The Heritage Insider: Conservatives talk federalism, accountability, and innovation at Resource Bank 2015; red states are winning; the real infrastructure funding problem, 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.

May 16, 2015

Latest Studies
71 new items, including an American Action Forum report on how Dodd-Frank has hurt growth, and a Texas Public Policy Foundation report on the Environmental Protection Agency's power grab

Notes on the Week
Conservatives talk federalism, accountability, and innovation at Resource Bank 2015; red states are winning; the real infrastructure funding problem, and more

To Do
Learn what’s next for Britain

Latest Studies

Budget & Taxation
• Dealing with Debt – American Enterprise Institute
• Killing the Goose that Lays the Golden Eggs: Four Myths and Realities of the Proposed Severance Tax – Buckeye Institute for Public Policy Solutions
• Corporate Tax Incentives: What’s the Harm? – John Locke Foundation
• A House Divided Against Itself Cannot Spend (as Much) – Mercatus Center
• The Child Tax Credit – Mercatus Center
• Congressional Brief: Taxes, Spending, and the Debt Limit – National Center for Policy Analysis
• The Conservative Texas Budget – Texas Public Policy Foundation
• A Pro-Growth Tax Reform Agenda for Virginia – Virginia Institute for Public Policy

Crime, Justice & the Law
• Baltimore’s Real Police Problem – Hoover Institution
• Murder by Minors – Hoover Institution
• Good-Bye “Presumption Against Removal”: Extending Dart Cherokee Basin Beyond CAFA? – Washington Legal Foundation

Economic and Political Thought
• Subsidiarity and A Free Society – Centre for Independent Studies

Economic Growth
• The Logic of the Market: An Insider’s View of Chinese Economic Reform – Cato Institute
• 1,000 People a Day: Why Red States Are Getting Richer and Blue States Poorer – The Heritage Foundation
• Firm Investment and the Term Structure of Uncertainty – Hoover Institution
• Status Report on the Job Creation Impact of the Life Sciences Act of 2008 – Pioneer Institute for Public Policy Research
• America’s Income “Dynamics,” Not Income “Inequality,” Is Important – Public Interest Institute
• The Texas Model: 1st Quarter 2015 Employment Update – Texas Public Policy Foundation

Education
• School Reform for Rural America – Education Next
• The Rise of AltSchool and Other Micro-Schools – Education Next
• Report Card on British Columbia’s Elementary Schools 2015 – Fraser Institute
• Congressional Brief: Federal Involvement in Education – National Center for Policy Analysis

Family, Culture & Community
• China’s Demographics in the One Child Policy Era: Answered and Unanswered Questions – American Enterprise Institute
• Can Changing Your Address Change Your Fortune? – The Heritage Foundation

Foreign Policy/International Affairs
• Iran’s Strategic Thinking: Origins and Evolution – American Enterprise Institute
• Putin’s Russia: How It Rose, Hot It Is Maintained, and How It Might End – American Enterprise Institute
• At U.N., Radicals Regret Lack of “Progress” and Seek to Feminize Post-2015 Development Agenda – The Heritage Foundation
• How to Assess Human Trafficking in Asia – The Heritage Foundation
• Key Issues of U.S. Concern at the United Nations – The Heritage Foundation
• Preparing for the Approaching Syrian Endgame – The Heritage Foundation
• U.S. International Broadcasting Still Needs Reform – The Heritage Foundation

Health Care
• Towards a More Competitive Medicare: The Case for Deregulating Medical Fees and Co-Payments in Australia – Centre for Independent Studies
• Physician-Assisted Suicide Betrays Human Dignity and Violates Equality Before the Law – The Heritage Foundation
• Responding to King v. Burwell: Congress’s First Step Should Be to Remove Costly Mandates Driving Up Premiums – The Heritage Foundation
• Global Health Initiatives: Pre- and Post-2015 – Hudson Institute
• Reforming Illinois Medicaid: How to Cut Waste, Fraud and Abuse – Illinois Policy Institute
• A Better Choice: Healthcare Solutions for America – Independent Institute
• Certificate-of-Need Laws: Implications for Missouri – Mercatus Center
• Certificate-of-Need Laws: Implications for South Carolina – Mercatus Center

Information Technology
• Hush Rush: Once Again the Intolerant Left Works to Censor Independent Voices in the Media – Capital Research Center
• Why Chevron Deference May Not Save the FCC’s Open Internet Order – Part II – Free State Foundation
• A National Data-Breach Notification Standard: Why Federal Preemption Is Imperative – Washington Legal Foundation

