In this podcast, Mike LaFaive of the Mackinac Center for Public Policy discusses in greater detail his article on the Heartlander titled “A Tax Hike Al Capone Could Have Loved”. In his article, he compares Al Capone’s liquor smuggling incentives to the new increases in cigarette taxes proposed by Chicago Mayor Rahm Emanuel.
LaFaive describes the excessive taxes on cigarettes as “prohibition by price”, where the taxes are so high it creates an “implicit prohibition” of cigarettes. Recently, Mayor Rahm Emanuel proposed a new, $.75 tax increase on cigarettes, which would put Chicago the most expensive city for cigarettes in the entire country. LaFaive believes this would cause Chicago to become the number one cigarette smuggling state, and bump down New York, where 60% of all cigarettes in the state are smuggled.
Before the most recent tax increases, the University of Illinois did a study of cigarette smuggling in the city of Chicago, and found that 75% of the cigarettes were not from Chicago; in fact, 29% were from Indiana. The fact is that increases taxes on cigarettes only drives smokers to buy elsewhere and the city (or state) actually ends up losing tax revenue, when the goal was to increase it. It creates incentives for smugglers to buy cheap and sell high; profits are as good as smuggling drugs and the punishments are less severe.
It’s time to fight back against these detrimental tax policies. You can read more at the Mackinac Center website.
Listen to the podcast in the player above
Dan Pilla, author of the Heartland-published Ten Principles of Federal Tax Policy, discusses the current tax system in the United States and how it does not follow any of the ten principles laid out in his book. Pilla is a taxpayer’s rights advocate and has defended countless tax payers against the IRS. He helps individuals and businesses who struggle with our tax problems, which are plentiful.
The first principle is simplicity, which our tax system is most certainly not. The tax code now consists of about four million words, which is three times the amount in the 1970′s, and twice the amount of the 1990′s. That doesn’t scream “simple” to me! Also, there have been more than 3,200 tax code changes between 2001 and 2008, with 500 of them being just in 2008. Nobody understands the tax code, not even the IRS.
Our current tax system creates criminals out of law-abiding citizens. Pilla says most people are trying to abide by the law and follow the tax rules, but they get tripped up by the complicated mess of the system. When you’ve got two different tax analysts telling you two different things, plus two IRS agents who tell you two different things, how are you to know what is correct and incorrect? Last year alone there were 37 million penalties issued by the IRS- and there’s only 130 million tax returns filed! That means 28% of people who filed tax returns were penalized… Scary stuff.
Another principle that Pilla discusses is stability. He says Americans have a right to know that their tax system will remain stable and consistent this year, and for years to come. This is important because every American is affected by the tax code in every part of their lives. Every decision made has tax consequences- to marry or not to marry, to have children or not, to take a raise at work, planning a business, and planning retirement.
The bottom line is the income tax and liberty cannot coexist. Which one are you willing to live without?
Listen to the podcast in the player above.
Good news from Florida on the insurance front: the state-run Citizens Property Insurance Corporation has shrunk their exposure by some 35 percent. This is a win for competitive insurance markets and for the taxpayers of Florida.
Last week in The Hill, I noted that taxpayers continue to bear significant risk from natural disasters:
The calm Atlantic hurricane season was a blessing for taxpayers, because both state and federal governments have taken on a large share of financial liability for hurricanes and other natural disasters. In Florida, the state-run Citizens Property Insurance Corporation has a half-trillion dollars of liabilities on its books. In Louisiana alone, the federally backed National Flood Insurance Program has over $100 billion in exposure.
While there’s still more work to do, it’s great that this amount has been pared back from $510 billion to $330 billion in the last 21 months. That still leaves taxpayers facing liabilities when a major storm next hits Florida, but it’s a great step in the right direction.
This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.
One hundred years ago this month, on December 23, 1913, the Congress passed the Federal Reserve Act, establishing a national central-banking system in the United States. The governing board of the Federal Reserve was organized on August 12, 1914, and the Federal Reserve banks opened for operation on November 16, 1914.
On the surface, the preamble to the Act, which summarized the purpose of the new government-created institution, seemed fairly innocuous:
“An Act to provide for the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes.”The Powers of the Federal Reserve
But what this meant was the start of the monopolization of monetary matters in the hands of a single politically appointed authority within the boundaries of the United States.
Those innocuously sounding functions listed in the Act’s preamble, however, gave the Federal Reserve the power to:
(a) Control the quantity of money and credit supplied in the United States.
(b) Influence the value, or purchasing power, of the monetary unit that is used by the citizenry of the country in all their transactions.
(c) Indirectly manipulate the rates of interest at which borrowers and lenders transfer savings for investment and other purposes, including the funding of government budget deficits.A Century of Central Bank Mismanagement
The 100-year record of the Federal Reserve has been a roller coaster of inflations and recessions, including the disaster of the Great Depression of the 1930s, the “excessive exuberance” of the late 1990s that resulted in the “Dot.Com” bubble that burst in the early 2000s, and the recent boom-bust cycle of the last decade from which the U.S. economy is still slowly recovering.The crucial and fundamental problem with the power and authority of the Federal Reserve is that it represents monetary central planning. In a world that has, for the most part, turned its back on the theoretical error and practical disaster of believing that governments have the wisdom and ability to centrally plan the economic affairs of a society, central banking remains one of the major remaining forms of socialism practiced around the globe.
