On the Blog

Heartland Daily Podcast: Jonathan Williams -Why Americans Choose to Move Out of State

Somewhat Reasonable - October 16, 2014, 4:11 PM

Jonathan Williams, American Legislative Exchange Council (ALEC) Tax and Fiscal Policy Task Force Director, joins Budget and Tax News managing editor Jesse Hathaway to debunk some common myths regarding why Americans choose to pack up and move to other states. While meteorological climate may play a role in some people’s decisions, Williams explains that states’ business and tax climates are a primary driver of the migratory habits of the American family.

Predictably, there are consequences to states’ poor fiscal decisions, as declining population numbers create a feedback loop, in which fewer and fewer taxpayers remain in a high-tax state. Williams explains why government statistics show that this is already happening in some areas of the United States.

Categories: On the Blog

A Supreme Court, Not Supreme Wisdom

Somewhat Reasonable - October 16, 2014, 1:52 PM

I am not a lawyer, but I have read the Constitution and I cannot find any indication that the Founding Fathers intended the guarantee of “equal protection of the laws” in the 14th Amendment to include same-sex marriage.

The idea would have been regarded as an abomination to the men who created the Constitution. To many who regard the institution of marriage a sacred bond between a man and a woman, the decisions of lower courts that have facilitated same-sex marriage are deeply offensive

When the Supreme Court decided not to decide upon appeals from seven states regarding lower court rulings that their bans on same-sex marriage were unconstitutional, they essentially endorsed same-sex marriage. It is now legal in 25 states, paving the way for a total of 30 states that recognize it, but only by popular vote in three of them; the rest had it imposed through the courts.

The same can be said of the Supreme Court’s decision in 1973 that permitted abortion as a legal right. Here again, the 14th Amendment was cited. As one source noted, “The Court summarily announced that the ‘Fourteen Amendment’s concept of personal liberty and restrictions upon state action” includes “a right to personal privacy, or a guarantee of certain areas or zones of privacy and that “this right of privacy…is broad enough to encompass a woman’s decision whether or not to terminate her pregnancy.”

As this is being written, there have been more than 57,245,810 fetuses aborted since 1973 and, this year, there have been 840,045. Thus, decisions that the Supreme Court makes can literally result in life or death.

One of the most dramatic decisions of an earlier Supreme Court was the 1857 Dred Scott case that ruled that African Americans, whether slave or free, could not be American citizens and thus had no standing to sue in federal court, nor that the federal government had any power to regulate slavery in the territories acquired after the creation of the nation. The Civil War would follow in 1861 and last until 1865, resulting in more than 600,000 casualties, but finally ending slavery in America. Even some of the Founding Fathers had predicted that conflict.

When the Supreme Court has wandered into the area of social policy and culture, it has made decisions that were contrary to the majority of the population. The decision about slavery was about property—the slave–but many regarded slavery as an institution that must be ended.

The Supreme Court, of course, is not one long list of bad decisions. It has done much good and one man is credited with setting it on its course as a co-equal brand of the federal government. That man was John Marshall. I doubt that his name and deeds are  even taught in the schools of America.

As a brilliant and very entertaining biography by Harlow Giles Unger, “John Marshall: The Chief Justice Who Save the Nation”, reveals, “Marshall’s pronouncements would ensure the integrity and eminence of the Constitution and the federal government and catapult him into the pantheon of American Founding Fathers as the father of the American federal justice system.”

“He would become the longest serving Chief Justice in U.S. history, signing 1,180 decisions and writing 549 of them, or nearly half, himself.” America was fortunate to have a legal scholar, utterly devoted to the Constitution, in its early, formative years. “Case by case he defined, asserted, and when necessary, invented the authority he and the Court needed to render justice, stabilize the federal government, and preserve the Union and the Constitution.”

Chief among Marshall’s achievements was to assert that the Supreme Court had the right and duty to declare federal and state laws to be either constitutional or unconstitutional. With that it became the third equal but separate branch of government.

Marshall had fought in the American Revolution and had had a distinguished career as a lawyer. As Unger says, “Clouds of doom shrouded the nation in 1800. George Washington was dead. For the first time in their twenty-five year struggle to govern themselves, Americans faced a future without the father of their country to lead them. And they lost their way.”

“Absent their commander-in-chief, the men who helped him lead the nation to independence went mad. Chaos engulfed the land as surviving Founding Fathers—Adams, Burr, Hamilton, Jefferson, Monroe, and others—turned on each other as they clawed at Washington’s fallen mantle.” Jefferson as the third President wanted to rule as a virtual tyrant, but Adams’ appointment of Marshall put a brake on those ambitions.

The United States is passing though a period of governance in which the Congress is so locked in partisanship and so divided that it is barely able to function in the national interest. The current President is losing the popularity he enjoyed when first elected and, now into his second term, he is losing the support and confidence of a majority of Americans. Barack Obama has repeatedly expressed his displeasure with a Constitution that places limits on his power as President.

As Unger notes “Nothing in the Constitution gives a President power to issue proclamations or executive orders with the force of law. Only Congress can legislate, yet presidents have issued more than 13,500 proclamations and executive orders since the founding of the Republic, while the Congress has enacted only about 20,000 laws.”

The Constitution remains supreme above the office of President and, in great measure, we can thank the work of Chief Justice John Marshall.

[Originally posted at Facts Not Fiction]

Categories: On the Blog

EPA Carbon-Dioxide Regulations Punish Seniors

Somewhat Reasonable - October 16, 2014, 12:59 PM

Seniors in particular and those on fixed incomes in general, will be devastated should the United States Environmental Protection Agency’s carbon-dioxide regulations currently under consideration for new and existing power plants ultimately become law. This is the conclusion of several state level analyses that have been conducted by the  60 Plus Association.  60 Plus was founded in 1992 as a non-partisan seniors advocacy group promoting a free enterprise, less government, less taxes approach to seniors issues.

Energy, like food and housing, is an indispensable necessity of life. In many states, including Alabama and Florida, the hot climate dictates that air conditioning is essential to the survival of many elderly and infirm citizens. Thus, EPA regulations would disproportionately affect seniors. 60 Plus’s national report revealed that EPA regulations would increase the price of electricity across America at rates above the general inflation rate and as much as 20% in some states.

This at a time when rising energy prices due to current regulations and renewable fuel mandates are forcing many seniors are to decide between spending their fixed incomes on food, heat or air-conditioning, or medicine. 60 Plus finds that the he President’s newly proposed EPA regulations will only make Seniors’ dire situation even worse. Among the key findings from 60 Plus’s analysis of nationwide impact of the EPA’s proposed regulations upon seniors are:

  • The United States has 27 million households aged 65 or more (“65+”), representing nearly one-quarter of the nation’s 116 million households. Low and fixed income seniors are among the most vulnerable to electric rate and other energy price increases.
  • Current and pending EPA regulations will increase the price of electricity in America at rates above the general rate, by as much as 20% percent in some states, of inflation and shut down numerous traditional plants.
  • Future energy price increases, driven in large measure by petroleum supply and demand trends and by current and pending U.S. EPA regulations, are likely to outstrip real household incomes among the 63% of America’s 65+ households with gross annual incomes less than $50,000.

Not all states are equal however. Because of climate conditions, regular heat and humidity, seniors in states like Alabama and Florida will suffer to a greater than average degree from the Obama administration’s CO2 regulations.

Alabama has 447,000 households aged 65 or more (“65+”). Future energy cost increases, driven in large measure current and pending U.S. EPA regulations are likely to outstrip real household incomes among the 70% of Alabama’s 65+ households with gross annual incomes less than $50,000.

  • The average pre‐tax household income of 65+ households in Alabama was $46,141 in 2012, 20% below the average
  • For Alabama’s 447,000 65+ households, electricity represents 74% of their total residential bills.
  • Even before any new EPA regulations, the price of electricity per kilowatt‐hour (kWh) in Alabama has increased by 41% since 2005, more than twice the 19% rate of inflation in the Consumer Price Index, due in part to higher fuel costs and the costs of compliance with EPA regulations.

According to 60 Plus’s analysis, seniors in Florida face similar problems.

  • Florida has 2.1 million households aged 65 or more (“65+”), representing 29% of the state’s 7.2 million households. More than 40% of Florida’s 65+ households had gross annual incomes below $30,000 in 2012, with an average pre‐tax household income of $16,919, or $1,410 per month.
  • Energy cost increases, resulting from current and pending U.S. EPA regulations, are likely to outstrip real household incomes among the 64% of Florida’s 65+ households with gross annual incomes below $50,000.
  • For Florida’s 2.1 million 65+ households, electricity represents 90% of total residential utility bills.
  • The price of electricity per kilowatt‐hour (kWh) in Florida has already increased by 46% since 2000, well above the 37% increase in inflation as measured by the Consumer Price Index. This increase is due in part to higher fuel costs and the costs of compliance with environmental regulations.

The energy situation and the hard choices will only get worse for seniors if the EPA’s proposed CO2 regulations become law.

Other studies confirm what 60 Plus has found. Higher energy prices always the poor and those on fixed incomes the most since they spend a higher percentage of their incomes on food and fuel.

Seniors vote at a higher percentage rate than most segments of the population. When they vote they should consider how their votes will affect the price they pay for electricity and gasoline.

Categories: On the Blog

Unsettled Science

Somewhat Reasonable - October 15, 2014, 4:57 PM

Government-funded climate alarmists claim their forecasts of dangerous man-made global warming relies on “settled science.”

Their “settled science” is a mare’s nest of computer models, resting on a few match-sticks of science, surrounded by tall forests of uncertainty.

It is indeed settled science all gases in the atmosphere can affect the exchange of heat between the sun, the Earth and outer space, and this can affect global temperatures. It is also agreedcertain gases like water vapour and carbon dioxide can absorb and redirect radiant energy passing through the atmosphere.

However, though seldom mentioned, the warming potential of each additional unit of carbon dioxide is progressively less, and is trivial at and above current levels. In addition, water vapour has a far greater “greenhouse effect”, because it is fifty times more abundant than CO2, and affects more radiation wavelengths. All of this is settled science!