International Trade/Finance
• Congress Should Recognize the Dynamic Benefits of Imports – The Heritage Foundation
• Currency Manipulation Provisions Do Not Belong in Trade Agreements – Milken Institute

Labor
• The Political Economy of Nail Salons – Hoover Institution

Monetary Policy/Financial Regulation
• The Growth Consequences of Dodd-Frank – American Action Forum
• Capital for Concentrated Credit Portfolios – American Enterprise Institute
• Does Bank Supervision Impact Bank Loan Growth? – American Enterprise Institute
• Renewing the Search for a Monetary Constitution: Reforming Government’s Role in the Monetary System – Cato Institute
• The Federal Housing Administration: What Record of Success? – The Heritage Foundation
• Injustice at the SEC – Hoover Institution
• Proxy Monitor 2015: 2015 Proxy Season Early Report – Manhattan Institute

National Security
• Instability in the Middle East – Hoover Institution

Natural Resources, Energy, Environment, & Science
• US Biofuels Policy, Global Food Prices, and International Trade Obligations – American Enterprise Institute
• Witch-Hunt 2015: Leftist Politicians and the Media Try to Blacklist Scientists Who Are Skeptical About Global Warming – Capital Research Center
• Redefining “Waters of the United States”: Is EPA Undermining Cooperative Federalism? – Federalist Society
• Environmental Impacts of Industrial Silica Sand (Frac Sand) Mining – Heartland Institute
• Power Play by the EPA – Texas Public Policy Foundation
• The EPA Targets Texas: Clean Power Plan – Texas Public Policy Foundation
• The EPA’s Dangerous New Power Grab – Texas Public Policy Foundation

Philanthropy
• The Elizabeth Warren Cheering Squad: Progressive Groups Push to Send the Anti-Capitalist Politician to the White House – Capital Research Center

Regulation & Deregulation
• Generics Substitution, Bioequivalence Standards and Oversight of International Pharmaceutical Producers: Complex Issues Facing the FDA – American Enterprise Institute
• Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State, 2015 Edition – Competitive Enterprise Institute
• Red Tape Rising: Six Years of Escalating Regulation Under Obama – The Heritage Foundation
• Federal Dietary Guidelines Lack Consistent and Scientific Approach to Caffeine – Washington Legal Foundation

The Constitution/Civil Liberties
• Who Will Regulate the Regulators? Administrative Agencies, the Separation of Powers, and Chevron Deference – The Heritage Foundation
• Eminent Domain Jurisdiction in Texas – Texas Public Policy Foundation

Transportation/Infrastructure
• What Will Drive the Future of Self-Driving Cars? – American Enterprise Institute
• Highway Trust Fund Basics: A Primer on Federal Surface Transportation Spending – The Heritage Foundation

Transportation/Infrastructure
• Funding Transportation With Diverted Sales and User Tax Revenue – Show-Me Institute

Welfare
• The Pros and Cons of a Guaranteed National Income – Cato Institute

 

 

 

Notes on the Week

Conservatives talk federalism, accountability, and innovation at Resource Bank 2015. Last week we went to the other Washington for The Heritage Foundation’s annual Resource Bank meeting. We were in Bellevue, which is right next door to Seattle. The theme of this year’s event was “Out of Bounds and Out of Control: Time to Bring Government Closer to Home.” Here are a few of the things we learned from the speakers and the discussions: 

Some states have leaders who are willing to say no to the federal government—for example Maine, Oklahoma, and Utah. Maine Governor Paul LePage, Oklahoma Attorney General Scott Pruit, and Utah Speaker of the House Greg Hughes discussed how their states are resisting federal control and charting their own course in health care, welfare reform, and land use.

The American Council of Trustees and Alumni is giving students the information they need to choose a good college—something beyond school reputation. They are answering the question: What Will They Learn? ACTA’s WhatWillTheyLearn.com grades 1,100 colleges and universities based on whether they require coursework in seven core subjects: composition, literature, foreign language, U.S. government or history, economics, mathematics, and natural or physical science. For their good work, ACTA received The Salvatori Prize in American Citizenship at the annual Krieble Dinner last Thursday.

[Photo from The Daily Signal, May 7]

Some good news in the fight against Common Core: States have been withdrawing from the consortia working on Common Core. The Partnership for Assessment of Readiness for College and Careers (PARCC) is particularly vulnerable, having declined from 26 member states to 11. A few more states withdrawing could make the consortia unviable.

