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.
December 15, 2012
Latest Studies: 55 new items, including a Tax Foundation report on how the Postal Service is like Greece, and a Mercatus Center analysis showing why government deposit insurance is not free
Notes on the Week: Higher ed has its own bubble, IRS discontinues an inconvenient metric, congratulations Mackinac Center and its right-to-work allies, and more
To Do: Discover What’s the Matter with Ohio
Budget & Taxation
• Time for Deficit Hawks to Walk Away from the Bargaining Table – e-21: Economic Policies for the 21st Century
• Fiscal Cliff Deal: Including Farm Bill Would Lock in Spending – The Heritage Foundation
• Fiscal Cliff: Five Budget Tactics to Reject – The Heritage Foundation
• Hurricane Sandy: Disaster Aid Request Too Big – The Heritage Foundation
• Saving the American Dream: The Fiscal Cliff and Beyond – The Heritage Foundation
• The Fiscal Cliff and the Perils of Grand Budget Deals – The Heritage Foundation
• An Improved Balanced Budget Amendment – Independent Institute
• How Would the Fiscal Cliff Affect Typical Families Across the Country? – Tax Foundation
• Is the Postal Service Like Greece? – Tax Foundation
• Raising Revenue: The Least Worst Options – Tax Foundation
Economic and Political Thought
• Can Big Government Be Rolled Back? – American Enterprise Institute
• False Idol: Barack Obama and the Continuing Cult of the Presidency – Cato Institute
• The Libertarian Vote: Swing Voters, Tea Parties, and the Fiscally Conservative, Socially Liberal Center – Cato Institute
• Fertile Ground for Extremism – Hoover Institution
• He Saw It Coming – Hoover Institution
• Moderating the Dark Side of Emotional Morality with the Bright Side of Market Morality – Independent Institute
• The Improprieties of the Pretense of Knowledge – Independent Institute
• Lincoln’s Constitutional Leadership – National Affairs
Economic Growth
• Heritage Employment Report: Job Market Struggles in November – The Heritage Foundation
• The Economic Situation, December 2012 – Mercatus Center
Education
• What’s Ahead for Education after the 2012 Election – American Enterprise Institute
• Wisconsin’s Act 10: Saving Schools from the Fiscal Cliff – Heartland Institute
• Common Core Standards’ Devastating Impact on Literary Study and Analytical Thinking – The Heritage Foundation
• Abolish Social Studies – Manhattan Institute
Family, Culture & Community
• What Is Marriage? Man and Woman, a Defense – Encounter Books
Foreign Policy/International Affairs
• An Action Plan for U.S. Policy in the Americas – American Enterprise Institute
• India and the United States: How Individuals and Corporations Have Driven Indo-U.S. Relations – Cato Institute
• A Reverse Road Map for Burma Sanctions – The Heritage Foundation
• How to Save Radio Liberty – The Heritage Foundation
• North Korean Missile Launch Challenges U.S. Foreign Policy – The Heritage Foundation
Government Reform
• Obama: Transparently Disappointing – Reason Foundation
Health Care
• A Tax Morass Only a Lawyer Could Love – American Enterprise Institute
• Constructing an Alternative to Obamacare: Key Details for a Practical Replacement Program – American Enterprise Institute
• The U.S. Department of Justice’s Targeting of Medical Speech and Its Public Health Impacts – American Enterprise Institute
• When Obamacare Fails: The Playbook for Market-Based Reform – American Enterprise Institute
• Medicaid Expansion and State Health Exchanges: A Risky Proposition for the States – The Heritage Foundation
• The Medicare Spending Program – Independent Institute
• The Veterans Disability System: Problems and Solutions – National Center for Policy Analysis
International Trade/Finance
• Heat without Light – American Enterprise Institute
Monetary Policy/Financial Regulation
• An Open Letter to President Obama – American Enterprise Institute
• Does Interest Rate Risk Matter If You’re the Fed? – American Enterprise Institute
• Glass-Steagall and the Volcker Rule – American Enterprise Institute
• Regulation of Bank Capital and Liquidity – American Enterprise Institute
• The Risky Mortgage Business: The Problem with the 30-Year Fixed-Rate Mortgage – American Enterprise Institute
• Has the Fed Been a Failure? – Cato Institute
• TAG: Phase Out Unlimited Bank Deposit Guarantees – The Heritage Foundation
• Deposit Insurance Is Not Free – Mercatus Center
Natural Resources, Energy, Environment, & Science
• The Impossibility of Rapid Energy Transitions – American Enterprise Institute
• Dig It! Rare Earth and Uranium Mining Potential in the States – American Legislative Exchange Council
• The Economic Impact of Missouri’s Renewable Energy Standard – Beacon Hill Institute
• The Wind Production Tax Credit: Corporate Welfare at its Worst – National Center for Public Policy Research
• The Crusade Against Plastic Bags – Pacific Research Institute