Government control and planning of the monetary system has resulted in extensive political power over virtually every aspect of our economic life. In 1942 Gustav Stolper, a German free-market economist then in exile in America from war-torn Europe, published a book titled “This Age of Fables.” He pointed out:“Hardly ever do the advocates of free capitalism realize how utterly their ideal was frustrated at the moment the state assumed control of the monetary system . . . A ‘free’ capitalism with government responsibility for money and credit has lost its innocence. From that point on it is no longer a matter of principle but one of expediency how far one wishes or permits government interference to go. Money control is the supreme and most comprehensive of all governmental controls short of expropriation.” The Power to Manipulate the Lives of Millions
Through monetary central planning governments have the capacity to manipulate and destroy the real value of the accumulated savings and wealth of hard-working people. Rising prices eats away at the real buying power of every dollar a person has set aside and saved for his needs of the future.
Governments can use money creation to redistribute income among individuals and groups in the society to serve various political purposes. When the money supply is increased it does not impact every market demand, price, or income at the same time. It is injected in the economy and, like a pebble dropped into a pond of water, sends out ripples of effects that differentially and disproportionally benefit some and harm others.
In addition, monetary injections through the banking system distort and twist the patterns of capital investment and resource use throughout the society, which inescapably generate the booms and busts that have punctuated the economic history of America during the last 100 years.
The rationale behind such control has been the notion that governments and their appointed central-banking authorities have the knowledge and capability of maintaining economy-wide stability and growth.Central Banking as the Failed Socialist Mentality
But what has never been explained is how a handful of central bankers can know, better than the free competitive market, what should be used as money, what the quantity and value of that money should be, and what interest rates can assure a proper and continuous balance between savings and investment for long-term sustainable economic growthIn other words, central banking represents one of those instances of the hubris of the social engineer, who claims to know more about how to better manage some aspect of society rather than to leave these decisions and their outcomes to the individual market participants themselves.
The fact is, the Federal Reserve can no more correctly plan for an “optimal” quantity of money or a fictitious “good” rate of price inflation than any other branch of government can properly plan for the optimal supply and pricing of shoes, cigars, soap, or scissors.
And the history of central bank monetary policy in the United States and around the world has demonstrated the same inevitable failures as all other forms of socialist planning over the last century.The Market Knows Better than a Central Bank
What should be used as money and what quantity of it would serve the uses and demands of people in society can only be discovered through the interactions of people in a free market.
What should be the value, or buying power, of a unit of money can only emerge out of people offering money they have to spend for the goods and services that others are offering in exchange for that money. The resulting money prices for purchasable goods would establish what the general value of that money should be in the market place.
And a truly free and competitive banking system would generate the stable and sustainable financial intermediation that would enable the formation of market-based rates of interest to bring people’s savings into coordinated balance with the borrowing demands of others desiring to undertake profitable investments.An Agenda for Monetary Freedom
What, then should be the done, and put in place of government central banking? The consistent advocate of the free market should call for the abolition of the Federal Reserve and the operation of a market-based system of private and competitive free banking in its place.
The following would be the steps to bring this about:
1.The repeal of the Federal Reserve Act of 1913 and all complementary and related legislation giving the federal government authority and control over the monetary and banking system.
Repeal of legal-tender laws, which give government the power to specify the medium through which all debts and other financial obligations, public and private, may be settled.
- Repeal of all restrictions and regulations on free entry into the banking business, including interstate banking.
- Repeal of all restrictions on the right of private banks to issue their own bank notes and to open accounts denominated in foreign currencies or gold and silver.
- Repeal of all federal and state rules, laws, and regulations concerning bank-reserve requirements, interest rates, and capital requirements.
- Abolition of the Federal Deposit Insurance Corporation. Any deposit-insurance arrangements and agreements between banks and their customers, or among associations of banks, would be private, voluntary, and market-based.
In the absence of government regulation and monopoly control, a free monetary and banking system would come into existence; it would not have to be created, designed, or supported.
A market-based monetary and banking system would naturally emerge, take form, and develop out of the prior system of monetary central planning. Monetary freedom would be established in place of the current Federal Reserve System.
The 100 years of central banking mismanagement and central banker hubris of presuming to plan the monetary and banking affairs of hundreds of millions of people would, then, would be brought to it’s end.
[Originally published on EPIC TiMES]
We are weeks away from being fully immersed in the 2014 election cycle. Predictions abound, likening the 2014 cycle to 2010—when the House flipped from Democratic to Republican. Only this time, it is the Senate that has the potential to change. Twenty of the 33 seats up in 2014 are currently held by Democrats—more than half of whom are in trouble.
In 2010, Senate Majority Leader Harry Reid was up for reelection—for his fifth term—and he was facing “a ferocious challenge.” He was “in trouble.” Remember, 2010 was the year of Tea Party victory. In light of the mounting government debt, pork barrel spending was no longer vogue. But Senator Harry Reid, apparently, didn’t get the memo. “The 71-year-old one-time boxer touted his ability to bring federal money to his home state—no one could do more,” said the HuffPost coverage of his “surprise” win.
A May 2010 internal email addressing the need to expedite Department of Energy (DOE) green-energy loan approvals for projects in Reid’s district says: “Reid is constantly hit at home for not bringing in the federal dollars.” In the email, reported Obama bundler and former Clinton Administration staffer, Jonathan Silver, who was, at the time, the executive director of the Loan Programs Office, was to assure Reid that he anticipated “a good number of projects to be approved in the coming months.”
Reid saw the potential in green-energy dollars before anyone else. He laid the foundation to allow him to bring home the “federal dollars.”
