July 15, 2015 1:15 PM
American Enterprise Institute president Arthur Brooks has a new book out this week, The Conservative Heart: How to Build a Fairer, Happier, and More Prosperous America. In the past, Brooks has expressed concern that a large portion of the American public doesn’t believe that conservatives (and libertarians) have much of a heart—that they don’t care much about the problems of the poor and disadvantaged. He has made countering this impression a major part of AEI’s mission, sponsoring events like AEI’s “Vision Talks,” in particular this one from last June, titled “A Conservative Vision for Social Justice,” which featured Brooks himself as well as former New York City social services guru Robert Doar and Bloomberg View columnist Megan McArdle.
In the book, Brooks observes that the spread of the institutions of free market capitalism has been consistent with dramatic reductions in poverty around the world—the percentage of people living in “starvation-level” poverty, for example, had declined 80 percent since 1970. And he names the five institutions that he thinks have been most important: globalization, free trade, property rights, the rule of law, and entrepreneurship. With this history of increasing prosperity, one would think that a capitalist economic system would be pretty popular among advocates for the poor. But, of course, Brooks reminds us of the paradoxical reality that we see today.
…it is precisely the loudest champions of free enterprise—the heroes of poverty relief in the developing world—who the public trusts least to fight for struggling people here at home. Conservatives have the most effective solutions for human flourishing in our intellectual DNA. Our ideas have lifted up people all over the world. But the American people do not trust us to put those principles into practice to help those who need help right here.
July 15, 2015 10:46 AM
Two weeks ago, the Export-Import Bank’s authorization lapsed. The agency remains open, but is not allowed to consider new loans or other projects. It may only maintain its existing portfolio, which will wind down over a period of several years.
In an op-ed over at Inside Sources, I take a look at what’s next for Ex-Im:
Rarely does a federal agency shut its doors — the Civil Aeronautics Board closed in 1985, and the Interstate Commerce Commission followed suit in 1995, but that’s about it. Twenty years later, will Ex-Im add its name to this short list? What will happen then? Should the agency be revived?
The short answers are that nobody knows if it will actually close, not much will happen in the short run either way, and the agency should not be revived.
In the time since I wrote the piece, it’s begun to look like Ex-Im reauthorization may be folded into the highway bill extension Congress will consider later this month, but nothing is concrete yet.
Read the whole thing here.
July 14, 2015 11:11 AM
Once upon a time critics of corporate America complained that executive salaries were too high, and too often disconnected from the performance of the firm. Senior managers are making millions while the company loses money—where’s the logic in that? So today many firms, including large banks and other financial services companies, have performance-based compensation packages—at least some of the money executives make is tied to the firm’s annual profits. Now incentives are aligned smartly, right?
A potential complication creeps in, however, when a firm needs to restate its earnings. If a major deal goes south and restated earnings are lower than they were initially reported, perhaps we should restate an executive’s compensation as well, the thinking goes. This is the idea behind a provision of the Dodd-Frank Wall Street “Reform” Act. As Andrew Ross Sorkin reports in The New York Times, the Securities and Exchange Commission is currently working on a new rule which would expand this “clawback” concept from where it is already in force among Wall Street firms to all publicly traded companies. If restated profits were lower than they were in the year in which performance-related compensation was paid out, the company can demand that some of that bonus be repaid—as long as three years later.
July 13, 2015 4:41 PM
The Competitive Enterprise Institute's newest film project, I, Whiskey: The Spirit of the Market, is currently in production, and you can help make it a success. We’re supporting the project with a crowd-funding campaign at Indiegogo, the largest global fundraising site, just launched today.
I, Whiskey is our next installment in the I, Pencil Film Series. It will be a story about the power of human ingenuity, the market, and how these forces work together to give us the many wonderful innovations and products that enrich our lives every day.
July 13, 2015 11:30 AM
The happy warriors of CEI have returned from our sojourn to Las Vegas and the excitement of FreedomFest 2015: Discover the New American Dream. The conference featured everyone from Steve Forbes and John Stossel to CEOs John Mackey and Peter Thiel to Dinesh D’Souza and Glenn Beck. The sessions were a mix of libertarian activism, conservative analysis, and new opportunities to invest in precious metals.