Philanthropy
• Investing in the Ideas of Liberty: Reflections on the Philanthropic Enterprise in Higher Education – Independent Institute
Regulation & Deregulation
• Avoid a Beer Monopoly by Setting the Market Free – Competitive Enterprise Institute
Retirement/Social Security
• Lifetime Income, Longevity and Social Security Progressivity – National Center for Policy Analysis
Where the tax cut expirations will hit hardest: The ten metropolitan areas that will be hardest hit by the expiration of the Bush tax cuts all have relatively low household incomes, according to calculations by the Tax Foundation. In these metro areas, the median household incomes for a four-person family ranges from $36,104 in McAllen-Edinburg-Mission, Texas, to $43,838 in Danville, Va. But, there are also some high-income areas among the top 20, too, including San Franciso, Baltimore, Boston, and Washington, D.C. The least affected are the middle-income metropolitan areas. Check out the Tax Foundation’s full list to see where your city ranks.
Until we can reestablish a condition under which the earnings of the people can be kept by the people, we are bound to suffer a very severe and distinct curtailment of our liberty.
These results are not fanciful; they are not imaginary. They are grimly actual and real, reaching into every household in the land. They take from each home annually an average of over 300 dollars – and taxes must be paid. They are not a voluntary contribution to be met out of surplus earnings. They are a stern necessity. They come first.
It is only out of what is left, after they are paid, that the necessities of food, clothing, and shelter can be provided and the comforts of home secured, or the yearnings of the soul – for a broader and more abundant life gratified.
When the government affects a new economy, it grants everybody a life pension with which to raise the standard of existence. It increases the value of everybody’s property, raises the scale of everybody’s wages.
One of the greatest favors that can be bestowed upon the American people is economy in government. [Old Radio.org, February 12, 2012]
Where your money is going: The real fiscal problem is federal spending on entitlements and debt service:
The plot thins. The development of high school students’ analytic skills will suffer if the Common Core standards on literature are implemented, warns Sandra Stotsky. The problem, she explains, is that the standard writers have chosen to emphasize informational over classic literary texts:
[I]t is more than likely that college readiness will decrease when secondary English teachers begin to reduce the study of complex literary texts and literary traditions in order to prioritize informational or nonfiction texts. This is because, as ACT (a college entrance exam) found, complexity is laden with literary features: It involves characters, literary devices, tone, ambiguity, elaboration, structure, intricate language, and unclear intentions. By reducing literary study, Common Core decreases students’ opportunity to develop the analytical thinking once developed in just an elite group by the vocabulary, structure, style, ambiguity, point of view, figurative language, and irony in classic literary texts.
It will be hard to find informational texts with similar textual challenges (whether or not literary nonfiction). A volume published in 2011 by the National Council of Teachers of English on how English teachers might implement Common Core’s standards helps us to understand why. Among other things, it offers as examples of informational or nonfiction texts selections on computer geeks, fast food, teenage marketing, and the working poor.This is hardly the kind of material to exhibit ambiguity, subtlety, and irony. [The Heritage Foundation, December 11]
There’s another government-induced bubble to worry about. Higher education has a big debt problem, reports the New York Times. The story here is consistent with the theory that increases in student aid don’t help students, but rather are captured by colleges and universities. That theory holds that, because of the unique non-profit set-up of higher education, colleges and universities compete not to provide a better product but to increase their prestige:
Overall debt levels more than doubled from 2000 to 2011 at the more than 500 institutions rated by Moody’s, according to inflation-adjusted data compiled for The New York Times by the credit rating agency. In the same time, the amount of cash, pledged gifts and investments that colleges maintain declined more than 40 percent relative to the amount they owe. […]
The debate about indebtedness has focused on students and graduates who have borrowed tens of thousands of dollars and are struggling to keep up with their payments. Nearly one in every six borrowers with a student loan balance is in default.