However, still open to debate is whether the amount of carbon dioxide in the atmosphere is the main controller of global temperatures. Nor is it settled man’s production of carbon dioxide is harmful to life on Earth, or that it will cause catastrophic global warming.

The official climate models are based on a theory the amount of carbon dioxide in the atmosphere drives surface temperature changes. However, none of the dozens of computer models the IPCC relies upon predicted flat-lining temperatures over the last 17 years. This indicates their carbon-centric assumption is wrong. At last count, there were 53 different explanations for these failures. This is hardly “settled science.”

The models ignore important climate controllers such as solar cycles, ocean oscillations, clouds, vegetation cover and volcanoes. These all have significant effects on surface temperature.

The models err in assuming most feedbacks are strongly positive, thus multiplying the initial small effect. This is not settled science. As surface temperatures rise, evaporation from the vast oceans will transfer heat from the surface to the upper atmosphere, where much of the heat is radiated to space and where the shading from the additional clouds tends to offset and stabilise the initial surface heating. Carbon dioxide has naturally exceeded today’s levels in the past but this did not cause runaway global warming. Also, official climate models fail to account for the interconnected variables of the solar system, the restless atmosphere, the changing biosphere and the vast oscillating oceans.

In short, climate science is not settled and there is no consensus.

Categories: On the Blog

FCC’s Wheeler likes the ‘idea’ of muni broadband

Somewhat Reasonable - October 15, 2014, 2:39 PM

Speaking at the recent National Association of Telecommunications Officers and Advisors annual meeting, Federal Communications Chairman Thomas Wheeler endorsed Lafayette, La.’s municipal fiber optic system—or more specifically, he endorsed the idea of the Lafayette Utilities System’s effort to bring competition to that southern Louisiana city of some 121,000.

Here are his remarks about LUS Fiber (full text of his speech here):

I love the story of Lafayette, La. where the local incumbent fought the city’s fiber network tooth and nail, bringing multiple court challenges and triggering a local referendum on the project. Thankfully, none of the challenges managed to prevent deployment – 62 percent of voters approved of the network in the referendum, and the Louisiana Supreme Court unanimously sided with the city – but they did delay deployment almost three years. When the network was finally built, the community experienced the benefits of competition, as the local cable operator decided to upgrade its network. Local choice and competition are about as American as you can get.

Everything Wheeler said was true, but he didn’t finish the story. That might be because of the doubts it would raise

As I reported last year in a case study on the Lafayette muni broadband project:

  • LUS Fiber is some 30 percent short of its revenue projection as set out in its business plan;
  • Is more than $160 million in debt;
  • Struggles to compete with cable, telephone, wireless and satellite service providers in terms of price, performance and service options;
  • Is relying on bigger government contracts to grow revenues.

In addition, LUS Fiber did not bring competition to Lafayette. If anything, it was a late entrant. Cox and the company then-known as BellSouth (now AT&T), were established as phone-cable-Internet providers. DirecTV and Dish Network were additional players in multichannel TV. Since LUS Fiber came on line, the upgraded broadband capabilities of wireless service providers have only added competitive pressure. In this environment, LUS’ 2004 feasibility study prediction that it would achieve 50 percent share of the market seems risible.

Even from a social good perspective, LUS Fiber has failed to deliver. Its biggest promise—the one that justified its $160 million bond issue—was that it would deliver 100 Mb/s fiber connections to all residents, including low-income households that the Lafayette government said incumbents were ignoring. That universal 100 Mb/s offer never appeared. In its first years of operation, LUS Fiber offered a $19.95 Internet-only plan, but found that it could not afford the cost of running fiber to a residence that was going to generate revenue that low. It then offered a 3 Mb/s connection at $19.95 per month for an introductory period, but that required purchase of a more expensive triple-play package. LUS ultimately ended the introductory offer in August 2012.

As of last year, the cheapest Internet-only rate LUS Fiber offered was $34.95 for 15 Mb/s. For whatever reason—most likely, the commercial realities discussed above—LUS Fiber has decided not to offer low-cost high-speed Internet service to poor households.

This is no surprise to those who have followed municipal broadband over the years. Of the hundreds of communities that have spent millions of dollars on such projects, LUS Fiber is one of the four that actually got viable FTTH service up and running (Chattanooga, Tenn.; Bristol, Va. and Provo, Utah being the other three). That’s still no guarantee of success. Bristol needed a $22 million grant from the Obama stimulus. Provo’s muni system was operational for seven years and never came close to payback. The city was more than happy to have Google Fiber take it off its hands for $1.

Wheeler’s shout-out to Lafayette comes as he’s pushing for federal pre-emption of state laws that prohibit municipal broadband projects where commercial service providers are already competing.

Certainly government can provide “competition.” But at the end of the day, it almost inevitably amounts to being a redundant broadband supplier, inferior to private-sector alternatives and entirely dependent on taxpayer resources to cover economic shortfalls. Muni broadband has been a long-term drain on city resources that could be applied more productively elsewhere.

 [Originally Published at RStreet.com]
Categories: On the Blog

Climate Change Insanity

Somewhat Reasonable - October 15, 2014, 1:39 PM

I went out for a walk today and enjoyed seeing how the autumn leaves are changing color because autumn, simply stated, is one of the four seasons that affects the Earth. It is part of the change that occurs as it has for billions of years.

The notion that humans have anything to do with autumn or the other seasons or that we should be spending billions of dollars to have any effect on the climate of the Earth is utterly insane.

On October 10, The Hill reported that “The U.S. might make a substantial contribution in November to an international fund that helps poor nations fight climate change, according to Peruvian Foreign Minister Gonzalo Gutierrez.”  Does anyone actually believe that any amount of money will change the climate? And yet, there is a United Nations Green Climate Fund. The UN is the locus of the climate change, formerly global warming hoax.

“So far, countries have put $2.3 billion into the fund” described as “a crucial negotiating piece for developed nations trying to woo poorer ones to the table for a global climate accord.”  Can you imagine how that money could be put to better use to fight the real problems of poorer nations?

“The fund was officially launched in 2013, after industrialized nations first pitched it in 2009 during the Copenhagen meeting, setting a target of $100 billion by 2020 for developing nations.” The U.S. has yet to have contributed, but the U.S. is $18 trillion in debt and can ill afford to throw millions at this absurd scam.

Unfortunately, the U.S. is being led by a President who has said that climate change is the greatest challenge facing the Earth. Our Secretary of State repeats this absurdity. There is surely an agenda behind this that I have yet to have determined except to think that this President has done everything in his power to destroy the nation’s economy and the claim is part of that agenda.

The climate change lies Obama keeps repeating are more than just obscene, they pose a threat to national security as he directs our military to address climate change. In a sane world, he would be removed from office.

As a recent October 1st Wall Street Journal noted, “President Obama prophesied at the United Nations last week that climate change is the ‘one issue that will define the contours of this century more dramatically than any other,’ and perhaps this vision of Apocalypse explains why he thinks he can disregard the law to regulate carbon.”

Obama has been using the Environmental Protection Agency as his primary means of foisting the global warming/climate change hoax on the nation via a deluge of regulations to control “greenhouse gas emissions.”  Carbon dioxide (CO2) is the bogyman the EPA and environmentalists have been telling us is driving up the Earth temperature. Only the Earth has been in a cooling cycle for eighteen years and, at the same time, the CO2 level in the atmosphere has increased! Without any effect on the temperature!

As the Wall Street Journal opinion noted “The EPA wants to reorganize U.S. electric power generation and drive coal and eventually natural gas out of the energy mix under a rarely used backwater of the Clean Air Act called section 111(d), whose mandates apply state by state.”

Now, however, thanks to an Ohio-based coal company, Murray Energy, along with a dozen states, the EPA is being sued as they seek a writ of mandamus, “a type of injunction the courts only grant when the government has taken an extraordinary action beyond its statutory authority.”

The courts are beginning to reject the EPA’s expansive claims of authority under the Clean Air Act. “The courts seem increasingly alarmed by abuses of executive power.”  That is the only line of defense between this outlaw federal agency and the rest of us. The EPA has succeeded thus far in driving coal-fired energy plants out of business, reducing the amount of electricity they have produced affordably and efficiently for the last century and ours.

If the EPA is permitted to continue the U.S. might as well just turn off the lights because we are being systematically deprived of sufficient energy. That is the Obama agenda for America.

[Originally published at Warning Signs]

Categories: On the Blog

Why Maximizing Innovation Is The Most Important Health Policy Priority

Somewhat Reasonable - October 15, 2014, 11:28 AM

President Obama sold Obamacare to the Left on the grounds that it would achieve universal health insurance coverage. But even the Washington Establishment CBO says it will still leave 30 million Americans uninsured 10 years after full implementation!

Moreover, the effect of the Obamacare mega-reform so far is ambiguous at best, with millions of Americans already losing the health insurance they had and liked, exactly contrary to what they were promised. When the employer mandate becomes effective, these Obamacare victims may balloon to tens of millions more (which was why Obama unilaterally delayed that mandate, contrary to the express language of the law he signed).

Obama tried to sell Obamacare to business and those more conservative on the grounds that it would reduce health costs, promising working people a reduction in health insurance costs of $2,500 a year. But after all the added regulatory costs and taxes on health insurance and health care, the result has been more nearly the opposite of that. (The incentives of expanded third party health insurance coverage – if Obamacare ever actually achieves that – would also increase health costs).

But more than universal coverage (though I have argued that free market health reforms can be designed to assure universal health care for all when needed), or even reduced health costs (though the incentives of free market health reforms have been proven to reduce health costs in the real world), the most important health policy priority is maximizing the freedom and incentives for health care innovation. That is because the rapidly advancing science of health care and technology is now offering on the horizon dramatic breakthroughs in human health and longevity (which also portend epochal reductions in health costs).

The incentives and policies of Obamacare, however, would do exactly the opposite, ultimately squelching health care innovation.

Personalized Medicine

As Newt Gingrich explains in his latest book, Breakout, one revolutionary, cutting edge theme in modern health care is personalized medicine. That would be based on the complete mapping of the exact genetic make-up of each individual. “In a matter of years,” Gingrich writes, “every patient in America could browse his own complete genome on an iPad.”