The best sessions, of course, featured CEI president Lawson Bader. On Friday morning the room was packed for “Gavel Out! Legal Opportunities to Push Back Regulatory Overreach,” in which Lawson gave an overview of the threat of the growing regulatory state and its costs and then described the many legislative and legal strategies available for rolling back the advance of federal agencies.
The next day Lawson joined the presidents of the Cato Institute, the Reason Foundation, and the Intercollegiate Studies Institute for “Think Tanks Make a Difference!” moderated by author Elizabeth Ames. Panelists shared their views of the role of think tanks in the liberty movement, and discussed the impact each organization has achieved over the years. David Nott of Reason, for example, shared the work of president emeritus Robert Poole and his success in persuading state and local governments to privatize the provision of public services.
July 13, 2015 6:24 AM
The newest batch of federal regulations cover everything from municipal fireworks shows to Venezuelan sanctions. On Monday, the Federal Register will likely pass the 40,000-page mark.
On to the data:
- Last week, 56 new final regulations were published in the Federal Register, after 91 the previous week.
- That’s the equivalent of a new regulation precisely every three hours.
- So far in 2015, 1,658 final regulations have been published in the Federal Register. At that pace, there will be a total of 3,140 new regulations this year, which would be several hundred fewer rules than the usual total of 3,500-plus.
- Last week, 1,647 new pages were added to the Federal Register, after 1,478 pages the previous week.
- Currently at 39,905 pages, the 2015 Federal Register is on pace for 75,578 pages.
- Rules are called “economically significant” if they have costs of $100 million or more in a given year. Fifteen such rules have been published so far this year, one in the past week.
- The total estimated compliance cost of 2015’s economically significant regulations ranges from $1.16 billion to $1.25 billion for the current year.
- 138 final rules meeting the broader definition of “significant” have been published so far this year.
- So far in 2015, 281 new rules affect small businesses; 43 of them are classified as significant.
July 9, 2015 11:49 AM
A new report by the Federal Reserve Bank of New York has found that the massive investment in grants and student loans by the federal government is a major contributor to the unbridled growth in the cost of attending college.
College tuition rates have consistently risen faster than inflation for some 25 years. One theory for the rise, dubbed the “Bennett hypothesis,” was put forward by Ronald Reagan secretary of education William Bennett, who argued that hikes in government student aid simply gave colleges a free pass to hike tuition.
Now, the New York Fed’s research suggests there’s some merit to the idea, and that it means the government could be spending billions on education to no effect.
“While one would expect a student aid expansion to benefit recipients, the subsidized loan expansion could have been to their detriment, on net, because of the sizable and offsetting tuition effect,” the paper concludes.
On average, the report finds, each additional dollar in government financial aid translated to a tuition hike of about 65 cents. That indicates that the biggest direct beneficiaries of federal aid are schools, rather than the students hoping to attend them.
As Neff notes, this finding is consistent with some earlier studies on the subject, such as a 2012 paper by Harvard and George Washington University economists, and a 2007 paper that found that higher Pell Grants drove up tuition at private schools as well as out-of-state tuition for public schools.
Earlier, Andrew Gillen, research director of the Center for College Affordability and Productivity, also reached the conclusion that federal financial aid fuels college tuition increases. In a colloquy on Gillen’s research, I concurred in this conclusion, while also noting that increased federal regulation has also fueled tuition increases—as have rules and red tape imposed by states and accreditation agencies. (A recent report by college presidents notes that under the Obama administration, the Education Department has flooded the nation’s schools with new rules that have never been properly vetted or codified, in violation of the Administrative Procedure Act.)
Education analyst Neal McCluskey of the Cato Institute cited four additional studies showing that increased government spending on student aid results in large tuition increases.
In 2011, Virginia Postrel wrote at Bloomberg News about how federal subsidies intended to make college more affordable have instead encouraged rapidly rising tuitions.
July 7, 2015 4:15 PM
The Supreme Court’s recent healthcare decision in King v. Burwell wasn’t the only case in which it twisted clear statutory or constitutional language in order to protect the progressive political agenda. The King decision perversely claimed that the words “‘Exchange established by the State’” “means ‘Exchange established by the State or the Federal Government,’” even though “the Act defines ‘State’ to mean ‘each of the 50 States and the District of Columbia.’”
Similarly, in another recent case, the Supreme Court perversely redefined the word “legislature” to include unaccountable, undemocratic bodies influenced by special interest groups. That disturbing ruling will increase the power of left-wing trial lawyers over America’s Congressional elections, by expanding the influence of trial-lawyer-influenced judicial nominating commissions over congressional redistricting.
