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.
April 1, 2013
Latest Studies: 49 new items, including a Friedman Foundation report on school choice myths, and Galen Institute reports on the harm of Medicaid expansion.
Notes on the Week: We’ve got a history with amnesty, the states can still defeat ObamaCare, investors are down on green.
To Do: Before you fly, find out what the government knows.
Budget & Taxation
• Two Budgets, One Point of Agreement, and a Third Way – American Enterprise Institute
• Creating a Fair Property Tax System: Is It Possible? – Public Interest Institute
• SB 5851: Creating a Defined-Contribution Retirement Plan Option for Public Employees – Washington Policy Center
Crime, Justice & the Law
• The Perils of Policing for Profit – Beacon Center of Tennessee
• Guilty Until Proven Innocent: Undermining the Criminal Intent Requirement – The Heritage Foundation
• Why Congress and the Courts Must Respect Citizens’ Rights to Arbitration – The Heritage Foundation
• Incentivizing Stronger Probation in the Texas Budget – Texas Public Policy Foundation
Education
• Accelerated Learning Would Add Trillions of Dollars in Wealth – American Enterprise Institute
• Erasing the Myths on How School Choice Would Impact Texas Private Schools – Friedman Foundation for Educational Choice
• College 2020: Higher Education and the Online 2.0 Institutions – The Heritage Foundation
• Official Education Spending Figures Do Not Incorporate Full Cost of Teacher Pensions – The Heritage Foundation
• Online Learning: Maximizing Results by Leveraging Technology – Maine Heritage Policy Center
• How to Open a Charter School in Washington State – Washington Policy Center
Elections, Transparency, & Accountability
• Mandatory Voter Registration: How Universal Registration Threatens Electoral Integrity – The Heritage Foundation
Family, Culture & Community
• The Consequences of Redefining Marriage: Eroding Marital Norms – The Heritage Foundation
Foreign Policy/International Affairs
• U.N. Arms Trade Treaty and the Customary International Law Standard – The Heritage Foundation
• The Falklands: Small Islands, Big Questions – Hoover Institution
Health Care
• 50 Vetoes: How States Can Stop the Obama Health Care Law – Cato Institute
• Voice and Exit in Health Care Policy – Cato Institute
• Ohio Should Block Medicaid Expansion – Galen Institute
• Tennessee Should Block Medicaid Expansion – Galen Institute
• Medicare’s Demographic Challenge—and the Urgent Need for Reform – The Heritage Foundation
• Medicare’s Outdated Structure—and the Urgent Need for Reform – The Heritage Foundation
• Medicare’s Rising Costs—and the Urgent Need for Reform – The Heritage Foundation
• Save Texas Medicaid – Texas Public Policy Foundation
Immigration
• Encouraging Lawful Immigration and Discouraging Unlawful Immigration – The Heritage Foundation
Monetary Policy/Financial Regulation
• The Extreme Dangers of a Deposit Tax – American Enterprise Institute
• Do We Need Regulation of Bank Capital? – Institute of Economic Affairs
National Security
• Shrinking Bureaucracy, Overhead, and Infrastructure – American Enterprise Institute
• Increasing Risk of North Korean Tactical Attack on South Korea: What U.S. Needs to Do – The Heritage Foundation
• Game of Drones – Hoover Institution
Natural Resources, Energy, Environment, & Science
• An EPA War on Coal? – Cato Institute
• The High Cost of Low-Value Wind Power – Cato Institute
• The Clean Air Act as an Obstacle to the Environmental Protection Agency’s Anticipated Attempt to Regulate Greenhouse Gas Emissions from Existing Power Plants – Federalist Society
• Trust Fund or Slush Fund? Energy Security Trust Has Fatal Flaws – The Heritage Foundation
• Texas Water Policy Options – Texas Public Policy Foundation
Regulation & Deregulation
• How Insurance Substitutes for Regulation – Cato Institute
• Toward a New and Improved Regulatory Apparatus – Cato Institute
• Slow Train Coming?: Misguided Economic Regulation of U.S. Railroads, Then and Now – Competitive Enterprise Institute
