• Makin: “Does the Fed Need to Ease Even More?”
• Noriega: “Is Mexico Our Ally or Our Enemy?”
• Lachman: “It’s Time for Plan B from the IMF”
• Barone: “Clarence Thomas: Liberal Nightmare on Obamacare”
• Schulz: “Bioengineering Methuselah”
• Goldberg: “Seduced by the Cult of Experts”
• Blumenthal, Hsiao, Mazza, Schriver, and Stokes: “Asian Alliances in the 21st Century”
• Hayward: “Maybe the Sun Has Something to Do with It“
AEI President Arthur Brooks answers the question from MSNBC’s Matt Miller, “What do we do when huge forces beyond our control shape our destiny?”
Visit msnbc.com for breaking news, world news, and news about the economy
The Associated Press asks “Are military pensions too generous,” which in terms of precision is a little like asking “How’s your wife?” (In both cases, “compared to what” comes into play.) The AP reports that the Obama administration is thinking of shifting both the form and the generosity of military pensions. A report from the Defense Business Board points out that military pensions are generous relative to the private sector, but that benefits are concentrated in the small percentage of servicemen who stay for 20 years. The Board recommended a shift to the defined contribution Thrift Savings Plan, which the military participates in but does not match employee contributions.
Military pensions require that an individual have 20 years of service before becoming eligible. And, unlike other areas of public service, in the military you need to be promoted to retain your job, meaning that a lot of folks who would be willing to stay 20 years don’t get to do so. This makes military pensions a winners vs. losers game: the 83 percent who leave before 20 years get little or nothing, while those who make it to 20 years receive half pay for life. (Full disclosure: my brother is a career Navy officer with more than 20 years of service, who presumably is looking forward to a life of half-pay leisure…)
The generosity is more difficult to measure due to the differing accounting conventions of defined benefit pensions. What we want to know is the value of what’s called the “normal cost” of the pension, which represents the value of benefits accruing in a given year. If the normal cost is 10 percent of pay, then you would be roughly indifferent between receiving your pension and getting a 10 percent salary increase each year.
The Department of Defense reports a “normal cost” of pensions for full-time workers of 32.7 percent of pay. That’s pretty generous; for ordinary federal employees, the normal cost, including both defined benefit pensions and employer matches to the Thrift Savings Plan, is around 17 percent of pay. So military pensions are more generous than federal civilian pensions, which are themselves far more generous than pensions in the private sector, where the typical employer contribution toward pensions is around 6 percent of salaries.
Moreover, to make defined benefit pensions comparable to defined contribution plans you need to adjust for different accounting conventions. Federal DB pensions assume an interest rate of 5.75 percent, versus the current Treasury yield of around 4 percent. Put another way, federal employees receive a guaranteed return of 5.75 percent on their and their employers’ contributions while a worker with a 401(k) plan could receive a guaranteed return of only around 4 percent. Adjusting for those differences, military pensions are worth around 1.6 times more, or about 52 percent of salaries. Pretty sweet, so long as you make it to 20 years to receive the pension.
How do military pensions compare to those of other high-risk government jobs, such as police and firefighters? For instance, the Florida Retirement System’s Special Risk plan reports a normal cost of 22 percent of pay, but this is based on an assumed 7.75 percent discount rate. Again adjusting to a 4 percent Treasury rate for consistency, that would rise to close to 58 percent of pay. So Florida police and firefighters receive more generous pensions than do members of the military. My guess is that being in the military is a bit tougher — more time away from your family, plus a fair amount of getting shot at — but that demands more analysis.
My gut is that both military pensions and public safety pensions are too generous; that is, the military allocates a greater share of total compensation to retirement benefits than a rational individual would if you simply gave him a single pot of money and let him split it between wages and benefits. My gut also tells me that part of the reason public sector pensions are so generous is that — because no one can figure out exactly what they cost (see my calculations above) — generous pensions and other fringe benefits allow total compensation to rise higher than would be politically sustainable if pay increases came through salaries, the generosity of which are easy for the public to gauge.
Would it make sense for the military (and, for that matter, police and fire) to shift to a DC pension structure? Probably so. It’s fairer to different employees, doesn’t penalize people who want to leave for a different career, and has far more transparent accounting so the risk to government finances and the taxpayer is lower.
What does it take to get a federal government job? Well, if you listened to the Office of Personnel management, you would think the main criterion would be the willingness to accept 24 percent lower pay than in the private sector — that’s how much they claim that federal employees are underpaid relative to private sector workers.
But here’s an easy gut-check: if federal employees were really underpaid by 24 percent, would you see books like “The Complete Idiot’s Guide to Getting Government Jobs,” which promises inside tips on landing that federal position? The book itself says,
What makes a job a good fit for you? Is it the salary or the fulfillment? The hours you work or the outcome of that work? Vacation or location? No matter what your answer is, one thing is for certain: working for the federal government is like the professional version of having your cake and eating it too. You can get the paycheck and the fulfillment, the flexible hours, and the chance to make a difference. You can live in cities across the country and countries around the world. You can live out your career dreams, whatever they may be.
