The Heritage Insider: Closing the Export-Import Bank would eliminate corruption without costing jobs, Jack Templeton was curious about the sources of our freedoms, and more

May 23, 2015

Latest Studies
34 new items, including the Reason Foundation’s privatization updates, and a Wisconsin Policy Research Institute report on the real impacts of prevailing wage laws

Notes on the Week
Closing the Export-Import Bank would eliminate corruption without costing jobs, Jack Templeton was curious about the sources of our freedoms, and more

To Do
Discover what’s at stake in the Iran deal

Latest Studies

Budget & Taxation
• Tax and Spending Reform for Fiscal Stability and Economic Growth – American Enterprise Institute
• An Alternative Budget: Response to the Governor's Proposed Budget for the Upcoming Biennium – John Locke Foundation
• Annual Privatization Report 2015: Federal Government Privatization – Reason Foundation
• Annual Privatization Report 2015: State Government Privatization – Reason Foundation
• Real-World Impacts of Prevailing Wage: 5 Stories from around Wisconsin – Wisconsin Policy Research Institute

Crime, Justice & the Law
• Annual Privatization Report 2015: Criminal Justice and Corrections – Reason Foundation

Economic Growth
• The “Income Inequality” Warriors – Hoover Institution
• The Seeds of IP Policy: A Growing Agricultural Success Story – Institute for Policy Innovation
• A Walkthrough of Gross Domestic Income – Tax Foundation

Education
• Rethinking the Regulatory Environment of Competency-Based Education – American Enterprise Institute
• The Paperwork Pile-Up: Measuring the Burden of Charter School Applications – American Enterprise Institute
• School Tax Growth Sinks Under Cap – Empire Center for Public Policy

Family, Culture & Community
• Fragmented Families and Silence of the Faithful: How Religious Leaders and Institutions Must Speak Up and Reach Out – Center of the American Experiment

Health Care
• Rational Rollout of New Medicines for Diseases of Poverty – American Enterprise Institute
• Fifty Changes to ObamaCare … So Far – Galen Institute
• The Alternative to Physician-Assisted Suicide: Respect Human Dignity and Offer True Compassion – The Heritage Foundation
• The New Disease Classification (ICD-10): Doctors and Patients Will Pay – The Heritage Foundation
• Certificate-of-Need Laws: Implications for Michigan – Mercatus Center
• Electronic Distribution of Prescribing Information for Human Prescription Drugs, Including Biological Products – Mercatus Center
• How the Affordable Care Act Empowers HHS to Cartelize the Health Care Industry – Mercatus Center
• Consumer-driven Health Plans for State Employees – Texas Public Policy Foundation

Information Technology
• Regulating Interconnection (Lightly!) – Free State Foundation
• You Don’t Need the FCC: How the FTC Can Successfully Police Broadband-Related Internet Abuses – The Heritage Foundation

National Security
• 68th Terrorist Plot Calls for Major Counterterrorism Reforms – The Heritage Foundation
• Section 215 of the PATRIOT Act and Metadata Collection: Responsible Options for the Way Forward – The Heritage Foundation

Natural Resources, Energy, Environment, & Science
• Seven Objectives for Effective and Productive Energy Legislation in 2015 – The Heritage Foundation

Regulation & Deregulation
• The U.S. Department of Stagnation? – Hoover Institution
• Drinking, Fast and Slow: Ten Years of the Licensing Act – Institute of Economic Affairs
• Business Perceptions of the Economic Impact of State and Local Government Regulations – Kansas Policy Institute

Transportation/Infrastructure
• Annual Privatization Report 2015: Air Transportation – Reason Foundation
• Annual Privatization Report 2015: Surface Transportation – Reason Foundation
• Annual Privatization Report 2015: Transportation Finance – Reason Foundation
• Improving Airport Funding to Meet the Needs of Passengers – Tax Foundation

Welfare
• Poverty and Welfare in the American Founding – The Heritage Foundation

Jobs won’t be lost if Export-Import Bank closes. The idea that not extending the Export-Import Bank will lead to American job losses is nothing more than fear mongering. The chart below shows that the companies benefiting from Export-Import bank financing have backlogs of orders that will take years to fill and dwarf the benefit they receive from Export-Import Bank financing.

thf 2015-05-23 insider EximBacklogs.png

This chart was produced by Veronique de Rugy and Diane Katz, who write:

The expiration of the Ex-Im Bank charter will have no effect—none—on the financing of deals that already have been approved. The bank will simply be unable to extend new loans, which would be a win for taxpayers who are ultimately on the hook for a total of $140 billion if bank reserves fail to cover defaults.

Absent subsidies from the Ex-Im Bank, these corporations have production backlogs that will take years to fulfill—some with Ex-Im Bank financing in place and others without. This means that shutting down the Ex-Im Bank will not result in job losses—except, perhaps, among the ranks of lobbyists who are trying to scare members of Congress into maintaining this fount of corporate welfare. [Mercatus Center, May 21]

The Export-Import Bank is corporate welfare. Daniel Ikenson:

U.S. trade promotion agencies are in the business of promoting exports, not trade in the more inclusive sense. That is worth noting because despite some of the wrongheaded mercantilist assumptions undergirding U.S. trade policy—that exports are good and imports are bad—the fact is that the real benefits of trade are transmitted through imports, not through exports.

In keeping with the conventional wisdom, in January 2010 President Obama set a national goal of doubling U.S. exports in five years. Prominent in the plan was a larger role for government in promoting exports, including expanded nonmarket lending programs to finance export activity, an increase in the number of the Commerce Department’s foreign outposts to promote U.S. business, and an increase in federal agency-chaperoned marketing trips.