• Emergency Cease and Desist Authority: HB 1600 – Texas Public Policy Foundation
• Improving Rate Regulation of Natural Gas and Electricity – Texas Public Policy Foundation
• Regulatory Reform Bills Would Improve Our Business Climate – Washington Policy Center
Retirement/Social Security
• Reforming SSDI – Cato Institute
• Restoring Social Security Disability’s Purpose – Cato Institute
The Constitution/Civil Liberties
• Returning to the True Spirit of the First Amendment – Cato Institute
Transportation/Infrastructure
• Virginia and Maryland’s Transportation Plans Fuel Tax Hikes, Not Mobility – The Heritage Foundation
• Florida’s Underground Water Infrastructure: Pathways to a More Secure Future – James Madison Institute
• A New Transportation Plan for Maryland – Maryland Public Policy Institute
• Driving Reform: Real Solutions to Our Transportation Challenges – Pioneer Institute for Public Policy Research
We’ve got a history with amnesty. There’s some sympathy for an immigration amnesty in the current Congress. The problem with amnesties is that after you’ve offered one once there’s no reason to think you wouldn’t offer one a second time. Remember, Congress created an amnesty for immigration violations in 1986; and the Senators then were not oblivious to the danger that an amnesty would incentivize more illegal immigration. David Addington notes a question posed by a Senator from Texas during the debate over that amnesty bill:
[O]ne of the things that has concerned me having looked at the problem on our borders, is that there may be those in other countries who will say that since we granted amnesty once maybe we will do it again. And rather than sign up to be on this list of 1.9 million people that have the dream of someday being able to come here, maybe people will just come on across the border thinking it will happen again.
So I ask my colleague, as one who has worked 6 years on this bill, and who clearly is going to have much to say about changes that will occur in the future, is it the clear position of the distinguished chairman that under no circumstances will there be another blanket amnesty in the future?
The response from the Senator from Wyoming:
I can assure the Senator from Texas that as long as I am involved in it that will be exactly the message that will be sent, that this is it. This is a generous Nation responding; instead of going hunting for you and going through the anguish of that in the cities and communities of America, this is it. It is one time.
The coda:
When Congress enacted the IRCA amnesty programs in 1986 for aliens unlawfully in the U.S., the population of aliens unlawfully in the U.S. was an estimated 3.2 million. In January 2011, that population was an estimated 11.5 million. [Internal citations omitted.] [“Encouraging Lawful Immigration and Discouraging Unlawful Immigration,” by David S. Addington, The Heritage Foundation, March 27, 2013.]
As with the moral hazard created by bailouts, the only way to convince people you won’t reward bad behavior with a second amnesty is to not do it the first time. And the only way to convince people you won’t offer a third amnesty is to not do it the second time.
The states have it in their power to veto ObamaCare. They can do it, says Cato’s Michael Cannon, simply by doing what the law allows them to do: Decline to create a health insurance exchange and decline to expand Medicaid. Under the law, according to Cannon, the individual mandate and the penalty taxes on employers do not operate where a state declines to create a health insurance exchange. Cannon writes:
To date, 34 states, accounting for roughly two-thirds of the U.S. population, have refused to create Exchanges. Under the statute, this shields employers in those states from a $2,000 per worker tax that will apply in states that are creating Exchanges (e.g., California, Colorado, New York). Those 34 states have exempted at least 8 million residents from taxes as high as $2,085 on families of four earning as little as $24,000. They have also reduced federal deficits by hundreds of billions of dollars.
