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.
March 22, 2013
Latest Studies: 40 new items, including a Rio Grande Foundation report looking at differences in public and private pay in New Mexico and an e21 report on the states’ Medicaid dilemmas
Notes on the Week: Marriage matters, free speech wins in Australia but loses in UK, the United States is losing its investment appeal, and more
To Do: March for Marriage
Budget & Taxation
• Minnesota Spending 101 – Center of the American Experiment
• What Obama’s Sequester Claims Says About the State of Public Administration – e21: Economic Policies for the 21st Century
• Senate Budget Tax Plan: Murray’s Tax Increases Trade Economic Growth for Revenue – The Heritage Foundation
• Without Fiscal Notes, Lawmakers Still Shopping Without Price Tags – Illinois Policy Institute
• The FY 2014 Budget Proposals – Mercatus Center
• Tax Myths Debunked – Oklahoma Council of Public Affairs
• Public v. Private Sector: Income Differences in New Mexico – Rio Grande Foundation
• Facts & Figures Handbook: How Does Your State Compare? – Tax Foundation
• Growth Dividend from a Lower Corporate Tax Rate – Tax Foundation
Crime, Justice & Law
• Protecting Public Safety and Reducing Correctional Costs in Oregon – Cascade Policy Institute
• Association for Molecular Pathology V. Myriad Genetics – Washington Legal Foundation
• Should Wisconsin Allow Commercial Bail in Pretrial Release? – Wisconsin Policy Research Institute
Economic and Political Thought
• Measuring Freedom Around the World – American Enterprise Institute
• Herbert Croly: Progressive Apostle – The Heritage Foundation
Economic Growth
• Argentina’s Race to the Bottom – American Enterprise Institute
• Zimbabwe: Why Is One of the World’s Least-Free Economies Growing So Fast? – Cato Institute
Education
• Jindal vs. the Teachers’ Unions – Capital Research Center
• A Short History of K-12 Reform – Hoover Institution
• A Scholarship Tax Credit Program for Colorado – Independence Institute
• Michigan School Privatization Survey 2012 – Mackinac Center for Public Policy
• Watch the Pennies, and the Pounds Will Take Care of Themselves! – Public Interest Institute
Elections, Transparency & Accountability
• Confronting Washington’s Administrative State: A Renewed Role for the States – The Heritage Foundation
• The Mirage of Racism – Hoover Institution
Foreign Policy/International Affairs
• Obama’s Middle East Trip: Security Goals Should Be the Highest Priority – The Heritage Foundation
• U.S.–South Korea Nuclear Cooperation: Agreeing on Commercial and Nonproliferation Goals – The Heritage Foundation
Health Care
• Expanding Medicaid: The Conflicting Incentives Facing States – e21: Economic Policies for the 21st Century
• Medicaid Solutions: Florida's Medicaid Cure for Illinois' Ailing Program – Illinois Policy Institute
• Rhetoric and Reality: The Obamacare Evaluation Project – Manhattan Institute
• An Economic and Policy Analysis of Florida Medicaid Expansion – National Center for Policy Analysis
• Medicaid Expansion: Principle, People, and Peril – Oklahoma Council of Public Affairs
Information Technology
• Abuse and Misuse of Personal Information – American Legislative Exchange Council
• Sharing Licensed Spectrum with Government Lessens Prospects for Wireless Broadband – Free State Foundation
Monetary Policy/Financial Regulation
• Seven Reasons Loan Guarantees Are Bad Policy – The Heritage Foundation
National Security
• International Monitoring System as a Nuclear Test Verification Tool – The Heritage Foundation
Natural Resources, Energy, Environment, & Science
• The Global Partnership for Oceans: Imposing ‘Limits to Growth’ Around the World – Capital Research Center
• Energy Efficiency, Not Efficiency Mandates – The Heritage Foundation
Regulation & Deregulation
• FHA Watch – American Enterprise Institute
• The Perilous Position of the Rule of Law and the Administrative State – Free State Foundation
• Take the REINS: How to Return Law-Making Authority to Elected, Accountable Legislators – John Locke Foundation
• The Employment Costs of Regulation – Mercatus Center
Marriage matters. This coming Tuesday, the Supreme Court will hear arguments in challenges to the federal Defense of Marriage Act and California’s Proposition 8 that defined marriage as a union between one man and one woman. The cases together represent a challenge the constitutional authority of citizens to make marriage policy. The Heritage Foundation’s Ryan Anderson explains what is at stake:
Government recognizes marriage because it is an institution that benefits society in a way that no other relationship does. Marriage is society’s least restrictive means of ensuring the well-being of children. State recognition of marriage protects children by encouraging men and women to commit to each other and take responsibility for their children. While respecting everyone’s liberty, government rightly recognizes, protects, and promotes marriage as the ideal institution for childbearing and childrearing.
