The Heritage Insider: Oxfam's bad inequality data, free market is the new normal, heard at the March for Life
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.
January 25, 2014
Latest Studies: 35 new items, including the latest edition of the Friedman Foundation’s ABCs of School Choice, and a Pacific Research Institute report that identifies the real problem with American health care before ObamaCare
Notes on the Week: What that Oxfam report got wrong, free market is the new normal, what they said at the March for Life, and more
To Do: Learn about school choice’s successes
Budget & Taxation
• State Budget Solutions’ Fourth Annual State Debt Report – State Budget Solutions
• The Worst State Budget Gimmicks of 2013 – State Budget Solutions
• Examining the Indiana Business Personal Property Tax – Tax Foundation
Crime, Justice & the Law
• Criminalizing America: How Big Government Makes a Criminal of Every American – American Legislative Exchange Council
• Agenda 2014: Criminal Justice – Georgia Public Policy Foundation
• A Rebuttal to the Attorney General’s Office on Asset Forfeiture – Libertas Institute
Economic Growth
• Most Minimum-Wage Jobs Lead to Better-Paying Opportunities – The Heritage Foundation
Education
• The ABCs of School Choice – Friedman Foundation for Educational Choice
• Agenda 2014: Common Core – Georgia Public Policy Foundation
• Michigan School Privatization Survey 2013 – Mackinac Center for Public Policy
• Does Per-Pupil Spending Matter? – Oklahoma Council of Public Affairs
Elections, Transparency, & Accountability
• McAuliffe vs. Cuccinelli: Virginia Race a Bellwether? – Capital Research Center
Family, Culture & Community
• The War on Women Myth: Pro-Abortion Groups and Others on the Left Keep Trying to Use This Weapon on Opponents—But Is Its Ability to Wound Lessening? – Capital Research Center
• GDP Undervalues the Impact of the Family – Oklahoma Council of Public Affairs
Foreign Policy/International Affairs
• Russia’s Precarious Olympics – American Enterprise Institute
• Turkey at the Crossroads – Hoover Institution
Health Care
• To Buy or Not to Buy: Uninsured Young Adults and the Perverse Economic Incentives of the ACA – American Action Forum
• The Doctor Won’t See You Now – Hoover Institution
• The Broken State of American Health Insurance Prior to the Affordable Care Act – Pacific Research Institute
Immigration
• An Examination of the USCIS Parole-in-Place Policy – Center for Immigration Studies
• China City – Center for Immigration Studies
Information Technology
• The Problem with Net Neutrality – Hoover Institution
Labor
• The Germans are Coming! ... and the UAW is Organizing in Tennessee and Throughout the South – Capital Research Center
Natural Resources, Energy, Environment, & Science
• Greening the Churches: The Role of Left-Wing Foundations in the Rise of Religious Environmentalism – Capital Research Center
Philanthropy
• The Nathan Cummings Foundation: Another Foundation Skews Leftward After Its Benefactor’s Death – Capital Research Center
• The Surdna Foundation Meets Saul Alinsky: Community Organizing in the Era of Obama – Capital Research Center
Regulation & Deregulation
• Three Years of Regulatory Reform: Did the President’s Executive Orders Work – American Action Forum
• Texas’ Competitive Capacity Market – Texas Public Policy Foundation
• The Soft Tyranny Index: A Measure of Government Power to Command the Economy and Erode Liberty – Texas Public Policy Foundation
Retirement/Social Security
• How Are Seniors Spending Their Money? – National Center for Policy Analysis
The Constitution/Civil Liberties
• Harris v. Quinn: An End to the Forced Unionization of Home-Care Workers? – The Heritage Foundation
• Asset Forfeiture in Utah – Libertas Institute of Utah
• Punitive Damages Imposed to Punish Overseas Conduct Are Constitutionally Suspect – Washington Legal Foundation
Transportation/Infrastructure
• Moody Avenue Retrofit: How Portland Spent $52 Million to Make Traffic Worse in the South Waterfront – Cascade Policy Institute
• Why Cities and Counties Should Consider Leaving TriMet – Cascade Policy Institute
Peddling poverty: From the Los Angeles Times, here’s the correction of the week:
A previous version of this post said the 85 richest people owned nearly half of global wealth and the same amount as the bottom half of the population. The 85 richest people are a small part of the wealthiest 1%, which owns 46% of the world’s wealth. The 85 richest people own about 0.7% of the world’s wealth, which is the same as the bottom half of the population. [Los Angeles Times, January 20]
The Times reporter, Jim Puzzanghera, was attempting to write about a recent report from the group Oxfam. But here is another, bigger problem: That particular datum, and much of the Oxfam report, concerns wealth inequality not differences in income or consumption levels. [“Working for the Few: Political Capture and Economic Inequality,” Oxfam, January 20]
Note that a person can have both a great lifestyle and very few assets—if he spends most of what he earns. So comparing asset levels doesn’t directly tell you anything about poverty or inequality of living standards—what people normally think of when they think of economic inequality. And since the poor consume a greater portion of their incomes than the wealthy, Oxfam’s choice of data to compare makes the inequality problem seem bigger than it really is.
