The Heritage Foundation - Leadership for America

New York Times columnist Paul Krugman was less than honest when he totally misrepresented my 2001 essay, “Taking Charge of Federal Personnel.”

My point was simple: To achieve significant change, a president needs key appointees dedicated to pursuing his vision and mandate, not entrenched D.C. “wise men” intent on pursuing policies that reflect their own “expert” views.

To promote his own “expert” view that the Bush Administration was unqualified to govern, Krugman lifts a sentence fragment from my essay and places it in a false context. Yes, I urged then President-elect Bush to “make appointments based on loyalty first and expertise second.” But Krugman presents this as evidence of “contempt for expertise.” Nonsense!

“Expertise cannot be ignored,” I stated. But picking appointees “merely [emphasis added] in terms of expert qualifications can be disastrous for an Administration genuinely committed to change….”

A loyal policy executive should seek out and listen to the expertise of the permanent civil service. But these experts tend to be change resistant, because (my essay notes) they are already “part of the status quo–the permanent government.”

Obama’s early picks for top posts have disheartened many of his supporters precisely because he seems to be recycling the same “experts” from the Clinton era. No one advocates loyalty to the exclusion of expertise. But if President-elect Obama truly intends to pursue “change,” he’ll need to fill the top policy slots with non-careerists who personally share his vision of the future.

That’s the point of my essay. It was good advice in 2001, and it’s good advice now.

Remember those games when you were younger (they also have them at bars)where you would test your observation skills by picking out the 10 differences between two similar pictures. Here’s a simple example.

Let’s try another. Open these two browsers by clicking (right-click, open new tab or window) here and here. If that’s too much work, I’ll tell you the difference. Carol Browner, Obama’s new Assistant to the President for Energy and Climate Change, used to be listed as a member of the Commission for a Sustainable World Society for Socialist International. That’s right, Socialist International. As of today, however, her bio was taken off the site.

Maybe it’s just a coincidence and maybe she didn’t have time to be a commission member of a socialist organization now that she’s an energy czar. Or maybe it’s similar to the Commissar Vanishes where

Photographs can lie. They certainly do in the Soviet Union from 1929 to 1953, the years of Joseph Stalin’s dictatorial rule. Stalin’s agents routinely arrest and kill as “enemies of the people” anyone who disagrees with his politics. Communist Party workers then try to remove any trace of these people from the photographic archives, and so from the media.”

Here’s an example of said Commissar Vanishing. As I mentioned with Browner, maybe it’s just coincidence or maybe there’s a reason why she’s no longer a part of the commission, but it’s interesting and I’m curious nonetheless.

Thus far, I’ve been pleasantly surprised with some of Obama’s nominations but his energy picks have been dreadful. As my colleague Ben Lieberman points out,

How does $8-a-gallon gas sound? Few Americans would want to see that happen. Unfortunately, President-elect Barack Obama’s choices for the government’s two highest energy posts have expressed a surprising level of comfort with sky-high gas prices. Sen. Ken Salazar, Colorado Democrat and Mr. Obama’s nominee for interior secretary, was on record as opposing lifting the offshore moratorium even if gasoline were to reach $10 a gallon. Energy Secretary-nominee Steven Chu. Last September, he told the Wall Street Journal that ‘somehow we have to figure out how to boost the price of gasoline to the levels in Europe.’”

Mix them in a pot with a socialist energy czar and what do you get? Four frightening years of bad energy policy. The energy bills passed in 2005 and 2007 during the Bush administration weren’t any good, either, but with these three steering the ship, we could reach uncharted waters.

Despite a new study that warns of “staggering costs” for nuclear power, the contracts keep on coming. The Pittsburgh-Tribune Review reports,

Westinghouse Electric Co. said Monday it signed a $7.65 billion deal to build two nuclear reactors in Florida — its third such contract in nine months. With 30 new reactors proposed for the United States in the coming years, Monroeville-based Westinghouse has hired 4,000 new staffers since 2004, and is on track to hire 500 more annually for the foreseeable future, said spokesman Vaughn Gilbert. It now employs 11,000 people worldwide, including 4,000 in Western Pennsylvania. A move into new headquarters in Cranberry begins this summer.”

We’ve said it here a number of times, it shouldn’t be to the discretion of policymakers to decide the fate of nuclear power one way or the other. It shouldn’t be the government’s role to step in to artificially distort the market with more subsidies, loan guarantees, tax credits, etc. It’s also not the role of the government to tell companies it’s too expensive to build nuclear power plants. That decision should be left to those who reap the profits or suffer the losses.

Some members of Congress who may have signaled support for “serious deficit spending” earlier in the week seem to have toughened their stance after news of just how serious the deficit looks to be.

To help Congress begin the spending cuts, we’ve started a list of non-essential government spending that could be curbed:

• Farm Subsidies: Taxpayers spend $25 billion annually on farm subsidies. Over 90 percent of all farm subsidies goes to growers of just five crops: wheat, cotton, corn, soybeans, and rice. Just as producers of fruits, vegetables, beef, and poultry currently thrive without subsidies, so can other farmers.
• Earmarks: The $17 billion spent annually on pork projects includes the Charles Rangel School of Public Service, the Montana Sheep Institute, and the Andre Agassi College Preparatory Academy.
• Overpayments: The government’s own auditors admit that Washington makes at least $55 billion in overpayments to government programs annually.
• Corporate Welfare: Washington spends $60 billion a year on corporate welfare–more than it spends on homeland security.