The threat that Common Core poses to basic education can be seen in the recent changes to the Advanced Placement U.S. History Test. At a panel on stopping bad education policy, Stanley Kurtz of the Ethics and Public Policy Center explained how the College Board has revamped the test to reflect a Leftist version of U.S. history—downplaying America’s virtues and emphasizing its sins. The federal government, meanwhile, has incentivized schools to offer AP history. The solution, says Kurtz, is to break the College Board’s monopoly in AP history testing. Kurtz has developed both an alternative test and model state legislation that would allow schools to choose different tests. If you are interested in working with Kurtz to get such legislation considered by your state legislature, you should contact him at skurtz@eppc.org.

Abortionist Kermit Gosnell is the most prolific serial killer in American history, but almost no one knows that fact because conservatives are not engaged in the culture. Liberals tell stories, while conservatives crunch numbers, explained Ann McElhinney. McElhinney and her husband Phelim McAleer are working hard to change that. They’ve made documentaries challenging the environmental movement on a number of topics, most recently on the facts about fracking (FrackNation). Their next project is to tell the story of Kermit Gosnell’s crimes. Andrew Klavan is writing the script and Nick Searcy is slated to direct.

Canada is a showcase for conservative reforms. Niels Veldhuis and Jason Clemens of the Fraser Institute talked about how Canada reversed course on fiscal policy in the 1990s. Canada closed its fiscal gap by cutting spending (real cuts) much more than raising taxes. Not only did the government move out of the red, but Canada’s economy has consistently outperformed the G7 since 1997. Canada has also reformed its welfare system and has a growing constituency for independent schooling.

Health care innovation is coming. Soon, explained Robert Graboyes of the Mercatus Center, we’ll be able to get diagnosed for $40 without leaving our homes, and we’ll have nanites that can eat leukemia in our blood and then dissolve. And we’ll get those and other good things sooner, said Graboyes, if we can get government out of health care. Key targets for reform, said Graboyes, should be the delays in drug development caused by Food and Drug Administration regulations, Medicare’s pricing setup, the hospital monopolies created by Certificate of Need laws, and the medical schools’ control of entry into the medical profession.

The supply side of education matters, too. School choice has achieved gains around the country, but in order for choice to really work, the suppliers—charter schools, private schools, online providers—need fewer regulatory constraints. At an education roundtable, Matt Ladner of the Foundation for Excellence in Education argued that Education Savings Accounts are probably the easier way forward for getting choice in education. A setup that lets families spend their share of education funding on a basket of education goods that they choose diffuses the imperative to regulate providers.

 

Americans are voting with their feet for red states. 

The chart above is from a new report by Stephen Moore, Arthur Laffer, and Joel Griffith, who write:

The nine zero-income-tax states gained an average of 3.7 percent of their population from domestic in-migration from 2003 to 2013, while the highest-income-tax states lost an average of 2.0 percent of their population during the same period. Overall, population growth on an equally weighted basis from 2003 to 2013 was twice as high in the low-income-tax states. In terms of raw population, the nine zero-income-tax states in total gained an average of 830 people per day from domestic migration throughout 2004–2013; meanwhile, the nine highest personal income tax states in total lost an average of 944 people per day from domestic migration. [Internal citations omitted.] [“1,000 People a Day: Why Red States Are Getting Richer and Blue States Poorer,” by Stephen Moore, Arthur B. Laffer, and Joel Griffith, The Heritage Foundation, May 5]

 

U.S. federal regulation consumes more than India. Government regulations are a hidden tax on the economy. The Competitive Enterprise Institute’s annual Ten Thousand Commandments report, written by Clyde Wayne Crews, helps makes those costs more transparent. Some highlights: 

Federal regulation and intervention cost American consumers and businesses an estimated $1.88 trillion in 2014 in lost economic productivity and higher prices.

If U.S. federal regulation was a country, it would be the world’s 10th largest economy, ranking behind Russia and ahead of India.

Economy-wide regulatory costs amount to an average of $14,976 per household – around 29 percent of an average family budget of $51,100. Although not paid directly by individuals, this “cost” of regulation exceeds the amount an average family spends on health care, food and transportation.

The “Unconstitutionality Index” is the ratio of regulations issued by unelected agency officials compared to legislation enacted by Congress in a given year. In 2014, agencies issued 16 new regulations for every law—that’s 3,554 new regulations compared to 224 new laws.