The White House and DOE insiders helped Reid secure green-energy stimulus funds for his home state of Nevada—which he touted in his 2010 campaign. He is tied to more than $3 billion of taxpayer money—currency that created just over 200 permanent jobs.
The Washington Times reported: “Mr. Reid, a Nevada Democrat, who led passage of the $814 billion stimulus bill and worked to include the loan guarantee program to help finance clean-energy projects…” The 2009 stimulus package—the American Recovery and Reinvestment Act (ARRA)—was jammed-packed full of clean-energy provisions, about 10 percent (nearly $100 billion) of the monies were earmarked for renewable energy.
Having “worked to include the loan guarantee program,” Reid was frustrated when the federal dollars weren’t flowing into Nevada fast enough.
Seven months after the stimulus was signed into law, Reid, sent a letter, dated September 23, 2009, to President Obama, complaining about the “slow pace of implementation of the Department of Energy’s loan guarantee programs.” In it, Reid patted himself on the back for his role (via the stimulus bill) in helping to “appropriate an additional $6 billion for an expanded loan guarantee program.” Despite Reid’s acknowledgement of the “risks” involved, he proceeded to request that “obstacles be cleared away,” and basically demanded that the ARRA monies for the loan program be “rapidly” dispensed.
Reid had campaign donors anxiously waiting for the federal dollars. The Washington Free Beacon revealed that executives from three companies that received millions through the “fast-track” approvals all donated to Reid and other Democrats—Nevada Geothermal, Ormat Nevada, and SolarReserve—have contributed more than $58,000 since 2008. Additionally, the then-CEO of BrightSource energy—which ultimately received $1.6 billion in stimulus funds—hosted a fundraiser for Reid.
Each of these projects did receive the federal dollars—but not because they were such great projects. President Obama has declared that DOE decisions had “nothing to do with politics.” But, all four of the above, plus a transmission project originally known as Southwest Intertie Project (SWIP), were speculative—at best. Their ratings, along with the majority (22 out of 26 projects) of the stimulus-created 1705 Loan Guarantee Program, were rated as “junk” grade investments (“with a high likelihood of failure”), yet the taxpayer-backed loans were approved, with many of these projects also being awarded huge amounts of free taxpayer cash in the form of stimulus grants. Why? Politics.
Loan Program Office emails indicate that Reid’s projects were prioritized because they were “high profile,” “tied to larger events,” or because they had Reid’s support. Here’s a sampling from the hundreds of leaked emails relating to the various Reid projects:
- December 5, 2009: “Reid may be desperate. WH might want to help. Short term considerations may be more important than longer term considerations and what’s a billion anyhow?”
These five projects gave Reid bragging rights at a time when he most needed it.
Reid’s 2010 campaign included this slogan: “FIGHTING FOR CLEAN ENERGY JOBS IN NEVADA.” In a campaign document, he brags about his “efforts in passing the American Recovery and Reinvestment Act” and about pursuing “consistent federal incentives to develop clean renewable energy resources.”
The projects were used as campaign photo ops and talking points that helped the connected companies seeking the loans. Ormat Nevada, Inc.’s director of policy and business development, Paul Thomsen, was featured in a 2010 campaign ad where he states: “Harry Reid saw the potential for geothermal before just about anyone else.” It is important to note that Thomsen served as an aide to Reid from 2002-2005 and he also contributed to Reid’s campaign. Regarding SWIP, the Las Vegas Sun reported: Reid gets “an election-year trophy.”
Reid’s role in the green-energy, crony-corruption story is illustrative of the election scam that so often takes place in America. Once again, Obama lied. These loanswere given for political reasons. They gave Harry Reid an election-year platform and victory.
The whole green-energy, crony-corruption story is convoluted and difficult to grasp—which, I believe, is part of the goal. It is so twisted and interconnected that the average person is unlikely to have the time to dig through the whole story. Only hard-core politicos care enough to follow the trail—which is why, for the past 18 months Christine Lakatos and I have covered the saga. Christine has done the in-depth research; I’ve presented the capsulized version. I hope this taste has tempted you to dig deeper.
Senate Majority Leader Harry Reid knows how to work the system. He’s not up for reelection in 2014, but 20 of his friends are. Like Reid, they voted for the 2009 stimulus bill that launched the entire green-energy, crony-corruption scandal that took nearly $100 billion taxpayer dollars to pay off donors to Harry Reid, President Obama and other high-ranking Democrats. More than fifty of those stimulus-funded projects, coupled with additional clean-energy funds, have gone bankrupt—or are circling the drain—and have taken our money with them.
These five “junk-rated” stimulus loans were rushed so they could offer Reid election year trophies. Of the five, two are facing trouble. The other three, after years of receiving taxpayer money, are still incomplete. Plus, BrightSource Energy’s Ivanpah solar power project has been “executing birds.”
More than $3 billion went to Reid’s friends with the promise that the federal dollars would create “tens of thousands of green jobs.” A little more than 200 permanent jobs have actually been created.
Harry Reid saw the potential before anyone else all right. Green energy was a gold mine for him and his cronies.
[Originally published on Town Hall]
TALLAHASSEE, Fla. (Dec. 10, 2013) – The R Street Institute welcomed today’s news that Florida’s state-run Citizens Property Insurance Corp. has seen its policy count fall to just over 1 million, a drop of 31 percent since 2011.
According to data presented to the Florida Cabinet – which consists of the governor, chief financial officer, attorney general and agriculture commissioner – over the past 21 months, Citizens’ total exposure has decreased by 35 percent to $330 billion and its probable maximum loss from a 1-in-100 year storm has decreased by 26 percent to $16.15 billion.