But some colleges and universities have also borrowed heavily, spending money on vast expansions and amenities aimed at luring better students: student unions with movie theaters and wine bars; workout facilities with climbing walls and “lazy rivers”; and dormitories with single rooms and private baths. Spending on instruction has grown at a much slower pace, studies have shown. Students end up covering some, if not most, of the debt payments in the form of higher tuition, room and board and special assessments, while in some instances state taxpayers pick up the costs. […]
The pile of debt — $205 billion outstanding in 2011 at the colleges rated by Moody’s — comes at a time of increasing uncertainty in academia. After years of robust growth, enrollment is flat or declining at many institutions, particularly in the Northeast and Midwest. [New York Times, December 13]
Competition from Indiana pushed Michigan Gov. Snyder to get behind right-to-work. Indiana was getting the jobs, reports Lachlan Markay:
“They did similar legislation back in February,” [Gov. Rick] Snyder said in a recent Fox News appearance. “They’ve seen thousands of jobs come to Indiana, and those jobs could also come to Michigan.” He might have added: instead of from Michigan.
“They’ve had 90 companies in the pipeline for economic development say this was a factor in deciding to look to come to Indiana,” Snyder said of the state’s right-to-work law at a news conference earlier this year, citing statistics from the Indiana Economic Development Corporation. “That’s thousands of jobs. We need more and better jobs in Michigan.”
According to IEDC, 67 planned projects in Indiana have reached the “pipeline stage,” and 31 companies have said they will move operations to the state, resulting in an estimated 3,700 new jobs and $431 million in investment. […]
“The state of Indiana and the local economic development folks have shown a willingness to do what is necessary to attract businesses to our state,” said Nick Busche, president and CEO of machine manufacturer Busche-CNC, which announced it would add 120 jobs at its Albion, IN, factory by 2015. “The recent passage of the right-to-work law was just another example of the strong commitment by this state to promote growth and job creation.” [The Foundry, December 12]
More competition between states, please.
The reason some people don’t pay their “fair share,” isn’t low tax rates. Rather, it’s because of all the handouts written into the tax code, observes Victor Davis Hanson:
Is Michael Moore (net worth: approximately $50 million) a one-tenth-of-one-percenter? If so, why do mansion-living-grandee movie directors like Moore and [Oliver] Stone need state subsidies and tax breaks to produce their films, when most states are nearly as insolvent as the federal government? […]
If the country is going to turn redistributionist, then we might as well do so whole-hog—given that eight of the wealthiest ten counties in America voted for Obama. Why not limit mortgage-interest deductions to just one loan under $100,000—while ending tax breaks altogether for second and third vacation houses?
Under the present system, the beleaguered 99 percent are subsidizing the abodes of Hollywood and Silicon Valley “millionaires and billionaires”—many of whom themselves have been railing against the 1 percent. Should the government provide tens of thousands of dollars in tax breaks for a blue-state 1-percenter to live in tony Palo Alto or Newport Beach when there are plenty of fine homes far cheaper and sitting empty not far away in Stockton and Bakersfield?
Blue states usually have far higher state income taxes that are used as deductions to reduce what is owed on federal income tax. Why should working folks in Nevada or Texas have to pay their fair share, while Wall Streeters get huge federal write-offs from their New York or Connecticut state income taxes? [National Review Online, December 13]
Also, now would be a good time to remember National Review founder William F. Buckley’s thoughts on the topic: “I would like to electrocute everyone who uses the word ‘fair’ in connection with income tax policies.”
The Rock and Roll Hall of Fame belongs on the list of things made worse by government. Rock and roll fans might be wondering this week how Randy Newman, Donna Summer, and Public Enemy have ended up in the Rock and Roll Hall of Fame. (At least Rush got in. Good to know there is a rock and roll wing in the Rock and Roll Hall of Fame!) One likely explanation is that the pursuit of continued government subsidies has corrupted the Hall’s judgment. The Chattanooga Times Free Press explains:
The building that houses the Rock and Roll Hall of Fame, a monstrous edifice on the shores of Lake Erie in Cleveland, cost taxpayers $65 million. According to IRS documents, in recent years, the Hall of Fame has snatched up as much as $2.8 million annually in public funds.
