Archives: July, 2013

Washington Post: Adding Insult to Obamacare’s Injury

On Sunday, The Washington Post published my letter to the editor:

The excellent July 24 front-page article “Health law’s unintended impact on part-timers” showed how President Obama’s health-care law is cutting part-time workers’ pay by forcing employers to limit these employees’ hours in order to avoid penalties. Yet the reality is even worse.

Obamacare does not authorize those penalties in states that leave the task of establishing a health insurance exchange to the federal government. That means most of the employers the article cited — the commonwealth of Virginia, various Texas employers, the Ohio-based White Castle burger chain, the city of Dearborn, Mich., and Utah’s Granite School District — don’t need to cut part-timers’ hours, because the federal government has no authority to penalize them.

Yet the Obama administration has decreed it will do so anyway, contrary to the clear language of federal law, proving that taxation without representation is not confined to the District.

Two lawsuits have been filed to stop this illegal action — one by the state of Oklahoma, another by employers and individual taxpayers in Kansas, Missouri, Tennessee, Texas, Virginia and West Virginia.

Even so, thousands of part-time workers are already losing wages because of a tax Congress did not authorize. As underemployed music professor Kevin Pace told The Post, “This isn’t right on any level.”

Michael F. Cannon, Washington

The writer is director of health policy studies at the Cato Institute.

On Wednesday, July 31, a House oversight subcommittee will be holding a hearing on the IRS’s illegal taxes, borrowing, and spending.

Cato’s Ivy League Internship

The Wall Street Journal reports:

While some colleges struggle to fill seats, the country’s most selective ones are becoming harder to get into. Seven of the eight Ivy League schools reported they lowered their acceptance rate for this fall, with Harvard leading the pack by accepting less than 6% of its more than 30,000 undergraduate applicants.

As we’ve noted before, perhaps the only student program more difficult to get into than Harvard is the Cato internship program. This summer we were able to accept 4.9 percent of the more than 800 applicants for internships.

The program’s rigor is similar to the Ivy League, too. But, unlike the Ivy League, Cato interns receive a broad and deep education in the fundamentals of liberty. Each intern is assigned to policy directors at Cato, allowing the intern to delve deeply into a particular area of study. Not only do the interns help Cato scholars with research and work with the conference department to organize policy conferences, debates, and forums, but they attend regular seminars on politics, economics, law, and philosophy, as well as a series of lectures and films on libertarian themes. The interns develop their public speaking skills by presenting policy recommendations and develop their writing skills by drafting letters to the editor and op-eds. After such intense study, they emerge at the end of the summer well equipped to promote and live the ideas of liberty.

Find out more about Cato internships here. Note that the internship program is year-round, and the process is a little less competitive for Fall and Spring internships. We encourage students to consider applying in any season. The deadline for Fall internship applications has passed, and the deadline for Spring is November 1.

Kathleen Sebelius on Obamacare’s ‘Very Tight’ Deadliness

Yes, deadliness. That was the original headline for this exclusive Washington Post interview with the Empress of ObamaCare. It’s still in the URL. All parties now swear it was a typo. We report, you decide.

In that interview, Sebelius admits they’re not going about this whole ObamaCare implementation thing the best way:

Ideally what you would do if you were building a data hub that needs this kind of information, you’d put a piece together and test that. You test it, if you will, sequentially. We have to build and test simultaneously.

And:

We always knew that the federal government clearly cannot do this alone. We never anticipated that we would.

And still Sebelius admits she isn’t doing ObamaCare full-time.

The IPCC AR5 Is in Real Trouble

Global Science Report is a weekly feature from the Center for the Study of Science, where we highlight one or two important new items in the scientific literature or the popular media. For broader and more technical perspectives, consult our monthly “Current Wisdom.”

The United Nations Intergovernmental Panel on Climate Change (IPCC) is in the midst of finishing its Fifth Assessment Report (AR5) on the topic. Based on a series of content leaks, it seems as if the AR5 has so much internal inconsistency that releasing it in its current form will be a major fiasco.

The  central issue of climate change science is the earth’s equilibrium climate sensitivity (ECS)—that is, how much the earth’s average surface temperature will increase as a result of a doubling the atmospheric carbon dioxide concentration. New and mutually consistent re-assessments of this important parameter are appearing in the scientific literature faster than the slow and arduous IPCC assessment process can digest them (presuming it even wants to—given that they are making the current AR5 look pretty bad).

Further, even if the IPCC is able to do an adequate job of assimilating this evolving and quite convincing science, the vast majority of the rest of the IPCC’s report will also have to be changed as it is highly dependent on the magnitude of the climate sensitivity. 

By now, though, it’s too late in the game (the final report is due out in early  2014)—the  cows have all left the IPCC’s barn on these subjects and it’s too late to round them all up and rebrand them.

Mirror, Mirror, on the Wall, Which State Is Headed in the Wrong Direction at the Fastest Rate of All?

There are all sorts of ways to measure the burden of government spending.

The most obvious approach is to look at the share of economic output consumed by the public sector. That’s what I did, for instance, when comparing fiscal policy in France and Switzerland. And it goes without saying (but I’ll say it anyhow) that Switzerland’s comparative frugality helps to explain why its economy is much stronger than the French economy.