If Oxfam had looked at consumption instead of assets, the authors would have had to tell a story of dramatic poverty reduction. The World Bank has estimated that the number of people living in extreme poverty fell from 2 billion in 1990 to 1.3 billion in 2005. Laurence Chandy and Geoffrey Gertz of the Brookings Institution updated the World Bank’s estimate in 2011:
We estimate that between 2005 and 2010, the total number of poor people around the world fell by nearly half a billion people, from over 1.3 billion in 2005 to under 900 million in 2010. Looking ahead to 2015, extreme poverty could fall to under 600 million people—less than half the number regularly cited in describing the number of poor people in the world today. Poverty reduction of this magnitude is unparalleled in history: never before have so many people been lifted out of poverty over such a brief period of time. [“Poverty in Numbers: The Changing State of Global Poverty from 2005 to 2015,” by Laurence Chandy and Geoffrey Gertz, The Brookings Institution, January 2011]
Over 56 million unborn children have been killed since Roe v. Wade in 1973. Forty years ago this week, the Supreme Court ruled that having an abortion is a decision protected by the due process clause of the 14th Amendment to the United States Constitution—which is another way of saying that the Court invented a right that wasn’t actually in the Constitution. On Tuesday, hundreds of thousands of Americans braved sub-20 degree temperatures, high winds, and snow to protest that decision by participating in the March for Life. Here is a report on the event from the National Mall in Washington, D.C.:
For the calculation of the number of abortions since Roe v. Wade, see “56,662,169 Abortions in America Since Roe vs. Wade in 1973,” by Randy O’Bannon [LifeNews.com, January 12].
Some questions and answers about abortion:
Q. Doesn’t a woman have the right to choose?
A. Many women find themselves in complicated, painful situations that leave them with difficult choices. But when we talk about rights, we have to talk about the rights of all people. Every human being has the right to life—before and after birth. Nothing in the Constitution, rightly understood, prevents the government from protecting that right for everyone.
In fact, government has a duty to protect the most vulnerable in society and recognize the inherent value of all human life. We cannot exclude the youngest children from the precious right to life. We should recognize the dignity of every life by ensuring mothers have accurate information and children are welcomed in life and protected in law. […]
Q. How does America compare to other nations in terms of abortion law?
A. The United States is one of only a handful of developed countries in which late-term abortions after 20 weeks—5 months—are allowed. At that stage, the child is capable of feeling pain and women are at increased risk for the negative effects of abortion. The United States—a country founded to protect unalienable human rights—should not deny those rights to the most vulnerable in our society.
More: “How to Speak Up for Life,” The Heritage Foundation, January 21, available at SpeakUp4Life.com.
