Topic: Cato Publications

Do Non-Profits Criticize Foundations? Or Are They Too Frightened to Do So?

Earlier this year, the National Committee for Responsive Philanthropy (NCRP) issued a report titled “Philamplify Poll Results: Nonprofits Don’t Criticize Foundations Because of Funding Fears.”

The report seeks to explain a phenomenon whose existence it does not bother to establish. Rather than presenting evidence that non-profits are in fact intimidated into silence by grantors, the report instead simply assumes that they are. Its first paragraph declares that “Given the power imbalance between foundations and grantees, grantees are often wary of providing foundations with constructive criticism.”

No evidence is presented to substantiate or quantify this claim. How often? How wary? Says who?

Assumption in hand, the NCRP is off to the races, asking its website visitors to speculate on this hypothetical question “What is the top reason why a nonprofit would choose not to openly criticize a foundation?”

Of course those speculations would be of dubious value even if the report had bothered to establish this phenomenon’s existence. The poll answers would not tell us if even one actual non-profit had held its tongue for the reason alleged, merely that some anonymous website visitor(s) thought it plausible.

Even if we grant that it might be difficult to collect hard evidence on cases of non-profits refusing to criticize prospective donors, it does not excuse publishing a “report” devoid of relevant facts.

Consider, too, that it might be comparatively easy to collect data on non-profits that have criticized foundations. An advantage of this flip-side approach to the question is that the critics themselves can be asked why they published their criticisms. I say this as the author of an empirical study whose findings were deeply unflattering to philanthropies seeking to scale-up charter school networks.

Why did I do it? It’s my job. I study comparative education policy, seeking to understand which policies are most effective in delivering the outcomes that families value. A key question within that field is to determine which policies lead most consistently to the “scaling-up” of educational excellence—which is to say the replication and/or imitation of best practices. Since that has long been a goal of donors to charter school networks I felt it important to determine empirically the extent to which their efforts were proving effective. It being an empirical study based on a large dataset (all the charter networks operating in the state of California) there was no way to predict the outcome prior to crunching the numbers. Nor was there any need for such a prediction.

Contrary to the speculations of NCRP’s website visitors, my highest priority as a think tank researcher is not to avoid antagonizing potential donors, it is maintaining my personal integrity and guarding my reputation and that of my employer for producing reliable, useful empirical research. I am certainly not alone in holding these priorities among think tank scholars. With that observation in mind, dear reader, please contact me if you have another example in which a non-profit published work critical of foundations/potential donors. I will relay the results to NCRP in the hope that they may wish to make amends for their earlier baseless, question-begging speculations.

On Soda Taxes and Purported Health Benefits

This week, the New York Times editorial board wrote in support of greater taxes on sweetened drinks, citing new research from a team Mexican and American researchers. They praise the novel design of the tax, which is levied on drink distributors rather than consumers. This caused the tax to be included in shelf prices, making the increase in total cost clear to consumers. The research found that soda consumption fell 12 percent in a year, and 17 percent among the poorest Mexicans.

The Times admits that we do not know whether any health benefits will actually result from soda taxes.  In this article in Regulation, the University of Pennsylvania’s Jonathan Klick and Claremont McKenna’s Eric Helland examined the effects of soda taxes. They conclude that a one percent increase in soda taxes led to a five percent reduction in soda consumption among young people.  But consumers substituted to other beverages.  A 6-calorie reduction in soda consumption was accompanied by an 8-calorie increase in milk consumption and a 2-calorie increase in juice consumption. Thus, the tax on soda led to an increase in overall calorie consumption, which offset the benefits of falling soda consumption. Moreover, there was “no statistically significant effect of soda taxes on body weight or the likelihood of being obese or overweight”.

Still the Slowest Recovery

Friday’s disappointing jobs report reminds us that we are still in a very slow recovery from the 2007 recession. Not only were far fewer jobs created in September than economists predicted, the estimates for July and August were revised downward. And the size of the total workforce slipped to 62.4 percent of the population, the lowest level since 1977.