Promoting marriage does not ban any type of relationship: Adults are free to make choices about their relationships, and they do not need government sanction or license to do so. All Americans have the freedom to live as they choose, but no one has a right to redefine marriage for everyone else.
In recent decades, marriage has been weakened by a revisionist view that is more about adults’ desires than children’s needs. This reduces marriage to a system to approve emotional bonds or distribute legal privileges.
Redefining marriage to include same-sex relationships is the culmination of this revisionism, and it would leave emotional intensity as the only thing that sets marriage apart from other bonds. Redefining marriage would further distance marriage from the needs of children and would deny, as a matter of policy, the ideal that a child needs both a mom and a dad. Decades of social science, including the latest studies using large samples and robust research methods, show that children tend to do best when raised by a mother and a father. The confusion resulting from further delinking childbearing from marriage would force the state to intervene more often in family life and expand welfare programs. Redefining marriage would legislate a new principle that marriage is whatever emotional bond the government says it is.
Redefining marriage does not simply expand the existing understanding of marriage. It rejects the anthropological truth that marriage is based on the complementarity of man and woman, the biological fact that reproduction depends on a man and a woman, and the social reality that children need a mother and a father. Redefining marriage to abandon the norm of male–female sexual complementarity would also make other essential characteristics—such as monogamy, exclusivity, and permanency—optional. Marriage cannot do the work that society needs it to do if these norms are further weakened. [“Marriage: What It Is, Why It Matters, and the Consequences of Redefining It,” by Ryan T. Anderson, The Heritage Foundation, March 11, 2013]
A bull market in non-government money? Markets have a way of evolving around and eventually bypassing government control:
[h/t: Marginal Revolution, March 21]
Free speech won big this week in Australia. The Australian government abandoned both an effort to create a new regulator of media and an effort to expand anti-discrimination laws. The proposed media regulator would have had the power to decide what is fair and accurate reporting, and to issue licenses. Without a license, reporters would have faced liability under privacy laws.
The anti-discrimination proposal would have made it illegal to discriminate against someone’s political views in the workplace. Businessmen faced the prospect of liability for posting political signs that their employees disliked. The government, it seems, wanted to make it illegal to offend someone’s political views. The Australian public found the proposal very offensive.
The Institute of Public Affairs, Australia’s free market think tank, played a big role in mobilizing public opinion against these measures. Why did it take backlash from the public to preserve fundamental freedoms? The IPA’s Simon Breheny identifies the problem:
Worryingly, the loudest voices in favour of these restrictions on freedom of speech came from taxpayer-funded bodies, such as the Australian Human Rights Commission. It is a damning indictment on these organisations that they failed to stand up for freedom of speech when it was under a very real threat.
Doubly so because they were shown up by ordinary members of the Australian community whose taxpayer dollars they use to fund their incessant lobbying. [The Australian, March 22]
Not a democracy: The demands made on Cyprus this week by Chancellor Merkel, et al., are not the first time anybody has thought of putting a tax on (i.e., confiscating a portion of) bank deposits:
Back in 1941, with the memory of the Great Depression still weighing heavy, an American wrote into the Federal Reserve with an idea. “Would it not be feasible,” the member of the public asked, “to impose a Federal tax on the deposit of funds in bank checking accounts?”
The reply from the Fed was polite but succinct: while there’s no doubt a tax on bank deposits would have “the advantage of administrative simplicity”, it is “not in accord with one of the fundamental principles of taxation in a democracy, namely, that taxes should be imposed in accordance with ability to pay”. [The Real Economy, March 16; h/t Marginal Revolution, March 18]
Chilling speech: Britain is on the verge of putting news outlets under the thumb of a new regulatory body. The nation’s political parties have negotiated a royal charter that would, as the New York Times describes it, “replace the newspaper industry’s self-regulating body with an independent agency that could levy fines of up to £1 million, or $1.5 million, order editors to issue prominent corrections and provide arbitration for people who believed they had been wronged by the press.” Publishers don’t have to participate in the system, but if they don’t, their liability for defamation or privacy violations would be higher. The move is the government’s response to the News of the World phone hacking scandal.