“These latest figures are an encouraging sign that the steps taken by the Legislature in recent years to shrink Citizens is working,” R Street Florida Director Christian Cámara said. “Indeed, the successful ‘takeout’ efforts pursued by management at Citizens, as well as its successful shift to using more private reinsurance, also deserve credit.”
As its surplus has grown to $7.66 billion, Citizens has managed to reduce its reliance on the Florida Hurricane Catastrophe Fund to $4.48 billion from $6.91 billion in 2012. It now cedes $1.85 billion to private reinsurance markets, up from just over a half-billion in 2011. Most importantly, the layer that would be funded by post-storm hurricane taxes has also fallen dramatically, to $3.99 billion from $11.61 billion in 2011.
But Cámara also noted that more needs to be done, as Citizens continues to pose a great threat to Florida taxpayers and the state’s ability to recover quickly after a hurricane.
“The Legislature should continue exploring ways to eventually restore Citizens as the state’s true insurer of last resort to reduce or eliminate the likelihood of a taxpayer bailout following a bad hurricane season,” he added.
Regarding your editorial “Coming to the aid of the Gulf of Mexico” (Our Views, Dec. 5), you are absolutely correct that the RESTORE Act presents an exceptional opportunity for Florida and other Gulf Coast states to invest in projects and infrastructure that support the coast’s interconnected ecology and economy.
But this is just an opportunity — not a guarantee. To ensure that the funds are spent effectively and as intended, it is critical that the funds be allocated and spent in a fully transparent manner, with benefit-cost analyses posted online long before decisions are made. Further, funds must be spent effectively on public goods, not on pet projects and lining the pockets of special interests.
The RESTORE Act shows great promise for the Gulf of Mexico. Whether it delivers on that promise will be up to how it is implemented.
Daniel M. Rothschild
The writer is senior fellow at the R Street Institute.
Imagine a purely hypothetical election. An incumbent president who is despised with unmatched wrath by his party base is swept out of office in disgrace after his administration’s pathological capacity for deceit is exposed. The next election sees a populist, seemingly moderate member of the other party from an infrequently won state elected on the promise to speak honestly and forthrightly to Americans. Partisans of the new president celebrate, believing the deep-seated ideological and systemic problems within their coalition have been papered over by a new chance at power, while the other party appears on the verge of being taken over by its most ideological wing.
The year is not 2016, as the reader may expect. It is 1976, when the stink of Watergate rendered Republicans so perpetually toxic for four years that America turned away from the infant Ford administration and elected Jimmy Carter. Ford, damaged by a primary challenge from the seemingly unelectable cowboy Ronald Reagan, is cut off inexorably from his party’s base, and as the 1980 race looms large, Carter looks poised for a landslide against what is probably his most ideologically unfriendly opponent.
The landslide came, but as we all know, it was not Reagan who got buried. Indeed, Reagan’s supposedly ideological, unelectable worldview ended up realigning the country, to the point where the best defense that Christopher Hitchens – at the time, a committed leftist – could offer in 1985 was that 1980 was merely “the election that Watergate postponed.”
Flash forward to now, and let me paint a similar picture of the future: Republicans, having just been drubbed in two successive elections, once when running a lukewarm moderate, and the second time running a nominee who, despite his personal moderation, ran on the most ideological platform his party has ever endorsed, are desperate for good news. Like clockwork (or rather, like Watergate), the good news comes in the form of Obamacare, which in just one short year threatens to derail the entire Obama presidency. The insult of Obamacare, coming on top of a presidential record that makes Nixon’s look positively transparent, re-galvanizes the Republican Party as Obama leaves office in disgrace. Hillary Clinton, like Ford before her, tries to tap into the zeitgeist of her increasingly ideological party, but fails, resulting in the election of unlikely conservative hero Chris Christie.
But Christie’s first term is marred by the aftershocks of Obama’s, and unlike with Obama, the press is not so forgiving. Soon, Christie becomes caricatured as a bully, more interested in rewarding his rich friends than helping the poor. The demographics that elected him at first, having been disgusted with Obamacare, sour on him almost instantly. Still, Republicans comfort themselves, they are in a strong position going into 2020, when Democrats appear poised to nominate their most ideologically extreme candidate in a generation – Elizabeth Warren. Surely the only possible result can be a Christie landslide?
Naturally, some details in this picture may change. It is far from certain that Christie will be the Republican nominee in 2016, for instance, nor is it certain that the Clinton machine has lost all its juice in the event that Hilary is nominated. However, in the event that the Obama administration’s many Nixonesque failings hand Republicans the White House in 2016, the broader trends of history still suggest that their first term should be treated as borrowed time. And while Elizabeth Warren may not be the candidate of 2020, it is nearly unquestionable that the Warren-style left is the Democrats’ only out in a world where moderate liberalism has been so tainted by Obamacare. Faced with Warrenism, Republicans will have to make a choice: Will they drag the country back towards conservatism, or will 2020 become “the election that Obamacare postponed?”
As of now, it appears that Republicans are courting their own Carter-style defeat. No stronger evidence for this exists than the interpretation of the Harvard Institute of Politics’ most recent poll showing millennial voters apparently souring on Obamacare so drastically that Republicans believe their electoral fortunes will soar. Unfortunately, the problem with this reading is that it is selective to the point of ridiculousness – almost as if those adhering to it had walked into a forest fire and remarked on how vibrant and stable the local ecology was based on a single clump of unburnt trees.
