On the Blog
In today’s edition of the Heartland Daily Podcast, we listen in as project manager for Lennie Jarratt speaks before the Illinois Christian Home Educators Conference in Naperville, Illinois. Jarratt was there to talk about Common Core and its effects on Homeschooling.
In the presentation, Jarratt discusses how Common Core drives the curriculum, how it involves excessive testing, and how the related data collection is invasive. He explains how Common Core originated and why it should be opposed. He covers the current efforts to repeal the program and the education bureaucracies efforts to simply rename and rebrand it.
In this episode of The Heartland Institute’s weekly Budget & Tax News podcast, managing editor and research fellow Jesse Hathaway talks with Mercatus Center at George Mason University’s State and Local Policy Project scholar Adam Millsap about a new study ranking each US state’s financial health, based on factors such as short- and long-term debt, fiscal obligations, unfunded pensions and entitlement spending.
According to Millsap, long-term obligations such as taxpayer-funded pensions and healthcare benefits strain state governments’ budgets in every state. Lawmakers must consider the consequences of their decisions, and understanding how each state is performing fiscally can help policymakers do this.
In the rankings, states such as Alaska and North Dakota are doing well, not because their lawmakers are being especially responsible, but because they have such large reserves of cash on hand, making it easier to be irresponsible. These states, however, are starting to struggle, as their finances are dependent on volatile revenue sources. Comparing state governments to a class full of “C” students, Millsap explains, almost all state governments are making irresponsible fiscal decisions, but some states are being slightly less irresponsible than others. States like Alaska and North Dakota may be the best in the class, but they’re still doing poorly, in absolute terms.
Last month’s wind-turbine fire near Palm Springs, CA, that dropped burning debris on the barren ground below, serves as a reminder of just one of the many reasons why people don’t want to live near the towering steel structures. In this case, no one was hurt as the motor fire was in a remote, unincorporated area of Palm Springs. But imagine if it was located just hundreds of feet from your back door—as they are in many locations—and the burning debris was raining down into your yard where your children were playing or onto your roof while you are sleeping.
Other reasons no one wants them nearby include the health impacts. Last month, Dave Langrud, of Alden, MN, sent a six-page, detailed complaint to the Minnesota Public Regulatory Commission. In it, he states: “Wisconsin Power and Light constructed the Bent Tree Wind Farm surrounding my home. There are 19 turbines within one mile and 5 within ½ mile. Both my wife and I have had difficulty sleeping in our home since the turbines started operating. If we leave the area, we don’t have this problem. The turbines have also caused severe headaches for my wife. She didn’t have this problem before the turbines, and this isn’t a problem for her when we spend time away from our home and away from the turbines. When we are home, the problems return.”
In response to another recent ongoing complaints at multiple Minnesota wind projects about the proximity of the turbines to residences, commissioners from the Minnesota Department of Health, Department of Commerce, and Pollution Control Agency acknowledged that regarding permitting and setbacks, “the noise standard was not promulgated with wind turbine-like noise in mind. It addresses audible noise, not infrasound. As such, it is not a perfect measure to use in determining noise-related set-backs between wind turbines and residences.” Yet, it is the “measure” that is used. The Commissioners also acknowledged: “At present there is no available funding to conduct such studies.”
Langrud’s letter addresses property values. He asks: “How do we get a fair price if we sell in order to save our health?” But recent studies prove that it isn’t just those forced to live in the shadows of the turbines whose property values are diminished. Waterfront properties that have offshore wind turbines in their viewshed would have a “big impact on coastal tourism,” according to a study from North Carolina State University. The April 2016 report in Science Daily states: “if turbines are built close to shore, most people said they would choose a different vacation location where they wouldn’t have to see turbines.” The economic impact to the coastal communities is estimated to be “$31 million dollars over 20 years.”
A similar study done in Henderson, NY, found a proposed wind project could have “a total loss in property value of up to about $40 million because of the view of turbines.” An interesting feature of the NY study, not addressed in the NC one is how the loss in property taxes, due to reduced values, will be made up. The Watertown Daily Times points out that most of the homes whose values “would fall sharply due to the view of turbines” are “assessed above $1 million.” It states: “homes in the $200,000 range without a view of turbines would probably see an increase in property taxes to make up for the overall drop in property values.” Robert E. Ashodian, a local resident is quoted as saying: “If property values go down and the town isn’t going to spend less money, the tax rate is going to go significantly up for all of the homeowners who aren’t impacted.” Henderson Supervisor John J. Calkin expressed concern over the “devastating impact” the wind project would have on the town and school district.
Offshore wind turbines were supposed to offer a visual benefit, but they, obviously, bring their own set of problems.
The Financial Times reports: “Building wind farms out at sea, rather than on land where critics say they are an eyesore, has made these power stations a less contentious form of clean energy … But it also makes them dearer than most other power stations and many EU governments face pressure to cut green subsidies that opponents say raise electricity prices and make some industries uncompetitive.” The higher cost argument is what has caused Denmark—known as the international poster child for green energy and the first to venture into offshore wind power—to abandon the policies that subsidized the turbines. Cancelling the coastal wind turbines is said to “save the country around 7 billion Krones ($1 billion).” According to Bloomberg: “The center-right government of [Prime Minister] Lars Loekke Rasmussen wants to scrap an electricity tax that has helped subsidize wind turbines since 1998.” The Danish People’s Party, the largest group in the ruling bloc, is part of the “policy about-face.” Party leader Kristian Thulesen Dahl says: “You have to remember this is a billion-figure cost that we’re passing on to the Danes.” She added: “We also have a responsibility to discuss the costs we impose on Danes over the next 10 years.”
Germany is facing similar problems with its green energy policies. Energy Digital magazine points out that Germany’s rapid expansion of green energy has “driven up electricity costs and placed a strain on the grid.” As a result, Germany has capped wind power expansion. In fact, subsidies—which drove the growth in renewable energy—are being cut throughout Europe. Bloomberg states: “Europe is falling out of love with renewables.”
Then, there are the U.S. utility companies who are forced to buy the more expensive wind-generated electricity due to an abused—but little known in the public—1978 law that was intended to help the U.S. renewable energy industry get on its feet. The Public Utility Regulatory Policies Act (PURPA) was designed to give smaller power players an entry into the market. If wind-turbine projects meet the guidelines, utilities must buy the electricity generated at “often above-market” costs. Instead, in many cases, big projects, owned by one company, get divided up into different parcels with unique project names, but are still owned by the major developer. Energy Biz magazine reports: “PacifiCorp, for one, estimates that such abuses will cost its customers up to $1.1 billion in the coming decade by locking the company into unneeded electricity contracts at rates up to 43-percent higher than market price.” It quotes John Rainbolt, federal affairs chief for Wisconsin-based Alliant Energy: “Our customers essentially pay for PURPA power at 20-percent higher-than-market-based wind prices.” Led by Senator Lisa Murkowski (R-AK), Rep. Fred Upton (R-MI) and Rep. Ed Whitfield (R-KY) a move is underway in Congress to review the nearly 40-year old legislation.
So, residents who live near wind turbines don’t want wind turbines. Nor do residents and renters who have them in the viewshed, governments looking to cut costs, utility companies, or ratepayers. And we haven’t even mentioned those who want to protect birds and bats. Scientific American just addressed the concern that “Bat killings by wind energy turbines continue.” It claims: “wind turbines are, by far, the largest cause of bat mortality around the world” and this includes three species of bats listed—or being considered for listing—under the Endangered Species Act. Bats are important because they eat insects and, therefore, save farmers billions of dollars in pest control each year. Scientific American reports that in addition to dead hawks and eagles found under the wind turbines are thousands of bats.
Who does want wind turbines?
Wind turbine manufacturers, the American Wind Energy Association, and the crony capitalists who benefit from the tax breaks and subsidies—which Robert Bryce, author of Power Hungry and Smaller Faster Lighter Denser Cheaper, reports total more than $176 billion “given to the biggest players in U.S. wind industry.” He states that the growth in wind energy capacity has “not been fueled by consumer demand, but by billions of dollars’ worth of taxpayer money.” To address those who defend rent-seeking wind turbines and squawk about the favorable tax treatment the oil and gas sector gets, Bryce points out: “on an energy equivalent basis, wind energy’s subsidy is nearly three times the current market prices of natural gas.” Even billionaire Warren Buffett acknowledged that the only reason his companies are in the wind business is: “We get a tax credit if we build a lot of wind farms.”
(Note: Each of these stories is from just the past several weeks. There are far more concerns that could be addressed, but that would require a length beyond the attention span of everyone but policy wonks.)
If no one but the rent-seeking crony capitalists want wind turbines, why must people like Minnesota’s Langrud have to endure them? Because the wind energy lobby is powerful and “green energy” sounded good decades ago when the pro green-energy policies like PURPA were enacted. However, as the Bloomberg story on Demark points out: wind power is “a mature industry that no longer needs state aid.” Unfortunately, in December 2015, Congress extended the wind energy tax credits through 2021. But tweaks, such as reforming PURPA, can take place and a new president could totally change the energy emphasis—which would be good, because, it seems, no one really wants wind turbines.
A new report published by the Congressional Budget Office, a nonpartisan federal government agency, estimates a bill awaiting a vote in the U.S. Senate, the Sentencing Reform and Corrections Act (SRCA), would reduce federal spending by $722 million over the next 10 years.