The Minneapolis Federal Reserve Bank has a handy tool for monitoring the depressing news, allowing you to compare this recovery to past recoveries since World War II. Output (GDP) is recovering more slowly than in past recoveries, along with employment:

Economic Recoveries

Why is the recovery so slow? John Cochrane of the Hoover Institution examined that question in the Wall Street Journal a year ago. Here’s part of his answer:

Where, instead, are the problems? John Taylor, Stanford’s Nick Bloom and Chicago Booth’s Steve Davis see the uncertainty induced by seat-of-the-pants policy at fault. Who wants to hire, lend or invest when the next stroke of the presidential pen or Justice Department witch hunt can undo all the hard work? Ed Prescott emphasizes large distorting taxes and intrusive regulations. The University of Chicago’s Casey Mulligan deconstructs the unintended disincentives of social programs. And so forth. These problems did not cause the recession. But they are worse now, and they can impede recovery and retard growth.

If you put obstacles in the way of investment and employment, you’ll likely get less investment and employment.

A new e-book edited by Brink Lindsey, Reviving Economic Growth, presents ideas from 51 economists of widely varying perspectives on this crucial question.

The Roberts Court at Ten

Ten years ago today, Judge John Roberts took the oath of office to become the 17th Chief Justice of the United States. Although we speak of “the Roberts Court”—its 10th term now behind it, its 5th under its current composition—it’s somewhat misleading to do so since it seems to imply that the chief justice has more power than in fact he has. To be sure, he leads the Court in a number of administrative respects, including the not inconsiderable power of assigning opinion writing when he’s in the majority in a given case. But at the end of the day, his vote counts for no more than that of any other justice.

Nevertheless, that’s the custom, so with those milestones before us, it’s worth asking how the Roberts Court is doing from a classical liberal perspective—liberty through limited constitutional government—the perspective we at Cato’s Center for Constitutional Studies have advanced since our inception over a quarter of a century ago. Given Roberts’ 2012 and 2015 opinions upholding Obamacare and his ringing dissent last June in the same-sex marriage case, one is tempted to answer “not well.” Those opinions speak volumes, about which I’ll say a bit more shortly. But on balance, it’s been a fairly good record. There are exceptions, for sure, and many cases are decided on technical grounds having little to do with substantive issues. But the Roberts Court has generally been supportive, for example, of property rights, religious liberty, free speechespecially political speech in the campaign finance contextand the Second Amendment, and it has mostly stood against affirmative action, executive branch overreach, and a number of other governmental intrusions.

“Health Care’s Future Is So Bright, I Gotta Wear Shades”

If you’ve ever wondered why a person would earn (and relish) titles like “ObamaCare’s single most relentless antagonist,” “ObamaCare’s fiercest critic,” “the man who could bring down ObamaCare,” et cetera, my latest article can help you understand.

Health Care’s Future Is So Bright, I Gotta Wear Shades” is slated to appear in the Willamette Law Review but is now available at SSRN.

From the introduction:

Futurists, investors, and health-law programs all try to catch a glimpse of the future of healthcare. Lucky for you, you’ve got me. I’m from the future. I’ve travelled back in time from the year 2045. And I am here to tell you, the future of healthcare reform is awesome.

When I presented these observations at the Willamette University College of Law symposium “21st Century Healthcare Reform: Can We Harmonize Access, Quality and Cost?”, I was tickled by how many people I saw using iPhones. I mean, iPhones! How quaint. Don’t get me wrong. We have iPhones in the future. Mostly they’re on display in museums; as historical relics, or a medium for sculptors. Hipsters—yes, we still have hipsters—who wouldn’t even know how to use an iPhone, will sometimes use them as fashion accessories. Other than that, iPhones can be found propping up the short legs of coffee tables.

I also noticed you’re still operating general hospitals in 2015. Again, how quaint.