This reaction is understandable, despite its naivete. Yes, it is true that President Obama’s approval ratings among young voters have plunged from 52 percent to 41 percent, and at least 56 percent of young people now disapprove of Obamacare, even when it is called by its less toxic name.
Those are the unburnt trees. But drill down deeper into the data, and the smell of smoke and the screams of dying animals intrude on the consciousness. For instance, while approval of Democrats in Congress has fallen by five points from the mediocre 40 percent to a worrisome 35 percent, approval of Republicans in Congress has fallen from a critical 27 percent to a suicide-inducing 19 percent, below President George W. Bush’s final approval rating on leaving office. Unsurprisingly, Republican Party registration lags Democrats by 6 points among voters aged 18-24, and by an unbelievable 16 points among voters aged 25-29.
The heat starts to become unbearable and the smoke starts to clog the eyes when an issue completely untouched upon by the press – student debt – enters the picture. According to the poll results, 42 percent of all millennials suffer from student loan debt, including 40 percent of Republicans. Moreover, 57 percent of millennials (the same as the rate for Republicans) view student debt for young people as a major problem, with only 26 percent disagreeing.
And unlike the average Fox News viewer, those millennials are not likely to blame the government, or themselves, for this issue. Rather, a solid 42 percent place blame on colleges and universities, with only 30 percent blaming the federal government. In contrast, only 11 percent blame students for the debt issue.
And when the “Buffett Rule,” another issue left untouched by the press, is introduced, the Republican Party may as well have been trapped by burning logs. Polling shows 69 percent of young people, including 57 percent of Republicans, favor the so-called “Buffett Rule,” requiring people making over $1 million a year to pay at least 30 percent of their income in taxes.
This is the good news for Republicans? If so, it’s a poison pill. Yes, Obama and his health care law have become more toxic than they were, but disapproval of a single policy and a single politician do not equate to disagreement with the project of liberalism. Especially not when one of liberalism’s totems – taxation of the wealthy – is a project supported even by 57 percent of millennial Republicans, and when one of the main issues young people care about – student debt – is one where Republicans’ only touchstone is often a formless anti-college resentment that treats students cheated by bad schools as entitled, hedonistic, stupid brats.
Can Republicans escape these problems and put out the forest fire? Time will tell. But to give them a spur, here’s a sobering reminder of one fact: There is one Democrat for whom the abatement of student debt and the taxation of the wealthy unify as factors in their mass appeal.
That politician? None other than the ideological, unelectable Elizabeth Warren. And if Republicans go into future elections unprepared to compete with her on the same terms, then a prescient quote comes to mind:
“There you go again.”This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.
From the New York Times:
Why? One idea is that Mr. Reagan himself had had skin cancer, and allowed a concern for public health to triumph over ideology. Eli Lehrer, the head of a Washington think tank called the R Street Institute and a longtime Reagan admirer, offered me a simpler theory: that the man truly loved nature. He was never happier than when riding horses and chopping wood. Perhaps the science of the ozone hole just spooked him. We know it spooked Margaret Thatcher, the British prime minister and Reagan ally, who had been a research chemist in her early life.
The Gulf Coast states — Florida, Alabama, Mississippi, Louisiana, and Texas — are all governed by Republican governors and have Republican majorities in both legislative chambers. With the exception of purplish Florida, these are rock-ribbed conservative states. Yet they may be on the verge of significantly growing their state budgets and public sector payrolls.
That’s because each state is looking at a one-time windfall totaling between the hundreds of millions and several billions of dollars in fines from BP and Transocean paid pursuant to the 2010 Deepwater Horizon oil spill. Under the terms of the RESTORE Act, which Congress passed in 2012 with strong bipartisan support, 80 percent of Clean Water Act fines will go into a trust fund for economic and environmental projects along the Gulf Coast. States directly control 65 percent of that fund and indirectly control most of the remainder.
Conservatives helped lead the charge for the RESTORE Act (the House version was sponsored by now-Republican Study Committee Chairman Steve Scalise, R-La.), and it embodies a number of conservative principles including devolution of authority from Washington and an emphasis on economic growth. Perhaps most notably, it didn’t create any new bureaucracies or permanent programs reliant on taxpayer funds.
But just because the legislation represented conservative fiscal policy doesn’t mean the states will execute it that way.
The simple fact is, states don’t have a great track record with windfall money, which, even when tied to specific spending, has a knack for making its way into general revenues. Revenue volatility tends to exacerbate poor decision-making. And”“temporary” spending tends not to be so temporary.
The RESTORE Act funds are just such a one-time windfall, and it’s entirely possible that funded projects could (if incorrectly designed) create ongoing liabilities for taxpayers. In other words, conservatives could inadvertently use this windfall to permanently grow the governments of the Gulf Coast states. As the massive growth of government under the Bush administration showed, conservatives that think it will help them win elections aren’t shy about busting budgets just as much as those on the political left.
Given the near-religious fervor with which many progressives want to raise taxes (especially on higher incomes), it would seem odd if this were not a deliberate strategy on their end. The urge to add new public sector jobs — and (ostensibly) private sector “green jobs” that rely on public subsidies — will be strong, and something conservatives may be willing to give up in political horse trading.
They shouldn’t. Nor should they use the RESTORE Act funds as an excuse to put off politically painful, but necessary, reforms. That way lies failure.