Doctors could then use that information to customize drug therapies and other targeted treatments designed to work for each individual given that individual’s precise genetic make-up. Gingrich elaborates that doctors can use that individualized information of who each individual is biologically “to personalize treatment, monitoring patients who are genetically or constitutionally predisposed to certain problems and delivering custom drug cocktails or targeted treatments as needed.”

As Gingrich implies, the individualized information for each patient will not only tell doctors how to fix any problems for that patient that develop. It will also tell doctors what to look out for, and monitor for the earliest possible warning, for each patient. Modern technological developments are also revolutionizing that monitoring as well.

Gingrich quotes Dr. Eric Topol, long time head of the cardiology department at the legendary Cleveland Clinic, explaining that “tiny sensors on the skin—or even nanosensors in the blood stream—could “remotely and continuously monitor each heart beat, moment-to-moment blood pressure readings, the rate and depth of breathing, body temperature, oxygen concentration in the blood, glucose, brain waves, activity, mood—all the things that make us tick.” Gingrich adds, “These data will be available not just for patients in the hospital hooked up to cumbersome monitoring contraptions, but for everyone at all times, accessible constantly with apps on our smartphones.”

Gingrich explains how doctors will be able to avoid harmful and costly developments armed with this individualized, real time, information, “Nanosensors in the blood, for instance, might alert doctors to an impending heart attack. They could respond with precise doses of blood-thinning medication. Other sensors might monitor for early signs of breast cancer in the bloodstreams of patients who are especially at risk, while low-risk women could avoid frequent screening procedures.”

Notice the comprehensive cost savings from this much better health care of the future. Avoiding preventable heart attacks or early resolution of breast cancer will save fortunes. Moreover, monitoring costs could be avoided for those not at risk, or reduced for those at low risk. But even monitoring costs for those at risk would be sharply reduced by the new technologies. And as Gingrich points out, “These breakthroughs are not decades away; many of the technologies are here now.”

Gingrich calls these cutting edge, modern health care developments “mass personalization.”

Regenerative Medicine

A second revolutionary, cutting edge theme in rapidly developing modern health care is regenerative medicine. As Gingrich explains, that “focuses on healing or replacing patients’ organs or tissues using their own cells rather than using drugs or relying on organ donations.” Gingrich emphasizes that this is so “exciting because it really has the opportunity not just to manage disease, like a drug would, such as for someone with high blood pressure or diabetes, but really to cure it.”

At the Wake Forest Institute for Regenerative Medicine, “They are literally growing organs in the laboratory that can become functional in the body,” Gingrich reports. Researchers at the Institute extract cells from a patient’s failing organs, such as a bladder. They put those cells in an incubator that matches the conditions of the human body. The cells reproduce into further cells of the organ from which they were taken.

When sufficient organ cells accumulate, the researchers use a special biomaterial, similar to cloth, to create a scaffold in the shape of the needed replacement organ. With a dropper, they coat the scaffold with the newly regenerating cells, and place it all back in the incubator. The cells continue to reproduce around the scaffold in the shape of the new organ. Ultimately, the now regenerating organ is transplanted into the patient’s body, where it continues to develop. Within a few weeks, the biomaterial bladder dissolves, and only the new, healthy, transplanted organ remains.

Dr. Anthony Atala, Director of the Wake Forest Institute, told Gingrich, “Today, [we] have bladders that have been planted into patients…that have been walking around for twelve years with their engineered organs.” Atala’s researchers now “are working on organs and tissues for more than thirty different areas of the body, including muscles, arteries, blood vessels, heart valves, kidneys, and livers.”

The next avenue for this research is to use 3D printers to build the new organs, which are already generating new bones, muscles and cartilage in the lab. Atala explains the next step, “where we print right on the patient…you actually want to have the patient on the bed with the wound, and you have a scanner…that first scans the wound on the patient, and then it comes back with the print heads actually printing the layers that you require [to create the replacement body parts] on the patients themselves.”

Gingrich adds, “Atala demonstrates a machine that takes a 3-D scan of a patient’s kidney inside his body and digitally slices it up into thin layers. This information is used by a 3-D printer to ‘print’ a prototype kidney by laying down scaffold material along with the patient’s own cells.”

Gingrich explains the full potential: “If your kidneys are failing today, you require dialysis, which takes many hours a day. Tomorrow, your doctor may instead print new ones. Today, nine out of ten patients waiting for a transplant are waiting for a kidney. That’s more than [93,000] people. In 2011, almost [5,000] people died waiting. Moreover, 355,000 Americans are on dialysis [costing] taxpayers $20 billion a year. The annual cost of dialysis is a quarter of a million dollars per year per patient….A lab grown kidney would be a bargain in comparison and of course would provide an enormous improvement in quality of life.”

Note again the enormous health cost savings from manufacturing new kidneys, to replace dialysis, along with enormous improvement in the quality of the health care. Gingrich adds further, “Are you one of the nineteen million Americans who suffer from diabetes? Instead of living with a chronic disease for decades, you could one day get a new pancreas grown by your doctor. Since diabetes costs $245 billion every year, these too might be a bargain. Certainly, they’d be lifesaving for the 1,400 people now waiting for a transplant.”

Gingrich summarizes, “These technologies have the potential to give us much longer, healthier lives in a very different world—a world in which diabetes, heart attacks, and even cancer are either completely avoidable, or merely short term inconveniences….[W]ithin the next 10 years, we could achieve a breakout in health that would have been almost unimaginable even one generation ago.” This is why maximizing innovation is the most important health policy priority, more important than universal health insurance coverage, or reducing health costs.

Central Planning, Regulating, and Taxing Health Care Innovation Into Oblivion

Unfortunately, Obamacare forces the health care system to move in exactly the opposite direction from personalized, individualized, and  custom-made regenerative medicine. Instead, Obamacare centralizes and nationalizes health care through one size fits all medicine centrally planned from Washington.

Obamacare empowers the federal bureaucracy to determine exactly what your health insurance must cover, through regulations defining the employer and individual mandates. Trailblazers of revolutionary, breakthrough, medical innovation as described above have to go to Washington to educate federal bureaucrats, who have no economic incentive for timely action, or adequate medical education, about the latest in cutting edge medicine before the innovators even get the word out to medical professionals.

Moreover, Obamacare empowers the federal bureaucracy to issue national guidelines for doctors and hospitals regarding medical practice, based on what the bureaucrats in Washington supposedly know about the “comparative effectiveness” of the alternatives. Such national guidelines are central planning, one size fits all medicine just the opposite of the personalized, individualized, custom made medicine discussed above. And what is the chance these Washington bureaucrats, with no effective economic incentives, or adequate medical education, will be up to speed about the latest in medical innovation as described above? Or will they be years and years behind the latest developments, like Washington bureaucrats always are?

Indeed, Obamacare further empowers federal bureaucrats to economically penalize doctors and hospitals through sanctions on their payments for services rendered, for not following the national guidelines, however outdated they might be. Obamacare also effectively empowers federal bureaucrats to determine whether and how much trailblazing innovators will be paid for their breakthroughs, such as those described above. That arbitrary, central planning power squelches the incentives for innovators to invest the millions and billions necessary to develop their innovations and bring them to market.

Obamacare also empowers another, new, federal bureaucracy, the Independent Payment Advisory Board (IPAB), to make further cuts to Medicare with no further Congressional participation, meaning no democratic accountability. Gingrich explains, “Will Medicare cover the nanosensors that Dr. Topol predicts will warn of heart attacks before they happen? Will it pay for the blood glucose-level monitors for diabetics? Will it cover drugs that are customized just for you? The IPAB experts will decide. All we know for sure is that the board’s ultimate aim is to cut costs, not necessarily to improve care.” And that this is more central planning, nationalized medicine, just the opposite of the personalized, individualized medicine discussed above.

Then there is Obamacare’s medical device tax, which Gingrich reports the FDA is interpreting broadly to tax all the cutting edge monitoring breakthrough devices discussed above. “The agency plans to treat health related mobile apps, of which there are already more than a million, as medical devices,” Gingrich writes. “Smartphone-linked sensors will be regulated and taxed by the federal government.” This will just further squelch incentives for development of the above described breakthroughs.

Obamacare only reinforces the FDA blockade on such innovation. Gingrich explains that the FDA plans to subject the above discussed personalized, individualized breakthroughs to the same regulatory tests and barriers as one pill fits all medicine. He writes, “In pharmaceutical trials, every pill is identical. That’s what makes the kind of testing the FDA demands statistically meaningful. But with regenerative medicine, as another doctor reminded me, ‘you’re using the patient’s own cells, so every time you’re creating a product, you’re really creating a different product because it’s unique to that patient.’” So are we going to sit by and watch the FDA require fatally ill people to take death sentence placebos instead of personalized drugs and treatments based on their own individual genetics, or manufactured organ transplants that would save their lives?

Gingrich further asks, “How can any company personalize its drug for you if it had to spend hundreds of millions of dollars on a two-thousand patient clinical trial for the FDA?” Such a regulatory cost burden would be a death sentence for the incentive to invest in the emerging health care breakthroughs discussed above.

Americans like to think that they have the most advanced health care in the world. But FDA overregulation is already driving health care innovation to other countries abroad years before it shows up in America. The FDA regulatory mandate needs to be legislatively amended so that the agency’s regulation is only focused on whether innovation is safe, not whether it is effective. Regulation regarding effectiveness has been proven to squelch innovation by adding hundreds of millions, or even billions, in regulatory costs for each new development. Whether any medical care is effective is a question for your own chosen doctor, not federal FDA bureaucrats who know nothing about you.

Gingrich summarizes, “The Obamacare law gave federal bureaucrats the authority to write thousands of rules that will determine everything from what treatments insurers will cover and how much doctors are paid to how the government handles your personal health information…. This approach comes with lots of bureaucrats in Washington, more regulations, IRS agents to wade through your medical bills, and boards of experts to tell you which treatments you may and may not have. Under Obamacare, the Department of Health and Human Services, the [FDA], Medicare, Medicaid, and the rest of the health care bureaucracy will take over your doctors office….[Y]ou and your doctor will certainly make fewer choices about your health care, while bureaucrats will make more.” And exactly the opposite of personalized, individualized, custom-made health care, these large bureaucracies will make sweeping decisions for whole populations at a time.