My co-author on various studies comparing federal and private sector compensation, Jason Richwine, recently pointed out that, for the truly committed, his local community college offers a class on how to get a federal job.
My guess is that neither books nor college classes play up the 24 percent salary penalty, probably because in reality it doesn’t exist. As Jason and I showed in the latest iteration of our working paper on federal pay, the average federal employee receives a salary roughly 15 percent higher than a private sector worker with the same education, experience and other earnings-related attributes. Add benefits and job security and a federal job is paid around 61 percent more than market levels.
This may explain why public employee unions fight so hard against any proposals to reduce staffing, even through long-term attrition. If federal jobs were really so underpaid, the typical worker could get a massive pay increase simply by quitting. Yet federal quit rates are consistently far below private sector levels.
Of course, if “The Complete Idiot’s Guide to Getting Government Jobs” strikes you as demeaning — we’re not saying that government employees are idiots by any means — you have other books to choose from, including:
• Ten Steps to a Federal Job: How to Land a Job in the Obama Administration, 2nd Edition (Author’s comment: 2nd edition??)
• Guide to America’s Federal Jobs: A Complete Directory of U.S. Government Career Opportunities
• Get a Job! [with the Federal Government]
That last one’s available for the Kindle, for workers on the go who still want a 24 percent pay cut.
No Good News: The president’s ratings are at a low ebb in Gallup’s polling. In the latest weekly average, 39 percent approved of the job he was doing while 53 percent disapproved. His approval rating among the electorally crucial Independents was 36 percent. He hit a new low in Harris Interactive’s poll this week, too. Thirty-two percent gave him an excellent/good rating, with 68 percent giving him a negative (fair plus poor) rating.
Although Congress’s ratings have been bumping along at low levels for some time, just 13 percent in Gallup’s mid-August poll approved. Only once before in nearly 40 years of asking the question has the rating been this low.
The University of Michigan’s preliminary August Consumer Confidence rating was the lowest since 1980. The sharp decline in sentiment in early August came before the S&P downgrade. “Never before in the history of the surveys,” said the Michigan release, “have so many consumers spontaneously mentioned negative aspects of the government’s role, and never before have consumers rated economic policies so unfavorably.”
Gallup also reported this week that Americans’ satisfaction with the way things are going in the United States has dropped to 11 percent, just four points above the all-time low in October 2008.
And from the Tech World: Pew reports that 83 percent of Americans have a cell phone. Forty percent with cell phones in the poll said having their cell phone had helped in an emergency situation. Forty-two percent had used them for entertainment when they were bored. Thirteen percent nationally, and 30 percent of 18- to 29-year-olds, had used them to avoid interacting with the people around them by pretending they were on the phone.
Super Committee: In the latest Economist/Yougov poll, 30 percent approved of the creation of the congressional debt reduction super committee. Fifty percent disapproved and 18 percent did not have an opinion. Only 19 percent think it’s likely the committee will agree on recommendations. Sixty-six percent think agreement is unlikely.
Slowing Down: Many of the pollsters are taking some time off so the poll pickings this week are slim. We’re taking some time off, too, but we will be back in September with our weekly reports on polls you may have missed and a special look at a decade’s worth of polling on the war on terror.
Nick, Klein’s post is interesting. But I have a problem with it you don’t address. Liberals just can’t make up their minds about the Great Depression. All they seem to really know for sure is that FDR is responsible for ending it. For decades, liberals—including the writers of textbooks, mainstream journalists, et al—insisted that the New Deal simply ended (or helped end, if you want to get persnickety) the Great Depression. But there are few economic historians or economists who think that traditional narrative is remotely plausible.
For starters, the National Recovery Administration—the heart of the early New Deal—was an unmitigated disaster. Also, it gets complicated because people mean all sorts of things by the New Deal. And many of the things we most associate with the New Deal, like Social Security, had little to nothing to do with fighting the Great Depression.
Over time, Milton Friedman and others showed that the monetary history of the 1930s was much more important to the story than the pictures in our civics textbooks or the clips from old newsreels. The sophisticated liberal position was that the New Deal helped, but it didn’t go far enough with Keynesian stimulus and that only came with World War II (this is Paul Krugman’s position). Recently Larry Summers proclaimed: “Never forget, never forget, and I think it’s very important for Democrats especially to remember this, that if Hitler had not come along, Franklin Roosevelt would have left office in 1941 with an unemployment rate in excess of 15 percent and an economic recovery strategy that had basically failed.”
In recent years liberals have grown more defensive as the argument has shifted to whether or not FDR prolonged the Great Depression.
Here’s how I began an essay for National Review on the subject a while back:
“A normal person,” the liberal economist Brad DeLong recently pronounced, “would not argue that the New Deal prolonged the Great Depression.” New York Times financial columnist and Newsweek contributing editor Daniel Gross is even more emphatic. “One would be very hard-pressed to find a serious professional historian—I mean a serious historian, not a think-tank wanker, not an economist, not a journalist—who believes that the New Deal prolonged the Depression.” David Sirota, an activist-journalist, writes on the Huffington Post: “Every high school civics class teaches the broad truth about Roosevelt, the New Deal and how it helped end the Great Depression, and if the conservative movement has gone so off the deep end that they want to make crazy-sounding arguments that even high schoolers know are silly, then the progressive movement is in an even better position than we may have thought.” And in his syndicated column, he adds that any argument otherwise is “abject insanity.”