SRCA, sponsored by Sens. Chuck Grassley, R-Iowa, and Richard Durbin, D-Illinois, would revise federally mandated minimum sentences for individuals convicted of some non-violent federal crimes.
Revising sentencing requirements is one way lawmakers can address the growing problem of prison overcrowding and ballooning incarceration spending without compromising public safety, but lawmakers should also consider the role the expanding reach of government has had in driving spending on the U.S. prison system.
In 1986, when aggressive policies such as mandatory minimum sentencing laws began to come into vogue with lawmakers, total state government spending on imprisonment was $21.6 billion, adjusted for inflation. In 2010, state governments were spending about $53.2 billion on criminal justice in present-day dollars.
According to statistics from the U.S Department of Justice’s (DOJ) Uniform Crime Reporting Statistics tool, violent crime rates declined by about 16 percent and property crimes declined by about 22 percent from 1986 to 2010.
So, if the country became less violent and individuals were less likely to commit crimes, why did state spending on government prisons increase by 146 percent over the same period?
It may be somewhat counterintuitive, but the answer is not because governments were spending more money on catching and locking people up.
According to the Government Accountability Office (GAO), tough-on-crime laws, such as the Violent Crime Control and Law Enforcement Act of 1994, which doled out $7.6 billion in taxpayer money to state and local governments to put more police on the streets, could only be credited with reducing overall crime rates by 1.3 percent, over a seven-year period. Factors other than criminal justice spending “accounted for the majority of the decline in crime during this period.”
If crime rates are declining, why is criminal justice spending and incarceration rates going up?
In 1982, DOJ estimated that there were 3,000 actions that could land an individual in federal prison. In 2015, that number has expanded, as nearly 300,000 federal regulations and 4,500 federal criminal statutes are now on the books. When more things are “illegal,” more people get arrested and convicted of doing illegal things.
Another reason federal overregulation contributes to incarceration rates is many laws and regulations are simply poorly written.
One can literally be charged, convicted, and hauled off to the hoosegow without even intending to do wrong by society. In 1991, race car driver Bobby Unser was convicted of committing a federal crime and spent six months in prison. What was Unser’s crime against the people, which necessitated the spending of taxpayer money on housing, food, and clothing?
While driving a snowmobile in Colorado, Unser got lost in a blizzard and spent two days in the wild, building a snow cave to weather the elements. Unable to navigate in the whiteout conditions, Unser accidentally veered into a patch of land owned by the federal government, violating the Wilderness Act of 1964. He was convicted of illegally operating “a snowmobile within a National Forest Wilderness Area.”
As the size of government’s role in everyday people’s lives has grown over the years, so has the government’s ability to ruin people’s lives. Lawmakers across the nation and in Washington need to re-evaluate whether taxpayers are getting the criminal justice system they deserve and spend millions of dollars per year to support.
Having already done yeoman’s work stifling economic growth and job creation, President Obama’s Environmental Protection Agency is doubling down again.
The United States created a paltry 38,000 new jobs in May: one for every 8,000 Americans. Its labor force participation rate is a miserable 63% – meaning 93 million Americans are not working, while 6.4 million more are trying to feed their families on involuntary part-time positions and a fraction of their previous salaries. Manufacturing lost another 20,000 jobs in May, as the economy grew at an almost stagnant 0.8% the first quarter of 2016. Middle class family incomes and net worth continue to slide.
Meanwhile, well-paid federal bureaucrats increasingly regulate our lives, livelihoods and living standards, hand down fines and jail terms for some 5,000 federal crimes and 300,000 criminal offenses, and inflict $1.9 trillion in annual regulatory compliance costs on families and businesses.
EPA’s war on coal has already cost thousands of jobs in mines, power plants and dependent businesses. Low oil prices amid a tepid, over-regulated, climate-fixated, crony-corporatist American, European and international economy have already killed thousands of US oil patch jobs.
On June 3 EPA issued more rules: methane emission standards for new and modified oil and natural gas drilling, fracking, pipeline and other operations. Under steady environmentalist pressure, it may be only a matter of time before the agency covers existing operations – and maybe even livestock, rice growing, landfills, sewage treatment plants and other methane-emitting activities.
The agency justifies these new job-killing rules by citing something it calls the “social cost of methane,” which is patterned after its equally arbitrary, speculative, infinitely malleable “social cost of carbon.” (Carbon, of course, actually means carbon dioxide – the miracle molecule that enables plant growth and makes all life on Earth possible.) Both the SCM and SCC are needed, EPA insists, to prevent dangerous manmade global warming and climate change, which it claims are driven by these two trace gases.
EPA’s methane claims are absurd. Methane emissions from US hydraulic fracturing operations have plummeted 79% and from the overall US natural gas sector by 11% since 2005.
Moreover, methane is a tiny 0.00017% of the atmosphere, the equivalent of $1.70 out of $1 million. According to the Intergovernmental Panel on Climate Change, 17% of that is from energy production and use; 26% comes from agriculture, landfills and sewage; and the remaining 57% is from natural sources. (Carbon dioxide, the other climate bogeyman, is 0.04% of the atmosphere – 400 ppm.)
The United States accounts for a mere 9% of the world’s total manmade methane – and just 29% of that is from oil and gas operations that provide 63% of all the energy that powers America. That means US oil and gas account for less than 3% of global manmade methane emissions – and thus just 0.000004% of all the methane in Earth’s atmosphere. That’s equivalent to 4 cents out of $1 million!
EPA insists that this undetectable amount will cause a global climate catastrophe, and forcing the oil industry to spend billions of dollars to reduce its already minimal methane emissions will bring billions in health and environmental benefits via climate change prevention. It says methane is 23 (or 28 or 35) times more potent than carbon dioxide as a greenhouse gas, and the USA must lead the way. What nonsense.
The atmosphere contains 235 times more carbon dioxide than methane – so this “ultra-potent” greenhouse gas will have only 10-15% of CO2’s supposed global warming power. The US petroleum industry’s contribution is utterly meaningless, especially compared to the solar, oceanic, cosmic and other powerful natural forces that have driven climate change throughout Earth and human history.
Of course, EPA’s shenanigans don’t end there.
The agency’s “social cost of methane” calculations rely on arbitrary 2.5, 3 and 5 percent “discount rates” that supposedly quantify the present value of future regulatory benefits, derived from preventing climate chaos 20, 50 or 100 years from now. The rates yield miraculous compounded benefits up to $1,700 per ton of methane emissions prevented by 2020 to $3,300 per ton by 2050. They could bring up to $550 million in alleged health benefits by 2025 – for “only” $330 million in oil industry costs.
But if EPA had used the 7% discount rate required under Office of Management and Budget guidelines, the supposed benefits would plummet to only $259 per ton by 2020. Naturally, EPA didn’t use that rate.
Even more dishonest, as it did for its “social cost of carbon,” EPA’s analysis incorporates virtually every conceivable “cost” of methane emissions and thus alleged “dangerous climate change” – to agriculture, forestry, water resources, “forced migration” of people and wildlife, human health and disease, rising sea levels, flooded coastal cities, ecosystems and wetlands harmed by too much or too little rain, et cetera.
But it completely ignores every obvious and enormous benefit of using oil and natural gas: generating reliable, affordable electricity for lights, heat, air conditioning, computers, electric vehicles and countless other applications; manufacturing fertilizers, plastics, paints and pharmaceuticals; and even reducing CO2 emissions by replacing coal in electricity generation. EPA also ignores the real, obvious and enormous health impairment from millions more people rendered unemployed, poor and unable to heat their homes.
That is the critical point. But almost as important, the alleged, exaggerated, computer-conjured and illusory benefits from these SCM regulations accrue to the world as a whole – while the very real costs are incurred solely by American companies, consumers and taxpayers. EPA doesn’t mention that.
And to top it off, the mandated reductions in US methane emissions will be imperceptible amid the world’s enormous and rapidly increasing oil, natural gas and coal production and use. In fact, 59 nations are already planning to build more than 1,200 new coal-fired power plants – on top of what they and developed nations are already building.
China, India, Russia and Europe together emit more than five times the methane that the USA does, and the world just set new oil and natural gas consumption records. In fact, the net increase in petroleum consumption was 2.6 times the overall increase in renewable energy use.
Indeed, fossil fuels now account for 79% of total global energy consumption – compared to 0.7% for wind and solar energy combined. The much-touted figure of 19% global renewable energy cleverly hides the fact that 68% of that consumption total is wood, animal dung and hydroelectric energy. Even more astounding, wood and dung account for 13 times more energy worldwide than wind and solar combined!
India has said it will not ratify the Paris treaty anytime soon, and will continue using fossil fuels to bring electricity to people and businesses and improve living standards. Meanwhile, renewable energy spending fell 46% in Germany and 21% overall in Europe in 2015 from the previous year.
EPA’s SCC and SCM scam underscores the religious dogma that drives the Obama Administration’s climate change agenda and ideological determination to end hydrocarbon use in America. Perhaps worse, presidential candidate Hillary Clinton has bragged about putting still more coal miners out of work. She has also said she would ban drilling on all onshore and offshore public lands, and regulate fracking into oblivion on state and private lands. Senator Bernie Sanders will almost assuredly push her and the Democratic Party even further to the Left on energy policies.
