The Heritage Insider: Someone wants to make your Thanksgiving annoying, FDA v. First Amendment, economic freedom is an anti-poverty agenda, and more
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.
November 27, 2013
Latest Studies: 26 new items, including a Heartland Institute report on the benefits of fracking, and a John Locke Foundation plan for free market health care reform
Notes on the Week: Someone wants to make your Thanksgiving annoying, FDA v. the First Amendment, economic freedom is an anti-poverty agenda, and more
To Do: Discover why we’ve got things as good as we do
Budget & Taxation
• Have the MBTA's Retirement Plans Gone Off the Rails? – Pioneer Institute for Public Policy Research
Crime, Justice & the Law
• Criminal Justice Policy in New Mexico: Keys to Controlling Costs and Protecting Public Safety – Rio Grande Foundation
Economic Growth
• Economic Freedom of the Arab World: 2013 Annual Report – Fraser Institute
• Government-Financed Employment and the Real Private Sector in the 50 States – Mercatus Center
Education
• Vocational Education 2.0: Employers Hold the Key to Better Career Training – Manhattan Institute
Foreign Policy/International Affairs
• Morocco: A Critical U.S. Ally in North Africa – The Heritage Foundation
• The Eurasian Union: Undermining Economic Freedom and Prosperity in the South Caucasus – The Heritage Foundation
• A Foreign Policy for the Future – Hoover Institution
Health Care
• How Obamacare Undermines American Values: Penalizing Work, Marriage, Citizenship, and the Disabled – The Heritage Foundation
• Redistribution of Health – John Locke Foundation
• A Conspiracy Against Obamacare: The Volokh Conspiracy and the Health Care Case – MacMillan Books
Information Technology
• Cooperative Federalism and the IP Transition – Free State Foundation
• Inequities in Texas Telecom Taxation – National Center for Policy Analysis
Labor
• Obamacare and a Minimum Wage Hike Pricing Many Unskilled Workers Out of Their Jobs – The Heritage Foundation
• Increasing the Minimum Wage Does More Harm Than Good – Show-Me Institute
Monetary Policy/Financial Regulation
• The New Autarky? How U.S. and UK Domestic and Foreign Banking Proposals Threaten Global Growth – Cato Institute
• Janet Yellen’s Challenge – Hoover Institution
Natural Resources, Energy, Environment, & Science
• Hydraulic Fracturing: A Game-Changer for Energy and Economies – Heartland Institute
• Loaded DICE: An EPA Model Not Ready for the Big Game – The Heritage Foundation
• Necessary Reforms in the Water Resources Development Act Conference Bill – The Heritage Foundation
• Can We Put a Price on Nature? – National Center for Policy Analysis
The Constitution/Civil Liberties
• Obamacare’s Abortion Surcharge and Taxpayer Funding of Abortion Coverage – The Heritage Foundation
• Obamacare’s Potential New Funding Streams for Abortion Providers – The Heritage Foundation
• Senate Joint Resolution 12: Sanctioning Racial Discrimination in Hawaii – The Heritage Foundation
Transportation/Infrastructure
• Transport Infrastructure: Adding Value – Institute of Economic Affairs
Welfare
• The 2013 Index of Dependence on Government – The Heritage Foundation
Just in case your Thanksgiving doesn’t usually include discussion of annoying subjects: ObamaCare is not only taking over much of health care, it’s taking over Thanksgiving dinner, too. The group Organizing for America has launched a campaign, complete with creepy video, to get Americans to needle their family members over the holidays about signing up for insurance. In the video, a young adult experiences that needling at the hands of his parents.
Young adults are the target for the message that getting insurance is a good idea. That’s probably because it is in fact not such a good idea for them. ObamaCare is less a way of providing insurance than a way of cross-subsidizing health care for older Americans at the expense of younger Americans. Insurers cannot charge different rates based on health condition. Many services have to be covered, regardless of whether the insured wants them or is likely to need them. That means premiums are going up for everybody, but especially younger Americans.