These are all still further reasons why Obamacare needs to be repealed and replaced with free market, Patient Power health care reforms, which I have explained in previous columns. Your life may depend on it.

[Originally published at Forbes.com]

Categories: On the Blog

Heartland Daily Podcast: Mike Nasi – EPA Clean Air Regulations

Somewhat Reasonable - October 13, 2014, 12:44 PM

Attorney Mike Nasi, Partner, with the Environmental and Legislative Affairs Group, Jackson-Walker LLP.  Nasi recently spoke at the Texas Public Policy Foundation’s Energy and Climate crossroads summit.

He discussed, in detail, the impact of certain EPA clean air regulations on new and existing power plants, putting it, no so much in terms of dollars and cents, rather in energy capacity lost.  In Texas alone, more than half the coal fired power plant fleet would have to be shut down by 2020 under newly proposed EPA rules.  And, under the proposed standards for new power plants, no new coal-fired power plants will be built.

The EPA has overstepped its authority under the clean air act, and it threatens the reliability and on demand service of American’s electric power system.

Categories: On the Blog

Confined Dinesh D’Souza Speaks to Chicago Event via Skype

Somewhat Reasonable - October 13, 2014, 9:21 AM

It was with regret that Paul Caprio, head of Family Pac, shared the disappointing news that featured speaker, Dinesh D’Souza, was unable to be present Oct. 8 at the much-anticipated Family Pac event, “An Evening with Dinesh D’Souza,” held at Harry Caray’s Chicago Sports Museum. He was serving his sentence for Mickey Mouse campaign finance violations.

Dinesh D’Souza first notified Paul Caprio last Saturday (Oct. 4th), telling Paul that he was unable to keep his commitment.  D’Souza then offered Ambassador John Bolton as his replacement. To this Caprio said no, believing it was important for D’Souza to be able to explain and answer questions as to why this country is exceptional. As Caprio related, “This country in in a time of great turmoil. We don’t have a liberal as president, we have a tyrant.” Furthermore, “Our Founding Fathers gave us a government with the understanding that it could be lost, it, but if this happens it will happen from within.”

Technology came to the rescue. Dinesh D’Souza appeared via Skype in a larger-than-life-image projected on a screen at the front of the banquet room. Two smaller TV sets were in place high up on either side of the big screen for easy viewing by all in attendance. After his remarks, D’Souza was able to answer a series of questions from audience members via Skype.

Probate sentence now in force

D’Souza was unable to personally attend the Family-Pac event because of alleged pressure from the Justice Department and President Obama. D’Souza’s was sentenced to confinement and probation for what amounted to a minor crime for breaking a campaign law.  D’Souza had arranged for straw donors to contribute to New York Republican Wendy Long’s failed U.S. Senate bid, a campaign finance violation.

The sentence had already been imposed as of Friday, October 3rd. Hear D’Souza speak about his felony sentence.  An agreement to delay D’Souza’s probationary sentence until January 1st, 2015 was not honored, so D’Souza’s sentence  was enacted immediately. The sentence includes eight months in a community confinement center, five years of probation, one day of community service a week during that probation (teaching English to new immigrants and illegal immigrants), and the payment of $30,000 for breaking campaign finance law during the 2012 election.

When appearing in Court for his verdict, D’Souza believed a jail sentence would be forthcoming of at least 18 months.  After all, the judge has given D’Souza a stern lecture up front. But mysteriously, the judge changed his mind. Instead of sentencing Dinesh to jail time and instead issued D’Souza a probationary sentence.

The night of the Oct. 8th Family-Pac event marked D’Souza’s 5th night spent with criminals at a community confinement center in San Diego, CA with bunk bed accommodations. D’Souza remains cautious, but he said he was not scared.  D’Souza described the containment center as not exactly a jail, nor is he in captivity, but he is restricted in his movements. Free during the day to write and work on his movies, D’Souza must check in again at night. Leaving the country is prohibited. This routine will continue for D’Souza until the end of May.

 D’Souza speaks via Skype

John McEnroe, Chairman of Family-Pac, in presenting introductory remarks prior to Dinesh D’Souza’s Skype appearance, described D’Souza as one who is willing to challenge liberal orthodoxy by speaking out with face-to-confrontations, such as when D’Souza challenged Bill Ayers, an unrepentant terrorist and President Obama’s long-time friend, about American exceptionalism on Megan Kelly’s Fox News TV show. D’Souza’s two movies were highly recommended to be viewed before the crucial November election: “2016:  Obama’s America” and “America:  Imagine a world without her.” To be noted is John Fund’s excellent review of D’Souza “America,” which was released this summer.

After expressing his regrets for not being able to appear in person, D’Souza directed this question to his captivated audience, “How did it happen?” D’Souza expressed how the America of today is a different America from the one he experienced when he first arrived from India at age 17 until the present time. It used to be that Republicans and Democrats agreed on goals, only disagreeing about the means to reach the goals. Present were common values that were embraced by both sides. Republicans and Democrats loved American and wanted it to succeed, believing that American was a good country, it was a force for good in the world, and it made the world a better place. This continuous, positive thread regarding the nature of America connected presidents, up to and including Democrat Bill Clinton.

Chicago, however, bears direct responsibility for the change that has taken place. We are now living in the Obama era, in Obama’s America.  Obama has taken this nation in a different direction. There are those who believe Obama is an amateur, a bungler, and a nincompoop.  As such efforts have been made to set President Obama straight on what really is and of consequences from past happenings. President Carter was judged as a nincompoop by D’Souza.  In calling The Shah of Iran a dictator, whoops, Carter got Komani!  But President Obama is not an amateur; he is smart and well informed.  When Obama said he wanted to remake America, he wasn’t kidding.

To D’Souza, the dangerous direction of this nation is the result of an incompetent President.  President Obama was elected in 2008 promising to 1) shrink America’s influence in the world; 2) reduce her military power; 3) shrink her economy; 4) reduce her standard of living; and 5) diminish the “American Dream.” Given these promises, Obama has succeeded in reducing this nation’s influence in the world. Whereas in the past nothing much happened without America first having a say so, this is no longer the world we live in. With this new America, Obama is good at redistributing America’s wealth to the rest of the world and also to those in our own nation.

Envy drives Obama

Through evaluating what the Left has to say about conservative Republicans, a window is opened up into the mindset of Obama. This, in turn, reflects why his supporters feel it is legitimate to brand conservative Republicans as greedy; war mongers; racist; sexist; haters of the environment, and not caring about the American people, when there is not a molecule of truth in any these statements.  For what drives the other side in unfairly branding Republicans as uncouth individuals is envy.  Envy also lives within the psych of President Obama.  As described by D’Souza: “Envy is the lowest desire and the most secretive of all human emotions.”  Envy differs from jealousy, as envy produces rage over being deprived of something that others are enjoying, such as, “Why do they have all this and not me?”  An individual filled with envy, not unable to improve himself, will proceed to pull other people down with him.

Obama came into office like a knight galloping on a white horse, but seething with self-hatred that was based on envy.  Society elevates the entrepreneur and those who can create things.  Obama, not being able to make or create new things — not even an i-phone or a website that works! — loathes entrepreneurship and the free market system.  It’s not that Obama isn’t talented, but his excellence shines forth as an organizer of public resentment.  Obama, without fail, tells the American people that the greedy CEO’s have stepped in and taken possession of some of your stuff, promising that with their vote he will confiscate some of their stuff and give it to you.  This has produced a deadly class struggle.

Are Republicans ready to fight?

Regarding Republicans, D’Souza finds them lacking the ability to advance their message in the public arena, having done a terrible job of reaching out and making the case. Granted, Republicans don’t have enough megaphones available to come close to the megaphones available to the Democratic Party. Even so, too many Republicans wrongly view politics as a fight involving gentlemen, when in truth Democrats are natural street fighters who fight aggressively and will do what it takes to win.

As a reminder to Republicans: “Our values and principles are appealing even today. Republicans stand for the principles of 1776, wishing to preserve the spirit of the American Revolution. The other party wants this spirit to just go away.”

Dinesh D’Souza believes the war is winnable.  He describes Americans as passive and sheep-like in allowing Obama to run amok.  Enjoined D’Souza: “We must all do more, give more, and sacrifice more.  It took 200 years to build this nation, but it won’t take 200 years to dismantle it, that is, if we allow it!”

[First published at Illinois Review.]

Categories: On the Blog

Metropolitan Housing: More Space, Large Lots

Somewhat Reasonable - October 12, 2014, 12:09 PM

Americans continue to favor large houses on large lots. The vast majority of new occupied housing in the major metropolitan areas of the United States was detached between 2000 and 2010 and was located in geographical sectors associated with larger lot sizes. Moreover, houses became bigger, as the median number of rooms increased (both detached and multi-family), and the median new detached house size increased.

These conclusions are based on an analysis of small area data for major metropolitan areas using the City Sector Model. City Sector Model analysis avoids the exaggeration of urban core data that necessarily occurs from reliance on the municipal boundaries of core cities (which are themselves nearly 60 percent suburban or exurban, ranging from as little as three percent to virtually 100 percent). It also avoids the use of the newer “principal cities” designation of larger employment centers within metropolitan areas, nearly all of which are suburbs, but are inappropriately joined with core municipalities in some analyses. The City Sector Model” small area analysis method is described in greater detail in the Note below.

Increase in Detached Housing

America’s preference for detached housing was evident across the spectrum of functional city sectors between 2000 and 2010. Overall, there was a 14% increase in detached housing in the major metropolitan areas. Among the major metropolitan areas (over 1 million population), the number of occupied detached houses rose the most (35%) in the later or generally outer suburbs and exurban areas (24%). Detached houses increased 2.8 million in the later suburbs and 2.5 million in the exurban areas. A smaller 50,000 increase was registered in the earlier or generally inner suburban areas. Most surprisingly, there was also a small increase (20,000) in the number of detached houses in the functional urban cores (Figure 1).