The really offensive part: Matthew Schmitz: “[Gov. Andrew] Cuomo says pro-life people aren’t welcome in New York. What he really means is that the unborn aren’t welcome. This is the real outrage, one not tied to the controversy of the week but grinding on day after day, year after year.” [First Things, January 21]
Free market is the new normal. The Heritage Foundation hired Stephen Moore this week as its chief economist. Moore has worked for The Heritage Foundation previously, and has also worked for the Cato Institute. He comes back to Heritage from the Wall Street Journal, where he was a member of the paper’s editorial board. At Heritage, Moore will oversee a new yet-to-be-named research center. Noting that Moore’s views are more pro-immigration than Heritage’s, the liberal Talking Points Memo has speculated that the hiring signals a shift at Heritage. But TPM went beyond the immigration issue and called the hire “a potential return to normalcy and respectability for the foundation.” [Talking Points Memo, January 23]
To provide a sense of what such a “return to normalcy and respectability” might entail, we thought it would be helpful to identify some of the key things Moore has written about issues in recent years. Herewith, a Stephen Moore sampler:
On how to make the rich pay their fair share:
The near 100-year history of the tax code teaches this inviolable law of politics: The higher the tax rate, the more tax carve-outs there will be for yacht owners. That is why the rich paid a smaller share of the income tax in the early 1960s when the top tax rate was 91%, and in the 1970s with a 70% rate, than they do today with a 35% rate.
That’s why the flat tax is the fairest tax of all. The combination of a single tax rate with a family-size allowance—shielding, say, the first $35,000 of income for a family of four—ensures that everyone would pay the same marginal tax rate above that level. A family of four with an income of $70,000 would pay an average tax rate of about 8.5%, whereas the members of the Buffett billionaire club would pay 17%. [Wall Street Journal, September 30, 2011]
On Democrat’s promises for future spending cuts:
Perhaps the biggest lie from the Keynesians is the premise that – with so many Americans unemployed – we should delay cuts in spending during this soft patch in the economy and lock in long-term cuts in entitlements in future years, when the economy is growing. This is the Obama pitch. But when have Democrats (or even Republicans for that matter) ever in any of our lifetimes said, “Now is the time to cut spending”? Nancy Pelosi has sprinted to the microphone after every negotiation with Republicans pledging that there would be no cuts in Social Security, Medicare, and Medicaid—not now, not next year, not ever. These are the programs that nearly everyone acknowledges are driving the red ink tsunami, with budgets that are expected to climb to $2.4 trillion from $1.6 trillion this year, and yet they are labeled untouchable by the fiscal doves.
Republicans would be fools to fall for the “spend now, save later” gambit. This is the attitude of a teenage girl roaming the mall with daddy’s credit card. It is a promise never to cut spending. [American Spectator, October 2011]
On stimulating the economy:
Abolishing the income tax. Now that really would be a genuine economic stimulus. [Wall Street Journal, January 9, 2009]
On providing a social safety net:
[W]e have a moral obligation to help our fellow man. It’s always an open question how much of that should fall to private charity and how much should be done through government taxation. That said, the truth is, such safety nets, if focused on the truly needy and designed to rely on modern markets and incentives, would not be costly compared to the immense wealth of our society.
But once such policies are established, going further—taking from some by force of law what they have produced and consequently earned, and giving to others merely to make incomes and wealth more equal—is not justifiable. [American Spectator, April 2012]
On education spending:
[E]ducation is an industry where we measure performance backwards: We gauge school performance not by outputs, but by inputs. If quality falls, we say we didn’t pay teachers enough or we need smaller class sizes or newer schools. If education had undergone the same productivity revolution that manufacturing has, we would have half as many educators, smaller school budgets, and higher graduation rates and test scores. [Wall Street Journal, April 1, 2011]
On labor unions in the auto industry:
[Creating a union at Volkswagen’s Chattanooga plant is] like inserting a cancer cell into a body. That one cancer cell is going to multiply and kill the body. It’s a disruptive influence. […] America is not losing auto jobs. Michigan, Ohio and Indiana are losing auto jobs. I think that, over time, if the UAW is approved, there’s a real risk of the plant leaving [Chattanooga]. [as quoted in “Volkswagen Labor Battle Seen as Pivotal for the South,” by Shelly Bradbury, Chattanooga Times Free Press, January 16, 2014]
On whether there are death panels in ObamaCare:
With 159 new bureaucracies, boards, agencies, commissions, and programs to govern American health care, plus the individual and employer mandates that require specific health insurance policies, Obamacare could be rightly Labeled “government-centered health care.” The government takes primary responsibility for paying health expenses. The government takes primary responsibility for deciding what health care services its citizens are allowed to consume. The government, then, decides whether each individual’s health care is worth the price. This is why the concept of the government “death panel” expresses a fundamental truth about Obamacare. [American Spectator, July-August 2012]
So there you have it: If Stephen Moore’s past writings are any guide, you can expect Heritage going forward to favor lower, flatter taxes; entitlement reforms; cutting government spending as the path to economic growth; checking union power; replacing the public school monopoly with school choice; and trading ObamaCare for consumer empowerment. We, too, call those normal and respectable views.