According to calculations by Drew Gonshorowski, in all but five states Americans will pay more for health insurance premiums in the ObamaCare exchanges than they had paid in the individual health insurance market. And in 34 states, the increases experienced by those who are age 27 are greater than the increases experienced by those who are age 50. [“How Will You Fare in the Obamacare Exchanges,” by Drew Gonshorowski, The Heritage Foundation, October 16]
Of course, young Americans could be eligible for subsidies. At the same time, by not signing up, they theoretically face a tax penalty. Yet, many young American will still come out ahead by not signing up. David Hogberg calculates that over 3 million young people would save $1,000 per year by paying the fine instead of buying a bronze plan from the exchanges. [“Why the ‘Young Invincibles’ Won’t Participate in the Obamacare Exchanges and Why It Matters,” by David Hogberg, National Center for Public Policy Research, August 2013]
And don’t forget, thanks to ObamaCare’s insurance regulations, insurers can’t turn you down. So why wouldn’t young Americans just wait till they get sick and then sign up? Maybe OFA wants to make them sick of their parents bugging them.
Here’s the ObamaCare conversation starter we really need: ObamaCare’s stumbles aren’t just a failure of government experts to design a program that makes sense and works. They are, as Peter Boetke points out, part of a pattern of government failure that arises whenever we rely on government experts to plan things that no set of government experts can plan because they cannot gather in one place all the knowledge they would need to improve on market (or in the case of health care, hybrid market-government) outcomes:
It is human arrogance and human opportunism with guile that gets us all the time in our efforts to pursue idealized plans for public management of economic and social affairs with the purpose of human betterment. And this isn’t just a matter of slouching toward a solution. Arrogance and opportunism have huge costs in terms of money and lives, and very few benefits in terms of devising better solutions.
Any governmental plan that exhibits the arrogance of the pretense of knowledge, and unleashes opportunities for the most opportunistic of us to benefit at the expense of others, must be resisted and ultimately rejected as an approach to public policy. We need a stronger filter on policies within the given structure of government – e.g., a generality norm – but more importantly we need to make sure the structure of governance is such that we do not ask the government and its officers to do things that they are incapable of doing. We need to address not only questions of the size of government, but more importantly the responsibilities of government.
What better time to start this conversation than now? [Coordination Problem, October 31]
If this theme of questioning the scope of responsibilities we give government sounds familiar to you, then perhaps you read Peter Boetke’s article in our Summer 2013 issue of The Insider: “Why Does Government Overspend? Because It Has Too Much Power.” If you haven’t read it yet, what better time than now?
ObamaCare will kill jobs. President Obama and some Members of Congress want to raise the federal hourly minimum wage to $10.10 per worker. But as James Sherk and Patrick Tyrrell note, ObamaCare has already raised the effective minimum wage:
Obamacare requires many employers with 50 or more employees to offer qualifying health coverage to their full-time workers. This health coverage is expensive. In 2015, it will add $2.24 per hour to the cost of employing a worker with single coverage. Those that do not provide coverage face a fine of $2,000 per employee per year (after the first 30 workers) that comes out of after-tax dollars. This equates to a $3,279 increase in pre-tax payroll costs—$1.64 per hour. The Administration has delayed the mandate’s implementation until 2015. When it takes effect, it will increase the cost of hiring unskilled workers.
These costs are on top of other government mandates. Businesses must also pay the minimum wage, the employer share of payroll taxes, and unemployment insurance (UI) taxes. Normally, businesses defray these costs by reducing workers’ wages by an offsetting amount. However, employers cannot reduce the pay of minimum-wage employees, so they must pay these payroll costs themselves or forgo hiring. […]
Full-time employees with qualifying health benefits will cost their employers at least $10.92 per hour (with single coverage). Employers who opt to pay the penalty instead will nonetheless pay at least $10.30 per hour for labor. [Internal citations omitted.]
Sherk and Tyrell calculate that if the hourly minimum wage were raised to $10.10, employers would actually face costs of $13.27 per hour per full-time employee if they provide health insurance coverage. Those that choose to pay the penalty would still face hourly per-employee costs of $12.71.
One way for businesses to respond to those higher costs is to raise prices and reduce output, which means fewer jobs. Or businesses could substitute capital for labor—e.g., put robot hamburger makers to work. Another problem:
Employers can further avoid the penalty for [not providing health insurance] by cutting employees’ hours below 30 per week. Under Obamacare, that qualifies employees as part-time workers and exempts their employers from the penalty. Many firms have already announced plans to cut hours below the Obamacare threshold. [The Heritage Foundation, November 22]
The world needs more free market competition, not less. Pope Francis is no fan of free markets, we learn this week from his Evangelii Gaudium. In particular he writes:
Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape.