Smaller Increase in Multi-Family Housing

The increase in detached housing dwarfed that of new multi-family housing (owned and rented apartments). The increase in detached housing in the major metropolitan areas was six times that of multi-family housing. Overall, there was a four percent increase in multi-family housing in the major metropolitan areas, less than one-third the increase in detached housing.  There were slight decreases in the number of multi-family houses in both the urban cores and the earlier (generally inner) suburbs. At the same time, there has been a healthy increases in the number of multi-family houses in the later suburbs and exurbs, where the growth rates exceeded the increase in major metropolitan population (11%). In the later suburbs, multi-family housing increased 29% and in the exurbs the increase was 14% (Figure 2).

Larger Houses, Larger Lots

Yet overall, houses were getting bigger. The median number of rooms per house rose from 5.3 in 2000 to 5.6 in 2010. Increases in median rooms were registered in each of the city sectors (Figure 3). Nationally, the median size of new detached housing edged up five percent between 2000 and 2010. (By 2013, median new house size had increased another 17 percent to a record 2,384 square feet).

Lots also were getting bigger. Nearly all of the population growth (99 %) was in the later suburbs and exurbs between 2000 and 2010, where population densities are much lower and lots are larger than in the earlier suburbs and the urban core (Figure 4).

The preponderance of  urban planning theory over the past decade has been based on the notion that people would increasingly seek houses on smaller lots. For example, Arthur C. Nelson of the University of Utah predicted that the demand for housing on conventional-sized lots (which Professor Nelson defines as more than 1/8 acre, which is smaller than the smallest lot size reported by the Census Bureauwould be only 16% in the major metropolitan areas of California by 2010, relying in part on stated preference survey data. In fact the revealed preferences — in other words what people actually did — was four times the predicted demand (64%) in the conventional-lot-dominated later suburbs and exurbs of California’s largest metropolitan areas between 2000 and 2010. This is despite California’s regulatory and legal bias against detached housing on conventional lots (See: California’s War Against the Suburbs). Outside California, later suburban and exurban detached housing represented 77% of new housing demand over the period.

Planning and Preferences

Urban cores and multi-family housing are favored by urban planning policy. Yet, large functional urban cores (high density and high transit market share, as defined in the City Sector Model, Note below) are few and far between, with only seven exceeding 500,000 population, a modest number equaled or exceeded by approximately 100 metropolitan areas. Overall, the functional urban cores of major metropolitan areas lost more than 100,000 residents between 2000 and 2010, while suburban and exurban areas gained more than 16.5 million. Predictably, the housing forms typical of the later suburbs and exurbs made strong gains. The preferences of planning are not those of people and households.

Note: The City Sector Model allows a more representative functional analysis of urban core, suburban and exurban areas, by the use of smaller areas, rather than municipal boundaries. The more than 30,000 zip code tabulation areas (ZCTA) of major metropolitan areas and the rest of the nation are categorized by functional characteristics, including urban form, density and travel behavior. There are four functional classifications, the urban core, earlier suburban areas, later suburban areas and exurban areas. The urban cores have higher densities, older housing and substantially greater reliance on transit, similar to the urban cores that preceded the great automobile oriented suburbanization that followed World War II. Exurban areas are beyond the built up urban areas. The suburban areas constitute the balance of the major metropolitan areas. Earlier suburbs include areas with a median house construction date before 1980. Later suburban areas have later median house construction dates.

Urban cores are defined as areas (ZCTAs) that have high population densities (7,500 or more per square mile or 2,900 per square kilometer or more) and high transit, walking and cycling work trip market shares (20 percent or more). Urban cores also include non-exurban sectors with median house construction dates of 1945 or before.

Photo: Northern Suburbs of Minneapolis-St. Paul (by author)

[Originally published at New Geography]

 

Categories: On the Blog

Taiwan High Speed Rail Near Bankruptcy

Somewhat Reasonable - October 12, 2014, 11:20 AM

Efforts are underway by the Taiwan government for a government led restructuring to avoid bankruptcy (Plan to stop Taiwan’s high-speed rail going bust set for review). Since opening in 2007, this privately financed and operated system has been plagued with ridership well below projections. The Taiwan experience is consistent with the research showing that ridership on high-speed rail lines has been frequently over-projected.

Minister of Transportation and Communications (MOTC) Yeh Kuang-shih offered this sobering assessment:

“This is not the best time to address the financial problems, but it is the last window of opportunity. The Taiwan High Speed Rail Corp will definitely go bankrupt if the problems are not addressed by the end of the year. The only other solution would be a government takeover. If the company files for bankruptcy and the government is forced to take over operation of the system, the banks will probably collect on their loans, but neither large nor small investors will get anything back.”

Kuomintang Party legislator Lin Kuo-cheng said that the “debt” and “accumulated losses” mean that the Taiwan high speed rail line is “broke.”

 

[Originally published at New Geography]

Categories: On the Blog

Obama Condemns Tax Inversions, but Pillages America with His Regulatory Agenda

Somewhat Reasonable - October 11, 2014, 10:31 PM

It’s no mystery why American companies have stockpiled over $2 trillion of overseas earnings in foreign bank accounts. If they bring it to the United States, the IRS would grab 35% of it. That’s the US corporate tax rate – the highest in the developed world, double the average in EU nations.

Medtronic found a creative way to repatriate its cash, allowing it to bring money to the USA subject to just a 12.5% tax. The company acquired Covidien, another, smaller medical device firm in Ireland and will establish its formal headquarters in Dublin, thereby slashing its tax rate by two-thirds, and leaving it with far more cash for plants and equipment, innovation, hiring and keeping workers, and tapping new markets.

Pharmaceutical, biotechnology, healthcare and other companies have concluded or are pursuing similar “tax inversion” strategies. The actions have outraged the White House, “progressive” activists and many Democrats in Congress – except when President Obama’s BFF Warren Buffett engineered Burger King’s acquisition of Canada’s Tim Horton café and bakery chain.

The President says the practice is “unpatriotic” and “immoral,” calls the companies “corporate deserters,” and says businesses must start acting like “good corporate citizens.” Congressional Democrats have issued similar denunciations and want inversions prohibited or punished. They’re barking up the wrong tree.

The proper solution is comprehensive tax reform. However, Republicans want to address both corporate and individual tax issues, Democrats insist that only corporate taxes on the table, and Mr. Obama is typically not inclined to do the hard work of forging bipartisan compromises. Instead, he wants his IRS and Treasury Department to review “a broad range of authorities for possible administrative actions” and ways to “meaningfully reduce the tax benefits after inversions take place,” as one Treasury official put it.

Companies, workers and investors are bracing for the coming executive fiats. The diktats epitomize a huge problem that neither Congress nor the courts have been willing to address, but which continues to drag our nation’s economy and employment into the abyss: an out-of-control federal bureaucracy that is determined to control virtually every aspect of our business and personal lives – at great cost, for few benefits, and with little or no accountability for mistakes or even deliberate harm.

Of course we need taxes, laws and regulations, to set norms and guidelines, safeguard society, punish miscreants and pay for essential government programs. No one contests that. The question is, How much?

What we need right now is regulatory patriotism – and Executive Branch morality, citizenship, and fealty to our Constitution and laws. The federal behemoth today is destructive, and unpatriotic.

  • The confiscatory 35% corporate tax rate is embedded in a Tax Code that’s 74,000 pages long, counting important cases and interpretations. It totals some 33 million words (compared to 788,280 in the King James Bible) and is loaded with crony corporatist provisions and complex, indecipherable language.
  • A 906-page, 418,779-word (un)Affordable Care Act that has already metastasized into more than 10,000 pages of complex, often contradictory regulations, with more interpretations and clarifications to come.
  • The 2,300-page Dodd-Frank law has already spawned over 14,000 pages of banking and financial rules.
  • Over 175,000 pages in the Code of Federal Regulations are coupled with more than 1.4 million pages of tiny-type Federal Register proposed and final rules published just since 1993, at the rate of over 71,000 pages per year. Doctors, patients, insurers, businesses large and small – much less average citizens – cannot possibly read, comprehend or follow this onslaught.
  • At least 4,450 federal crimes are embedded in those laws and regulations (with some 500 new crimes added per decade) – often for minor infractions like failing to complete or file precisely correct paperwork for selling orchids or importing wood for guitars. Neither inability to understand complex edicts, lack of knowledge that they could possibly exist, nor absence of intent to violate them is a defense, and the “crime” can bring military swat teams through doors, and land “violators” in prison for months or years.
  • Production Tax Credits and other sweetheart “green” energy subsidies and grants total some $40 billion a year – for ethanol producers and folks like Tesla CEO Elon Musk and Mr. Tom Kiernan, who is both CEO of the American Wind Energy Association and treasurer of the League of Conservation Voters, which gives millions to mostly Democratic candidates to perpetuate the arrangements.
  • American businesses and families must pay $1.9 trillion per year to comply with these mountains of regulations. That’s one-eighth of the nation’s Gross Domestic Product; it’s almost all the corporate money now held overseas: $5,937 a year for every American citizen – and far more than the $1.6 trillion in direct economic losses that re-insurer Munich Re blames on weather-related disasters between 1980 and 2011.
  • $353 billion of these regulatory costs are inflicted by the Environmental Protection Agency alone, say Competitive Enterprise Institute experts who prepared the $1.9 trillion regulatory costs analysis for 2013.

Even worse, these criminal complexities and costs are being imposed by increasingly ideological, left-of-center, anti-business “public servants” who target conservatives and are intent on advancing President Obama’s agenda of “fundamentally transforming” the United States. They are determined to redistribute wealth, pit economic and ethnic groups against each other, close down coal-fired power plants, ensure that electricity prices “necessarily skyrocketing,” and stop drilling, mining, ranching, fracking and pipelines.

Poll after poll finds Americans focused on jobs and the economy, and on ISIL, terrorism and Ebola. Not so our federal government. Secretary of State John Kerry says climate change is “the world’s most fearsome weapon of mass destruction,” posing “greater long-term consequences” than terrorism or Ebola. For EPA the biggest issues are global warming, “environmental justice” and “sustainable development.”

How is the US economy responding to these policies? Median household income is down $2,000 since Obama took office, while costs of living continue to rise. Despite the subsidies, electricity prices have soared 14-33% in states with the most wind power. Some 45 million Americans now live below the poverty line – a 50% increase over the 30 million in poverty on inauguration day 2009.

