Mark Schneider, a former National Center for Education Statistics commissioner and current American Enterprise Institute scholar, has put together a very insightful -- and disturbing -- four-part blog series on the oft-cited Programme for International Student Assessment (PISA) and its creator, the Organization for Economic Cooperation and Development. Basically, Schneider writes, the much-hyped PISA figures very prominently in the "international benchmarking" of coming national curriculum standards -- which the Obama Administration is coercing states to adopt -- despite the paucity of meaningful evidence that doing well on PISA actually translates into desirable educational outcomes.
Now, Schneider throws out some debatable stuff himself. For instance, he emphasizes early-grade progress on the federal, National Asessessment of Educational Progress while ignoring utterly flat results for 17-year-olds. He also reiterates several things that I have already pointed out in "Behind the Curtain: Assessing the Case for National Curiculum Standards." Still, his points overall are generally very fresh, and very important. It is also heartening to see growing critiques, even if somewhat oblique, of the national standards that many on the left and right are hoping to impose on us in the coming months.
I’m pleased to report that Walter Olson, known to many Cato@Liberty readers for his Overlawyered website, has joined the Cato Institute. Wally led the Manhattan Institute’s litigation reform program for more than a quarter of a century. He’ll be a senior fellow in our Center for Constitutional Studies, with a wide-ranging portfolio.
A Yale graduate, Wally began his career at Regulation magazine, back when it was published by the American Enterprise Institute. He has authored three books, 1991's The Litigation Explosion, 1997's The Excuse Factory, and 2003's The Rule of Lawyers, and countless articles. And another book will be out in the fall on bad ideas coming from the legal academy, Schools for Misrule. At PointofLaw.com, Jim Copland, director of Manhattan’s Center for Legal Policy, gives us a rich account of Wally’s contributions. We’re delighted to have Wally on board.
The new budget from the White House contains all sorts of land mines for taxpayers, which is not surprising considering the President wants to extract another $1.3 trillion over the next ten years. While that's a discouragingly big number, the details are even more frightening. Higher tax rates on investors and entrepreneurs will dampen incentives for productive behavior. Reinstating the death tax is both economically foolish and immoral. And higher taxes on companies almost surely is a recipe for fewer jobs and reduced competitiveness.
The White House is specifically going after companies that compete in foreign markets. Under current law, the "foreign-source" income of multinationals is subject to tax by the IRS even though it already is subject to all applicable tax where it is earned (just as the IRS taxes foreign companies on income they earn in America). But at least companies have the ability to sometimes delay when this double taxation occurs, thanks to a policy known as deferral. The White House thinks that this income should be taxed right away, though, claiming that "...deferring U.S. tax on the income from the investment may cause U.S. businesses to shift their investments and jobs overseas, harming our domestic economy."
In reality, deferral protects American companies from being put at a competitive disadvantage when competing with companies from other nations. As I explained in this video, this policy protects American jobs. Coincidentally, the American Enterprise Institute just held a conference last month on deferral and related international tax issues. Featuring experts from all viewpoints, there was very little consensus. But almost every participant agreed that higher taxes on multinationals will lead to an exodus of companies, investment, and jobs from America. Obama's proposal is good news for China, but bad news for America.
My difference with the President on releasing photos of Abu Ghraib notwithstanding, he exhibits an understanding of terrorism and how to counter it -- an understanding that was not on display at the other end of Pennsylvania Avenue this week or at the American Enterprise Institute today.
Here's a portion of President Obama's speech today showing that he knows how overreaction to terrorism (such as resorting to torture) plays into the terrorism strategy:
As commander-in-chief, I see the intelligence, I bear responsibility for keeping this country safe, and I reject the assertion that these are the most effective means of interrogation. What’s more, they undermine the rule of law. They alienate us in the world. They serve as a recruitment tool for terrorists, and increase the will of our enemies to fight us, while decreasing the will of others to work with America. They risk the lives of our troops by making it less likely that others will surrender to them in battle, and more likely that Americans will be mistreated if they are captured. In short, they did not advance our war and counter-terrorism efforts – they undermined them, and that is why I ended them once and for all.
Photo by Peter Holden Photography for AEI
I was a panelist at an American Enterprise Institute forum today discussing the proliferation of federal tax credits, particularly for low-income families.
AEI scholars Kevin Hassett, Larry Lindsey, and Aparna Mathur have a draft paper that looks at the idea of consolidating current individual credits into one supercredit. The idea would be to simplify the system and reduce the economic distortions created by these credits, which are valued at about $170 billion in 2009.
My observations included:
- Obama's Make Work Pay credit is valued at about $60 billion per year, much of which is "refundable." (That means it is partly a spending increase not a tax cut). Coincidentally, Obama's proposed tax hikes for higher-income individuals are also about $60 billion per year. So Obama is damaging the economy with "Make Work Not Pay" tax increases at the top in order to fund dubious work incentives at the bottom. It makes no economic sense.
- The AEI scholars provide interesting calculations about how we could make the $170 billion of redistribution in these credits simpler. That's fine as far as it goes, but I'd like to end the redistribution altogether. Let's provide a large basic exemption in the tax code for folks at the bottom, but we don't need any complex credits. Instead, let's repeal federal policies that damage the budgets of struggling families at the bottom, such as import barriers that raise the price of clothing and federal milk cartels that raise the price of dairy products.
- Here's my compromise redistribution plan. Let's chop the $170 billion in tax credits in half and use the extra funds to cut the corporate income tax rate. With a purely static calculation, that would allow cutting the corporate rate from 35% to 25%. Assuming some behaviorial feedbacks, the $85 billion in credit savings would easily allow us to reduce the corporate rate to 20% or so.
- What do corporate taxes have to do with the workers who currently get all these tax credits? As Hassett and Mathur explained in a 2006 paper, corporate tax cuts would increase investment, improve productivity, and that in turn would raise wages of average American workers. We don't need President Obama's fancy new Make Work Pay credits. Instead, we need to cut the corporate tax rate to make the economy boom and raise worker's wages and incomes in the private marketplace.
When President Obama opened today's summit on health care reform at the White House, he said:
In this effort, every voice has to be heard. Every idea must be considered.
Of course, he spoke those words to a room that contained not a single advocate of free-market health care reform.
- No one from the American Enterprise Institute (ranked the #5 think tank in the world for health policy)
- No one from the Cato Institute (ranked #7)
- No one from the National Center for Policy Analysis (ranked #10)
- No one from the Manhattan Institute
- No one from the Pacific Research Institute
- No one from the Galen Institute
- No one from the Heritage Foundation
- The list goes on...
Obama did, however, invite people from left-wing think tanks, including avowed advocates of socialized medicine. That makes Obama's pledge of openness a farce, and today's event a charade.
Or as my colleague Wayne Crews puts it: it's a ditch, not a summit.