See also: Rob Bluey’s “WSJ’s Stephen Moore to Join Heritage as Chief Economist,” [The Foundry, January 21] discusses Moore’s new role at Heritage and addresses the few issues where Moore has disagreed with Heritage in the past.
Things you might not have known about the Citizens United decision: If you think all people are sheep, maybe you need new friends.
Public schools create social conflicts. In theory, public schools are supposed to instill a common civic culture in students. But, as the Cato Institute’s new Public Schooling Battle Map shows, public schools are also the source of much conflict over things like curriculum; teaching philosophy; treatment of controversial issues like religion, evolution and creationism, sexuality, particular works of literature; and student rights. Cato’s Battle Map is a compilation of media reports of such schooling conflicts since 2005. You can search the database by type of conflict, state, school district, keyword, or year. Then you can click on the map markers to learn more about each incident.
As you can see from looking at the map there is a lot of conflict over schools. There is more school choice today than ever before, but the traditional public school set-up remains dominant. About 260,000 students participated in school choice voucher or tax-credit programs in 2013. [“Fast Facts on Private School Choice,” Friedman Foundation for Educational Choice, August 2013.] Meanwhile, 3.8 million students attended either charter or magnet schools according to 2011 data. Total enrollment in primary and secondary schools in 2011 was 49.2 million. [Table 108 in Digest of Education Statistics: 2012, National Center for Education Statistics, December 2013]
Thus, the public school set-up—everybody pays for them (via taxes) and students must attend their local school—leaves many parents with no control over their children’s education except trying to influence what the schools do. And different parents want different things from their schools. Cato’s research on this problem raises the question of whether public schools do more good or harm for a democratic society.
The bad news is that the bureaucracy has gotten more efficient. We hear the federal civilian workforce today is no bigger than it was in the 1960s. Meanwhile, the U.S. population has grown about 74 percent since 1960. Are we under-governed compared to 1960?
Not when you consider what those federal workers are doing. As Chuck DeVore points out, the federal government outsources more jobs today than it did in the 1960s, making it less likely that the average federal employee wields a mop and bucket and more likely that he focuses on writing regulations. Indeed, DeVore calculates that the number of federal regulators has grown from 39,595 in 1960 to 137,159 in 2013. Meanwhile, technology has helped the average worker today become three times more productive than the average worker in 1960. That means regulators are likely to be more productive, too.
Indeed, the data show that the federal rule writers are writing rules at a much faster pace:
In the four years from 1960 to 1963, an average of 46,786 regulators produced an average of 13,835 pages in the Federal Register, most of those pages being regulations. This means that an average regulator could churn out roughly 0.30 pages of Federal Register every year. In the four years from 2010 to 2013, it took an average of 132,742 regulators to write 79,723 pages in the Federal Register—or, about 0.60 pages per rules-writing bureaucrat. [Internal citations omitted.] [“The Soft Tyranny Index: A Measure of Government Power to Command the Economy and Erode Liberty,” by Chuck DeVore, Texas Public Policy Foundation, January 2014]
We do wonder though, if the average private sector worker is three times more productive than he was in 1960, why is the average government regulator only twice as productive?
No net neutrality means more innovation for the Internet. The Federal Communications Commission, explains Richard Epstein, should respond to the District of Columbia Circuit Court’s decision striking down the Commission’s net neutrality regulations by doing exactly nothing—because the possibility that cable operators will charge different rates for the transmission of different types of content is not a problem that needs to be fixed:
Federal Express does not have a monopoly in the shipping business. In order to bolster its service, it engages in extensive forms of price discrimination. It lets its customers decide whether they want same-day, one-day, or two-day delivery, and then charges them in accordance with their preferences, with rate differentials that it sets for itself. The upshot is a wide array of services that is only possible when government does not stand between the conception and execution of a planned program. Product and price differentiation improve consumer welfare.