That need to keep cash rolling in is much of the reason the Hall of Fame has turned its efforts from highlighting and honoring the history of rock and roll to featuring a mishmash of whatever popular music will cause people to visit and pay attention to the Hall of Fame. The decision by the Hall of Fame to turn its back on its mission of educating “visitors, fans and scholars from around the world about the history and continuing significance of rock and roll music” has cost the organization both credibility and money.
When it was originally built, the Hall of Fame’s directors promised a million people through the door each year. In reality, the facility struggles to get 400,000 visitors annually. […]
By attempting to become everything to everyone, the Rock and Roll Hall of Fame has become nothing at all. What began as a grand effort to celebrate one of history’s most important cultural movements, is now a bland, passionless, disheartening money grab. In other words, the Rock and Roll Hall of Fame has become the antithesis of rock and roll. [The Chattanooga Times Free Press, December 13]
Michigan’s right-to-work revolution didn’t just happen in the past week. It’s been in the works for decades thanks to the work of folks like Lawrence Reed and the Mackinac Center, which began pushing for the reforms virtually from its founding in 1988. In 1995, Reed, the group’s president and founder convinced the state’s largest daily to publish an op-ed promoting the idea. Reed wrote: “Michigan is overdue for a thoughtful consideration of fundamental labor law. Should workers be compelled to join a labor union to hold their jobs.” [Detroit Free Press, December 6, 1995]
It took another 17 years, and a lot of observing other states move ahead with better policies. Today, Reed, who now heads up the Foundation for Economic Education, writes:
Many good people came to be involved, but no honest or thorough history of how Michigan ended the scourge of compulsory unionism can be told without citing the indispensable role of the Mackinac Center. I am immensely proud of that fact. We made the case for it when it was on no one’s radar. We produced studies, commentaries and lectures about the concept for two decades. We simply never gave up. When you know something is right, why would you?
One of the chief architects of our long-term strategy was my best friend and, before he died in a plane crash in June 2003, Mackinac’s senior vice president, Joe Overton. This great triumph for liberty is a tribute to him as much as it is to any person or any organization. Joe, we did it—just as you knew we would, sooner or later! [Mackinac Center, December 13, 2012]
You know you’ve won when the other side wants to stop keeping score. The Internal Revenue Service is discontinuing a program that compiled data on the movement of taxpayers into and out of every county and state in the country, reports Jim Pettit [National Review Online, December 11]. It’s hard not to suspect that this kind of information is just too embarrassing to the high-tax, union-run blue states that keep losing people to the low-tax, right-to-work red states.
Will the ObamaCare exchanges be a privacy nightmare? Be worried, say Stephen Parente and Paul Howard:
In order to determine eligibilty for health insurance subsidies, the new exchange has to bring together information about you and your family from the Treasury Department and IRS, the Department of Homeland Security, the Department of Justice, as well as your Social Security number — all coordinated by the Department of Health and Human Services. […] [T]he hub will have all the details needed to steal identities and fraudulently access credit. […]
According to an April RAND Corporation report, the feds might lose up to $98 billion annually to Medicare and Medicaid fraud and abuse, significant amounts of that related to the theft of personal information from government databases. And the political pressure to complete the hub before the exchanges begin enrolling applicants next fall will only add to the temptation to cut corners and declare success with a shoddy product not ready for prime time. [Green Bay Gazette, December 9]
• Find out what’s gone wrong in Ohio. The Heritage Foundation will host Matt Mayer, author of Taxpayers Don’t Stand a Chance: Why Battleground Ohio Loses No Matter Who Wins (and What To Do About It). Mayer will speak at noon on December 17.
• Learn about entrepreneurial solutions to poverty by watching Poverty Cure’s new 6-part DVD series on the real sources of human flourishing.
• Watch these videos: Antony Davies demolishes the idea that higher tax rates will provide the government with more revenue. The Atlas Economic Research Foundation traces Chile’s economic revolution from the University of Chicago to implementation. Lanny Ebenstein identifies 20 of Milton Friedman’s greatest essays.
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