The Obama administration is nevertheless attempting to tax those employers and individuals, contrary to the plain language of the PPACA and congressional intent, and to deny millions of Americans the opportunity to purchase low- cost, high-deductible coverage. Employers, consumers, and even state officials in those 34 states can challenge those illegal taxes in court, as Oklahoma has done. States can also block those illegal taxes—and even stop the federal government from operating an Exchange—by approving a strengthened version of the Health Care Freedom Act.
The PPACA’s Medicaid expansion, which would cost individual states up to $53 billion over its first 10 years, is now optional for states, thanks to the Supreme Court’s ruling in NFIB v. Sebelius. Some 16 states have announced they will not expand their programs, while half of the states remain undecided. Yet the Obama administration is trying to coerce states into implementing parts of the expansion that the Court rendered optional. States can replicate Maine’s lawsuit challenging this arbitrary attempt to limit the Court’s ruling.
Collectively, states can shield all employers and at least 12 million taxpayers from the law’s new taxes, and still reduce federal deficits by $1.7 trillion, simply by refusing to establish Exchanges or expand Medicaid. [“50 Vetoes: How States Can Stop the Obama Health Care Law,” by Michael F. Cannon, The Cato Institute, March 2013]
If governments are doing the bargaining … Reducing trade barriers between the United States and Europe, as President Obama has proposed, can only produce mutual gains for both sides of the Atlantic, right? Economist Pedro Schwartz is skeptical that the effort will really lead to freer markets:
The real obstacles are non-tariff barriers. They would loom large even if all concerned were true friends of free trade. There are genuine differences in property rights protection between the United States and the European Union, especially as regards intellectual property and patents, since the procedures are judge-based in America administrative in Europe. And agreement about accounting standards is still not within reach despite the many years of negotiation. Technical standards differ widely and not all are hidden forms of trade protectionism: examples include differences in data and consumer protection norms, the procedure for the approval of drugs for human use, financial regulations, corporate governance rules, and telecommunications standards, re-export and trade facilitation among many others.
There may be a way to cut through this red tape if there is a will. This way is mutual rule recognition, whereby what is cleared through the proper bodies in America would be automatically accepted in Europe and vice versa. This is what Europeans tried with the Bolkenstein Directive and it has not worked very well among EU States. Is it realistic to expect a better outcome in a future [Transatlantic Trade and Investment Partnership]? […]
Jeremy Bentham, the utilitarian philosopher, used to call pressure groups “sinister” that were always out to defend their privileges under cover of darkness. These groups will use technical hurdles to keep barriers down. And failing that, they will appeal to feelings of fairness and altruism to put genuine reformers in the wrong. Free trade in food will harm the environment. The cinema or education cannot perform their much needed and indispensable role without public subsidy. Public procurement needs to be fair to local firms. National airlines and airports cannot be left in the hands of foreigners for reasons of defense. Complex regulations must govern the medical and legal professions for fear of a fall in quality. There will be a race to the bottom as free trade forces national workers to compete with the underfed and exploited foreign masses whose products unfairly compete away the social conquests of national workers. And failing all that, we can ask our central banks to wage a little currency war. […]
In the end, our hope for free trade lies with the Internet, with anonymous money, with offshore financial centers. The freedom to trade cannot be put in the hands of governments. [Internal citations omitted.] [Library of Economics and Liberty, March 4]
Making history: In Europe, they’re still busy pretending that Cyprus and Greece belong in a currency union with Germany. How long will that illusion last? What will come next? Now is a good to remember that even when the forces of history seem to be roiling political and economic structures, individuals do matter and they can play a surprising role in shaping events. Ron Granieri’s recent essay on the role of Helmut Kohl in German reunification provides just such a lesson. The piece concludes this way:
Bismarck has famously been quoted as saying, “A statesman cannot create anything himself. He must wait and listen until he hears the steps of God sounding through events; then leap up and grasp the hem of his garment.” Some opportunities appear only once, and for a very brief time. German unity was such an opportunity. [Helmut] Kohl represented a generation that considered reunification a natural goal, but that generation was on its way out by 1989. Considering further what happened in the Soviet Union, especially the intense backlash culminating in the 1991 coup attempt, one sees that it was good that Kohl had moved so quickly, because the window of opportunity was very small. What was possible in 1990 had been unthinkable in early 1989, and would have been unthinkable again by the summer of 1991.