These policies would put even more Americans out of work, landing them on welfare rolls and forcing them to depend on unsustainable government handouts that rely on taking more money from an ever-shrinking workforce. Americans would have to get used to the idea of having lights, AC and computers when increasingly expensive electricity is available – instead of when we need it. What a depressing future that would be for our children and grandchildren.
With due credit to “Ripley’s Believe it or Not!®,”so much odd and bizarre is happening at the FCC in the “name” of “privacy” that the topic calls for its own collection of: “Believe it or Not!®” oddities.
Title II Privacy Proposed Rules
The FCC claims consumer privacy is important, but preempted existing FTC privacy regulation of broadband providers before they had any replacement privacy protections in place, so U.S. broadband consumers have been left without any federal privacy protection for over a year!
If a consumer asks the FCC if the private network information that the FCC claims is important to protect, would be kept private by any company other than the ISP, the FCC would have to answer: no!
When the FCC claims they have no authority to regulate edge platforms for privacy, they omit the fact that it is the FCC’s discretion not to do so, because the Chairman’s original Open Internet remand proposal would have given them Title II privacy authority over edge platforms!
In claiming the FCC needed the “strongest possible” Title II regulatory authority to protect Internet users, the FCC may adopt the “weakest possible” Internet privacy rules because the FCC does not want to apply them to Internet edge platforms where the biggest potential privacy threats to users reside!
The FCC claims users deserve strong control over how their private network information is used, but FCC staff rejected, without an FCC vote, Consumer Watchdog’s petition to give users control over how their private network information is used via a Do Not Track list!
The FCC asserted Title II privacy authority over wireless by declaring the public switched telephone network and the Internet to be one in the same, while proposing to implement its Title II privacy authority completely differently, only for broadband, and not at all for Internet edge platforms!
Since Google at the last minute got the FCC to exempt edge providers from Title II regulation and privacy responsibilities, a consumer’s broadband upstream traffic would be privacy protected, but its downstream traffic would not!
Some consumer groups publicly backing the FCC’s Title II privacy proposal appear to be more interested in protecting the worst edge platform privacy offenders from FCC privacy regulation than protecting consumers’ privacy!
AllVid Set-Top Box Proposed Privacy Non-Rules
The FCC claims it is important for the FCC to have direct Title II legal authority to protect consumers’ private network information, but in the AllVid proceeding, the FCC is fighting hard to force consumers’ private video viewing information, to be made publicly available to edge providers, in direct contravention of the FCC’s direct legal duty to protect consumers’ video viewing privacy!
In claiming that the FCC had superior Title II privacy authority to the FTC’s, as justification for preempting FTC’s successful and longstanding privacy jurisdiction over broadband providers, the FCC is now claiming it can protect consumers’ video viewing privacy by edge providers when the FCC, in rejecting the Do Not Track petition, promised: the FCC “has been unequivocal in declaring that it has no intent to regulate edge providers!”
Internet Advertising Competition
When the FCC’s mantra is “competition, competition, competition,” and when Mary Meeker’s Internet Trends report (p. 44), spotlights that Google and Facebook dominate 76% of U.S. Internet advertising growth, why is the FCC proactively protecting such dominant edge platforms from more Internet advertising competition from ISPs?
Strange but true.
“Believe it or Not!®”
If you don’t visit Somewhat Reasonable and the Heartlander digital magazine every day, you’re missing out on some of the best news and commentary on liberty and free markets you can find. But worry not, freedom lovers! The Heartland Weekly Email is here for you every Friday with a highlight show. Subscribe to the email today, and read this week’s edition below.
Government Tech Waste Illustrates Disrespect for Taxpayers
Jesse Hathaway, The Hill
During the Eisenhower administration, the Treasury Department used state-of-the-art computer technology to maintain the nerve center of the U.S. tax system. More than 50 years later, nothing has changed – literally! Treasury’s IT systems haven’t been updated in 56 years. A new report from the Government Accountability Office (GAO) reveals how many government agencies are operating on outdated and obsolete technology. The most frightening example comes from the Department of Defense, which is still using 8-inch floppy disks to maintain the American nuclear missile arsenal. READ MORE
GMO Labeling Laws Are Harmful and Unnecessary
Tim Benson, Heartland Research & Commentary
Starting July 1, all food in Vermont (except meat and cheese) that contains genetically modified organisms (GMOs) must carry an identifying label. Several other states are lining up to follow suit, so it’s important to take a look into what effects this law may have. Hundreds of studies prove the safety of GMOs, but that hardly matters when state-mandated labels carry a stigma, conditioning the public to falsely believe GMOs are dangerous and should be avoided. READ MORE
No, Radical Environmentalism Is Not Inevitable
Joseph Bast, Somewhat Reasonable
Instead of trying to win the climate change debate, the radical environmental left is acting as if its world view has already won. Case in point: a recent Huffington Post essay claims the culture has inevitably shifted toward embracing “environmentalism.” The author implies those opposed to the radical views of Earth First and Greenpeace are racists, sexists, xenophobic, and homophobic. Heartland Institute President Joseph Bast responds, highlighting the author’s most dishonest and disingenuous claims. READ MORE
Featured Podcast: Dr. David Wojick: How Government Funding Bias Corrupts Science
David Wojick, Ph.D., former consultant with the Office of Scientific and Technical Information at the U.S. Department of Energy, joinsEnvironment & Climate News Managing Editor H. Sterling Burnett to discuss how government funding corrupts science. Wojick explains how some prominent science organizations follow government money when studying climate change – and the government tends to want to see conclusions that support the discredited hypothesis that human activity is causing a climate crisis. LISTEN TO MORE
Coming Next Week to Arlington Heights: Know Your Second Amendment Rights
On Wednesday, June 15, a panel of experts will be at The Heartland Institute’s Andrew Breitbart Freedom Center in Arlington Heights, Illinois to discuss the Second Amendment and how government at all levels is continually challenging that right to bear arms. And then on Monday, June 20, join The Heartland Institute at the Union League Club in Chicago as we welcome energy experts Stephen Moore of The Heritage Foundation and Kathleen Hartnett White of the Texas Public Policy Foundation, who will make an unapologetic case in favor of fossil fuels. SEE UPCOMING EVENTS HERE
Fracking and Frac Sand Mining Contribute to Cleaner Air
Isaac Orr, The Oklahoman
It’s understandable that people living near industrial sand facilities would be concerned about the potential impacts of sand mining on the environment and human health. Their concern makes it all the more important to recognize that the best available science on the topic shows industrial sand mines and processing plants pose virtually no threat to air quality near these facilities. In fact, the sand mined in the Upper Midwest is playing an important role in reducing air pollution across the nation by encouraging fracking for abundant and cleaner-burning natural gas. READ MORE
Give Vision Patients Protection, not ‘Eye of Newt,’ in Lobbyists Witches’ Brew
Michael Hamilton, Consumer Power Report
Free-market advocates have come to expect legislation to produce results exactly opposite what their names suggest – can anyone say, “Affordable Care Act”? We are thus immediately wary of a new bill, the Contact Lens Consumer Health Protection Act. The law seeks to impose regulations that would essentially kill a new tech startup offering a do-it-yourself online eye exam. Aaron Dallek, CEO and cofounder of Opternative, calls the act a “protectionist bill” that serves only entrenched interests in the industry. READ MORE
What’s the Difference Between K–12 and College Again?
Joy Pullmann, School Choice Weekly
As Milton Friedman explained in his seminal essay on the role of government in education, the line between K–12 and college is not arbitrary. The Founders’ understanding of public education was to develop America’s young people into good citizens capable of governing themselves, as our unique system of government requires. By contrast, college educations benefit the individual more than the general public. READ MORE
Bonus Podcast: In The Tank (ep41): Independent Women’s Forum, Ranking States, Unemployment Rates
John and Donny continue their exploration of think tanks across the country in episode #41 of the In The Tank Podcast. Sabrina Schaeffer, executive director of the Independent Women’s Forum, joins the show to talk about IWF and its new report, “Working for Women: A Modern Agenda for Improving Women’s Lives.” This episode also features work from the Mercatus Center, Rhode Island Center for Freedom and Prosperity, and more. LISTEN HERE
Help Us Stop Wikipedia’s Lies!
Joseph L. Bast, Somewhat Reasonable
Many people rely on our profile on Wikipedia to provide an objective description of our mission, programs, and accomplishments. Alas, the profile they find there is a fake, filled with lies and libel about our funding, tactics, and the positions we take on controversial issues. Wikipedia refuses to make the changes we request. It even deletes and reverses all the changes made by others who know the profile is unreliable. We need your help! READ MORE
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In The Tank Podcast (ep42): DeVoe L. Moore Center, 10 Things Keeping Us Poor, Uber Unions, and Carbon Taxes
John and Donny continue their exploration of think tanks in episode #42 of the In The Tank Podcast. This weekly podcast features (as always) interviews, debates, and roundtable discussions that explore the work of think tanks across the country. The show is available for download as part of the Heartland Daily Podcast every Friday. Today’s podcast features work from the Devoe L. Moore Center, the Maine Heritage Policy Center, the Mackinac Center, American’s for Tax Reform, and the Heritage Foundation.
Better Know a Think Tank
In today’s edition of the Better Know a Think Tank segment, Donny teams up with Director of Communications Jim Lakely to welcome Dr. Sam Staley, Managing Director of the DeVoe L. Moore Center out of Florida State University. Dr. Staley joins the show to talk about his organization as well as the impact of regulations, sports stadium subsidies, and public financing of mass transit.