While the official unemployment rate is now under 6% for the first time in six years, University of Maryland economist Peter Morici puts the real jobless rate at closer to 20% – which includes the millions who have given up looking for work, those who want to work full-time but must settle for part-time, and students enrolled in graduate school because their employment prospects are so bleak.

The labor force participation rate now stands at 62.7 percent, the lowest level in 36 years, with over 92 million adults not working. Over the past six years, one million more Americans have dropped out of the labor force than have found a job.

Indeed, a hallmark of the Obama recovery is its unique ability to convert three full-time jobs with benefits into four part-time positions with no benefits – and then say unemployment is declining.

It’s hardly surprising that dozens of senators and congressmen who voted with Mr. Obama 90-99% of the time now want to be seen as “moderate independents” – and do not want to be seen with the President.

But as President Obama told Northwestern University students October 2, “Make no mistake, [my] policies are on the ballot, every single one of them.”

He’s absolutely right. So are his economic and employment records. Time will tell how many people remember that when they vote November 4.

Categories: On the Blog

Time for Travel Caution in Dealing with Ebola Outbreak

Somewhat Reasonable - October 11, 2014, 12:00 PM

Breaking news as this article was being written is that Howard University hospital in Washington, D.C. has admitted a patient — a recent traveler to Nigeria — who has symptoms that could be associated with Ebola. Receiving little coverage was a report on Thursday, October 3, that an American freelance television cameraman working for NBC News in Liberia has contracted Ebola, the fifth U.S. citizen known to be infected with the deadly virus.

To date, there has been one confirmed case of Ebola in Texas, Thomas Duncan, a visitor that arrived by commercial air from Liberia on September 20. He died October. 8 at Texas Presbyterian Hospital. He was infected with Ebola before he left for the U.S., when he helped carry a convulsing pregnant woman who later died of the virus along with four more of his neighbors. How Duncan was permitted to board the plane on September 19 to travel to the U.S. has now come to light. According to Liberian authorities, Duncan allegedly lied on his airport departure screening questionnaire about whether he had had contact with a person infected with the virus. Liberian authorities plan to prosecute Dallas Ebola patient Thomas Eric Duncan when he returns home.

Four days after Duncan’s arrival in the U.S. he sought treatment at Texas Presbyterian Hospital for non-specific symptoms and was sent home with a prescription for antibiotics. During the interim, before returning to Texas Presbyterian Hospital with full-blown Ebola two days later, Duncan had contact with several family members, including five school children, who attend four different schools in Dallas. These children are now being monitored.  The four individuals having direct contact with Thomas Duncan were quarantined on Thursday, Oct. 2 in the Dallas apartment where Duncan stayed. His sheet and other items used were sealed and taken away in plastic bags. More recently the same four individuals were moved to a place in a gated community.

We can’t know for sure, but dozens, possibly hundreds of individuals, including medical personnel, were exposed to Thomas Duncan after he developed symptoms. The CDC, which can’t seem to keep track of viable smallpox samples, assures us all is under control. They are tracking possible contacts, but have no plans to quarantine these contacts as a precaution.

Obama is as defensive about African affairs as he is about Islam, especially when the two overlap and reinforce. The administration draws a parallel to the SARS epidemic, which “never really was as bad as predicted.” Tell that to the hundreds of thousands of Asians who contracted it. What about the thousands of canceled flights? Face masks mandatory in public throughout much of China? It could be worse, because China filters bad news, and deals firmly with leaks. The administration’s response to a potential Ebola epidemic is rife with political correctness.

The Obama administration in 2010 quietly dumped Bush-era plans to enact quarantine regulations supported by the Centers for Disease Control that were designed to prevent travelers from spreading infectious diseases. The regulations were proposed by the Bush administration in 2005 during the height of avian and swine flu fears. The rules would have required airlines to report to federal authorities any ill passengers. They mandated that airlines collect information on international passengers – including email addresses, traveling companions and return flight details – to make it easier to trace passengers in any investigation of a disease outbreak.

Despite the calls for heavy travel restrictions between the U.S. and those west African countries hardest hit by the outbreak, with one advocate even warning against the possibility of “Ebola tourism” by patients seeking better care here, the administration is rejecting calls for a visa ban for West Africans. Visas are held by 13,500 people in three Ebola countries in Africa, Sierra Leone, Guinea, and Liberia, to visit the U.S.

Meanwhile, the World Health Organization reported on Wednesday, Oct. 1, that the manufacture, financing and distribution of a large-scale Ebola vaccine is not possible until the middle of next year at the earliest. The WHO is expediting Phase 1 and Phase 2 trials on two highly promising experimental Ebola vaccines, hoping to obtain approval next February.

Can we believe Ebola victims are only contagious once symptoms start? If so, Ebola must be unique among viral diseases. Besides, symptoms are not turned on and off like a switch, and the hospital in Texas missed even the most obvious ones. Is it only spread by direct contact with bodily fluids? Perhaps, but bodily fluids are spread by coughs and sneezes too. We don’t catch colds from exhaled carbon dioxide (not even the Climate Change Cult believes that, so far). Furthermore, bodily fluids linger on clothing and other things. How long is the virus viable under those conditions? Duncan was carried into the ambulance, where he continued to vomit. Have those EMTs been quarantined? How many patients and hospital workers did they contact after being contaminated? It’s simple math. If one person infects two others, the spread is by definition, exponential — and the chart resembles a hockey stick.

Well worth reading is this article, Ebola: The Truth About How Viruses Work by Suzanne Hamner (pen name).  To be considered is the final sentence in Hamner’s article:

Officials, right now, appear to be over-confident which can be dangerous because no one at this juncture can say they know “all there is to know” about Ebola.

This underscores the utter madness of sending 4,000 American soldiers to West Africa to help deal with this disease. There will be no “accidental” contact in their case, it is virtually assured. And what of their friends and loved ones when they return? Will they all be quarantined too? Are we absolutely certain that the disease is spread only by direct contact, and not airborne or through other vectors? Are we sure the virus is not contagious when it has run its course, even though it is still present in body tissues for months or years afterward.

Congress must be urged to stop this troop movement before it occurs. Render all the humanitarian aid as practical, but at arm’s length. Flights to and from West Africa and the US must be stopped or severely limited, as well as flights that might transfer through other countries.

History tells us what can happen in we proceed in ignorance. The Plague (Yersinia pestis) ravaged Europe in several waves from the 6th to the 18th century, spread by returning Crusaders.  Nearly one third of Europe’s population was lost.  The Plague is still endemic in certain areas, including the American Southwest, despite antibiotics.

In truth, Ebola is probably not as virulent as other pandemic diseases and can be treated and controlled by exercising due diligence. However, this diligence is unlikely to occur as long as the White House is in denial. Obama’s fantasy administration isn’t just a game anymore. In the events of this week, we see that the resources used to deal with a handful of Ebola cases in the United States are already strained. Ad hoc efforts at quarantine for relatives of Thomas Duncan in Texas were ignored until enforced with an armed guard. Voluntary compliance is likely to be poor, and cases may go unreported if doing so results on confinement for a month.

The United States is the only Western nation permitting virtually unrestricted air travel from West Africa. This is not a reason to cry “panic,” but a call to exercise firm and effective measures to prevent the spread of a devastating disease and its economic consequences, while exercising compassion for those in suffering.

[Originally published at Illinois Review]

Categories: On the Blog

Common Core Proponents Blame Their Victims

Somewhat Reasonable - October 11, 2014, 10:59 AM

It has become fashionable to blame the effects of nationalizing education on anything but the national curriculum mandates and the tests that accomplish it.

Teachers unions have seized on Common Core to undermine testing mandates and teacher evaluation schemes, bemoans Stanford University economist Eric Hanushek. Bad model lessons are undercutting Common Core’s potential, exclaims Robert Pondiscio of the Thomas B. Fordham Institute. Common Core teacher retraining sessions teem with learning theories that research has proven ineffective, complains E. D. Hirsch, founder of the Core Knowledge Foundation. And textbook publishers have twisted Common Core into a resurgence of “fuzzy math,” asserts College Board’s Kathleen Porter-Magee.

In other words, our nation’s 50 million schoolkids enter a storm of curricular chaos this fall, but, like them, Common Core is just a hapless victim. Has Common Core really been hijacked, or has it been a rogue vessel all along?

To answer that question in education terms, consider the current furor among New York educators over whether Common Core supports phonics-based literacy or a content-lite approach known as “balanced literacy.” The two are essentially pedagogical polar opposites, yet both sides claim Common Core justifies their approach.

A look at the standards themselves, as its proponents often demand, suggests this controversy is at least partly Common Core’s fault. Its curriculum mandates are wordy, obtuse, and inaccurate. Try this representative directive, for kindergarten: “Associate the long and short sounds with the common spellings (graphemes) for the five major vowels.” After wading through the blubbery language, an astute reader will ask, “How many ways can there be to spell the five vowels? And are there any minor vowels?” There is precisely one spelling for each of the five, and only five, vowels. So what could this mandate mean?

It’s unclear, and so is the rest of Common Core, as in-depth analysis along these lines from Hillsdale College’s Terrence Moore shows in his book The Story Killers. So no wonder New York teachers, and teachers everywhere, must muddle about, prey to contradictory education theories, in the name of Common Core. The lack of curricular clarity in Common Core has spawned mass confusion. Follow the money: The Common Core beneficiaries are consultants and test developers.

Aside from such complaints, Common Core proponents suggest the curriculum makes for good political arrangements. If it undercuts mediocrity by demonstrating the flabbiness of American children’s mental muscles, or makes U.S. education more efficient and orderly, perhaps all this pain might produce some gain. Or, in the words of Common Core’s biggest financial backer, Bill Gates, “It’s ludicrous to think that multiplication in Alabama and multiplication in New York are really different.”

That’s the real essence of Common Core: a political movement, a neat and tidy scheme to streamline U.S. education through a set of rapid, enormous policy changes rather than undergo the tedious process of convincing people and their elected representatives they should assent to a new way of organizing education. To speed things along, the people who created Common Core requested back in 2008 that the federal government play “an enabling role” and “offer a range of tiered incentives” to get states to sign onto national curriculum mandates and tests.