German unification should humble all who profess to be able to predict the course of history, and also demonstrates the limitations of a realism that attempts to reduce international and domestic politics to the sum of external structures. Structures may indeed strongly shape reality, but they alone are not enough. It takes people to give them meaning. The Cold War did not end because the superpowers said so. Or rather, what the superpowers meant by the end of the Cold War would have left the Berlin Wall standing, and a great many other walls besides. It took people with imagination to grasp the possibilities, not simply to end, but to transcend the Cold War.
The fall of the Berlin Wall and the end of communism in Europe is a story full of fascinating characters. They include a man in Rome, born in Cracow with a kindly smile and an iron will; another in Moscow who risked the fate of an empire, and lost, to win a victory for humanity; two men in Washington, mocked as an “amiable dunce” and a “wimp,” who showed both skill and empathy in dealing with friends old and new; and the ponderous, slow-talking man in Bonn who grasped the opportunity to unite his divided nation.
But it is not enough to focus only on the powerful. It was the people in their broadest sense that made this history possible, often in the face of criticism from experts who clucked and told them that they needed to accept the permanence of concrete realities. They are the thousands of individuals who marched together for freedom in Leipzig, Dresden, East Berlin, and other German cities and towns, as well as thousands more in Prague, Warsaw, Vilnius, Kiev, and even Moscow. We do not know their names, but we know what they accomplished. By tearing down a hateful monument to dictatorship, they helped build a better world. [“The Fall of the Berlin Wall, the Power of Individuals, and the Unpredictability of History,” by Ronald J. Granieri, Foreign Policy Research Institute, March 2013.]
Green investments are not producing a return. The folks who thought “they were going to strike it rich off the backs of consumers and taxpayers with green energy subsidies and mandates, federal loan guarantees, and the higher energy prices that would make renewable energy competitive with coal, oil, and natural gas once cap-and-trade was enacted” are disappointed with the state of green energy investments. Myron Ebell takes note of the Wall Street Journal’s special report on last week’s “ECO:nomics—Creating Environmental Capital” conference in California:
The lead article by John Bussey was headlined: “Green Investing: So Much Promise, So Little Return: At The Wall Street Journal’s ECO:nomics conference, the talk was about all the innovations taking place in renewable energy—and about all the investors who are losing interest.”
Bussey writes: “Given all the interest in protecting the environment from mankind’s rapid advance, you’d think this might be the best time ever to invest in renewable energy and the Next Big Green Thing. Guess again. Large parts of green-tech investment look like the torched and salted fields left behind by Roman conquerors: barren, lifeless—and bereft of a return on capital. Put another way: In some areas, if you aren’t already investor road kill, you’re likely the hedgehog in the headlights about to join your maker.”
On page two, an article on a talk by John Dears, chief investment officer of the California Public Employees’ Retirement System (or Calpers), reveals that their “fund devoted to clean energy and technology which started in 2007 with $460 million has an annualized return of minus 9.7% to date.” Dears is quoted as telling the conference: “We have almost $900 million in investment expressly aimed at clean tech. We’re all familiar with the J-curve in private equity. Well, for Calpers, clean-tech investing has got an L-curve for “lose.” Our experience is that this has been a noble way to lose money.” [Global Warming.org, March 27]
ObamaCare will raise health insurance premiums. The consulting firm Milliman for Covered California, which is charged with setting up California’s new health insurance exchanges, has a new report on how ObamaCare will affect health insurance premiums, reports the Wall Street Journal:
The report estimates that for currently insured people whose income is too high to qualify for subsidies, premiums could go up 30% on average next year, though part of that rise would be due to health-care cost inflation, not the law. […]
The law’s changes to the individual health-insurance market could cumulatively push up premium rates in California by 14%, on average, it suggests. That includes the effect of the ban on setting premiums or denying coverage based on a consumer’s previous health history.