Featured Work of the Week
Featured this week is a policy study from The Maine Heritage Policy Center titled “10 Things Keeping Mainers Poor.” The study explains how the state is struggling, how the percentage living under the poverty level is growing, and why that is. While this study is specific to the state, Donny explains how many of the outlined items in the report can be applied to the most, if not all, states across the country.
In the World of Think Tankery
Uber, the innovative peer-to-peer ride sharing program, has been under a constant regulatory assault since its inception. A new article authored by Vincent Vernuccio, Labor Policy Director at the Mackinac Center discusses the steps Uber has taken to get out ahead of these calls for increased regulation. The article, titled “Uber Disrupts Organized Labor and a Union may get More Dues Paying Members,” talks about how Uber and the International Association of Machinists District 15 established a Independent Drivers Guild to supply limited union benefits. The author explains how the pseudo-union is good step, but it leaves the door open for a move to a more traditional union model.
In the last part of this segment Donny and John talk about the Carbon Tax. A letter from Grover Norquist, President of the Americans for Tax Reform organization, urges Senator Roy Blunt to to fight against any form of a carbon tax. Additionally, Testimony before the Committee on Finance by David Kreutzer from the Heritage Foundation lays out many of the details. According to Kreutzer, a carbon tax would impose major negative impacts on people and the economy without yielding any substantial benefits.
- Property and Environment Research Center (PERC) – Property Rights, Markets, and Freedom (Tuesday, June 21), in Bozeman, Montana.
- Heartland Institute – Funding Education Choice: Jason Bedrick (Wednesday, June 8) @ The Heartland Institute in Arlington Heights, Illinois
- Cato Institute – Cato University 2016 (Starting July 24) @ The Cato Institute in Washington D.C.
Last week, Federal Reserve Board Chairman Janet Yellen was awarded the Radcliffe Medal at Harvard’s Radcliffe Institute for Advanced Study. At a lunch in Yellen’s honor, Lizabeth Cohen, dean of the institute, praised the Fed chair’s “steadfast commitment to robust growth” and the way the she “steers our economy,” guided by the philosophy of her Yale mentor, Keynesian economist James Tobin.
Embedded in Cohen’s seemingly innocuous presentation of the award — as well as Yellen’s subsequent conversation with Harvard economist Gregory Mankiw — are several important premises about what economics is and what economists do. For generations, the mainstream of the economics profession — personified by Yellen and her predecessor, Ben Bernanke — has treated fiscal and monetary policy as, in Yellen’s own words, “tools” to promote growth and end economic inequalities.
That Yellen’s views are sincerely held is beyond question. But it is an open question whether the central bank really can “steer” the economy and whether its policies deliver the promised results.
A recent report from the St. Louis Fed suggests that Federal Reserve policies such as quantitative easing and artificially low interest rates do not moderate inequality. On the contrary, by focusing on buoying stock prices, these policies have inadvertently funneled more money to the very rich — especially to those with enough disposable incomes to invest in the equities market.
Thus, as economist Charles Wolf, Jr. has argued, the Fed’s policies have aggravated wealth and income inequality in the United States. Citing a rise in the country’s “Gini coefficient” — a way that economists measure inequality — Wolf notes that “private equity, hedge funds and venture capital funds [are among the] major beneficiaries of near-zero short-term interest rates.”
Libertarians have, since the Fed’s founding, warned that such monetary manipulations would benefit special-interest groups, in particular, the financial-world insiders who are best situated to take advantage of them. There is a disconnect between the Fed’s stated goals and the strategies it implements — a disconnect that can be traced back to a fundamental flaw in current, mainstream economic thinking.
In his forthcoming book Specialization and Trade: A Re-Introduction to Economics, economist Arnold Kling attempts to “expose and try to correct” certain widespread misconceptions about economics — in particular, about the dynamic phenomena of specialization and trade. Kling contends the economics profession went astray in the 20thcentury, with economists settling into a flawed paradigm during World War II, one that treats the economy as an apparatus to be controlled and repaired by appointed experts.
Following journalist Greg Ip, Kling categorizes economists into two groups: “ecologists” and “engineers.” The engineers try to “steer” the economy by employing mathematical models as tools. The ecologists, by contrast, are skeptics; they are reluctant to generalize from discrete data sets and mathematical equations. As Friedrich Hayek put it in his Nobel Prize lecture “The Pretense of Knowledge,” these economists are distrustful of the tendency of their discipline to “imitate … the procedures of the brilliantly successful physical sciences.” For this reason, the ecologists are less inclined to try to steer the economy.
It may not be immediately obvious why economics shouldn’t imitate the physical sciences. Given the remarkable advancement of scientific methods, the processing power of our computers, and the ostensibly boundless sophistication of our mathematical models, we might believe that central bankers, armed with latest economics research, are capable of treating economic infirmities.
But Hayek recognized something few economists understand today: that what we misleadingly call “the economy” is infinitely more complex than any machine or edifice human beings could ever design or build. The economy is in fact a living, changing, moving web of disparate actions and entities, each of which is composed of multiple, subjective judgments and motivations.
This is a difficult notion for economists who have been trained to regard themselves as practitioners of a “hard” science such as physics. The problem is that, unlike physicists, economists can’t come even close to controlling conditions in their laboratory — the economy — making it difficult, if not impossible, to isolate the causes of a given economic outcome. For this reason, Kling argues, economists must rely instead on “hard-to-verify interpretive frameworks.” These are the sets of philosophical ideas and normative claims that inform our judgments about the events we observe.
The ecologist’s skepticism is not global or unqualified; it’s not as though economics is entirely outside the realm of human understanding. The point, rather, is that we can know very little about this infinitely complex thing we call “the economy” at any given time. For that reason, we should hesitate to inflict our ignorance upon it.
Central bankers such as Yellen would do well to heed Hayek’s call for a humbler approach to economics.
Silicon Valley entrepreneur Peter Thiel is a pretty smart guy. As partial evidence, I give you his self-made net worth of $2.7 billion. He co-founded online payment mega-company PayPal – which was in 2002 sold to eBay for $1.5 billion. Anyone who saw the very good flick “The Social Network” knows Thiel was one of the first outside investors in Facebook. He still owns a chunk, and is on their Board. He invested in LinkedIn. He’s…done well.
Thiel obviously has a knack for knowing what is worth his money, time and effort. So it was noteworthy when he officially acknowledged that he helped fund professional wrestler Hulk Hogan’s lawsuit against the online publication Gawker (Gawker had amongst other things posted a Hogan sex tape.) Hogan was awarded $140 million for Gawker’s invasion of his privacy.
Why did Thiel fund Hogan? Because nine years ago, Gawkerinvaded Thiel’s privacy – with a story headlined “Peter Thiel is Totally Gay, People.” Thiel said Gawker followed up with similarly invasionary stories on several of his friends (and others) – which Thiel said “ruined people’s lives for no reason.”
So Thiel “funded a team of lawyers to find and help ‘victims’ of the company’s coverage mount cases against Gawker.” Which begat Hogan. Thiel assessed why he stepped up: “I can defend myself. Most of the people they attack are not people in my category. They usually attack less prominent, far less wealthy people that simply can’t defend themselves…It’s less about revenge and more about specific deterrence.”
Thiel should apply these very words and this perspective to patents – which he bizarrely loathes and denounces. Thiel doesn’t at all like patent-protection lawsuits – especially when they are filed against him and his business interests.
But this opposition directly contradicts his very reasoned, reasonable explanation of why he launched Team Lawsuit against Gawker. In the tech world, huge companies (See: Google– Net Worth: $350 billion) routinely steal patented things – usually from “less prominent, far less wealthy” inventors “that simply can’t defend themselves.” It’s the classic bully move –Gawker would be proud. Thiel should be appalled.
In fact, this bully abuse of patent holders has contributed to an increase in the number of “patent trolls” people like Thiel loath. “Patent trolls” are actually nothing more than people who own patents – but don’t actively manufacture anything
with them. Often they purchase the patents as an investment – to make up the purchase price (and then some) by charging people to license them. A perfectly valid business practice.
Why do the inventors themselves sell their patents? Really, it’s none of your business – it’s their property, and they can do with them whatever legal thing they wish. That being said – there are a couple of routine reasons.
One: Have you ever met an inventor? They can be…quirky. They usually aren’t the CEO type. The last thing most want to do after inventing something – is go into the business of selling, manufacturing and distributing it. They would much prefer to make some coin on their last invention – and plow it into their next. So they sell their patents.
Two: Again, inventors oft don’t have a lot of coin. Certainly not Peter Thiel-coin. So if a giant company (See: Google) steals their patent – they are not in a fiscal position to sue and do anything about it. So to ensure they get something for their patent, they sell it – to people with more coin to fend off the thieves (See: Google).
So opposition to “patent trolls” by the likes of Peter Thiel – actually creates more “patent trolls.” In a sense, inventors are outsourcing the protection of their patents – just as Thiel outsourced his legal campaign against Gawker.
Meanwhile, our United States Congress has crafted legislation (the Innovation and PATENT Acts) – that makes it even harder for inventors to protect their patents. These bills make it more difficult and much more expensive for patent holders to sue in defense of their property.
Which will lead even more cash-strapped inventors – to sell their patents to more-fortified “patent trolls.” Even more of the exact opposite result the likes of Thiel say they want.