If you are going to have gerrymandering of congressional districts, it might as well be done by a state legislature, which is accountable to the people, rather than an “independent” commission, which is not. Moreover, regardless of who would do a better job, the Constitution explicitly states that it’s the legislature’s job: the Constitution’s elections clause states that the “Times, Places, and Manner of holding Elections for Senators and Representatives shall be prescribed in each State by the Legislature thereof.”
But on June 29, the Supreme Court ignored the language of the Constitution in its ruling in Arizona State Legislature v. Arizona Independent Redistricting Commission. In a five-to-four decision, the Court “upheld a plan Arizona voters approved in 2000 that set up an independent commission to draw the boundaries.” Although voters may have been fooled by the “independent” label applied to this commission, it has proven to be not truly independent, but rather a reliable ally of state Democrats, who comprise a minority of Arizona voters.
July 6, 2015 11:58 AM
Joel Kotkin has written an outstanding analysis posted on the Daily Beast of Pope Francis’s encyclical, Laudato Si’. I would quibble with certain details. For example, I think Francis is more influenced by Liberation Theology than by Argentina’s Peronist economy. And Kotkin’s historical account of the “Middle Ages” is based on outdated scholarship. But he is absolutely correct that the encyclical allies the Pope with radical Greens who hate capitalism and favor de-industrialization.
Here are several excerpts from Kotkin’s insightful article:
What makes the Pope’s position so important—after all, the world is rejecting his views on such things as gay marriage and abortion—is how it jibes with the world view of some of the secular world’s best-funded, influential, and powerful forces. In contrast to both Socialist and capitalist thought, both the Pope and the greens are suspicious about economic growth itself, and seem to regard material progress as aggression against the health of the planet.
Another flash point between papal concerns and those of their new best friends lies in addressing poverty. The Pope is correct in identifying inequality and poverty as major concerns, but it’s hard to say how green strategies—particularly when they make energy, housing, and industry far more expensive—actually alleviate the plight of the poor or the middle class. Ultimately the green platform seeks not to increase living standards as we currently understand them (particularly in high income countries) but to purposely lower them. This can be seen in the calls for “de-development,” a phrase employed by President Obama’s science advisor John Holdren for all “overdeveloped” advanced countries, in part to discourage developing countries from following a similar path.
Given the reluctance of still poor countries to further impoverish themselves, the burden of the Catholic-green alliance will necessarily fall on the middle and working classes. As we can already see in California (the state with the most draconian environment laws), long-term economic growth has been tepid, despite the occasional tech and property bubbles. At the same time, the state suffers not only among the highest unemployment rates in the country, but the highest level of poverty, when cost of living is addressed, and has become home to one-third of the nation’s welfare recipients.
This confluence of private interest, public power and the clerical class is suggestive of a new feudal epoch. Bankrolled by inherited money, including from the oil-rich Rockefellers as well as Silicon Valley, the green alliance has already shown remarkable marketing savvy and media power to promote its agenda. Now that their approach is officially also the ideology of the world’s largest and most important church, discussion of climate change has become both secular and religious dogma at the same time.
July 6, 2015 8:28 AM
It was a short work week due to the July 4 holiday, but regulators still managed to publish 34 proposed regulations and more than 90 final regulations covering everything from cranberries to rules of acquisition.
On to the data:
- Last week, 91 new final regulations were published in the Federal Register, after 64 the previous week.
- That’s the equivalent of a new regulation every one hour and 51 minutes.
- So far in 2015, 1,602 final regulations have been published in the Federal Register. At that pace, there will be a total of 3,071 new regulations this year, which would be several hundred fewer rules than the usual total of 3,154-plus.
- Last week, 1,478 new pages were added to the Federal Register, after 1,343 pages the previous week.
- Currently at 38,258 pages, the 2015 Federal Register is on pace for 75,312 pages.
- Rules are called “economically significant” if they have costs of $100 million or more in a given year. Fourteen such rules have been published so far this year, one in the past week.
- The total estimated compliance cost of 2015’s economically significant regulations ranges from $1.14 billion to $1.22 billion for the current year.
- 133 final rules meeting the broader definition of “significant” have been published so far this year.
- So far in 2015, 269 new rules affect small businesses; 40 of them are classified as significant.