Britain will end up with a media that only the pro-EU crowd in Brussels could love, says Daniel Hannan, British Member of the European Parliament:
In many European countries, newspapers receive tax-breaks or other forms of state subsidy. In a surprising number, it is quite normal for journalists to submit their copy before publication to the politicians about whom they have written. The result is the deferential attitude that supporters of press regulation like to call ‘grown-up’ and ‘responsible’.
It’s true that the papers in, say, France, are much less likely to intrude into the personal lives of politicians or celebrities; but it’s equally true that they are less likely to deviate from the approved line on questions of tax, immigration, Europe and so on. That’s the trouble with putting the state in charge of the media. What begins as an attempt to protect privacy ends with politicians deciding which opinions are acceptable.
Guess who is not standing up for free speech:
The [British] Europhile publications have been surprisingly muted in their opposition to state regulation; indeed, several of them have positively welcomed it. These, by and large, are also the papers that have been most peevish about the political pluralism ushered in by the rise of electronic media. [The Telegraph, March 20]
Publishers of content outside Britain—e.g. bloggers—should take note: “Lawyers who have looked at the proposal say it would also cover Internet news and opinion sites outside the country that could be read in Britain.” [New York Times, March 19]
The Murray budget means slower growth. Senator Patty Murray’s 2014 budget calls for tax increases of $975 billion over ten years, with most of the increase likely hitting capital gains and dividend income. That means the cost of capital investment will go up. Rea Hederman and John Ligon estimate the consequences:
The Murray tax proposal would slow private business investment substantially over the 10-year forecast period. Increasing taxes on capital and corporate income would slow business investment by $82 billion annually over the 10-year forecast.
The slowdown in business investment and capital in the U.S. economy contributes to a slowdown of $1.4 trillion in real economic output and an average 853,000 U.S. jobs over the 10-year forecast period. […]
The tax increases would likely slow the S&P 500 Index of Common Stocks by an average 17 percent from baseline levels over the first five years and an average 14 percent relative to baseline levels over the 10-year period.
Declining asset values and lower income (after-tax personal income would decline an average $180 billion annually) would leave households with an average $1.8 trillion less net wealth annually. […]
The Murray tax proposal would generate less federal revenue as the economy slows. Dynamically, when accounting for the economic feedbacks of the increased taxes on personal and corporate incomes, the Murray proposal would achieve about 57 percent ($878 billion) of the $1.55 trillion static revenue estimate. [Internal citations omitted.] [The Heritage Foundation, March 19]
Television news is serving up more opinion and less news—especially MSNBC. Says the Pew Research Center’s State of the News Media 2013 report:
CNN, which has branded itself around reporting resources and reach, cut back between 2007 and 2012 on two areas tied to that brand—in-depth story packages and live event coverage. Even so, CNN is the only one of the three big cable news channels to produce more straight reporting than commentary over all. At the other end of that spectrum lies MSNBC, where opinion fills a full 85% of the channel’s airtime.
According to the survey, the balance for Fox News was 55 percent commentary/opinion and 45 percent factual reporting. [“The Changing TV News Landscape,” by Mark Jurkowitz et al., in “The State of the News Media 2013,” Pew Research Center, March 18, 2013]
The United States is losing its investment appeal. Twenty-two countries are more attractive places for foreign direct investment than the United States, according to the Milken Institute’s Global Opportunity Index. The United States’ score in the index has fallen 9.35 percent since 2007, largely because of expanding public debt and tightening regulatory barriers, say the authors of the report. The Global Opportunity Index is composed of 67 variables that measures such things as trade openness, economic performance, restrictions on capital flows and bank ownership, tax and regulatory burdens, the costs of crime, the presence of corruption, and the strength of legal protections for property rights. The authors say the index explains 65 percent of the variation in foreign direct investment levels between countries.
As in The Heritage Foundation/Wall Street Journal 2013 Index of Economic Freedom, Hong Kong and Singapore rank first and second in the Global Opportunity Index. Australia, Switzerland, Denmark, and Canada are also in the top ten of both indices. The United States, which has slipped in the Index of Economic Freedom but remains in the top ten (10th), comes in 23rd in the Global Opportunity Index.