What’s actually going on is pretty much the opposite of what the Pope thinks. Earlier this year, Economist reported:
In 1990, 43% of the population of developing countries lived in extreme poverty (then defined as subsisting on $1 a day); the absolute number was 1.9 billion people. By 2000 the proportion was down to a third. By 2010 it was 21% (or 1.2 billion; the poverty line was then $1.25, the average of the 15 poorest countries’ own poverty lines in 2005 prices, adjusted for differences in purchasing power). The global poverty rate had been cut in half in 20 years. [Economist, June 1; h/t: Matt Welch at Reason, November 26]
We don’t know any place on the planet where “everything comes under the laws of competition and the survival of the fittest,” but nobody should doubt that freer markets do better job of lifting the people out of poverty than less free economic systems. Consider this graph from The Heritage Foundation/Wall Street Journal Index of Economic Freedom:
The Iran deal will make future bargaining harder. On Sunday, the United States and Iran announced an agreement over Iran’s nuclear program. The Iranians are happy with the deal, but Israel and Saudi Arabia are not. James Phillips explains why that might be:
The agreement will marginally slow, but not halt, Iran’s nuclear efforts. It has been incorrectly described as a “freeze,” but many elements of Iran’s nuclear program will continue. Iran is allowed to enrich uranium, despite the fact that this explicitly violates U.N. Security Council resolutions. Tehran pledged to halt uranium enrichment above the 5 percent level appropriate for power reactors.
But the agreement does nothing to reduce Iran’s stockpile of low enriched uranium, ostensibly meant for its nuclear power reactor at Bushehr, despite the fact that reactor will be fueled by the Russians for at least 10 years anyway. […]
This is a flawed deal that risks reducing sanctions pressure on Iran over the next six months in return for easily reversible Iranian pledges, some of which Iran has given before but subsequently reneged on. The nuclear deal requires Iran to curb some, but not all, of its nuclear activities in return for about $7 billion in sanctions relief over six months. The problem is that easing sanctions will make the final step harder. To force Tehran to make the necessary deeper concessions in a final deal, more sanctions are required. But the deal commits the Administration to refrain from imposing more sanctions over the next six months. [The Foundry, November 26]
The agreement does send a message, says Victor Davis Hanson:
The president’s dismal polls are only a multiplier of that general perception abroad that foreign policy is an auxiliary to fundamental transformation at home, useful not so much to create international stability per se, as to enhance Obama influence in pursuing his domestic agenda. Collate reset, lead from behind, “redlines,” “game-changers,” ”deadlines,” the Arab Spring confusion, the skedaddle from Iraq, Benghazi, the Eastern European missile pullback, and the atmosphere is comparable to the 1979–80 Carter landscape, in which after three years of observation, the opportunists at last decided to act while the acting was good, from Afghanistan to Central America to Tehran.
There is not a good record, from Philip of Macedon to Hitler to Stalin in the 1940s to Carter and the Soviets in the 1970s to radical Islamists in the 1990s, of expecting authoritarians and thugs to listen to reason, cool their aggression, and appreciate democracies’ sober and judicious appeal to logic—once they sense in the West greater eagerness to announce new, rather than to enforce old, agreements. [National Review, November 24]
The Food and Drug Administration now wants to regulate the sharing of genetic information—in other words, free speech. For several years up until this week, the company 23andMe had been selling kits that allow consumers to take their own DNA samples at home and then mail them in for testing that will identify genetic risks for certain diseases and conditions. This week, the Food and Drug Administration informed the company that it can no longer sell the kits because the agency considers them unapproved medical devices.
The FDA claims its wants to make sure consumers aren’t being given inaccurate information about their genetic risks. What it’s really doing, says Alex Tabarrok, is unconstitutionally preventing individuals from receiving information about their own bodies:
[T]he FDA wants to judge not the analytic validity of the tests, whether the tests accurately read the genetic code as the firms promise (already regulated under the CLIA [Clinical Laboratory Improvement Amendments]) but the clinical validity, whether particular identified alleles are causal for conditions or disease. The latter requirement is the death-knell for the products because of the expense and time it takes to prove specific genes are causal for diseases. Moreover, it means that firms like 23andMe will not be able to tell consumers about their own DNA but instead will only be allowed to offer a peek at the sections of code that the FDA has deemed it ok for consumers to see.