Sirota’s point about high-school civics classes helps explain the vitriol. The glory of the New Deal is, for liberals, settled dogma. To question it is akin to casting doubt on geocentrism in the 14th century. Worse, it is an attempt to erase liberalism’s most usable past.
Significantly, FDR has recently become more relevant and popular among “progressives” than he’s been for a generation. In 2006, Nancy Pelosi reportedly said that three words prove the Democrats aren’t out of ideas: “Franklin Delano Roosevelt.”
Anyway, getting back to Klein. I have no idea if the argument he makes is right. It might be. Or it might be simply part of the answer. It’s certainly worth thinking about. But a few things are obvious. First, if FDR devalued the dollar on purpose in order to boost exports, that’s no defense of the New Deal. He could have done that without putting dry cleaners in jail and cartelizing big business. Second, if he did it on purpose, blind luck is a better explanation than some liberal technocratic expertise. Remember, this is the guy who set gold prices based on his lucky numbers. And his “bold, persistent experimentation” had far more failures than successes. Third, if Executive Order 6102 ended the Great Depression, then it follows that all of those wonderful things that New Deal voluptuaries routinely cite as the success and the glory of the New Deal did not end the Great Depression. And if that’s case, maybe we don’t need a new New Deal after all.
Chris Conover notes a New York Times story on worries in the health sector that its job growth in recent years may be nearing an end. Current cuts to state Medicaid programs across the country and impending cuts to Medicare are two contributors to these worries. Both Representative Paul Ryan’s (premium support) and President Obama’s plans (IPAB) for Medicare include decreases in spending from the current baseline. An opinion piece in yesterday’s Wall Street Journal compared these plans.
In case you missed it, AEI’s Thomas P. Miller had an article this week on health sector spending. He digests a number of recent health economics studies on how spending in the health sector affects the economy in a variety of ways including unemployment, nonhealth consumption, and taxes.
In a recent post, Conover—whose new book American Health Economy Illustrated will be out in January from AEI Press—wrote on the tough task of reducing spending in the health sector:
So long as healthcare employment growth outpaces the rate of growth in employment in the rest of the economy, healthcare is likely to grow as a share of GDP as well. This may distress those who believe we spend too much on healthcare. At the same time, we must recognize that every dollar of health spending also represents a dollar of income to someone employed in the health sector. That makes cutting health spending a two-edged sword. Making healthcare more affordable may seem like a Pyrrhic victory if it is achieved at the price of slower economic growth and/or higher unemployment.
Ezra Klein has a post arguing that Hitler and FDR ended the Depression (h/t RCM):
The two policies … key to the recovery were FDR’s decision to sign Executive Order 6102 and Hitler’s decision to overrun Europe.
Executive Order 6102 sounds pretty bizarre when you explain it. Remember that in the 1930s, dollars were backed by gold. Your dollar was worth what it was worth because the American government was committed to giving you a certain amount of gold in exchange for it. In Executive Order 6102, FDR forced every American to turn in almost all of their gold at a price of about $20 an ounce. Then he said that gold would stop being worth $20 per ounce and begin being worth $33 an ounce. This meant a massive devaluation in the dollar, which sounds bad, but actually meant a huge stimulus: our exports became cheaper and more popular, which in turn meant we created jobs because we needed more people to manufacture stuff that we could export.
As for Hitler, the more he did to threaten Europe, the more Europeans did to safeguard their money in the event of a Nazi invasion. That meant investing in American stocks and bonds, which expanded the amount of money in our economy, which lowered interest rates and increased expectations for future inflation (and eased fears of coming deflation), and gave consumers and businesses reasons to invest.
The post is interesting and worth reading in full.
Ezra says this interpretation of how the U.S. got out of the Depression is shared by conservative/libertarian economists including Greg Mankiw and to some extent Milton Friedman.
I’m pretty sure Friedman did not share this view. Regardless, the efforts to give FDR credit for rescuing the nation from the Depression would be more persuasive if they at least addressed Robert Higgs’s powerful essay on why the Depression lasted as long as it did and Roosevelt’s role in prolonging the Depression. I’m not saying Higgs has everything exactly right, but he strongly undercuts the case that FDR got the nation out of Depression.
This summer Catoctin Creek Distillery opened a sales room where the public can buy its terrific whiskeys. This is good news, and not just for the Purcellville, Virginia distillery and its visitors.
This is yet another chip in the nation’s antiquated, three-tier alcoholic beverage distribution system, which has fleeced consumers for decades. Under the three-tier system, beer, spirits, and wine producers cannot sell directly to the public. Instead, they must sell to distributors, who then sell to retailers who may sell to the public. It is a grossly inefficient system, one that adds to the price of drink at each step. The three-tier system produces patently ludicrous scenarios—distillery visitors can see how the whiskey gets made and bottled, but then must schlep to a liquor store to buy it.