Similar practices have driven success in hotels and airlines. Indeed, the forces of innovation are so great, that it may well be the case that it is better, especially in rapidly evolving industries, to forget the idea of rate regulation altogether, given that future competitors, sensing opportunity, will attack first those market niches where monopoly power still exists. […]
[T]here are certain markets in which some service providers may well possess monopoly power. But for those incursions, net neutrality is still not the answer. Even in the short run, rival plays will seek to steal market share from the monopolist. In the long run, the rapid movement of technology has already left us with a new and vibrant landscape that is light years removed from a generation ago when the major premise of the Telecommunications Act of 1996 was that landlines would continue to hold a monopoly position for years to come—about two years, in fact. That false premise led to extensive regulatory battles over all the interchange relations between local exchange carriers and long line carriers. But the rise of cell phones and VoIP technology changed all that, so that the regulation did much to hamper innovation, but virtually nothing to protect consumers. [Defining Ideas, January 20]
Interesting people we met in beautiful and balmy Myrtle Beach last weekend at the South Carolina Tea Party Convention:
• Alice Linahan from Women on the Wall. She is the creator of the #CANiSEE project, which recruits parents to become involved with their children’s education by asking: Can I see what you are teaching my child? Can I see how you are teaching my child? Can I see who is benefiting financially from the curriculum being used?
• Debbie Dooley from Tea Party Patriots in Georgia, who is an excellent speaker on how to hold your legislators to their campaign promises.
• Jude Eden, a former marine who gives a contrarian view of women in the military and other topics at PoliticalAnimalblog.com.
• Ben Smith, a former Navy Seal and founder of Helping Our Warriors Foundation, an organization devoted to helping soldiers transition back into civilian life.
Joe Dugan, Ron Hughes, and the Myrtle Beach Tea Party put on a fun and informative event! You can view some of the speeches on the Tea Party Patriots website!
• Learn how school choice is helping students. This coming week is National School Choice Week, and hundreds of participating organizations around the country will host events. You can find events in your area at SchoolChoiceWeek.com. One option is to check out Bob Bowdon’s new film The Ticket: The Many Faces of School Choice, which is being screened by a number of organizations, including the Nevada Policy Research Institute (January 28 in Las Vegas), the Platte Institute (January 29 in Omaha), the Rio Grande Foundation (January 29 in Albuquerque), and the Mackinac Center (January 30 in Birmingham, Michigan).
• Examine the supply side of the education market. The American Enterprise Institute will host a conference looking at how school choice can be made more effective by reforming constraints on the supply of high-quality private schools. The conference will begin at 9 a.m. on January 30 at AEI headquarters in Washington, D.C.
• Find out how economic freedom leads to better health care, education, and environmental results. The Heritage Foundation will host a discussion featuring Donald Boudreaux, economics professor at George Mason University. The discussion will begin at 11 a.m. on January 27.
• Learn how natural rights philosophy forms the foundation of The United States Constitution. Timothy Sandefur will be at the Cato Institute to talk about his new book The Conscience of the Constitution: The Declaration of Independence and the Right to Liberty. Sandefur’s talk will begin at noon on January 30.
• Help welcome the Foundation for Individual Rights in Education to Washington, D.C. FIRE is opening an office in the District of Columbia, and the Reason Foundation is throwing them a happy hour party—at Reason’s DC headquarters, of course. Virginia Postrel will be there, too. The party will begin at 6 p.m. on January 28.
• Inspire, educate, and connect with the next generation of leaders for liberty. The Foundation for Economic Education’s Inspire, Educate & Connect Summit will equip you with the foundational principles of freedom and entrepreneurship. The Summit will be held in sunny Naples, Fla., on February 1.
• Apply for a Robert Novak Journalism Fellowship. The program allows working journalists to pursue a journalism project of their choosing that supports American culture and a free society. Fellowships of up to $50,000 are available. Applications will be accepted up to February 11.
Save the date: Join leaders in the conservative movement for The Heritage Foundation’s 2014 Resource Bank Meeting, March 26 – 28, 2014, in New Orleans. Resource Bank is a must-attend conference of today’s top conservative leaders—policy experts, think tank CEO’s, activists, and donors—filled with strategy sessions, networking, coalition building, and policy collaboration.
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