It’s also good to know whether a country is heading in the wrong direction or right direction. If one country has a bigger government but has implemented reforms that slow the growth of the public sector, it may have a better future than another country where government currently is a smaller burden but the long-term fiscal outlook is grim.

For this reason, I was very interested in the data showing that most European nations actually increased the size of government in recent years – notwithstanding all the hyperbole about “savage” and “draconian” austerity.

That’s why the “exceptions to the rule” in Europe – such as Estonia and Germany – are so noteworthy. While their neighbors are doing the wrong thing, these countries are being at least semi-responsible and trying to rein in the burden of government spending.

The same thing is true for state governments, which is why this new map from the Tax Foundation is worth sharing. It shows how fast spending has increased in each state over the past 10 years.

Louisiana gets the worst grade for profligacy, followed by Wyoming and New Jersey, while Alaska has been the most frugal, followed by West Virginia and South Carolina.

State Spending Map

It would be interesting to see annual numbers. Is Louisiana’s poor performance due to Governor Jindal, for instance, or in spite of him? Likewise, has Chris Christie made any difference in New Jersey?

Looking at states that have done well, did Governor Palin make a difference in Alaska? And did Governor Sanford make a difference in South Carolina? Again, without seeing the annual data, there’s no way of answering these questions.

Moreover, it might be interesting to also know what has happened to local government spending, particularly since some states may have artificially low or high numbers depending on whether there have been changes in how overall spending is allocated.

Last but not least, we should remember that the key goal of fiscal policy is – or should be – to have government grow slower than the private sector. To determine whether states are satisfying my Golden Rule, you need the Tax Foundation data on spending, but it needs to be augmented by similar data for economic output.

And if you look at personal income growth on a state-by-state basis, adjust it for inflation, and then compare it to spending growth, you get some interesting results.

It turns out that North Dakota is the state that most satisfies Mitchell’s Golden Rule, followed by South Dakota and Alaska. West Virginia and South Carolina stay in the top 10, but they drop to 4 and 9, respectively.

New Jersey, meanwhile, takes over as the worst state, followed by Arizona and Louisiana.

Not only has New Jersey been the biggest failure based on my Golden Rule, it also doesn’t have a lot of breathing room. If you look at this info-graph on state debt, you can see that it has the nation’s 7th biggest debt load. In other words, the Garden State’s politicians have been making a bad situation even worse.

And since New Jersey also has a punitive death tax, the obvious message is that productive people should flee the state. Which is exactly what’s been happening. Thanks to migration, about $70 billion of wealth escaped between 2004 and 2008 alone.

But be careful where you move. Other states that get black marks on both spending and debt are Ohio, Illinois (gee, what a surprise), and New Mexico.

Again Already with the China Bashing?

The 2012 election season will surely not be remembered in history for great debates on public policy. From what I remember, we were supposed to pick our favored candidate based on who hated women the least, who could be relied upon to bomb other countries most readily, and who could blame China the loudest for our economic woes. The China-bashing theme brought us not only Mitt Romney’s disingenuous promise to tax Americans in the name of Chinese currency reform, but also a bizarre slew (and slough) of offensive and ignorant campaign ads from Republican congressional candidates.

Now it appears that the Republican Governors’ Association has rediscovered the China-bashing tactic in 2013 with an ad targeting Democratic Virginia gubernatorial candidate Terry McAuliffe. In  the video (watch it here, if you must), McAuliffe is shown expressing excitement over a factory being built in China with which he has perhaps some proprietary relationship. The voiceover proclaims, “Instead of creating jobs in Virginia, McAuliffe is betting on China. Can you trust Terry McAuliffe?” That’s it. That’s the entire ad.

I’m not sure whether to be encouraged by the fact that the ad never takes issue with or advocates a particular policy. I suspect that Ken Cuccinelli, McAuliffe’s Republican opponent, doesn’t actually support restricting the outflow of investment capital for the sake of domestic job creation—even though the video implies the wisdom of such a policy. Does Cuccinelli honestly believe that investing in China is a sign of insufficient moral turpitude? I doubt it. We are left pinning our hopes on the possibility that Republicans are merely betting that xenophobia will be a winning campaign strategy. It wouldn’t be the first bad idea they’ve had.

Hat Tip: Google Adsense Algorithm

Common Core Will Hurt School Choice

Earlier this week, school choice champion Doug Tuthill argued at RedefinED.org that Common Core can help school choice. In Tuthill’s view, common standards merely “serve the same function as the operating systems in computers or smart phones” in that they provide a common platform that’s open to an “endless supply” of different applications (curricula, lesson plans, activities, etc.) that can be customized by users.

Responding at the blog, I argue that Common Core it not just an open-platform operating system. The Common Core-aligned tests (particularly college entrance exams) will essentially dictate content: what concepts are taught when and perhaps even how. It’s as though Apple told app-designers they could make any kind of app they want so long as all the apps perform the same basic function, operate at the same speed, and cost the same amount. Of course, they’re welcome to vary the color scheme.

In short, rather than complement school choice, Common Core undermines it.

You can read the entire argument at the RedefinED.org post.