Thiel doesn’t like bullies like Gawker – and he’s exactly right. Bullies stink on ice. But Thiel is worth $2.7 billion – which means he too can be a fairly huge bully if wants. Sadly, he appears to want to be – and to embolden and empower other bullies – when it comes to patents.
That ain’t good – and it ain’t in keeping with Thiel’s Gawker Team Lawsuit mission statement.
America! For more than 250 years the word has represented hope, opportunity, a second chance, and freedom. In America the accident of a man’s birth did not have to serve as an inescapable weight that dictated a person’s fate or that of his family. The American identity is shaped, not predetermined. We are a society of the free.
Once a newcomer – the immigrant – stepped on American soil he left the political tyrannies and economic barriers of the “old world” behind. A willingness to work hard and to bear the risks of one’s own decisions, the possession of a spirit of enterprise, and a little bit of luck were the keys to the doors of success in their “new world” home.
Visitors from Europe traveling to America in the nineteenth century, Frenchmen like Alexis de Tocqueville and Michel Chevalier, marveled at the energy and adaptability of the ordinary American. An American paid his own way, took responsibility for his actions, and showed versatility in the face of change, often switching his occupation, profession, or trade several times during his life, and frequently moving about from one part of the country to another.American Ideals Don’t Need Regulating
What’s more, individual Americans demonstrated a generous spirit of charity and voluntary effort to assist those who had fallen upon hard times, as well as to deal with a wide variety of common community services in their cities, towns, and villages.
Those foreign observers of American life noted that no man bowed to another because of the hereditary accident of birth. Each man viewed himself as good as any other, to be judged on the basis of his talents and abilities as well as his character and conduct as a human being.
Even the scar of slavery that blemished the American landscape through more than half of the nineteenth century stood out as something inherently inconsistent and untrue to the vision and conception of a society of free men laid down by those Founding Fathers. The logic of liberty meant that slavery, and all other denials of equal rights before the law, would eventually have to end, in one way or another, if the claim of freedom for all was not to remain confronted with a cruel hypocrisy to the ideal.A Free America’s Wondrous Fruits
What a glorious country this America was. Here was a land of free individuals who were able to pursue their dreams and fulfill their peaceful desires. They were free men who could put their own labor to work, acquire property, accumulate wealth, and fashion their own lives. They associated on the basis of freedom of exchange, and benefited each other by trading their talents through a network of division of labor that was kept in order through the competitive processes of market-guided supply and demand.
In this free marketplace, the creative entrepreneurial spirit was set free. Every American was at liberty to try his hand, if he chose, to start his own business and devise innovative ways to offer new and better products to the market, through which he hoped to earn his living. No man was bond to the soil upon which he was born or tied to an occupation or profession inherited from his ancestors. Every individual had an opportunity to be the master of his own fate, with the freedom to move where inclination led him and choose the work that seemed most profitable and attractive.The Counter-Revolution of Collectivism
Then something began to happen in America. The socialist and collectivist ideas that were growing in influence in Europe during the last decades of the nineteenth century began to spread over to the United States. Two generations of young American scholars went off to study in Europe, particularlyGermany, in the 1880s, 1890s, and early 1900s. They became imbued with socialist and state paternalistic conceptions, especially the interventionist and pro-welfare-state ideas that were being taught at the universities in Bismarck’s Germany.
These scholars came back to the United States enthusiastic about their newly learned ideas, convinced that the “negative” idea of freedom dominant in America – an idea of freedom that argued that government’s role was only to secure each individual in his life, liberty, and property – needed to be replaced by a more “positive” notion of freedom. Government should not merely protect citizens from violence and fraud. It should guarantee their health care and retirement pensions; it should regulate their industry and trade, including their wages and conditions of work. The government needed to secure the members of society from all the uncertainties of life, “from cradle to grave” – a phrase that was first popularized during this time.
These European-trained students and academics soon filled the teaching positions in the colleges and universities around the country; they occupied a growing number of jobs in the federal and state bureaucracies; they became the fashionable and “progressive” forward- looking authors of books and magazine articles; they came to dominate the culture of ideas in America.Progressivism’s Attack on Enduring Principles
How did they sway an increasing number of Americans? They asked people to look around them and observe the radical changes in technologies and styles of life. They pointed to the rapid shift from the countryside to growing urban areas. And they asked, how could such a transformed and transforming society remain wedded to the ideas of men who had lived so long ago, in the eighteenth century? How could a great and growing country be tied down to a Constitution written for a bygone era?
The Constitution, these “progressives” argued, had to reflect the changing times – it had to be a “living” and “evolving” document. Progress, for these proselytizers of Prussian paternalism, required a new political elite who would guide and lead the nation into a more collectivist future.Results of Collectivism in America
The fruits of their work are, now, after a century all around us. At the beginning of the twentieth century all levels of government in the United States took in taxes an amount less than 8 percent of the people’s wealth and income. Now all levels of government extract, directly or indirectly, often 50 percent of our earnings, in one way or another. One hundred years ago, government hardly regulated and controlled any of the personal and commercial affairs of the American citizenry. Now, government’s hand intrudes into every corner of our private, business, and social affairs. Indeed, it is hard to find one area of our daily lives that does not pass through the interventionist sieve of state management, oversight, restriction, and command.
Perhaps worst of all, too many of our fellow Americans have become accustomed to and, indeed, demanding of government protection or subsidy of their personal and economic affairs. We are no longer free, self-supporting individuals who solely make our ways through the peaceful transactions and exchanges of the marketplace. We have become collective “interest groups” who lobby and pressure those in political office for favors and privileges at the expense of our neighbors. And the political officeholders are only too happy to grant these political gifts to those who supply campaign contributions and votes as the avenue to their own desires for power and control over those whom they claim to serve.
It is sometimes said, “But we are still the freest country in the world. Our wealth and standard of living are the envy of tens of millions all around the globe. We should be proud of what and who we are.”The Standard for Judging America
Our present greatness in terms of these things, however, is only relative to how much farther other countries have gone down the path of government paternalism and regulation during these past one hundred years. The benchmark of comparison should not be America in relation to other countries in the contemporary world. The standard by which we should judge, especially, our economic liberty should be how much freer the American people were from the stranglehold of government more than one hundred years ago, before those proselytizers of paternalism began to change the political and cultural character of the United States.
By this standard, today’s American people are extremely unfree. We have all become wards of the state. And like the convict who has spent so many years in prison that he is afraid of being released and no longer having his jail keepers to tell him what to do and how to live, we are fearful of even the thought of a life without government caring for us, protecting us, subsidizing us, guiding us, and educating us.
Too many in the older generation in America have lost their understanding of what freedom means and why constitutionally limited government is both necessary and desirable. And the vast majority of the young have never been taught in our government-run schools the ideas, ideals, and political institutional foundations upon which this country of ours was created.
Too many younger Americans presume and take for granted a politically provided financial horn-of-plenty that is to supply all the material means of everyday life and ease, whether it be “free” college tuition or guaranteed healthcare. The recently reawakened interest and sympathy for “democratic” socialism among a significant number of younger voters is one indicator of this trend.The Damage Done by Political Paternalism
What those earlier German-trained political and cultural paternalists set out to do in America at the beginning of the twentieth century has been to a great extent accomplished. We are threatened with becoming a people who have no sense of an invariant nature of man, and who possess no idea of those values and attitudes in the human character so necessary for preserving freedom and prosperity.
The Founding Fathers were not unaware that “times change.” But in the whirlwind of life they saw that reason and experience could and had demonstrated that there were unchanging qualities to the human condition. They understood the various mantles that tyranny could take on – including the cloak of false benevolence and promises of national “greatness” if only a strong man was put in charge to set things right, unrestrained by traditional conceptions of individual rights and liberty and constitutional limitations.
They established a constitutional order that was meant to guard us from the plunder of violent and greedy and power-hungry men and women, while leaving each of us that wide latitude of personal and economic freedom in which we could find our own meanings for life, and adapt to new circumstances consistent with our conscience and concerns.
This is what made America great. This is what made a country in which individuals could say without embarrassment or conceit that they were proud to be Americans. That is the America we are losing.
The Northwestern University College Republicans and the Young America’s Foundation co-sponsored an event featuring author John Stossel on Tuesday, May 24, at 8:00 p.m. at the Leverone Auditorium in Evanston, IL. The topic of Stossel’s speech, “Freedom and Its Enemies.” In keeping with Stossel’s professed political affiliation, a sizable number of Libertarian college students were in attendance at the free event.
John Stossel, a graduate of Princeton University, with a B.A. in psychology, joined Fox Business Network (FBN) in 2009. He is the host of “Stossel”, a weekly program highlighting current consumer issues with a Libertarian viewpoint. (See here for an overall view of what the Libertarian Party stands for.)
Included in its platform is support for drug legalization, free trade, and free-market health care, plus the elimination of campaign finance, gun control laws, the Internal Revenue Service, Social Security and income taxes. Libertarians also espouse a non-interventionist foreign policy.
(As an aside: As a Libertarian Stossel will now have a candidate to vote for in November, having admitted early on in his address that he disliked both Hillary and Trump. Former New Mexico Gov. Gary Johnson won the Libertarian nomination for president at its party’s convention Sunday, May 29, 2016. Although Gary Johnson may get a boost in the 2016 race, a new poll out shows that Johnson looks to be drawing more support from Democrat voters than Republican.)