There are certainly things for which the RESTORE Act provides that conservatives can and should support. Louisiana is facing a crisis as its wetlands disappear; this puts citizens, homes, and businesses across the state progressively closer to the ocean. Louisiana’s Coastal Master Plan provides a good template for decision making in the state about RESTORE Act money, and the media and watchdogs should question every RESTORE Act dollar spent outside the Master Plan.
The economy and the ecology of the Gulf Coast are closely linked, so good environmental programs (including flood infrastructure) can have significant economic benefits. Gulf Coast tourism supports over half a million jobs and generates over $45 billion in annual consumer spending. Restored shrimp, oyster, and fish habitats are critical to the commercial and recreational fishing industries. Since the coast’s ecology has been damaged in no small part by generations of failed federal water management policies, undoing the damage is only sensible. Contrary what many believe, the Gulf Coast is far from “fixed”; they are still finding tar from the spill, and fisherman are still hurting.
Politically, good environmental and economic programs make sense as well. Pace the enviros, conservatives don’t want to strip-mine the earth and pave it over. The RESTORE Act is a good chance for conservatives to show their conservationist bona fides — and show why conservative environmental policies that focus on responsible stewardship of the environment and use of natural resources are preferable to left-wing command-and-control policies that see man as a threat to and not a part of the natural world.
All five Gulf states, as well as their political subdivisions charged with implementing the RESTORE Act and spending its funds, need to commit to complete transparency throughout the process. This means, at a minimum, building online databases of all spending, and project benefit cost analyses should be published as well. Journalists have a critical role to play in tracking the spending and making sure it’s on the up-and-up.
And conservatives need to call out bad programs for what they are — even when a Republican is proposing them. Mississippi’s plan to spend $15 million from an earlier settlement related to the oil spill on a minor league baseball stadium for an as-yet non-existent team stinks of cronyism and corporate welfare.
It’s important that policymakers ensure that money is spent in a way that doesn’t create ongoing liabilities for taxpayers, either as a matter of policy or a matter of politics. One of the great conservative selling points of the RESTORE Act is that it created no new bureaucracies or permanent claims on the public fisc. Undermining this principle in execution would be unfortunate.
Neil Stenhouse, lead author of a paper accepted for publication by the Bulletin of the American Meteorological Society, trashed the ability of American Meteorological Society meteorologists to understand global warming after they failed to validate Stenhouse’s mythical global warming consensus. Stenhouse’s criticism of AMS meteorologists in the UKGuardian puts dues-paying AMS members in the odd position of supporting and publishing the work of a non-scientist who is bashing their credentials.
Stenhouse, a psychologist and doctoral student in communications at George Mason University, emailed all full members of the American Meteorological Society for whom he could find an email address and asked them to fill out an online survey on global warming. More than 1,800 AMS meteorologists filled out the survey.
Only 52 percent said global warming is occurring and is caused mostly by humans – which is itself a far cry from having 52 percent say humans are causing a global warming crisis. The results were a huge blow to the mythical notion that all or nearly all scientists agree that humans are causing a global warming crisis. This is especially the case considering the AMS survey reflected the views of scientists with atmospheric science expertise. This wasn’t a survey of engineers or other non-atmospheric scientists with little if any atmospheric science expertise.
After I reported the results of this survey last month at Forbes.com, global warming activists went into damage-control overdrive, doing everything possible to downplay the results.
The Guardian, in an article published by Scott Abraham and Dana Nuccitelli (one an engineer, the other a solar scientist), was especially critical of most AMS members’ ability to understand and hold informed opinions on global warming issues. “Most AMS members are not climate researchers, nor is scientific research of any kind their primary occupation,” Abraham and Nuccitelli asserted.
Stenhouse piled on with additional criticism, downplaying in the Guardian article most AMS meteorologists’ ability to hold informed views on global warming. “You only see low levels of consensus in the sample if you also look at the views of people who are not climate experts,” Stenhouse told the Guardian.
Considering only 52 percent of AMS scientists believe humans are the main cause for some global warming, and considering the Guardian protested that only 13 percent of AMS meteorologists listed climate science as their primary area of expertise (as if having expertise in one area of atmospheric science precludes expertise in others), this leaves Stenhouse asserting that the term “not climate experts” applies to a majority of AMS members.
This might lead you to wonder why Stenhouse conducted the survey in the first place. Most likely, the psychologist lives in an echo chamber of like-minded global warming alarmists and expected the survey to reveal a broad alarmist consensus. Now that Stenhouse doesn’t like the survey results, he trashes AMS meteorologists’ ability to hold informed opinions on global warming, even as Stenhouse publishes the results of his study in an AMS-administered journal.
Stenhouse and the Guardian also attempted to isolate and give unique credibility to the small percentage of AMS meteorologists who self-identified their primary job focus as research. This, by definition, excludes almost all meteorologists who don’t work for government. Therefore, the survey results show that the majority of meteorologists whose jobs, salary and publishing activities are dependent on government funding and the perpetuation of the mythical global warming crisis say global warming is occurring and humans are the primary cause.
Wow, that’s quite a news flash. Meanwhile, for the vast majority of meteorologists who don’t fall within that group – those who aren’t beholden to government funding and who don’t have a funding dog in the global warming debate – only a minority say global warming is occurring and humans are the primary cause.
Stenhouse’s undermining of the credibility of AMS meteorologists should come as no surprise given that his job is to spread global warming alarm. The website for the George Mason Center for Climate Change Communication, under whose auspices he conducted the survey, states at the very top, “Climate change is the result of human actions and choices.”
Boy, that’s an objective point of view, especially for a psychologist who criticizes the informed opinion of atmospheric scientists.