The Virginia legislature finally recognized the insanity of this and changed the law. Other states, including Maryland (wine), Minnesota (beer), Illinois (beer), and North Carolina (liquor), have removed three-tier system impediments between producers and consumers.
A few factors seem to have nudged states to act. First, consumers have complained loudly that the three-tier system is an impediment to choice. They do not appreciate government telling them, for example, “No you cannot buy this wine online from the winery. You must ask a retailer to order it for you, and then go pick it up at the store.”
Second, the economic downturn has states itching to find ways to grow employment and tax revenues. Many states long ago changed their laws to permit wineries to sell directly to the public, fueling wine tourism. The same thing is happening with breweries and distilleries—they are becoming destinations.
Third, and relatedly, distilleries and breweries have been popping up like daisies. Distributors frequently refuse to carry their beverages, leaving these small businesses shut out of the retail market. Politicians do not like seeing these small businesses croaked in the cradle; hence they are freeing them to sell directly their customers.
Whether the economy is up or down, alcohol sells, so sweeping away costly post-Prohibition regulations on commerce is a no-brainer.
Kevin R. Kosar is the author of ‘Whiskey: A Global History.’
As a Texan, I couldn’t help but share this blog post about the Texas jobs numbers that is deservedly getting a lot of play in the blogosphere.
On his website Political Math, blogger Matthias Shapiro goes through all of the anti-Texas rejoinders liberals like Paul Krugman have lobbed at the state since news of the “Texas Miracle” started spreading. They’ve been extra vehement over the last few days as Governor Rick Perry threw his hat into the Republican primary race.
Shapiro isn’t so fond of Perry himself, but that doesn’t matter. He uses raw data (and some excellent charts) to show that the claims about Texas’s employment success over the last few years are legitimate. Here are a few highlights of his analysis:
About the “high” unemployment rate in the state:
People are flocking to Texas in massive numbers. This is speculative, but it seems that people are moving to Texas looking for jobs rather than moving to Texas for a job they already have lined up. This would explain why Texas is adding jobs faster than any other state but still has a relatively high unemployment rate.
Responding to the claim that new jobs in Texas are especially low-paying:
Texas median hourly wage is $15.14 … almost exactly in the middle of the pack (28th out of 51 regions). Given that they’ve seen exceptional job growth (and these other states have not) this does not seem exceptionally low.
But aren’t all of the jobs in Texas coming from those fat-cat oil barons? Not really:
Take the energy sector completely out of the equation and Texas is still growing faster than any other state. This indicates to us that the energy sector is not a single sector saving Texas from the same economic fate as the rest of the states. It’s not hurting, but Texas would still be growing like a weed without it.
There’s much more like this in the post. I encourage a close read.
• Barone: “Debate Leaves Republican Field Unaltered”
• Goldberg: “Riot Rationalization Misses the Mark”
• Hubbard: “Tax Reform Is the Swiftest Path to Growth”
• Hayward: “Con-Con-Con Job”
• Miller: “Health Spending Projection Spin Cycle: Rinse and Repeat, or Reset?”
• Vajdic: “Russia’s Ballistic Missile Politics“
No Good News for Congress: The new Gallup/USA Today poll finds 70 percent of respondents saying most members of Congress do not deserve reelection. Gallup notes that lower support “usually precedes significant turnover in the coming election.” Fifty-four percent said their own member deserved reelection. Gallup says this response is the low end of their trend on this question. The new National Journal/Congressional Connection poll showed the share saying their own member deserves reelection is lower than before the 2006 and 2010 landslides flipped control.
The CNN/Opinion Research Corporation poll found that 58 percent said most Democrats members of Congress did not deserve reelection (38 percent said they did). Sixty-four percent thought most Republican members should be voted out (31 percent said they deserved reelection).
S&P Downgrade: A whopping 81 percent had heard a lot or a little about the downgrade in this week’s Washington Post poll. Fifty-four percent said it was fair and 25 percent unfair.
British Hard Liners: In a YouGov poll for The Sun in Britain, a third supported using live bullets on the rioters, two-thirds plastic bullets, 78 percent tear gas, and nine in ten water cannons. Two-thirds think the yobs won’t face justice.
Testing Ideology: In the early August Marist/McClatchy poll, 41 percent of registered voters said the Republicans in Congress were too conservative, 31 percent that their views were about right, and 17 percent said they were too liberal (nearly three in ten Tea Party supporters said they were too liberal). Forty-two percent said the Democrats in Congress were too liberal, 36 percent about right, and 12 percent too conservative. Thirty-six percent of registered voters in the poll said Obama was too liberal, 48 percent about right, and 7 percent too conservative.
State Stats: Presidents with approval ratings above 50 percent usually win reelection. Obama’s half year average approval rating is 47 percent, just what it was for all of 2010. Right now, residents of 16 states give him an approval rating above 50 percent, with his strongest support coming from the East. Another sixteen states give him an approval rating of 40 percent or less.