Stossel has received 19 Emmy Awards and has been honored five times for excellence in consumer reporting by the National Press Club. Earlier in his career, Stossel served as consumer editor for “Good Morning America” and as a reporter at WCBS-TV in New York City. His first job in journalism was as a researcher for KGW-TV (NBC) in Portland, Oregon. Stossel’s economic programs have been adapted into teaching kits by a non-profit organization, “Stossel in the Classroom.
John Stossel Introduced by Northwestern University Republican Club President
Appearing thinner and with a slightly altered speaking voice in the aftermath of his hospitalization and successful treatment for throat cancer in April of this year, Stossel confessed that his academic experience was not all that noteworthy. Stossel used to tell young people they should attend college, but he no longer does, questioning whether Northwestern students were getting something from their steep financial outlays.
In speaking about his own college experience, Stossel told students that those who did the best in college were the ones who didn’t know what they wanted to do upon graduation. As a psychology major at Princeton, when Stossel graduated from college he took every job that came his way. Having never taken a journalism course, Stossel’s work in a newsroom led him to a TV gig delivering the news. Not only did Stossel look like a 12 year old when delivering the news, he also had a stuttering problem. It took Stossel years to completely conquer his stuttering, but he did in time through professional help.
Stossel’s early thinking about how government involvement was necessary for the good of the people grew out of Johnson’s War on Poverty , observed while a student at Princeton. Stossel’s professors told him the problems didn’t need to be solved, but instead to create programs to take care of the problems. The need for government protection was likewise popular concept by the media.
Stossel’s Consumer Reports Win Notice
It was Stossel’s Consumer reports that brought him media attention and for which he won 19 Emmy awards. The public loved them; they were hits. Stossel recounted one early consumer report in which he advocated the licensing of all TV repair shops. It seemed the right thing to do at the time. Why wouldn’t it be a good idea to license all TV repair shops? until Stossel perceived how problems weren’t being solved even after licensing. The consumer wasn’t being helped. Furthermore, there were the same number of complaints. One thing was certain, it cost a fortune in time and money when filling out the licensing forms, which goes to show that rules cause people to do stupid things. Stossel’s explanation of why the economy didn’t perk up after the last depression was based on the massive number of laws and regulations which stifled this nation’s economic growth.
Stossel visited various countries to find out how difficult it would be to start a new business. In 1999 he went to Hong Kong and in one day, with one form, he got legal permission to open a shop, “Stossel Enterprises”, selling ABC trinkets. Contrast this to “Stossel’s Lemonade – 50 cents” business enterprise in New York City which never did get off the ground because of all the regulatory requirements that had to be met. Even after 60 days Stossel couldn’t get a permit to operate his lemonade stand. He could sell the lemonade to patrons, but they weren’t allowed to drink it, and the money had to be returned.
Stossel on Competition and Free Markets
Stossel’s world vision of government to make life better, Princeton instilled, was gradually replaced by watching how the markets worked over the years. As an illustration Stossel spoke about the Trabant car made in GDR (German Democrat Republic), for which there was a five-year waiting period. GDR’s best car, the Wartburg, couldn’t compete with the most mediocre of cars made in America. Good companies will survive. Competition makes things better and cheaper. This is why free markets can also work for medicine. Competition brings prices down and also allow the market to police itself.
OSHA was used by Stossel to show how government laws and regulations often make little difference in the long run. Although work place injuries did drop after OSHA, in reviewing work place injuries before OSCA, it was found that the situation was improving before OSHA. For as this nation became wealthier, she cared more about work place safety. Similarly, free markets handle safety issues better than state controlled entities, which is why in a free society things often get better on their own.
From his initial belief in Johnson’s War on Poverty, Stossel came to realize that Johnson’s policies created a situation where a woman no longer needed to have a man in the house to be taken care of. As such an underclass of people was created. Things, however, did improve for 7 years before all went south. $22 trillion has been spent so far to reduce poverty, but the results are dismal. Even before the War of Poverty things were getting better on their own.
Blunt Assessment: Expect no Social Security
John Stossel had these blunt remarks to share with Northwestern students. In pegging unsustainable the amount of government spending per person in this nation, Stossel discounted any expectation that students might have of receiving Social Security benefits upon retirement. Students were reminded that when Social Security was first established by FDR most people didn’t live until age 65. It was meant for a minority of the American people. There was never a trust fund with a person’s name on it. Instead, the money paid in by workers for future Social Security benefits was spent by greedy politicians to cover government expenses. Now the American people further expect Medicare to be there in their senior years, notwithstanding its exorbitant cost to government. Your futures are being robbed through today’s out-of-control spending.
Why life in America is pretty good?
Despite a massive debt and spending that continues to increase, especially in the last decade, Stossel recounted answers given him by New Jersey high school students when confronted with this question: “Why is life in America pretty good in contrast to other places on Earth with its seven billion inhabitants?”
- Because we have a democracy.
- Because we are a young country.
- Because we have natural resources.
Stossel then related how he has traveled to other countries to look at poverty. Keeping in mind the suggested student criteria, Stossel challenged the students as to why India doesn’t offers a reasonably good life for its citizens. It is a democracy and it has resources. Hong Kong, a Special Administrative Region of the People’s Republic of China, was then considered: Here is a place without a democracy and having no natural resources, yet Hong Kong went from 3rd world poverty status to a place of great wealth.
For Stossel the answer was obvious. The Rule of Law is necessary, but it was because government left free people alone in Hong Kong, that people could make themselves rich. This is the ingredient of prosperity. Government control takes away opportunities for people to succeed and prosper on their own.
Anger Toward Stossel in Defense of Free Markets over Government Regulations
It was after Stossel make the tie between big government and its drawbacks in creating a prosperous and free society that Stossel’s Emmy awards for consumer reporting became a thing of the past. Instead of praise, anger erupted over Stossel’s decision to defend free markets over government regulations. John Stossel’s third book, “No, they Can’t: Why government fails but individuals succeed”, published in 2012, explores the virtues of the free market system vs that of big government. Unlike when government is in control, businesses must please customers with their goods or services as a requisite to remaining in business. Such competition fosters better service and lower costs, unheard of when government controls and dictates.
Stossel, musing how up to now he had spoken mostly about economic freedom, went on to explain the importance of individual freedom. How so? When government gets bigger, we get smaller. Before President Johnson’s Great Society Program in the 1960’s, there were 14,000 mutual aid societies that helped the needy. These societies understood the needs of the people better than the one-size-fits-all government approach which crowds out good voluntary efforts.
Even so, continued Stossel, the ingenuity of the American people and business competition have made life better even for poor Americans, in contrast to a government that can’t even count votes correctly! The American people take supermarkets selling a variety of food at good prices for granted. Likewise taken for granted is cash coming out of ATM machines. Our plastic cards are used to make all kinds of purchases, but many individual contributed to the development of this convenience which is widely used. It was the freedom to realize dreams, despite massive increases in government rules and regulations, that has enabled all we take for granted in this nation today to exist. Such individual freedom has resulted in creating a quality of life that other countries could only dream of having experiencing. Even among the poorest of the poor there are flush toilets.
Stossel challenged students by wondering out loud what it was like for them to live in Illinois?, which he called a “model for failure.”
Question and Answer Time:
In a question addressing Stossel’s views on climate change: Stossel believes that man is causing climate change, but that it would be far better to address the issue when harm to man becomes obvious, rather than spending money now to curtail climate change by building wind turbine and putting up solar panels which depend largely on government subsidies and which require backup power when the sun doesn’t shine and the wind doesn’t blow.
Political Correctness Prevail
In a display of political correctness, before introducing John Stossel the president of the Northwestern Republican Club made this disclaimer, that the views of John Stossel were his alone and were not endorsed by Northwestern University. Furthermore, since John Stossel was invited to visit the Northwestern campus, he had the right to be heard and to be respected.
The same night Stossel spoke at Northwestern, a speaker enlisted by DePaul,Milo Yiannopoulos, had been shut down when a group of activists stormed the stage and allegedly threatened to punch Yiannopoulos in the face. Outrageous tactics by DePaul University to shut down conservative speech are not limited to DePaul.
Recent Stossel Commentary, May 25, 2016
Published the day after Stossel spoke at Northwestern University, this commentary, “Private Is Better”, dovetails with Stossel’s Northwestern address which touted free markets and competition over government control.
The Environmental Protection Agency has a new target in it’s sights…strippers. Now that we have your attention, In this edition of The Heartland Daily Podcast, research fellows Bette Grande and Isaac Orr discuss how the EPA is targeting oil and gas wells that produce less than 15 barrels of oil equivalent per day. These wells, also known as stripper wells, are under attack from new EPA methane regulations that inappropriately apply rules for new wells on these typically older, lower volume wells.
The new rules will be so costly to implement, they will effectively shut down these wells. In 2014, there were 770,000 stripper wells and their production accounted for approximately 20 percent of U.S. oil and gas production. It’s yet another example of the EPA using flawed methods to turn the screws on oil and gas production in the United States.
Recently, the Federal Communications Commission has proposed to construct a new, additional regulatory apparatus, asserting, without any factual support, that creating untested and discriminatory rules for internet service providers (ISPs) will be the silver bullet for protecting consumers’ privacy.