Many Americans complain about taxes, but regulatory compliance costs exceed what the IRS is expected to collect in both individual and corporate income taxes for last year—by more than $160 billion. [“Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State, 2015 Edition,” by Clyde Wayne Crews, Competitive Enterprise Institute, May 12]

And here is a look at how the current administration has added to the regulatory state:

[“Red Tape Rising: Six Years of Escalating Regulation Under Obama,” by James L. Gattuso and Diane Katz, The Heritage Foundation, May 11]

 

User fees fund safety; politicians fund shiny objects. Politics may indeed be a problem for the upkeep of our infrastructure, but the villain is probably not who the media thinks it is. Randall O’Toole: 

The reason for this is that politicians prefer to spend money building new infrastructure over maintaining the old. The result is that existing infrastructure that depends on tax dollars steadily declines while any new funds raised for infrastructure tend to go to new projects.

We can see this in the Boston, Washington, and other rail transit systems. Boston’s system is $9 billion in debt, has a $3 billion maintenance backlog, and needs to spend nearly $700 million a year just to keep the backlog from growing. Yet has only budgeted $100 million for maintenance this year, and instead of repairing the existing system, Boston is spending $2 billion extending one of its light-rail lines.

Similarly, Washington’s Metro rail system has a $10 billion maintenance backlog, and poor maintenance was the cause of the 2009 wreck that killed nine people. Yet, rather than rehabilitate their portions of the system, Northern Virginia is spending $6.8 billion building a new rail line to Dulles Airport; D.C. wants to spend $1 billion on new streetcar lines; and Maryland is considering building a $2.5 billion light-rail line in D.C. suburbs.

On the other hand, infrastructure that is funded out of user fees is generally in good shape. Despite tales of crumbling bridges, the 2007 Minnesota bridge collapse was due to a construction flaw and the 2013 Washington state bridge collapse was due to an oversized truck; lack of maintenance had nothing to do with either failure.

Department of Transportation numbers show that the number of bridges considered structurally deficient has fallen by more than 50 percent since 1990, while the average roughness of highway pavement has decreased. State highways and bridges, which are almost entirely funded out of user fees, tend to be in the best condition while local highways and bridges, which depend more on tax dollars, tend to be the ones with the most serious problems. [Cato Institute, May 13]

 

States are preventing competition in hospitals. They do it with something called Certificate of Need Laws: 

 

Who wins and who loses from Export Import Bank lending? The Export-Import Bank uses taxpayer money to finance foreign purchases of U.S. products. This graphic from the American Enterprise Institute explains who wins and who loses from that arrangement: 

[American Enterprise Institute, May 11]

 

The United States is not keeping its commitments. President Obama’s pursuit of a deal with Iran is undermining our relationships with allies, says Sen. Tom Cotton (R-Ark.): “This President is soft and soothing and supplicating towards dictators and adversaries but harsh and unyielding toward allies.” 

 

To Do: Learn What’s Next for Britain

• Assess the state of freedom in the United Kingdom. A panel discussion at the Cato Institute will look at Britain following reelection of Prime Minister David Cameron. The discussion will begin at 11 a.m. on May 20. [Cato Institute]

• Hear the story of one family’s search for the truth about their son’s fate in battle at Normandy in 1944. The Heritage Foundation and National Review will host a screening of the documentary, Honoring a Commitment. The screening will begin at 4 p.m. on May 21 at The Heritage Foundation. [The Heritage Foundation]

• Examine what fracking has to do, if anything, with earthquakes in Dallas. The Institute for Policy Innovation will host a talk by geologist Craig D. Pollard. Pollard will speak at noon on May 19 at IPI headquarters in Irving, Texas. [Institute for Policy Innovation]

• Hear a Brit’s take on how to meld conservative and libertarian ideas into a winning movement. The John Locke Institute will host Charles C. W. Cooke discussing his new book The Conservatarian Manifesto: Libertarians, Conservatives, and the Fight for the Right’s Future. Cooke’s talk will begin at noon on May 18 at the John Locke Foundation in Raleigh, N.C. [John Locke Foundation]

• Find out what Michigan needs to do to fix its civil asset forfeiture laws. The Mackinac Center will host a panel discussion beginning at 11:30 a.m. on May 20 in rooms 402 & 403 of the state Capital Building in Lansing, Michigan. [Mackinac Center for Public Policy]

• Discover whether focusing on learning rather than time spent in class is the way to fix American higher education. A panel at the American Enterprise Institute will examine a new approach called competency-based education. The event will begin at 3:15 p.m. on May 21. [American Enterprise Institute]

 

 

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