The report says average premiums could go up about 17%, before accounting for subsidies, because consumers will be getting more generous coverage. The law includes requirements that health plans cover certain benefits and limit out-of-pocket charges such as deductibles—tweaks that lead to richer plans with fewer fees for care, but also push up premiums.
The report projects a roughly 9% premium increase due to rising health-care costs not connected to the law. [Wall Street Journal, March 28]
The Journal reporter points out that ObamaCare will lower the out-of-pocket costs for some people because the law’s subsidies will more than offset the increase in premiums. Another way of making that point would be to say that ObamaCare will increase out-of-pocket costs above and beyond the increase in health insurance premiums for some people, because they’ll have to pay the higher taxes that will fund the law’s subsidy programs.
ObamaCare’s exchanges cost a lot to create. California has received $910 million in federal grants to create a new health insurance exchange under the Affordable Care Act (AKA, ObamaCare), according to data compiled by the Kaiser Family Foundation. The exchanges are supposed to make it easy for consumers to buy health insurance online. As Rob Laszewski points out, the start-up costs just for California’s exchange will dwarf those of some major private-sector web businesses:
In total, according to Kaiser’s figures, the federal government has granted states $3.4 billion this year to create health insurance exchanges under ObamaCare.The California exchange, “Covered California,” has so far awarded a $183 million contract to Accenture to build the website, enrollment, and eligibility system and another $174 million to operate the exchange for four years.
The state will also spend $250 million on a two-year marketing campaign. […]
Privately funded Esurance began its multi-product national web business in 1998 with an initial $5.5 million round of venture fund investment in 1999 and a second round of $34 million a few months later. […]
Facebook received $13.7 million to launch in 2005. eBay was founded in 1995 and received its first venture money in 1997––$6.7 million. […]
The California Exchange officials also say they need 20,000 part time enrollers to get everybody signed up––paying them $58 for each application. Having that many people out in the market creates quality control issues particularly when these people will be handling personal information like address, birth date, and social security number. California Blue Shield, by comparison has 5,000 employees serving 3.5 million members. [Health Care Policy and Marketplace Review, March 24; h/t Michael F. Cannon, Cato Institute, March 15]
• Find out what the government knows about you when you travel. At noon on April 2, the Cato Institute will host a panel discussing government surveillance of travelers as well as the Transportation Security Administration’s continued refusal to engage in a public comment process for using imaging machines to screen air travelers.
• Law students: Apply now for the Institute for Justice’s 2013 Law Student Conference. The Institute for Justice is one of the premier public interest law firms defending liberty in the courts, and they’ll give away the secrets of their success to select students. The conference will be held July 26 - 28 in Washington, D.C. Don’t miss out on this epic boot camp for future freedom fighters. The application deadline is April 1.
• Learn how to use film to promote the core American value of freedom. The Moving Picture Institute’s Hollywood Career Launch Program places talented young filmmakers with major film production companies to learn about the industry first hand. MPI is accepting applications now on rolling basis for the summer and fall semesters.
• Save the date for the Becket Fund’s annual Canterbury Medal Dinner. The year’s dinner will honor Elder Dallin H. Oaks, a member of the Quorum of the Twelve Apostles of The Church of Jesus Christ of Latter-day Saint. The dinner will be May 16, 2013 at the Pierre Hotel in New York, N.Y.
• Don’t forget to register for Resource Bank 2013, which is April 25 - 26 in Orlando, Florida. It’s your best opportunity every year to share ideas and know-how with hundreds of think tank heads, scholars, and activists for liberty from around the world. New Heritage Foundation President Jim DeMint will be there!
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