Stenhouse’s website even goes a step farther, arguing that social activism is necessary to address human-caused climate change. “Limiting climate change – and protecting people and ecosystems to the degree possible from unavoidable changes in the climate – will require significant public engagement in the issue so that difficult decisions can be made by members of the public and policy makers,” Stenhouse’s website argues.
Is it any wonder that a psychologist/global warming activist would throw atmospheric scientists under the bus after he discovers they don’t share his global warming alarmism? Probably not. But what is really interesting is how the very AMS meteorologists whom Stenhouse is trashing are the ones whose professional dues support the journal that publishes Stenhouse’s paper. Granted, the survey results reported in the paper destroy the mythical global warming consensus, for which there is value in spreading the word.
Still, I suspect the AMS bureaucracy is going to get an earful from its member meteorologists on this one.
WASHINGTON (Dec. 9, 2013) – The R Street Institute welcomed today’s news that leading private sector technology firms have formed a coalition seeking reform of government surveillance laws and practices.
Consisting of AOL, Apple, Facebook, Google, LinkedIn, Microsoft, Twitter and Yahoo, the coalition is asking that governments around the world codify sensible limits on compelling service providers to disclose user data, allow companies to publish the number and nature of government demands for such data and for intelligence agencies to operate under a clear legal framework with checks and balances.
In an open letter to President Barack Obama and members of Congress, the coalition asks that the United States “take the lead and make reforms that ensure that government surveillance efforts are clearly restricted by law, proportionate to the risks, transparent and subject to independent oversight.”
“There is growing evidence that runaway government surveillance is impacting U.S. business interests abroad, so seeing this sort of outreach from our domestic technology community is very welcome,” R Street Policy Analyst Zach Graves said.
R Street has been active in pointing to the need to update the Electronic Communication Privacy Act to reflect changes in communications technology over the past quarter-century. An online petition calling on the Obama administration to support ECPA reform has already gathered more than 65,000 signatures.
The Food and Drug Administration (FDA) should highlight e-cigarettes as a way to reduce tobacco harms, says Dr. Joel Nitzkin, a senior fellow in tobacco policy for the R Street Institute.
The Obamacare “disaster” is everywhere. Recently, a poll in Transom showed that 42% of Indpendents trust democrats in regards to healthcare, whereas 58% trust Republicans. Ben Domenech, senior fellow from The Heartland Institute, says the poll shows a major shift in attitudes; historically, democrats have been viewed in favor regarding health care.
In this podcast, Domenech warns of the coming “dominoes” of Obamacare implementation. In the coming year, we will likely see a spill-over of disruption into the employer-based insurance market. In fact, the American Enterprise Institute estimates we could see up to 50 million cancellations in the next year.
The first major domino of Obamacare was the website launch, healthcare.gov. Domenech says we’ve had two unexpected dominoes as well;
1. Epic policy cancellations
2. The non-functioning back end of heatlhcare.gov. In fact, the back end isn’t even fully built yet…
To illustrate the disastrous quality of Obamacare, we can turn to a poll by CBS who found that 84% of democrats said they wanted Obamacare changed or repealed. How astonishing!
Domenech predicts another domino, which he calls “doc shock”. He predicts that the large, quality-care hospitals like the Mayo Clinic, Cedars-Sinai, and M.D. Anderson will see an enormous amount of disruption (As well as the patients who need them). Most of the Obamacare exchange plans cut the top hospitals out of the networks because they’re too expensive to support. This means that families who need quality care for cancer or other such serious illnesses won’t be able to purchase health insurance via the exchange that covers what they need.
All-in-all, Obamacare will cause some major disruptions in the health care world; for doctors, hospitals, and patients alike.
Listen to the podcast in the player above.
Americans know the Internet, wireless, and broadband have revolutionized communications. In six years, nearly three quarters of Americans have become smart-phone or tablet users!
House Energy and Commerce Committee Chairman Fred Upton and Subcommittee Chairman Greg Walden understand America’s biggest communications disconnect.
They know the core of America’s communications law was written in 1934 based on 19th century technology and regulatory assumptions and is in serious need of overhaul. They know America has 1G communications law in a 4G world.
Chairmen Upton and Walden are showing much needed leadership in thoughtfully and diligently beginning the important multi-year task of modernizing and simplifying communications law for the 21st century.
They appreciate the risks of relying on 1934 technology law that has no living authors and technology assumptions that predate the TV, computers, and cellular, let alone today’s world of the Internet, broadband, smart-phones and apps.
They rightfully have concerns that outdated law that incorrectly presumes monopolies and that is inherently hostile to competition and innovation could snag 21st century growth and innovation in the legal blight, rubble and underbrush of the distant past.
Why force companies of today to run an obstacle course of obsolete technology law in order to grow and innovate? Much of this law has outlived its usefulness and is a drag, distortion, and discouragement of further communications growth and innovation.
So what’s the need for change? What isn’t working for a 21st century marketplace?
Technologically, legacy law assumes inefficient, analog, electrical, continuous-voltage function technology, the opposite of today’s hyper-efficient, digital, and discontinuous-voltage technology of computers.
This profoundly wrong technology predicate means the core law presumes all communications technologies have monopoly economic characteristics requiring preemptive, technology-specific, or “silo-ed” regulation.
A converged Internet world burdened with myopic silo-regulation inherently suffers from huge and unnecessary inefficiencies and impediments to competition and innovation.
Another fundamentally incorrect technology assumption of legacy law is that “place” matters.
In the monopoly wire line-centric world of the distant past, “place” was literally how and where the government regulated most everything.