Austerity via spending cuts works better than austerity via tax increases. Alberto Alesina and Veronique de Rugy review the economic literature:
[W]hile not all fiscal adjustments lead to economic expansion, spending-based adjustments are less recessionary than those achieved through tax increases. Moreover, when successful spending-based adjustments were not expansionary, they were associated with mild and short-lived recessions, while tax increases were unsuccessful at reducing the debt and associated with large recessions. These findings hold even when using the IMF definitions of fiscal adjustments.
In fact, these findings are consistent with IMF studies themselves. For instance, IMF economists Jaime Guajardo, Daniel Leigh, and Andrea Pescatori studied 173 fiscal consolidations in rich countries and found that “nations that mostly raised taxes suffered about twice as much as nations that mostly cut spending. “IMF researchers, however, downplay this result and incorrectly attribute it—as shown by Alesina, Favero, and Giavazzi—to different reactions of monetary policy to different types of fiscal adjustments.
[…] [S]uccessful and expansionary fiscal adjustments are those based mostly on spending cuts rather than tax increases. Also, these adjustments lasted slightly longer and were associated with higher growth during the adjustment. Using data from 21 Organisation for Economic Co-operation and Development (OECD) countries from 1970 to 2010, Alesina and Ardagna find that successful fiscal adjustments on average reduced debt-to-GDP ratio by 0.19 percentage points of GDP in a given year. GDP grew by 3.47 percentage points in total, which is 0.58 percentage points higher than the average growth of G7 countries. Successful adjustments lasted for three years on average. […] Alesina, Favero, and Giavazzi’s work shows that taking the business cycle and monetary policy into account does not change the main finding. [Internal citations omitted.]
And: “Besides, it is not clear that the alternative to reducing spending is more economic growth. In fact, the alternative for certain countries could be a very messy debt crisis.” [“Austerity: The Relative Effects of Tax Increases versus Spending Cuts,” by Alberto Alesina and Veronique de Rugy,” Mercatus Center, March 7]
The young single mom is still here, just a little older. Teen pregnancy is down, but child-bearing by unmarried 20-somethings is up. What’s going on? Kay Hymowitz, W. Bradford Wilcox, and Kelleen Kaye explain:
The knowledge economy and greater professional expectations have made higher education essential for middle-class life and integral to a personal sense of achievement for many women and men. This has meant changing not just the timing but the meaning of marriage. Once marriage was the foundation for adult identity, finances and family; now it has become a crowning achievement that only happens after a young adult is vocationally, psychologically and financially set.
But this model of marriage has left many less-educated, less well-off Americans without a viable life script. With manufacturing jobs and median male wages on the decline, less-skilled men are finding it ever harder to become financially “set.” Under these circumstances, it is no surprise that growing numbers of Middle Americans are postponing marriage or forgoing it altogether.
Meanwhile, many whose jobs do not give them membership in the professional class turn to a traditional source of young adult identity—parenthood—for meaning and satisfaction. Although nearly all unmarried young adults say it’s important to them to avoid pregnancy at the present moment, a third also say they would be at least a little happy if they did find themselves pregnant. And so young women often drift “unintentionally” into parenthood with men whom they believe are not good enough to marry or not ready for it.
The sad irony is that the unmarried 20-something parent is often both responding to and helping to produce the economic and social troubles now enveloping much of the country. Children born to stable, married parents are more likely to graduate from high school and from college, well-equipped to thrive in a knowledge economy and, in turn, more likely to marry and start their own families on a stable footing. The converse is true for children from homes marked by instability. Without a stable family, their chances of moving up the education and income ladder are stunted, which—in turn—reduces their odds of getting married as adults. [Wall Street Journal, March 15]
• Tell the Supreme Court you support marriage and citizens’ constitutional authority to set marriage policy by attending the March for Marriage. On Tuesday, March 26, the Supreme Court will hear the constitutional challenge to California’s Proposition 8 that defined marriage as a union between one man and one woman. The March, organized by the National Organization for Marriage, will begin on the National Mall in Washington, D.C., at about 9:30 a.m. and will proceed to the Supreme Court. There will then be a rally on the National Mall at about 11 a.m.
• Find out what’s at stake in the marriage cases before the Supreme Court this week. The Heritage Foundation will host a panel discussion on Monday beginning at noon.
• Put your lights on! Human Achievement Hour is this Saturday beginning at 8:30 p.m. The event takes place wherever you want to celebrate the genius of human achievement.
• Learn from the leading lights of liberty by checking out the Cato Home Study Course. The course is composed of 12 audio lectures on such topics as The United States Constitution, Adam Smith’s Wealth of Nations, Henry David Thoreau, and the “Austrian” school.
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