Once President Barack Obama came into office, he obliged, and then some. Thanks to federal grants offered during the recent recession, 40 state departments of education offered to accept this complete overhaul of their schools’ curricula and tests more than five months before the actual curriculum requirements were published in June 2010 and two months before even a draft was made publicly available. Taxpayers still await the final version of these new national tests.

Given the speed, secrecy, and arm-twisting of this initiative, the resulting chaos is no surprise. Potential pitfalls and a broad base of support never emerged during public debate, because there was no public debate. What is surprising is that people still insist on blaming Common Core’s victims rather than its perpetrators.

Joy Pullmann is a 2013–14 Robert Novak journalism fellow and education research fellow for The Heartland Institute.

Categories: On the Blog

What We Lose In A World Without Saturday Morning Cartoons

Somewhat Reasonable - October 11, 2014, 9:19 AM

Last weekend was the first without Saturday morning cartoons, and you have government to thank for it.

What killed Saturday morning cartoons? Cable, streaming, and the FCC. In the 1990s, the FCC began more strictly enforcing its rule requiring broadcast networks to provide a minimum of three hours of “educational” programming every week. Networks afraid of messing with their prime-time slots found it easiest to cram this required programming in the weekend morning slot. The actual educational content of this live-action programming is sometimes debatable, but it meets the letter of the law.

This is the sort of shift which, for Boomers, Xers, and Millennials, marks a moment of fond recollection of the Honey Nut Cheerio days that were. In our house, we had a 2-3 hour maximum (based on chore completion), and some combination of superheroes and meta-commentary on superheroes – the Lone Ranger, Batman, Superman, X-Men, Spider-Man, The Tick, Freakazoid, Animaniacs and Looney Tunes – filled it. Others had The Johnny Quest, The SuperFriends, The Laff-a-Lympics, The Teenage Mutant Ninja Turtles, The Transformers, G.I. Joe and more.

For many of us, Saturday morning cartoons were also a shared bonding experience with our parents. A Transom reader wrote me to make the point that “My dad usually watched with us and I continued the tradition, watching (Muppet Babies!) with my kids when they were small.  I remember thinking, ‘how cool that Dad wants to watch this show’, and I’m sure my kids appreciated that unique time spent with me.” It also served as a moment in the week where kids could just be kids, as opposed to being shuffled from class to practices to games, prepping that high-achiever resume for future Ivy League applications.

There is an interesting paradox here, though. While we may view the animation of the 1980s and 1990s through the lens of nostalgia, the reality is that much of the material produced in this era was subpar and unimpressive. For the most part, what came out of Kroft, Rankin-Bass, and Hanna-Barbera was just filler, with terrible plotting, acting, and artistry. Today’s animated content is leaps and bounds ahead of what was being done then. The idea of a show like Adventure Time was completely out of the question. And in those days, what was on TV was your only option. So it’s that episode of Spider-Man which has the lousy villain you’ve seen a dozen times? Tough. There’s no ability to switch to something you’d rather see. Most Saturday morning shows weren’t Heart of Ice.

Today, the camaraderie of the Saturday morning routine has been exploded by the marketplace. The quality of animation is higher; the availability of options is essentially unlimited. Children today have the ability to pull up a fun, dark, or interesting cartoon anywhere at anytime, streaming through the air a fix of three decades of takes on Batman or any other superhero, a lifetime of homicidal cats and mice, giant robots out the ears. No longer limited to a single slot in the week, they are able to access this entertainment for themselves on-demand whenever they please.

But we should recognize there’s something lost here, as well, as it is in so much of the on-demand economy. The Saturday morning cartoons and breakfast cereal meant that children experienced things as they came, together, and could talk about those shared experiences after. It was inherently a community activity, a definitional moment in childhood, with ties of shared reaction to surprising moments and turns of plot, not individualized to the user’s priorities. What replaces it is more responsive to our desires, with more instant gratification, but also more atomized. The loss of that shared experience is a minor thing in the scheme of Burkean collapse – but it is something, and I suspect something more meaningful than we might understand. And we won’t get it back.

[First published at The Federalist.]

Ben Domenech is the publisher of The Federalist and a senior fellow at The Heartland Institute. Sign up for a free trial of his daily newsletter, The Transom.

Categories: On the Blog

What Would Milton Friedman Say About Renewable Electricity Mandates?

Somewhat Reasonable - October 10, 2014, 1:34 PM

Photo Credit: Academy of Achievement

In a May 23, 1977 column for Newsweek, titled “A Department of Energy?” the late Nobel laureate economist Milton Friedman wrote:

Do not be misled into supposing that the energy problem is a purely technical problem that engineers can solve. No government engineer is in as good a position as you are to decide whether you would rather use expensive energy for heating your home, driving your car, or helping to produce one or another product for you to buy. No government engineer is in as good a position as the owner of a factory to choose the most economical fuel for his purposes or the cheapest way to conserve energy. No government engineer can replace the market in calculating the indirect effects of energy use or conservation. And no government engineer will enforce the ever more numerous edicts that will come down from on high. That will be done by policemen.

Such a line is even more relevant today than it was back then. Not just because we do now, in fact, have a Department of Energy, but because of the 29 state laws across the country that more specifically do exactly what Prof. Friedman said would inflict great harm on the economy. Namely, force people to consume expensive energy – whether or not they value or can afford it – simply because the government believes it has the technical authority to determine what form of energy is the best for us to use.

These laws, called renewable portfolio standards (RPS), or renewable electricity mandates, are laws that require utilities to sell or produce a certain percentage of electricity from renewable sources. Find out if your state has an RPS law here.

The Heartland Institute has written about RPS policy and traveled the country testifying in favor of its repeal for years. Last June, Ohio Gov. John Kasich became the first Governor to sign legislation that reduced the RPS. Hopefully that will dramatically improve the odds for similar bills in other states to become law in 2015.

Photo: Academy of Achievement

Categories: On the Blog

Desperate Wildlife Extinction Claims are Part of the Warming Hoax

Somewhat Reasonable - October 10, 2014, 11:57 AM

One thing that those of us who have been longtime observers and debunkers of the lies surrounding global warming and/or climate change have noticed is that the “Warmists” have gotten increasingly desperate after more than eighteen years in which there has been no warming.

As what they call “a pause” continues, they are coming up with some of the most absurd “research” to make their case.  When you consider that not one single computer model produced by the UN Intergovernmental Panel on Climate Change or any of the other charlatans was accurate, one can imagine their sense of panic at this point.

The latest claims were made by the wildlife group, WWF, the Zoological Society of London, and other affiliated groups. On October 1st, it was reported that, based on “an analysis of thousands of vertebrate species,” populations had fallen 52% between 1970 and 2010. In 2012 the same group had claimed they had declined 28% over a similar period of time. So now we are expected to believe that within two years’ time a massive larger decline had been detected.

The claims are absurd. I won’t insult you by repeating them. Suffice to say they did not begin to cover the thousands of species that share planet Earth with humans, but you can be sure that it was humans that got blamed for the alleged declines, along with the usual recommendations that we give up the use of fossil fuels and other aspects of modern life to save some furry creature somewhere.

For years we have been hearing that polar bears have been in decline, but one of the leading authorities on this species, zoologist Dr. Susan Crockford, has a report, “Ten good reasons not to worry about polar bears”, posted on the website of the Global warming Policy Foundation, led by Dr. Benny Pieser, a longtime critic of those behind the global warming hoax.

Dr. Crockford called polar bears “a conservation success story. Their numbers have rebounded remarkably since 1973 and we can say for sure that there are more polar bears now than there were 40 years ago.

Over on CFACT’s Climate Depot.com website, similar claims about walruses were debunked by Dr. Crockford who noted that mass haulouts (areas where they congregate) of Pacific walrus and stampede deaths are not new, now due to low ice cover. “The attempts by WWF and others to link this event to global warming is self-serving nonsense,” said Dr. Crockford,, “that has nothing to do with science…this is blatant nonsense and those who support or encourage this interpretation are misinforming the public.”

“The Pacific walrus remains abundant, numbering at least 200,000 by some accounts, double the number in the 1950s.”

The same time I read the article about the wildlife extinction claims, an email arrived from the Sierra Club—the kind they send to thousands who support its agenda—saying “For a mother polar bear and her cubs, the ice is already melting around them. The last thing they need to contend with is an oil spill.”  The claim about ice is another lie because Arctic ice has been expanding, not melting, in the same fashion as ice in the Antarctic. The real reason for the email was to protest “two massive drilling leases” and prevent access to Alaskan oil.

The Sierra Club and other environmental organizations have been on the front lines to get the Obama administration to keep the Keystone XL oil pipeline from being constructed. It has been senselessly delayed for six years despite the jobs and energy independence it will provide. One wonders if the top brass at the Sierra Club actually drive cars or do they all just bike to work?

In a similar fashion, in May the Union of Concerned Scientists announced that, thanks to climate change, our national landmarks such as Ellis Island, the Everglades, and Cape Canaveral will be endangered, claiming that face a serious and uncertain future in a world of rising sea levels, frequent wildfires, flooding and other natural events. Only the sea levels are rising in millimeters, not inches or feet. There have been fewer forest fires and far fewer hurricanes of late. In short, this is just one more desperate Green claim.

If the Greens are so concerned for wildlife, why don’t they protest the wind power turbines that slaughter thousands of birds and bats, and are exempted from prohibitions on the killing of eagles and condors? Because they are hypocrites, that’s why.

Species extinction, like climate change, is a normal, natural aspect of life on Earth. It has nothing to do with human activities. There were no humans around to blame for the Great Permian Extinction when 90% of all life on Earth was destroyed. Global warming periods and abundant carbon dioxide have never been causes of mass extinctions.

Craig Rucker, president of CFACT, the Committee for a Constructive Tomorrow, says the Warmists “actually want us to believe that global warming is responsible for the Ebola virus, the rise of ISIS, and for tens of thousands of walruses getting together to ‘haul out’ on a beach in Alaska. Attributing such things to global warming is among the most shameless tactics in the warming campaign’s playbook.”