The electoral weight of these two groups is lopsided. The 16 states where Obama has over 50 percent approval have 212 electoral votes. The 16 states where he has less than 40 percent approval have only 83 electoral votes. In the country’s most heavily Democratic large state, a new poll this week from Quinnipiac shows that New Yorkers were split 48 percent yes, 46 percent no on whether Obama deserves reelection.
Smoke Gets in Your Eyes: Fifty-nine percent of nonsmokers in a July Gallup poll said secondhand smoke is very harmful to adults compared with 35 percent of smokers who gave that response. In a separate question, 67 percent of smokers said smoking is very harmful to adults who smoke.
Tea Party Troubles? In the new CNN/ORC poll, 51 percent had an unfavorable opinion of the Tea Party and 31 percent a favorable opinion. In all six 2010 askings of the question, fewer than 45 percent had an unfavorable opinion. In a new PRSA/Pew poll, 29 percent say members of Congress who support the Tea Party have had an overall negative effect. This is up from 18 percent in January 2011.
Handling Terrorism: In May, after Osama bin Laden was killed, 67 percent in the CNN/ORC poll approved of the job President Obama was doing handling terrorism. In their new August poll, that has inched down to a still strong 62 percent.
Not Liberal Enough: Sixteen percent told CNN pollsters that they disapprove of Obama’s job performance because he is not liberal enough. Surprising, 11 percent of Republicans and, separately, conservatives disapprove of Obama because he is not liberal enough.
Mitt, Michele, and Tea: When asked if Mitt Romney would make a good president in the new Fox News poll, 51 percent of registered voters who are Tea Party supporters said he would. Fifty-nine percent of this group said Michele Bachman would make a good president.
A Third Party: A substantial 66 percent in the latest Fox News poll said they would consider voting for a third party presidential candidate next year. But only 31 percent said such a candidate has a reasonable chance of winning.
A landmark article went online a few days ago in the journal Molecular Psychiatry. The study was prepared by a team of 32 researchers headed by the University of Edinburgh’s Gail Davies and entitled “Genome-wide association studies establish that human intelligence is highly heritable and polygenic.” The study’s methods do not lend themselves to easy explanation unless you’re at home with SNPs (single nucleotide polymorphisms) and inverse variance weighted models used to capture “the variance in the trait that is due to linkage disequilibrium between genotyped SNPs and unknown causal variants.” But the bottom line of the article is reasonably simple. Using nothing but genetic information, the team of researchers was able to establish that the narrow heritability of crystallized intelligence (the kind that can be more easily affected by education) is at least 40 percent. The narrow heritability of fluid intelligence (the kind that involves pure problem-solving ability, independently of acquired knowledge) is at least 51 percent. Note the at least. The study’s authors explicitly state that these estimates are lower bounds.
Shelves of books and articles denying or minimizing the heritability of IQ have suddenly become obsolete. Those who continue to claim that IQ tests don’t measure anything real inside the brain also have their work cut out for them.
No sooner than Congress had scurried out the door did some members start tweeting their summer plans, including their summer reading lists (none of the publications featured on THOMAS, natch) a la a beach-books issue of Marie Claire. But those lawmakers left more than a bit of unfinished business as they hightailed it for their home districts; world events don’t wait for Congress to finish summer picnics or for the Speaker to brush up on his tan. So in the spirit of being prepared for the policy world post-recess, here are some reading recommendations from your AEI.org editor:
BEYOND SATANIC PANINI: There may have been an 11th-hour debt ceiling deal reached among the gnashing of peas and Satan Sandwiches, but the issue of reining in the national debt is far from over despite the additional $900 billion in borrowing authority granted to the Treasury. Intrinsically woven into this debate is the question of what’s a “fair share” when it comes to taxes and what’s “fair” when it comes to entitlement reform. “Structural change will only succeed if it’s accompanied by a moral argument—an unabashed cultural defense of the free enterprise system that helps Americans remember why they love their country and its exceptional culture,” AEI President Arthur Brooks wrote in the Washington Post last month in his column “The Debt Ceiling and the Pursuit of Happiness.”
FREE SPEECH BLOW: Did you know that there could be an executive order in the works that, after the Obama administration’s defeat in the landmark Citizens United v. FEC campaign finance case, would require federal bidders to disclose their political donations if they want to be considered for a contract? John Yoo and David Marston wrote about this assault on free speech in “Overruling Citizens United with Chicago-Style Politics.”
VLAD’S GREATEST ENEMY: As Vladimir Putin keeps marching across Russia like a macho man and is most assuredly eyeing another shot at the Kremlin, the opposition to the prime minister’s reign and accompanying repression of free speech and press freedom has a strong, growing ally: the Internet. Leon Aron, who traveled across Russia talking to activists who have found “a shelter in the world of censorship” online, analyzes the growing phenomenon that is a “major and evolving factor in Russian politics today and, even more so, tomorrow.” Read “Nyetizdat: How the Internet Is Building Civil Society in Russia.”