It’s not often I get to cite MLK, Bono, Justin Bieber, the Terminator, Bill and Ted’s Excellent Adventure, two Back to the Future films, and Timbuk3, all in one law-journal article.

King v. Burwell and the Triumph of Selective Contextualism

This Thursday, the Cato Institute will release the 14th edition of the Cato Supreme Court Review, covering the Court’s October 2014 and 2015 terms. The lead article, “King v. Burwell and the Triumph of Selective Contextualism,” is by Jonathan Adler and yours truly. Here’s the abstract:

King v. Burwell presented the question of whether the Patient Protection and Affordable Care Act of 2010 (ACA) authorizes the Internal Revenue Service (IRS) to issue tax credits for the purchase of health insurance through Exchanges established by the federal government. The King plaintiffs alleged an IRS rule purporting to authorize tax credits in federal Exchanges was unlawful because the text of the ACA expressly authorizes tax credits only in Exchanges “established by the State.” The Supreme Court conceded the plain meaning of the operative text, and that Congress defined “State” to exclude the federal government. The Court nevertheless disagreed with the plaintiffs, explaining that “the context and structure of the Act compel us to depart from what would otherwise be the most natural reading of the pertinent statutory phrase.” The Court reached its conclusion by disregarding portions of the ACA’s text and considering only selected elements of the ACA’s structure, context, and purpose. The King majority’s selective contextualism embraced an unexpressed congressional “plan” at the expense of the plan Congress actually enacted.

Our article—which is available now at SSRN—quotes Darth Vader more often than any previous Cato Supreme Court Review article. (Probably.)

Adler and I will also discuss the King ruling on a panel at Cato’s 14th Annual Constitution Day Conference this Thursday, September 17, from 10:45am-12pm. Click here to register.

New Human Freedom Index, U.S. Ranks 20th

Today we’ve released The Human Freedom Index, a new report that presents a broad measure of personal, civil, and economic freedom around the world. It is co-published by the Cato Institute, the Fraser Institute (Canada) and the Liberales Institut (Germany), and is the most comprehensive index on freedom yet created for a globally meaningful set of countries.

My co-author Tanja Porcnik and I look at 76 indicators in 152 countries to capture the degree to which people are free to engage in voluntary exchange and enjoy major liberties such as freedom of speech, religion, and association. We also include measures on freedom of movement, women’s freedoms, safety and security, and rule of law. We use data from 2008 to 2012, the most recent year for which sufficient data is available.

Hong Kong and Switzerland top the rankings, followed in order by Finland, Denmark, New Zealand, and Canada. The United States ranks in 20th place, below the United Kingdom (9) and Chile (18). Other countries rank as follows: Singapore (43), India (75), Russia (111), China (132), Venezuela (144), and Zimbabwe (149).

The United States fell from 17th place in 2008 to 20th place in 2012. The decline reflects a long-term drop in every category of economic freedom and in its rule of law indicators. The U.S. performance is worrisome and shows that the United States can no longer claim to be the leading bastion of liberty in the world. In addition to the expansion of the regulatory state and drop in economic freedom, the war on terror, the war on drugs, and the erosion of property rights due to greater use of eminent domain all likely have contributed to the U.S. decline.

We do not measure democracy in the index, though we consider it important. Indeed, we find a strong relationship between human freedom and democracy, a link that merits further study. As such, Hong Kong is an outlier in our index. Its high ranking is due to its traditionally strong rule of law, and high levels of both personal and economic freedom, something that all advocates of freedom, including democracy advocates, should seek to protect. The danger there is that China’s efforts to limit democracy will lead to increasing interference in the territory’s institutions—including on the independence of its legal system and the freedom of its press—which will reduce its overall freedom.

We believe that freedom is inherently valuable and plays a central role in human progress. As the graph above shows, belonging to the freest countries in the world greatly improves the average person’s income. Read the study here to see our other findings, the data, and other goals of the research.