Today, both mobile-wireless and the Internet make “place” largely irrelevant. People are no longer tied to a wired place and companies can access the Internet virtually anywhere.
Simply, people expect to be able to communicate and access the Internet from anywhere, when legacy law still assumes they somehow should be tethered to a specific “place.”
Economically and competitively, much of legacy 1934 law still incorrectly presumes monopolies still exist.
Today there is no telephone monopoly when 75% of Americans have chosen a competitive alternative. And there’s no cable monopoly when 46 million American households subscribe to a cable competitor.
Incorrectly assuming monopolies exist, means legacy law also incorrectly presumes monopoly economics exist. That’s despite the important change in policy toward competition in the 1996 law update and the advent of digital competitive economics.
That profound inherent economic conflict essentially means American communications law is at war with itself.
While legacy law assumes Government network unbundling needs to be done via regulation, digital technology naturally unbundles itself into infinitely-interchangeable building-block technologies.
Tellingly, IP technology enables engineers, and often users, to easily and quickly configure, devices, transmission technologies, and networks before a regulator can even collect their thoughts.
Simply, obsolete law assumes competition is not possible without Government, whereas modern law would recognize that digital and Internet technologies, with their ever-increasing cost efficiencies, naturally enable robust facilities-based broadband competition.
Legally, the FCC increasingly is finding obsolete law dysfunctional in the 21st century. It loss of authority in Comcast v. FCC, and its upcoming likely partial loss of authority in Verizon v. FCC, increasingly leaves the FCC with square pegs to put in round holes.
To stay relevant long term, expect the FCC to work cooperatively with Congress in updating the Communications Act.
As for spectrum, since there is no legal requirement for modern management, accountability or accounting of Government spectrum use, it hoards over two-thirds of this critical natural resource.
This wasteful Government spectrum hoarding denies the private sector the spectrum it needs to keep pace with exploding demand for mobile bandwidth. This benign neglect is becoming a growth cap on the mobile revolution.
In sum, the need for modernizing America’s communications law is urgent and undeniable.
Legacy law is not working for the 21st century marketplace; increasingly it is working against it.
[Originally published on The Daily Caller]
On the same day that the Los Angeles City Council moved to regulate e-cigarettes, the National Center for Public Policy Research’s Jeff Stier testified at a New York City Council Health Committee hearing on a similar measure being rushed through the New York City Council.
In his testimony, Stier encouraged council members to think twice about whether it is in fact “prudent” to extend New York City’s ban on smoking in public places to include e-cigarettes:
I would caution you that this is not the prudent thing to do. The prudent thing to do here is to help cigarette smokers quit. Rushing to judgment here could have serious, unintended consequences that you need to be aware of. It will stop people from quitting smoking. E-cigarettes are not a gateway to smoking. The data does not show that. E-cigarettes are a gateway to quitting smoking.
E-cigarettes, which do not produce smoke, have been a boon to those who have tried to quit smoking but have failed.
“Nicotine,” Stier explains, “is addictive, but not particularly harmful, especially at the levels consumed by smokers or users of e-cigarettes, who are called ‘vapers’ for the vapor, rather than smoke, emitted by e-cigarettes.”
“Nicotine’s bad reputation should be attributed to its most common delivery device, cigarettes,” says Stier. “Nicotine itself is about as dangerous as the caffeine in soda. Along the same lines, while too much soda can cause weight gain, nobody seriously suggests that caffeine causes obesity. Similarly, e-cigarettes provide the nicotine and the habitual activity of smoking, without the danger of burning tobacco.”
“Mayor Bloomberg and his nanny state allies in New York City and Los Angeles have steam coming out of their ears about e-cigarettes. Here is a product created by private-sector innovation that is doing what many hundreds of millions of dollars of government spending, costly litigation, addictive excise taxes, warning labels and punitive regulation have been unable to do: help cigarette smokers quit happily.”
“Regulators understand that in order to maintain not only their huge budgets, but their basis for authority to control both private-sector businesses as well as personal decisions, they must demonize, delegitimize, and defeat e-cigarettes every step of the way,” Stier says.
“Some, without any basis in science, allege that e-cigarettes are a ‘gateway’ to smoking. But initial studies, as well as empirical evidence, show that e-cigarettes are a major gateway away from, not toward, smoking. For all the heated rhetoric, there’s little dispute in the scientific community: those who quit smoking cigarettes and switch to e-cigarettes reap immediate as well as long-term health benefits. And those improvements are dramatic.”
Stier concludes: “Regulations that treat e-cigarettes the same as their deadly predecessor will have the unintended consequence of keeping smokers smoking. Quitting nicotine use altogether is the best choice. But for those who chose not to, or find it too difficult, e-cigarettes are a potentially life-saving alternative.”
Outgoing New York Mayor Michael Bloomberg, nicknamed “Nanny Bloomberg” by many for his use of government tools to influence what private citizens eat and drink, supports the New York proposal. Bloomberg’s administration imposed New York City’s ban on public smoking in 2003.
Like Los Angeles and New York, Chicago is considering banning the use of smokeless e-cigarettes anywhere in the city tobacco smoking is banned. The proposed ban is supported by Mayor Rahm Emanuel. The sale of e-cigarettes to minors is already appropriately illegal under Illinois state law.
The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from individuals, less than four percent from foundations, and less than two percent from corporations. It receives over 350,000 individual contributions a year from over 96,000 active recent contributors.
Contributions are tax-deductible and greatly appreciated.
[Originally published on Pundicity]