Alternatively, firms may be allowed to sequence a consumer’s genetic code and even report it to them but they will not be allowed to tell consumers what the letters mean. Here is why I think the FDA’s actions are unconstitutional. Reading an individual’s code is safe and effective. Interpreting the code and communicating opinions about it may or may not be safe—just like all communication—but it falls squarely under the First Amendment.
Tabarrok also notes that the only way of discovering and validating connections between genes and diseases is to collect genetic data from a very large number of people—precisely what the FDA is now telling 23andMe that it can’t do. “There are some 7,000 known diseases and only about 500 have a treatment. Individual and disease heterogeneity is so large that even the diseases that we can treat are often not treated well. New approaches are necessary for progress.” [Marginal Revolution, November 26]
The ways of power: Reflecting on the recent death of Jennifer Lynch, the Chief Commissioner of the Canadian Human Rights Commission and the chief antagonist against his free speech rights, Mark Steyn points to a fundamental lesson about government power:
Ms. Lynch lamented the “completely unbalanced” discussion in which she was cast as the Queen Censor, or even the Chief Commissar.
How odd to hear the head of a state agency whose principal purpose is to label citizens – Racist! Sexist! Homophobe! Islamophobe! – object to being labeled herself. I’m proud to say I gave her both names, and made a point of referring to her as “Commissar Lynch” in Canadian media appearances. We never met, mainly because she didn’t want to and went to great lengths to avoid my company. Nevertheless, we had several mutual friends, who told me that Jennifer was a decent, well-meaning sort who was simply in a mess not of her making. I don’t doubt it. When the Canadian thought police began their campaign against me and Ezra Levant, a number of outraged American readers wrote to me, saying, “You need to start kicking up a fuss about this, Steyn, and then maybe Canadians will get mad and elect a conservative government that will end this nonsense.” Made perfect sense. Except that Canada already had a Conservative government, under a Conservative Prime Minister, with a Conservative Justice Minister, who had appointed a Conservative to serve as the very head of the “human rights” commission investigating me: Jennifer Lynch. Ms Lynch had been Chief of Staff to Joe Clark, a former Conservative (after a fashion) Prime Minister. But, as a current cabinet minister once remarked to me, when an incoming Conservative ministry takes over the reins of Big Government, there are thousands and thousands of positions to fill in the bureaucracy, and nowhere near enough reliable Conservatives to fill them. So you find who you can, and the bureaucracy trundles on regardless. As I say somewhere in After America, you don’t need a president-for-life if you’ve got a bureaucracy-for-life. Jennifer Lynch, garlanded with every bauble the Canadian state could confer (the Queen’s Golden Jubilee Medal, etc), was the sort of person a government turns to fill all these posts. I’m sure she was decent and well-meaning and pleasant and likeable, but she put her fine qualities in the service of a squalid and corrupt regime whose practices could not survive the light Ezra and others shined on them. [SteynOnline, November 27]
Conservatives aren’t changing anything if they just win elections in order to put different people in control of the same levers of power. The bureaucracy will always tempt its appointees, even the conservative ones, to the dark side; and many appointees arrive there not even realizing they now work for evil ends.
• Learn how most of humanity has escaped grinding poverty and early death. Angus Deaton will talk about his new book The Great Escape: Health, Wealth, and the Origins of Inequality at the Cato Institute at noon on December 3.
• Take in a “gripping, heart-wrenching look at the risks North Koreans are willing to endure to escape a despotic regime to reach freedom.” The Heritage Foundation will screen The Defector: Escape from North Korea, at 5:30 p.m. on December 5.
• Get the latest ideas on reforms in the states. The American Legislative Exchange Council’s 2013 States & Nation Policy Summit begins December 4 at the Grand Hyatt in Washington, D.C.
• Find out how economists are integrating cultural data into their analyses. Jonah Goldberg will moderate a panel discussion on the intersection of economics and culture. The discussion will begin at noon on December 6 at the American Enterprise Institute.
• Nominate a freedom champion for a Milton Friedman Prize. The Cato Institute gives the award every other year to “an individual who has made a significant contribution to advance human freedom.” The winner not only gets a $250,000 cash prize, but also feted at a dinner at the Waldorf-Astoria Hotel, to be held in May 2014. Nominations are due by December 31, 2013.
• Save the date for Resource Bank 2014: March 26 – 28 at the Sheraton New Orleans.
• Have a wonderful Thanksgiving!
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
Comments
Post a Comment