However, since the beginning of the World Wide Web the Federal Trade Commission has exercised oversight of the internet ecosystem, including websites and internet service providers. The agency has been focused on deceptive and unfair practices and on how data have been collected and used. Under this comprehensive FTC approach there have been very few ISP-related privacy or data security issues.
As MANA National President Amy Hinojosa recently wrote in The Huffington Post, “The FTC is the lead federal consumer protection agency and has been a strong cop on the beat for our privacy. But in a classic case of the ‘law of unintended consequences,’ the FTC had the jurisdictional rug pulled from under its feet for a small portion of the internet—broadband providers—due to legal changes contained in the Open Internet rules passed last year.”
Hinojosa continues, “As a result, the FCC—which regulates telecommunications—is now eager to put their footprint in this space by knitting a patchwork set of rules that would apply narrowly to broadband companies while exempting everyone else. In fact, the rules under consideration at the FCC would be a huge step backwards for consumers—confusing consumers and increasing the risk of abusive or discriminatory use of our data online.
Instead of an inconsistent patchwork based on false assumptions and a misreading of the privacy threat, the FCC can and should step back and put consumers ahead of this jurisdictional land grab and learn from the success of the FTC approach that puts consumers in the driver’s seat rather than in a maze.”
As Hinojosa points out, the FCC does not have relevant experience in the consumer privacy realm. While the Communications Act does convey a limited amount of power to cover consumer privacy of satellite and cable subscribers, the actions that the FCC has taken have been almost completely about billing information.
The FTC is appropriately limited to enforcement proceedings after a determination that it has the authority to do so under the relevant law. Such actions send signals to the marketplace as to what is within the bounds of acceptable and legal behavior, allowing for flexible solutions and for innovation to flourish. On the other hand, the FCC makes prophylactic rules which quickly constrain the marketplace with enforcement actions being brought if the rules are violated.
Further, the Communications Act does not provide a basis for the expansion of power that the FCC is seeking. Specifically, the Act contemplates records of phone calls and billing information, not authority over the sorts of broad, personal data the FCC is trying to claim.
Ultimately, too many government entities looking after our privacy means that we do not have any. Consumers will not have a solid understanding of what signals to watch for that indicate a data breach or a scam. The result is a less vigilant populous increasingly prone to their data being collected and used inappropriately without the understanding that certain actions are wrong.
The FCC should bear the burden of proving that it is needed in this area or can add something of value before even considering moving forward. At the very least, a factual, data-driven analysis of whether consumers will gain or be harmed should be undertaken. Even if the Commission had the authority to institute a new and untested regulatory regime doesn’t mean that it should do so.
In 2015, Exelon threatened to shut down up to six of its nuclear power plants in Illinois due to the plants’ unprofitability and the reduced price of coal and natural gas energy sources — unless Exelon received a government bailout from the state. The company claimed it needed direct taxpayer subsidies to keep three unprofitable nuclear power plants open.
Exelon later backed off its threat to close the nuclear plants and, instead, supported a different rescue plan effort: the establishment of a low carbon portfolio standard, which would have required 70 percent of the electricity used in utilities’ distribution systems to come from qualified low carbon-dioxide sources, including solar, wind, hydro, nuclear, tidal, wave and clean coal. Utilities falling short of the 70 percent mark would have had to buy credits to make up the difference. Crain’s Chicago Business reports the rescue plan, which Exelon has also backed away from in recent months, would have charged ratepayers $300 million annually.
In May, Exelon announced another new rescue plan. This time, Exelon plans to close two cash-strapped nuclear plants — one in Clinton in central Illinois and one in the Quad Cities area on the Mississippi River. The new approach would be considerably less lucrative for Exelon than the 2015 rescue plan, which would have imposed monthly surcharges on electric bills statewide, but it is still a form of crony capitalism that requires taxpayers to support private businesses and should therefore be avoided.
According to Crain’s Chicago Business, ComEd, which is owned by Exelon, is touting this latest rescue plan as part of a pathway toward a clean-energy future in Illinois. To move its plan forward, ComEd has allied itself with environmentalists who are committed to revamping the state’s clean-energy law, which for largely technical reasons is supporting next-to-no renewable power development in Illinois.
Exelon and ComEd plan to support comprehensive legislation — called the Next Generation Energy Plan — that will comprise major elements of three bills that did not win approval in the past session of the Illinois General Assembly. This comprehensive legislation would overhaul the law to ensure $140 million per year is available for new solar projects in Illinois.
In 2015, ComEd said its reason for needing taxpayer funds to keep multiple nuclear power plants open is to keep people employed. But now, ComEd says it needs support to keep multiple nuclear power plants open to “drive Illinois’ clean energy future while saving and creating jobs and strengthening the state’s economy.”
Illinois’ current renewable portfolio standard mandates 25 percent of power distribution be composed of renewable energy — not including nuclear — by 2025. The average retail price of electricity in Illinois is already 20 percent higher than in Indiana, 24 percent higher than Iowa’s, and 25 percent higher than in Missouri. This means Illinois residents and businesses already pay $2.1 billion per year more for electricity than they would at Indiana prices and $2.5 billion more than they would at Iowa or Missouri prices.
Justice Clarence Thomas contended the Constitution does not tell the states how to apportion their legislatures at all. His argument was elaborate, and entire books have been written on the subject, but a look at the Constitution itself reveals Thomas is correct.
During the 1960s, Supreme Court justices largely ignored their responsibility to keep the federal government within constitutional bounds. They bullied the states instead, ruling the Constitution’sEqual Protection Clause requires every state to base both houses of its legislature on population. No longer could states give much weight to other factors, such as county and city boundaries. When the voters of Colorado overwhelmingly voted to allow state senate seats to be based on factors other than population, a divided Supreme Court overruled them.
The Equal Protection Clause states, “No State shall… deny to any person within its jurisdiction the equal protection of the laws.” It is one of four rules in Section 1 of the Fourteenth Amendment, adopted in 1868. Those rules were designed to protect newly freed slaves from certain kinds of state tyranny.
What does the Constitution mean when it says that states may not deny “equal protection of the laws”? The most natural reading is states must treat citizens equally. The language addresses “outputs” — law enforcement and state services — rather than citizen inputs, such as voting. If we say a child is entitled to “protection” from his parents, we refer to how his parents treat him. We do not refer to whether the child can dictate to his parents.
Under the natural reading, a state violates the Equal Protection Clause if it protects white people — but not African-Americans — from terrorist groups such as the Ku Klux Klan. Similarly, a state may not deny the right to bear arms to women while allowing it for men. It may not impose stiffer criminal penalties on Lithuanian-Americans or on poor people than on other citizens.
Admittedly, there are times when the most natural reading is not the correct one. One could argue when a state gives more legislative weight to a rural voter than to an urban voter, it also fails to “protect” them equally, but that reading is ruled out by other parts of the Constitution. The very next section of the Fourteenth Amendment acknowledges and accepts the practice of weighing citizen input unequally by acknowledging and accepting the denial of suffrage for women and persons less than 21 years of age. It also acknowledged implicitly a state may disenfranchise some adult males, requiring only that the state’s representation in Congress be reduced proportionately.
If the Equal Protection Clause applied to voting, then Congress could have extended suffrage to racial minorities, women, and others merely by exercising its Fourteenth Amendment authority to enforce the Equal Protection Clause “by appropriate legislation.” Until the Supreme Court rewrote the Clause, however, it was universally recognized that it did not apply to the vote. That is why Americans ratified the Fifteenth Amendment in 1870 to bar states from denying suffrage “on account of race, color, or previous condition of servitude.” That is why Americans ratified the Nineteenth Amendment in 1919 to guarantee women the right to vote. That is also one reason Americans ratified the Twenty-Fourth Amendment, which effectively ended property-based voting restrictions.
So there is little doubt the majority of the justices are wrong and Thomas is right.
What can we do about it? During the 1960s, Sen. Everett Dirksen (R-IL) proposed a constitutional amendment partially overruling the Supreme Court reapportionment cases. The effort stalled with the senator’s death in 1969, but Americans could revive it at any time.
Meet a pediatrician who voluntarily surrendered her board certification in order to protest extortion of physicians by the American Board of Medical Specialties, provide better care for her patients, and influence lawmakers to act.
Dr. Meg Edison’s story has received more than 100,000 page views at the blog Rebel.MD. She is a private practitioner in Grand Rapids, Michigan, a policy advisor to The Heartland Institute, and a Hillsdale College graduate. Edison joins Health Care News managing editor and fellow Hillsdale alumnus Michael Hamilton to explain how forcing doctors to maintain board certification results in poorer patient care and less freedom for doctors and patients, with nothing to show for it.
Behold “Mother May I?” government. Where the private sector can’t do a thing, make a move, invent or innovate – until after the incompetent, pathetically slow government finally gets around to granting permission to do so. If we’re lucky – more likely than not, they’ll say Nay.
This is why our economic growth has remained stifled and stunted. President Barack Obama will be the first chief executive in our nation’s history to never, ever have a year of even 3.0% Gross Domestic Product (GDP) growth. (By contrast, Ronald Reagan – who inherited a far worse economy than did Obama – AVERAGED 3.5% GDP growth.)
The terrible laws passed by President Obama and his Democrat-majority Congress are bad enough. Obamacare has basically outlawed full-time employment. Dodd-Frank didn’t shrink too-big-too-fail banks – it suffocated and shut down thousands of the small banks we all say we want. Leaving us with just the banking monsters with which to deal.