But the [National Export Initiative] neglected a broad swath of worthy reforms by ignoring the domestic laws, regulations, taxes, and other policies that handicap U.S. businesses in their competition for sales in the U.S. market and abroad. For example, nearly 60 percent of the value of U.S. imports in 2014 consisted of intermediate goods, capital goods, and other raw materials—the purchases of U.S. businesses, not consumers. Yet, many of those imports are subject to customs duties, which raise the cost of production for the U.S.-based companies that need them, making them less competitive at home and abroad. U.S. duties on products like sugar, steel, magnesium, polyvinyl chloride, and other crucial manufacturing inputs have chased companies to foreign shores—where those inputs are less expensive—and deterred foreign companies from setting up shop stateside.

Policymakers should stop conflating the interests of exporters with the national interest and commit to policies that reduce frictions throughout the supply chain—from product conception to consumption. Why should U.S. taxpayers underwrite—and U.S. policymakers promote—the interests of exporters, anyway, when the benefits of those efforts accrue, primarily, to the shareholders of the companies enjoying the subsidized marketing or matchmaking? There is no national ownership of private export revenues. [Cato Institute, May 22]

There is corruption in Export-Import Bank lending. The Export-Import Bank provides taxpayer-supported financing that benefits big corporations. Not only that, some of that financing is obtained fraudulently. Here is a look at how much fraud is going on in the Export-Import Bank:

thf 2015-05-23 insider ExportImportCorruption.jpg

Jack Templeton, R.I.P. Jack Templeton died last Saturday at the age of 75. Under his direction, the Templeton Foundation, founded by his father, John, became one of the biggest givers to efforts to promote free enterprise and liberty around the world. Alejandro Chafuen remembers how Templeton’s curiosity about the big questions in life guided his philanthropic work:

His vision of freedom was inspired by that of the Founding Fathers of the United States. Dr. Templeton was convinced that having a good understanding of human nature is an essential aspect of all social sciences and the best guide for public policy. In promoting free enterprise and the principles of the free society, he quoted the Founding Fathers more than the great classical liberal economists. He found that, except for Adam Smith, especially in his Theory of Moral Sentiments, the vision of the human being promoted by free-market economists tends to be very limited and narrow. The drama, the conflict, the potential for evil as well as for good moral acts, the role of passion, as well as the relevance of virtues and vices, tends to get lost in simplistic arguments and in a “know it all” attitude.

He noted that during the periods when free enterprise developed and became respected as the road to prosperity, the focus of writers, such as the Founding Fathers, was on human freedom rather than on capital. Is the current decline of economic freedom and the rule of law in the United States rooted in a misunderstanding of human nature? This and other Big Questions fascinated Dr. Templeton. The motto of the foundation he led is “how little we know, how eager to learn.” It was natural for him to have an eagerness to ask big questions as a path to new knowledge. Those who were not aware of this were usually intimidated or surprised by his queries. Dr. Edwin J. Feulner, former president of the Heritage Foundation, recently remarked that, in meeting with him, “when some of us thought we had a chance to speak about our projects he would change topics and ask us: are humans inherently good?” [Forbes, May 19]

Kasparov on the importance of always having a goal: Garry Kasparov tells St. Louis University’s class of 2015 how he became a chess champion and then a champion of human rights and democracy around the world:

Toolkit: Don’t get stuck in your booth. If you’re like us, you attend a few conferences every year; and when you do it usually involves manning a booth to promote your organization’s work. As Amy Armstrong points out, however, there are things you can do outside the booth space to promote your organization. Here is one idea:

Talk to your marketing staff to create a company app that is either company-related or tied into the trade show or event at which you are exhibiting. At the very least, be sure to promote using Facebook, Twitter, Instagram, or LinkedIn. All of these platforms are great for live updates during the show. LinkedIn and Twitter are proven to be the best social media platforms to promote yourself while at the event, so don’t let them be silent. LinkedIn is a great way to get professional attention!

For more ideas, see Armstrong’s article “Think Outside the Box! 5 Ways to Promote Beyond Your Booth Space.” [Skyline Trade Show Tips, April 2]

Remember those who sacrificed to keep us free. Tony LoBianco performs a poem in tribute to American soldiers:

If you like this video, consider taking a moment to visit justacommonsoldier.com. The producers of the video would like to reach 21 million views by Veterans Day, November 11—to match the estimated 21 million living veterans.

To Do: Discover What’s at Stake in the Iran Deal

• Assess President Obama’s proposed deal with Iran. Efraim Inbar of the Begin-Sadat Center for Strategic Studies at Bar-Ilan University will give a talk on the potential consequences of a deal that removes all nuclear sanctions against Iran within 15 years. Inbar will speak at the Hudson Institute in Washington, D.C., at noon on May 26. [Hudson Institute]

• Celebrate the America’s Future Foundation’s work building the liberty movement. This year’s AFF Gala will commemorate the organization’s 20th anniversary. The festivities will begin at noon on May 27 with a luncheon followed by a conference at the National Press Club in Washington, D.C. The gala will begin at 7 p.m. at the Reagan International Building. [America’s Future Foundation]

• Find out what the Conservatives’ victory means for economic policy in the United Kingdom. A panel at The Heritage Foundation will look at Britain’s options on European Union relations, austerity, financial regulation, and other issues. The discussion will begin at 11 a.m. on May 28. [The Heritage Foundation]

• Examine the potential of online medical care. A panel at the Cato Institute will look at the regulatory barriers that hinder telemedicine. The discussion will begin at noon on May 28. [Cato Institute]

• Remember those who sacrificed to preserve our freedom. Memorial Day is Monday, May 25.

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