DANGEROUS (LEGAL) DRUGS: A little too much summer fun have you reaching for a bottle of ibuprofen? Think about this before you wash ‘em down: Nearly 80 percent of drug products originate from outside the United States, including $1.74 billion in imports from China. Several pharmaceutical industry experts in China quietly admit that up to a quarter of ingredients purchased by U.S. companies come from unknown sources. Simply put, there’s a reason why they’re cheap. Roger Bate, Julissa Milligan and Lorraine Mooney examine the legal but potentially lethal market in “Dangerous Substandard Medicines: An Increasing Global Problem.”
GREEN ON GREEN JOBS: Eager to tangle in an environmental debate on that beach trip? Check out Ken Green’s recent testimony before the Senate HELP committee on the myth of green jobs, expanding on his spring paper diving into the subject. It included this nugget about the effectiveness of the 2009 stimulus in creating green jobs: “A report September of 2010 pointed out that only $20 billion of the $92 billion allocated for renewable energy projects had been spent. And, according to the Department of Energy, much of that was spent abroad, creating green jobs in China, Spain, and South Korea.”
There’s much more I haven’t touched on here, so browse our research papers and recent articles and commentary for stimulating summer reads.
Yesterday marked the 99th anniversary of the birth of Nobel economist and one of the world’s greatest champions of liberty, Milton Friedman. Upon Friedman’s death in 2006, AEI’s Allan Meltzer expressed these thoughts in “An Appreciation: Milton Friedman, 1912-2006”:
Milton Friedman was an extraordinary economist and individual. Few people have had as much influence on both social policy and economic policy in the United States and the rest of the world. That influence continues to grow.
Milton Friedman swam against a strong and hostile current. Using his intelligence and abilities to communicate, he made major contributions to reverse the current. Facts helped to establish the correctness of his views. Rest in peace, Milton, secure in the knowledge that many others, everywhere, carry on your advocacy of freedom and opportunity as the basis for human betterment.
There are millions of people around the world who have more economic freedom, a better life, and a higher standard of living today thanks to Friedman’s enormous influence. Friedman was the strongest and most effective advocate of economic and political liberty in modern history, and the anniversary of his birthday provides an opportunity to reflect and appreciate his enduring impact on the world.
Hacking Away: Just 16 percent of Americans surveyed by Pew were following the British hacking scandal very closely. When told that “a British newspaper has been accused of hacking into the private cell phone lines of British citizens, celebrities and elected officials,” and that “the company has also been accused of illegally gaining peoples’ private financial and medical records,” 72 percent said it was very or somewhat likely that American news organization do the same thing. When asked if News Corp. owned any U.S. properties, three in ten said they didn’t know, and 35 percent said the corporation did and separately, did not. Gallup reports that Brits are slightly more confident in their media than the Americans are in theirs.
Anxious America: The new issue of AEI’s Political Report looks at anxiety about jobs, personal finances, healthcare, and retirement in the face of this long and painful recession. A new ABC News/Washington Post poll provides some updates. In it, only 14 percent said there were plenty of jobs available in their communities, but 82 percent said jobs were difficult to find. Fifty-four percent said the economic situation had caused them to change their personal lifestyle, and 23 percent in a separate question said they were angry about it. In a new Gallup poll, “lack of money” topped people’s financial concerns.
California Dreaming: In a new survey from Greenberg Quinlan Rosner of Californians, 65 percent said they favored moving the state’s full-time legislature to part-time status with part-time pay. The survey was conducted by The Los Angeles Times and the USC/Dornsife College of Letters, Arts, and Sciences. Republicans (75 percent), Democrats (58 percent), and Independents (67 percent) all favored the move. The California legislature’s approval rating was 25 percent.
What Consumer Financial Protection Bureau? While its supporters claim the agency has broad popular support, a new poll from CNN and the Opinion Research Corporation finds that 80 percent don’t know enough about the new bureau to have an opinion about it. Eleven percent nationally had generally positive views about it in the mid-July poll.
Comparing the Parties in Congress: Also in the CNN/Opinion Research Corporation July poll, 37 percent said the Republican leaders in the House and Senate would move the country in the right direction and 58 percent the wrong direction. In January, those responses were more positive, 46 and 50 percent, respectively. As for the Democrats, 43 percent answered right direction and 53 percent wrong direction, little changed from January, when the responses were 45 and 52 percent, respectively.
Obama On the Skids: President Obama had a 43 percent average job approval rating for the week of July 18-24 in Gallup’s polling, tied for the lowest weekly average of his administration. In Pew’s latest, 44 percent approved and 48 percent disapprove of the way he was handling his job. For the first time in Pew’s polling, a majority of Independents (54 percent) disapproved of his performance. Pew reports that Independents now prefer a generic Republican candidate over Obama for president.
