Regulatory Incompetence (and King v. Burwell) Could Save the Nuns

Obamacare imposes a requirement that employers provide insurance that covers “preventive care” for women, but does not specify what that entails. The Department of Health & Human Services (HHS) determined that “preventive care” includes all FDA-approved contraceptives, from condoms to the morning-after pill.

While houses of worship were exempted outright from the mandate, other religious orders were not. (And, as we know from the Hobby Lobby case, for-profit employers who object to certain forms of contraceptive don’t have to pay to cover them.) Instead, under an “accommodation” created by HHS and the Departments of Labor and Treasury, an objecting religious organization isn’t required to pay for the offending contraceptives, but they do have to notify HHS, which then modifies their insurance contracts so their insurers cover the objected-to items.

Even though the religious organizations are not paying for the contraceptives, groups like the Little Sisters of the Poor—an order of nuns who provide various kinds of social services—still feel complicit in sin and claim that their free exercise of religion has been burdened.

Cato and law professor Josh Blackman (who recently became a Cato adjunct scholar) have filed an amicus brief supporting the Little Sisters’ request that the Supreme Court hear their case. The Little Sisters raise claims under the First Amendment and the Religious Freedom Restoration Act. Our brief asks the Court to consider a supplemental question: Whether the Departments have the interpretive authority and “expertise” to resolve this “major question” of profound social, “economic and political significance”—to quote Chief Justice Roberts’s majority opinion in King v. Burwell (where he said that courts couldn’t simply defer to the IRS on the important question presented there).

Congress gave absolutely no indication that it delegated to federal agencies the authority to decide which religious groups would be exempted and which could have their religious liberty burdened under an accommodation, or for that matter, how agencies were to design any accommodations. To quote another recent case where the Court refused to defer to an administrative agency, UARG v. EPA (2014), here the agencies are “laying claim to an extravagant statutory power” affecting fundamental religious liberty interests—a power that the ACA “is not designed to grant.”

If the Departments lack the interpretive authority to craft accommodations, then Hobby Lobby provides the rule of decision and the Little Sisters must be exempted from the mandate. Accordingly, the Supreme Court should consider this additional question and conclude that the Departments’ regulatory incompetence prevents them from forcing the Little Sisters to be complicit in what they view as sin.

The Kansas City Fed’s Top Secret Jackson Hole Conference

Each year, since 1978, the Federal Reserve Bank of Kansas City hosts central bankers from around the globe at Jackson Hole, Wyoming, to assess monetary policy.  The conference is closed to the public and the Kansas City Fed does not make its program available to the public until the day of the event.  Here’s what one can find when going to their website:

“The 2015 Economic Symposium, “Inflation Dynamics and Monetary Policy,” will take place Aug. 27-29, 2015. (The program will be available at 6 p.m., MT, Aug. 27, 2015).”

This information is treated as if it’s “top secret.”

But it’s not a top secret that the Federal Reserve lacks transparency, is not bound by any monetary rule, has more power than ever before (as a result of the unconventional monetary policies pursued since the 2008 financial crisis), and opposes a congressional audit—even though the Constitution gives Congress the power to regulate the value of money. 

Luckily, the American Principles Project will be holding a parallel conference near the Fed’s site in Jackson Hole to evaluate the Fed’s performance after more than 100 years and offer alternatives to a regime of pure discretionary government fiat money.

The topic of the APP conference—“Is Central Banking the Problem or the Solution?”—will give participants the opportunity to offer advice on how to improve the monetary regime, not just monetary policy. (On the same topic, see the Spring/Summer 2015 issue of the Cato Journal: “Alternatives to Central Banking: Toward Free-Market Money”)

Mark Calabria, director of Cato’s Financial Regulation Studies, within Cato’s newly established Center for Monetary and Financial Alternatives, will be speaking at the APP conference on Friday, August 28. His topic is “Regulatory Failure at the Fed.” Tune in.

Americans Have More than They Realize

According to Gallup, more Americans think of themselves as “have-nots” today than at any point since Gallup began posing the question almost thirty years ago, while fewer Americans see themselves as “haves.” (Please see Emily Ekins’s earlier post for an in-depth analysis from a different angle). But do Americans actually have less in 2015 than in 1988? Let’s dig into the data to see whether Americans might have more than they realize.