© Alan Caruba, 2014

[Originally published at Warning Signs]

Categories: On the Blog

EPA Antics on Sea Level Rise–Gina McCarthy’s Miami Trip

Somewhat Reasonable - October 10, 2014, 11:48 AM

EPA Administrator McCarthy is going to be in Miami October 8 during or close to a King Tide and I suspect call the high tide of the year due to global warming.  The reason for the name of King Tide is given by Wikipedia that follows this paragraph.  If global warming is blamed on King Tide’s, this will be another example of EPA distorting science to promote their damaging policies for the nation.

I believe Hurricane Sandy hit New York in 2012 during a King Tide; it definitely was during a full moon.

“King tides are simply the very highest tides. Conversely, the low tides that occur at this time are the very lowest tides. They are naturally occurring, predictable events. Tides are actually the movement of water across Earth’s surface caused by the combined effects of the gravitational forces exerted by the Moon and the Sun and the rotation of Earth which manifest in the local rise and fall of sea levels. Tides are driven by the relative positions of the Earth, Moon, and Sun, the elliptical orbits of the celestial bodies, land formations, and relative location on Earth. In the lunar month, the highest tides occur roughly every 14 days, at the new and full moons, when the gravitational pull of the Moon and the Sun are in alignment. These highest tides in the lunar cycle are called spring tides. The proximity of the Moon in relation to Earth and Earth in relation to the Sun also has an effect on tidal ranges. The Moon moves around Earth in an elliptical orbit that takes about 29 days to complete. The gravitational force is greatest when the Moon is closest to Earth (perigee) and least when it is farthest from Earth (apogee – about two weeks after perigee). The Moon has a larger effect on the tides than the Sun but the Sun’s position also has an influence on the tides. Earth moves around the Sun in an elliptical orbit that takes a little over 365 days to complete. Its gravitational force is greatest when Earth is closest to the Sun (perihelion – early January) and least when the Sun is farthest from Earth (aphelion – early July).

The king tides occur when the Earth, Moon and Sun are aligned at perigee and perihelion, resulting in the largest tidal range seen over the course of a year. Alignments that are ‘near enough’ occur during approximately three months each winter and again for three months in the summer.[contradiction] During these months, the high tides are higher than the average highest tides for three or four days. The predicted heights of a king tide can be further augmented by local weather patterns and ocean conditions. Winter king tides may be amplified by winter weather making these events more dramatic. In the northern hemisphere, the term king tide is used to describe each of these winter high tide events. On Australia’s East Coast, the highest of each of these periods (i.e., one in winter and one in summer, totaling two per year) are known as the king tides. In this region of the world, the winter king tide usually occurs at night and therefore goes unnoticed. Consequently the summer king tide usually catches the most attention.”

These activities are part of the reason the nation is going in debt between $1billion and $1.5 billion per day.

James H. Rust,  Professor of nuclear engineering and policy advisor The Heartland Institute

Categories: On the Blog

Abusive Tax Policies Are to Blame for Corporations Going Overseas

Somewhat Reasonable - October 10, 2014, 10:15 AM

American companies that reincorporate abroad are not doing so to avoid paying taxes on U.S. earnings, despite the often misleading impressions left by the rantings of Senators Carl Levin, Dick Durbin, Elizabeth Warren, and others to the contrary. They are doing it to avoid paying U.S. taxes on earnings in other countries.

The United States is the only industrialized nation that uses a “worldwide” tax system, in which a U.S.-based corporation must pay taxes to our government regardless of where the corporation earns its money. Most of the rest of the world uses a “territorial” tax system, in which a corporation pays taxes only where it earns income.

For instance, Volkswagen and BMW pay taxes to the federal and state governments on income earned in the United States. If they bring that money back to Germany, where they are headquartered, Germany taxes none of it, because the United States has already taxed it. On the other hand, if a U.S.-based company earns income in Germany and wants to bring some of it back into this country, the company must pay federal tax even though the money has already been taxed in Germany.

This is a huge disadvantage to multinational corporations based in the United States and a big reason for corporate “inversions,” the word used to describe U.S. companies reincorporating in foreign countries. Compounding the disadvantage is this: The United States has the highest corporate tax rate in the industrialized world. The federal rate is 35 percent, and most states levy their own corporate tax on top of that.

The Tax Foundation earlier this year noted the combined (state and federal) average corporate tax rate in the United States is 39.1 percent, while the average rate is 25 percent among the 33 other nations in the OECD (Organization for Economic Cooperation and Development). OECD nations include Australia, Canada (this nation’s largest trading partner), France, Germany, Japan, Korea, Mexico, Sweden, and the United Kingdom.

In a recent interview with Budget & Tax News, Chris Edwards, director of tax policy at the Cato Institute, noted Canada has a net corporate tax rate of 15 percent—less than half the U.S. federal rate of 35 percent—and receives as much corporate tax revenue as a percentage of its gross domestic product as the United States receives.

“We don’t find companies trying to invert out of Canada or Ireland these days, because they have reasonable corporate tax policies,” Edwards said. “Left wingers like Durbin and [Sens. Carl and Rep. Sander] Levin talk about how government is losing money because of these inversions. The government is losing because their policies are inducing companies to move offshore.”

Pete Sepp, executive vice president of the National Taxpayers Union, also noted, “PricewaterhouseCoopers’ annual ‘Paying Taxes’ study shows that for a hypothetical medium-sized firm, the time and cost spent just on tax paperwork puts the U.S. 61st out of 189 countries. Somehow the chant of ‘We’re 61!’ doesn’t seem to have much appeal to a beleaguered business.”

Sen. Carl Levin (D-MI) has introduced a bill that would virtually end the ability of American companies to do inversions. So has Durbin (D-IL), who has seen the news that two Illinois-based companies, including Walgreen Co., the nation’s largest pharmacy chain, are mulling overseas mergers to do inversions. In response he has introduced the “Patriot Employer Tax Credit Act,” a bill his press statement says “would provide a tax credit to companies that provide fair wages and good benefits to workers while closing a tax loophole that incentivizes corporations to send jobs overseas.”

Notice the slam against the “patriotism” of companies that do inversions.

Lack of patriotism and “tax loopholes” are not the problem. The problem is a nation with the highest corporate tax rate in the industrialized world, a government that taxes income earned anywhere in the world, and an outrageously time-consuming and costly system just to pay taxes.

Until those problems are addressed, expect more U.S. companies to try to reincorporate outside the United States, and expect almost no companies outside the United States to try to reincorporate here.

Steve Stanek (sstanek@heartland.org) is a research fellow at The Heartland Institute in Chicago.

Categories: On the Blog

Wireless Taxes Growing Out of Control

Somewhat Reasonable - October 10, 2014, 10:00 AM

Wireless tax rates have reached all-time highs. Almost half the states nationwide now impose a wireless tax above 10 percent. According to a new report released this morning by the Tax Foundation, the national average, consisting of  the combined federal, state, and local taxes and fees on cell phone bills, has now reached as high as 17.05 percent. Broken down, this historically high tax rate is comprised of a 5.82 percent federal rate and an average 11.23 percent state-local rate. Even as revenue earned per wireless phone falls, taxes and fees continue to climb.

In a media release on the study, Joseph Henchman, Vice President of Legal & State Projects at the Tax Foundation argues that state and local legislators should look away from wireless taxes for new tax revenue.

“Accessing content on our phones these days is easier than ever before, but paying cell phone bills remains difficult for many,” said Joseph Henchman, Tax Foundation Vice President of Legal & State Projects. “Instead of singling out wireless services with stealth tax increases, state and local governments should seek more neutral and less disruptive sources of revenue.”

According to CTIA, a wireless industry trade group, around 326 wireless device connections exist in the United States today (this number includes devices like smartphones, feature phones, tablets and personal wireless hotspots). In addition, according to the National Center for Health Statistics, around 41% of U.S. households have only wireless phones in the second half of 2013, indicating a move away from traditional landlines.

Scott Mackey of KSE Partners, co-author of the report argues in the media statement that wireless taxes are regressive and pose a threat to wireless network development.

“Wireless taxes and fees are regressive and have a disproportionate impact on poorer citizens,” said Scott Mackey of KSE Partners and co-author of the report. “Excessive taxes and fees may reduce low-income consumers’ access to wireless service at a time when such access is critical to economic success.”

Additionally, targeted cell phone taxes may slow investment in wireless infrastructure by lowering consumer demand for wireless service. “The reduced demand impacts network investment, because subscriber revenues ultimately determine how much carriers can afford to invest in network modernization,” adds Mackey.

In the report, Wireless Taxation in the United States 2014, the authors examined state, local and federal wireless taxes, creating state and local tax rankings. Below is a review of some of these findings:

The report finds that:

  • The five states with the highest state-local rates are: Washington State (18.6 percent), Nebraska (18.48 percent), New York (17.74 percent), Florida (16.55 percent), and Illinois (15.81 percent).

  • The five states with the lowest state-local rates are: Oregon (1.76 percent), Nevada (1.86 percent), Idaho (2.62 percent), Montana (6.00 percent), and West Virginia (6.15 percent).

  • Four cities—Chicago, Baltimore, Omaha, and New York City—have effective tax rates in excess of 25 percent of the customer bill.

  • The average rates of taxes and fees on wireless telephone services are more than two times higher than the average sales tax rates that apply to most other taxable goods and services.

  • States favor the taxes because they can raise revenue in a relatively hidden way.

With wireless taxes growing out of control, legislators should take another look at Wireless Tax Fairness Act, a bill designed to slow the growth of these taxes. The Act would put a five-year moratorium on discriminatory state wireless phone and data service tax increases. Although this wouldn’t prevent governments from creating new taxes and fees on all communications, it would disallow them from targeting any one service. A five-year freeze would slow the rate of tax increases while allowing more time to create a new taxing system for wireless that is more carefully developed, fair, and non-disruptive.

High wireless taxes drag down both consumers and the wireless market, deterring innovation and infrastructure improvements, while disproportionately affecting minority and low-income populations. Many of these groups support lower wireless taxes. As an example, according to a MyWireless study conducted by McLaughlin & Associates partnered with Penn Schoen Berland, nine in ten Hispanics believe the wireless tax rate should be the same or less than the taxes they pay on general goods and services.

Placing a moratorium on these discriminatory tax hikes would benefit the economy and consumers.

Categories: On the Blog
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