And the Others: In January 2009, Vice President Joe Biden had a 52 percent favorable and 26 percent unfavorable rating in the CNN/Opinion Research Corporation poll. Today his rating is 43-43 percent. In the poll, Nancy Pelosi’s numbers were was 35 percent favorable, 52 percent unfavorable. John Boehner fared better: 43 percent had a favorable opinion of him and 32 percent an unfavorable one.
eRegret: Even though 82 percent of Internet users say they have never sent or said anything over the Internet that they regret, a notable 18 percent have, according to a new Marist poll. Younger Internet users are more likely than older ones to have regretted online actions. Twenty-four percent of Internet users younger than 45 years old compared to 13 percent of those 45 and older gave that response.
Healthcare Update: It’s a typical pattern. Pollsters are all over a topic while a hot debate is going on (think debt ceiling now), but then they drop the subject. Very few pollsters are asking about healthcare anymore so it is hard to know how Americans view the new legislation. Fortunately, the Kaiser Family Foundation regularly updates its core questions. In their new poll, released Wednesday, 42 percent said they had a favorable opinion of the healthcare reform bill and 43 percent an unfavorable one. Thirty-one percent had a very unfavorable view.
Down on Public Schooling: Gallup reported this week that only 34 percent say they have a great deal or quite a lot of confidence in public schools. This marks a 24 percent drop in confidence since Gallup first asked the question in 1974, when 58 percent said they had confidence in public schools. Compared to other institutions, public schools currently rank in the middle, 8th out of 16, placing them just underneath the presidency and above the criminal justice system.
• Bowman and Rugg: The latest polls on recession reactions, job anxiety, personal finances, inflation worries, and the debt limit drama. “Political Report”
• Kenneth P. Green: “The Question of Green Jobs”
• Philip I. Levy: “The Nutters’ Side of the Story”
• Michael Barone: “The U.S. Debt Deadlock”
• Marc A. Thiessen: “Boehner’s Reykjavik Moment”
• Steven F. Hayward: “New York Times Passes Gas“
• Brooks: “The Debt Ceiling and the Pursuit of Happiness”
• Barone: “To Get a Mandate, GOP Must Win Another Election”
• Downs: “How Business Can Improve Education”
• Yoo and Marston: “Obama Targets Political Donors”
• Viard: “Should Groceries Be Exempt from Sales Tax?”
• Rubin: “Remembering Ambassador Bill Eagleton”
Last week, as I received my umpteenth invitation to an event touting “responsible” behavior, it suddenly struck me that “responsible” is the new “smart.” Remember “smart power,” the buzz phrase of 2007 and 2008, the beloved notion of Obama (and Hillary) backers in the election? “Smart” was meant to underscore its difference from Bush policies, which were, you know, stupid. We had a “Smart Power” speaker series, a report explaining “A Smarter, More Secure America,” and even “Smart Power in U.S.-China Relations.” But it’s not only U.S.-China relations that should be “smart”—after all, wasn’t Bush kinda stupid in the Middle East too? Hence, “Boosting Smart Power: The Role of the United States in the Middle East.”
But the time for smart power is over. After all, the smart president got elected. But “smarter” just sounds smarmy. How can we distinguish the “smart” president from his, you know, stupid opponents? Wait. I’ve got it. He is not just smart, he is “responsible.” I know because Obama said so here:
“We will seek a rapid, but responsible, transition of operations to coalition, regional or international organizations that are postured to continue activities as may be necessary to realize the objectives of U.N. Security Council Resolutions 1970 and 1973.”
And here:
“These are the resources that we need to seize the initiative, while building the Afghan capacity that can allow for a responsible transition of our forces out of Afghanistan.”
And here:
“As a candidate for president, I pledged to bring the war in Iraq to a responsible end.”
And sure enough, Washington is with the program. We should have “A Return to Responsibility: The History of Defense Budgeting,” “Top 10 Fiscally Responsible Defense Cuts: How to Save $357.8 billion by 2015,” “Responsible Transition: Securing U.S. Interests in Afghanistan Beyond 2011,” and… well, you get the picture.
Crisis Mentality: When no clear winner emerged after the 2000 election, Americans were asked a number of times whether the inconclusive result constituted a crisis. Over and over again, they said no. They thought the situation presented major problems, but they never saw it as a crisis. That seems to be the prevailing opinion about the debt ceiling. Eighteen percent in a new CNN/Opinion Research Corporation International poll said the situation would cause a crisis, and 43 percent major problems. These responses are virtually identical to when CNN/ORC last asked the question in April.
Who Is to Blame: NBC News and the Wall Street Journal asked who would be more to blame if the debt limit isn’t raised and “the government is unable to meets its obligations, including payments to those on Social Security and in the military.” Thirty-five percent said President Obama and the Democrats in Congress, and 39 percent the Republicans in Congress. When asked in 1995 about who would be more to blame if the government shut down, 43 percent said the Republicans in Congress would be more to blame, while 32 percent said President Clinton would be.
The latest Fox News results found that 47 percent thought the Republicans in Congress would be more to blame if the country went into default, and 32 percent said President Obama would be.