2015 is the first year when Americans spent more money dining out than they spent on groceries. Let’s examine why that might be. In 2015, U.S. GDP per person (adjusted for inflation) reached an all-time high. At the same time that average personal wealth is rising, many necessities like food are going down in price. As a result, spending on the basics takes up a smaller and smaller share of an American’s personal disposable income—dropping from 39% in 1988 to 32% in 2013. This means that Americans have more money left at the end of the day, which they can then choose to save, invest, or spend on luxuries like dining out.

Not only are Americans wealthier on average, but they are also working less. The average American worker in 2015 works 30 fewer hours in a year than her counterpart in 1988, and yet is almost $18,000 dollars richer in real terms.

HumanProgress.org advisory board member Mark Perry recently pointed out that today’s young Americans may actually be the luckiest generation in history, based on what they can buy with earnings from a summer job. And increases in real wealth do not capture technological advances, which also contribute to rising living standards. The quality and variety of available goods is improving across the board. Almost no one had a cell phone in the United States back in 1990, but today they’re ubiquitous—and more useful, with an app for just about everything.

In many ways, Americans have more today than ever before: more leisure time away from work, more disposable income left after basic expenses,  more choice in what they buy, and more advanced technologies at their fingertips.  Of course, there are still people who live in genuine need. The Great Recession and various growth-retarding policy decisions have done great harm, especially to the poor. Still, if the many positive trends that we are seeing continue, then hopefully more Americans will come to count themselves among the haves instead of the have-nots. To learn more about improving living standards in the United States and beyond, pay a visit to HumanProgress.org.

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Another Poll: Core Getting Clobbered, Keep the Feds out, and More

Last week I dissected the annual Education Next poll a bit, and today the newest Phil Delta Kappa/Gallup poll on the state of education is out. Let’s take a look at several of the same topics we examined in the EdNext poll, shall we?

Common Core

Last week’s survey featured questions with several different wordings about Core backing, and while they all showed the Core hemorrhaging support over the last few years, percentages approving ranged from 49 percent to 39 percent. PDK/Gallup asked just one question about Core support, and it had very different wording from any used by EdNext, focusing not on the intention of the Core – “accountability” – or describing the Core as “standards for reading and math that are the same across states,” but asking if respondents approve of “having the teachers in your community use the Common Core State Standards to guide what they teach.” In response, 54 percent appeared to oppose the Core and only 24 percent supported it. It’s an odd way to ask about Core support – how about just ask if people “support or oppose the Common Core” – but it is unquestionably true both that an intended effect of the Core is to guide what is taught, and that this is more bad news for the Core.

Federal Role

EdNext found what I thought was unexpectedly (and discouragingly) high support for having Washington in charge of “setting educational standards for what children should know,” but still very low approval of federal direction over labeling schools as “failing” and dictating how to fix such schools. PDK/Gallup did not ask directly about setting standards, but did ask which level of government should be “holding schools accountable” and “determining the right amount of testing.” What they found was in line with what EdNext found: Only about 1 in 5 respondents want Washington in charge, with most wanting states and districts in control. Maybe the Constitution does still count.

54% of Americans Say America Is Not Divided into “Haves” and “Have Nots”

Recent Gallup polling finds that 58% of Americans view themselves as “haves” while 38% say they are “have nots.” Nevertheless, most Americans (54%) reject the premise that the United States is a rigid economic hierarchy, while 45% say it’s a fair depiction.

When asked to choose, 58% of Americans view themselves as “haves,” a share fairly constant since 2003, and similar to 59% found in 1989. (There was a blip in the late 1990s when 60-67% said they were “haves.”) However, the share who say they are “have nots” has more than doubled from 17% in 1989 to 38% in 2015, as fewer Americans say they “don’t know.” In line with this trend, more Americans view the United States as a society divided into “haves” and “have nots” increasing from 39% in 1998 to 45% in 2015.* Similarly the share who say the US is not divided has declined rom 59% in 1998 to 54% today.

These data suggest that Americans have begun to focus more on economic status with increasing debate over rising income inequality.

