-Assad are going to hard-line Islamic jihadists, and not the more secular opposition groups that the West wants to bolster, according to American officials and Middle Eastern diplomats. […]
“The opposition groups that are receiving the most of the lethal aid are exactly the ones we don’t want to have it,” said one American official familiar with the outlines of those findings, commenting on an operation that in American eyes has increasingly gone awry.
The United States is not sending arms directly to the Syrian opposition. Instead, it is providing intelligence and other support for shipments of secondhand light weapons like rifles and grenades into Syria, mainly orchestrated from Saudi Arabia and Qatar. The reports indicate that the shipments organized from Qatar, in particular, are largely going to hard-line Islamists. [The New York Times, October 14]
• Find out how corruption and bankruptcy became an opportunity for a city to revive civic engagement. The Hudson institute hosts a panel discussing what happened in Bell, Calif., following the scandal that left it without any working government two years ago. The discussion will be held at noon on October 26 at the Hudson Institute in Washington, D.C.
• Hear the Cato Institute’s new President John Allison talk about his new book, The Financial Crisis and the Free-Market Cure: Why Pure Capitalism Is the World Economy’s Only Hope. Allison’s talk begins 6 p.m. at the Cato Institute in Washington, D.C.
• Learn how to tell your organization’s success stories. Erin Brett of the Fund for American Studies and John Kramer of the Institute for Justice will offer their insights on produce high-quality donor communications. They’ll speak at noon on October 26 at the Competitive Enterprise Institute in Washington, D.C.
• Are you a college student who wants to be a Heritage Foundation intern? Know of a college student who does? Get the applications in soon. The deadline for applying for the Spring semester is November 1.
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