Which is a lesson of too much government – the monster companies are the only ones who can afford it. It’s the little guys who get crushed under the Leviathan’s weight.
The American people found revolting these Democrat laws – and elected first a Republican House and then a Republican Senate to stop them. Did that cause President Obama even to pause? Of course not. His instead became the Unilateral Fiat Administration.
Blocked by the American people (via the Congress we elected), President Obama’s Executive Branch turned to executing sweeping power grabs – unprecedented in both size and number (20,642 – so far). While their awful laws are killing the likes of the health care and banking sectors, regulations are killing industries like coal.
Compliance with just federal regulations – just last year – cost us $1.9 trillion. And regulations are pernicious in ways laws aren’t. We have the Constitution-protected“right…to petition the Government for a redress of grievances.” Which is much easier to do with an elected Congress. We are all-but-powerless when unelected bureaucrats impersonate Congress – and write laws disguised as regulations.
To wit: The Obama Administration’s Federal Communications Commission (FCC). The Commission’s three unelected Democrat bureaucrats executed a huge power grab – so as to execute myriad subsequent ones.
The HUGE grab was the FCC unilaterally rewriting the law determining how the Internet is regulated. Gone was the light-touch regulatory approach emplaced by Congress via its 1996 Telecommunications Act. You know, the one that allowed the Internet to grow faster than nigh anything in human history. To in two decades go from next-to-nothing – to the free speech-free market Xanadu at which we marvel daily.
The Internet was anything but broken. Obama’s FCC insisted on “fixing” it. By imposing 1934 landline telephone laws and regulations – written a half century before anyone knew what an Internet was. The FCC executed this authoritarian, bizarre, time-warp grab – because the FCC has dramatically more regulatory (and taxing) authority over landline telephones than they do the Web. They did it – to unleash their avalanche of subsequent power grabs.
Behold: Network Neutrality. Which plops down the Leviathan between you and the Internet economy. The ever-expanding, constantly innovating Internet – now has to ask the government for permission before doing anything new or different. Which freezes the Web in amber – and will slowly grind perhaps the greatest economic machine in history to a lurching halt.
Behold: “Zero rating.” An Internet wrinkle – which really isn’t even new or different. “Zero rating” is Internet providing companies allowing you unlimited access to websites – without it counting against your data cap. This is the Web equivalent of pre-paid postage and toll-free phone numbers – nothing new or different.
The FCC imposed Net Neutrality in February 2015. Yet in June 2016, we STILL are getting headlines like this:
Sixteen months into the Net Neutrality regime advocates spent a decade-plus saying was imminently, vitally important – and the government STILL hasn’t decided whether or not to grant us permission to engage in this mundane economic practice.
So the entire Internet economy waits, and waits, and stagnates, and…. In a holding pattern over LaGuardia while we wait for incompetent, pathetically slow government to get its act together and make a decision – on whether or not Internet providers can do what phone companies and snail mailers have done for decades.
In other words, Democrat FCC Chairman Tom Wheeler’s incessant mantra about “permission-less innovation” – were talking point lies along the lines of “If you like your health care plan – you can keep your health care plan.”
But when it comes to economy-killing, government-expanding power grabs – the ends justify any means necessary.
And they did it. We’re still stuck with the likes of Obamacare, Dodd-Frank – and Net Neutrality.
And the private sector sinks further beneath the regulatory waves.
The rapid development of frac sand mining in Illinois, Iowa, Minnesota and especially Wisconsin led many people living near mines and processing plants to become concerned about the potential negative impact these facilities could have on local air quality. One of the primary worries some residents cite is the amount of very fine particle pollutants, measuring 2.5 micrometers in diameter (PM2.5), that may be generated from these facilities. But what does the best available evidence tell us?
The Institute for Wisconsin’s Health Incorporated conducted a health impact assessment on the impact of frac sand mining and found it isn’t contributing to hazardous levels of particulate matter. A new study released by the World Health Organization has found the United States as a whole has decreased its PM2.5 air pollution over the past five years, even as frac sand mining has boomed. PM2.5 levels have fallen in part because of increasing reliance on natural gas (which is captured as part of the hydraulic fracking process) to generate electricity. In this respect, the small, spherical grains of frac sand mined in the Upper Midwest are helping to bring cleaner air to the entire country.
Natural gas is a clean-burning fuel, and it is helping to reduce the amount of PM2.5 in the air. Burning gas emits only one-third of the nitrogen oxides and only 1 percent of the sulfur oxides that are emitted when coal is burned. These two compounds can combine with water vapor in the atmosphere to create the PM2.5 particles that have been linked to negative health impacts when they are present in very high concentrations. Those negative impacts include increasing the risk of stroke, heart disease, lung cancer, and chronic and acute respiratory diseases, such as asthma.
Natural gas helps reduce air pollution, and in order to get natural gas, the nation needs more hydraulic fracturing operations. Hydraulic fracturing now accounts for approximately 67 percent of all U.S. natural gas production, making the United States the largest producer of natural gas in the world. Increasing supplies of natural gas have caused energy prices to plummet, making it a significantly cheaper source of fuel to generate electricity with compared to other forms of energy, such as coal.
Low natural gas prices are the reason why the Energy Information Administration has predicted 2016 will be the first year natural gas-fired generation exceeds coal generation in the United States on a year-to-year basis. As natural gas becomes responsible for generating a greater share of the nation’s electricity in the future, and fracking becomes responsible for a greater share of natural gas production, America’s reliance on frac sand mining will only continue to grow.
It’s understandable for people living near industrial sand facilities to be concerned about the potential impacts of sand mining on the environment and human health, but it’s important to understand the best available science on the topic shows industrial sand mines and processing plants pose virtually no harm to air quality near these facilities, and the spherical sand mined in the Upper Midwest is playing an important role in reducing air pollution across the entire nation.
Sand mining must be done in an environmentally responsible manner that minimizes the risks and maximizes the benefits. It’s easy to fixate on what the local impact of a new industry will be, but it’s also important to understand the benefits derived from sand mining extend beyond our own backyards.
Mr. Trump has been castigated for saying that if the government goes bankrupt, he’d get creditors to accept less. That is standard operating procedure for businesses. Creditors make deals because something is better than nothing, and if a company is utterly destroyed, nothing is what they will get. They may complain, but unless they were actually defrauded, they voluntarily assumed a risk of loss, hoping to make a profit.
The situation with government is not quite the same. But neither is it altogether different.
Every knowledgeable person who is not in deep denial knows that the U.S. government has already accumulated debts that can never be repaid, and made promises it cannot keep. How rude of Mr. Trump to say it out loud!
A huge part of the government’s obligation is owed to recipients of Social Security and Medicare. These programs are already paying out more than they take in from payroll taxes. Their future unfunded liabilities have been variously calculated. Maybe they are $40 trillion, maybe $100 trillion. The lowest estimate might as well be infinite: it is impossible for government to pay.
We already have seniors in the streets with signs that say “Hands off my Medicare!”
Say what? Whose Medicare? Its instigator, Lyndon Baines Johnson, said it was his Medicare. To be sure that hisprogram succeeded, he virtually wiped out the private insurance alternative. Aside from a few employment-related programs for which Medicare is the primary payer, almost all plans for persons over 65 are supplements, which only cover part of what Medicare allows.
If an insurance policy is yours, you have a contract with the company. You probably didn’t read it, but you at least got it and should have kept it. Unlike a retirement fund or a real insurance policy, Social Security and Medicare are entitlements—to whatever Congress chooses to provide at a given time. Congress could cancel your benefits at any time, and it has for selected beneficiaries deemed unworthy. What could you do about it aside from voting them out at the next election?
There’s the “social contract.” It’s not enforceable in court; it’s just an ethical obligation. We Baby Boomers didn’t have a choice about paying the tax, and they promised to take care of us. But what does it really mean? We paid taxes to support older retirees, and in turn we expect the government to tax the younger generation to support us. Like in all pyramid schemes, the early subscribers did well, but eventually the pool of new subscribers will run dry.
How about this deal between me and the hard-working young man who is servicing my pickup truck: “I’ll pay a relatively modest tax to provide older people with good benefits, and you’ll pay a higher tax to take care of me, and when the money runs out, the government might buy you a suicide drug.” Would anyone consent to that?
That’s the deal Congress imposed on Americans, who didn’t understand what it meant—or who possibly think it is ok to mortgage the future of our children.
No healthcare reform is credible unless it addresses the impending crash of Medicare. As Mr. Trump said, everything is negotiable, and I’ll make the first offer. I’ll relinquish all claims on Medicare in return for a monthly annuity of half the expected value of Medicare coverage. I’ll take responsibility for paying for my medical care, and forgo the Medicare claims processing, utilization review, “quality assurance,” compliance auditing, etc. At least half of all Medicare revenue is wasted on such administrative overhead. I’d face the risk of a big hospital bill, but better that than the risk of treatment in a facility that benefits from my early demise. Some hospitals might be willing to treat me in return for assigning my annuity to them. Or if I reject Medicare on ethical grounds, I can join a health sharing ministry. To sweeten the deal, the government could exempt me from capital gains taxes if I sell assets to pay those who help me. Most capital gains are fictitious anyway because of deterioration in the value of the dollar. And the government could allow greatly expanded health savings accounts.
People who like “their” Medicare could keep it. The rest of us are willing to deal, Mr. Trump!