Interestingly, while Hispanics are more likely (51%) to say they are a “have not” when pressed, a fully 60% reject the premise that America is “divided into haves and have nots.” This suggests that Hispanic Americans believe in upward income mobility. While some may not view themselves as a “have” today they or their children could be eventually.

While African-Americans are about equally likely as Hispanics to say they personally are a “have not” (48%), 69% view the country as divided between “haves” and “have nots,” 32 points higher than Hispanics.

White Americans tend to agree (57%) with Hispanics that America is not a divided land of “have” and “have nots,” however, they are about 20 points less likely to say, when pressed, they personally are a “have not.”

The share of Americans who think they are winners of the economic system has remained fairly constant over the past decade. However, more Americans are beginning to think the overall system is rigged in favor of economic division, but this view is not necessarily a product of their own experience. Instead, passionate public discourse over income inequality has likely played a key role in changing Americans’ perceptions about how the system works for others.

Read the full Gallup post here.

For more public opinion analysis sign up here for Cato’s weekly digest of Public Opinion Insights.


* Note: Gallup found in 1998 that 71% of Americans rejected the idea that America is divided into two economic groups while 26% accepted the premise. However by 1998 59% rejected and 39% accepted the idea. It’s unclear if the decline between 1988 to 1998 is a a trend, or if 1988 registered an unusual response.

Evidence Shortage for Teacher Shortage

According to a report circulating this week “Indiana is not the only state facing a teacher shortage. It is a national and global issue.” This is said to be proven by a Google search returning blog posts and news stories in which some people claim there is a teacher shortage. But is that true? The claimants could be uninformed, misinformed, or could even have incentives to cry “shortage!” when there isn’t one. For instance, consider this U.S. government program for cancelling teachers’ loans:

34 CFR 674.53(c) enables Federal Perkins Loan borrowers who are full-time teachers of mathematics, science, foreign languages, bilingual education or any other field of expertise where the State educational agency determined there is a shortage of qualified teachers to qualify for cancellation of up to 100 percent of their loan repayment.

Hmm. But let’s not speculate. The federal government’s National Center for Education Statistics compiles data on public school enrollment and teacher employment. To verify the claims of teacher shortages in Indiana and nationally, I charted those data in the figure below.

For the United States as a whole, we see that there are fewer pupils per teacher today than at almost any time in the past 50 years. Put the other way, we currently have more teachers per pupil that we’ve had in the past—with the exception of a brief period last decade.

Warming-Assisted Rapid Evolution of a Parasitic Host

In 1980, heated water from a nuclear power plant in Forsmark, Sweden (60.42°N, 18.17°E) began to be discharged into Biotest Lake, an artificial semi-enclosed lake in the Baltic Sea created in 1977 that is adjacent to the power plant and covers an area of 0.9 km2 with a mean depth of 2.5 m. The heated water has raised the temperature of the lake by 6-10°C compared to the surrounding Baltic Sea, but aside from this temperature difference, the physical conditions between the lake and the sea are very similar.

A few years after the power plant began operation, scientists conducted a study to determine the effect of the lake’s increased temperatures on the host-parasite dynamics between a fish parasite, the eyefluke (Diplostomum baeri), and its intermediate host, European perch (Perca fluviatilis). That analysis, performed in 1986 and 1987, revealed that perch in Biotest Lake experienced a higher degree of parasite infection compared to perch living in the cooler confines of the surrounding Baltic Sea (Höglund and Thulin, 1990), which finding is consistent with climate alarmist concerns that rising temperatures may lead to an increase in infectious diseases.

Fast forward to the present, however, and a much different ending to the story is observed.

Nearly three decades later, Mateos-Gonzales et al. (2015) returned to Biotest Lake and reexamined the very same host-parasite dynamic to learn what, if anything, had changed in the intervening time period. According to the team of researchers, Biotest Lake “provides an excellent opportunity to study the effect of a drastically changed environmental factor, water temperature, on the evolution of host-parasite interactions, in a single population recently split into two.” Specifically, it was their aim “to examine if the altered conditions have produced a change in prevalence and/or intensity of infection, and if these potential variations in infection have led to (or might have been caused by) a difference in parasite resistance.”