In nearly all the polls, President Obama looks better than the Republicans or, separately, the Democrats in Congress. In a Gallup poll, a near majority, 49 percent, said compared to previous presidents and Congresses, this president and Congress were doing a worse job addressing the nation’s problems. Only 13 percent said they were doing a better one.
Anger: Twenty-eight percent in the new CBS News/New York Times poll said they were angry about the way things were going in Washington, the highest level since the question was first asked by this polling team in early 2010. Fifty-one percent were dissatisfied. Only 3 percent were enthusiastic, and 14 percent satisfied.
The Power of Golf: When Fox News asked people what would help more to move the debt limit talks ahead, 57 percent said the negotiators should pray together, while 18 percent wanted the negotiators to play golf.
Shuttling Off: Americans typically favor space exploration, but don’t like paying for it. In the latest CNN and Opinion Research Corporation poll, a plurality of 50 percent said the end of the space shuttle program will be bad for the United States. Seventy-five percent agreed that the United States should develop a replacement spacecraft capable of sending astronauts into space and returning to Earth.
An Independent Streak: In the latest Fox News poll, Mitt Romney tops President Obama, 41 percent to 35 percent, with self-identified Independents.
Journalistic Integrity: The News of the World scandal is not helping traditional news sources. Only 17 percent of respondents in this week’s Economist/YouGov poll had a great deal or quite a lot of confidence in traditional news media. Fifty-four percent said that illegally accessing voicemails is definitely or probably a common practice in journalism.
A New Wave: The anti-incumbent mood that arose in 2010 does not seem to have subsided. In the latest ABC/Washington Post poll, only 30 percent of respondents would vote to re-elect their member of Congress. Sixty-three percent say they are inclined to look around for someone else.
Taxes: In the new Fox News poll, 63 percent say raising taxes in an economic downturn is a bad idea. Twenty-seven percent say it’s a good idea. When Fox last asked the question in August 2009, 80 percent said raising taxes was a bad idea. In the same poll, Americans were divided over whether getting rid of tax deductions was the same as increasing taxes. Forty-two percent said yes, it was the same. Forty-seven percent said no, it wasn’t.
Smoke Gets in My Eyes: Last week, we highlighted that for the first time in a recent Gallup poll, Americans want smoking made illegal in all public places. But, according a Gallup release this week, they still believe that people should be free to smoke if they choose. While the vast majority (85 percent) say employers should not be allowed to discriminate against smokers in hiring, they do believe it is justified (60 percent) to set higher insurance rates for them.
• Thiessen: “The Gang of Six’s $3 Trillion Tax Hike”
• Goldberg: “The Terminology of Taxation”
• Gottlieb: “A Prescription for Savings: Reducing Drug Costs to Medicare”
• Jan: “Ilyas Kashmiri: The Possible Death of an al Qaeda Mastermind”
• Zimmerman: “Yemen Crisis Situation Reports: Update 40“
• AEI, Heritage Foundation, and Foreign Policy Initiative: The Effect of Ever More Defense Budget Cuts on U.S. Armed Forces. “Warning: Hollow Force Ahead!”
• Schmitt: “Will Fixing the Debt Crisis Lead to a National Security Crisis?”
• Gottlieb: “Health Insurance Exchanges: A Race to the Bottom”
• Bolton: “Why Is Obama Giving Libya to the Russians?”
• Viard: “Does the Current Tax System Encourage U.S. Companies to Ship Jobs Overseas?”
• Herman: America’s retreat from space. “Goodbye, Atlantis“
• Yoo and Marston: Federal contract bidders must disclose political giving. “Overruling Citizens United with Chicago-Style Politics”
• Wallison: “Repeal the Democrats’ Complex and Expensive Legislation”
• Noriega: “Venezuela without Chávez”
• Goldberg: Who is the real ideologue in the debt-limit talks? “The Ideologue in the Oval Office”
• Dhume: “India’s Sri Lanka Problem”
• Barone: “Will College Bubble Burst from Public Subsidies?”
• Ornstein: “Ethics Committee’s Shortcomings on Display“
• Ornstein: End-game negotiations work. “What Will the Debt Debate Mean for 2012?”
• Thiessen: “Calling Jim DeMint—To Warn GOP on Debt Plan”
• Ornstein: “Why a Balanced-Budget Amendment Is Too Risky”
• Donnelly: Terminating the F-35 program would be catastrophic. “An Extremely Immodest Proposal“
• Wallison: “Is Obama’s New Deal Better Than the Old One?”
• Barone: “Federal Expansion the Real Issue in Debt Ceiling Debate”
• Auslin: Japan’s victory in the FIFA World Cup Women’s Championship is the first bit of good news they’ve had in months. “Japan’s Lake Placid Moment”
• Davis: “Why Employers Are Slow to Fill Jobs: Business Class”
• Blumenthal: “Opening to the East”
• Hayward: “An Environmental Reformation”
• Blumenthal: “Present in Asia? With What?”
• Cárdenas: “Preparing for a Post-Hugo Venezuela“
The American Enterprise Institute takes no institutional positions on policy advocacy or political campaigns. The views expressed on The Enterprise Blog represent those of the individual writers.