We invite our readers to share suggestions of other non-essential items.

Two days into the new Congress, the majority has signaled they are unlikely to take their promise of fiscal discipline seriously. House democrats have turned off the Medicare trigger under the rules package for the 111th Congress, which means they are unlikely to even debate entitlement policy, let alone engage in necessary reforms.

The trigger requires that the President submit legislation that would contain Medicare spending if the program draws on general revenues for more than 45 percent of its funding for two years in a row. The benefits of the trigger are twofold. First, it helps prevent Medicare from crowding out other programs that rely on general revenue funding. Second, it forces Congress to debate the President’s proposal, shedding light on the ballooning costs of entitlements.

Majority Leader Steny Hoyer (D – MD) claimed that turning off the trigger was necessary because it was “an ideologically driven target based on a misleading measure of Medicare’s financial health.” This causes one to wonder exactly what “measure” Hoyer is using. The Congressional Budget Office, The Medicare Trustees, and The Government Accountability Office have all warned that entitlement spending—driven primarily by Medicare—is unsustainable in the long-term. Medicare alone will double in the next 30 years as a share of GDP, and excess costs in the program currently exceed $85 trillion. That’s the equivalent of more than 120 $700 billion bailouts—and even this figure underestimates the real fiscal woes in the Medicare program.

Ironically, economists on the left and right agree that triggers are a vital tool to force Congressional action to curb spending, tame entitlements, and get our long-term budget back on track. With today’s announcement that the deficit will reach $1.2 trillion this year, it’s a shame the 111th Congress doesn’t agree.

Jack Spencer, Research Fellow in Nuclear Energy at the Heritage Foundation, authored this post.

The Center for American Progress is promoting a  study called “Business Risks and Costs of New Nuclear Power,” which according to a CAP press release uncovers the “staggering” costs new nuclear power. The study prices out new nukes based on what it purports to be a realistic set of conditions.

Aside from the cherry-picking of data and its clear tilt toward Big Green (the vast industrial complex and lobbying machine being built around global warming alarmism), its conclusions are potentially not that far off.

In other words, it describes a possible cost structure for new nuclear power. Where it misses the mark is by not telling the reader that such an outcome is not predetermined, thus leaving its audience with the impression that nuclear energy is necessarily expensive. That is not the case.

The reality is that nuclear related institutions in the U.S. are not structured to promote a strong, efficient, and sustainable nuclear industry. Subsidies, the regulatory environment, and the nation’s nuclear waste management strategy all promote entrenched interests, are disincentives to innovation and discourage competition. Together, these all result in higher prices.

The value of the CAP study is to demonstrate why a nuclear renaissance may never unfold unless something is done to ensure that the conditions set forth by the study never come to pass. The Heritage Foundation has written extensively on what some of these pro-market reforms should be.

Here is a study on waste management;
here is one on subsidy reform; and
here is one on how regulation contributed to killing the nuclear industry
and one on how to fast-track permits for new reactors.

The CAP study shows what could be if we do not learn any lessons from the past. Heritage is busy using CAP’s base numbers with a new set of assumptions to determine what could be if we make the right policy choices.

While we are working on that, here are our initial thoughts on the study. This will give you some insight into what we are thinking as we are crunching a new set of numbers.

• Environmentalists didn’t stop nuclear energy. Oh, wait, yes they did. The study dedicates an entire page (3) to argue that environmentalists did not kill nuclear energy. It suggests that Wall Street and utility executives simply assessed the risks associated with nuclear power being too great to carry forth with their nuclear projects. Fast forward to page 20, after describing how one of the greatest cost drivers with nuclear power is construction delays, the paper points out that organized opposition has been a “highly significant factor” in delaying plant construction. Perhaps these were not environmentalists who organized.
• New plants are already delayed and over budget, well not ALL of them. Sticking with page 20, the study falls back on the anti-nuke adage that delays and budget overruns of the Finish reactor demonstrates that new U.S. reactors will also be over budget and delayed. It also points out that two-thirds of current reactor projects around the world are also being delayed. First, as Heritage has pointed out numerous times, the Finland reactor is a first of a kind and assigning delays and cost overruns that it incurs to future reactors is not a legitimate criticism. But more importantly, while the CAP study might point out that two-thirds of the reactors might be delayed, one-third is not. So instead of assuming that the U.S. will do the wrong things that the two-thirds are doing, how about learning some lessons from what the successful one-third?
• A ten year construction schedule is not predetermined. The basic problem with the study is that their conclusions are based on the assumption that new nuclear plants will take ten years. This significantly drives up both the cost of capital and other inflationary pressures, which the study refers to as construction cost escalations. A fairer approach would have been to develop conclusions based on a few scenarios. Japan, for example, is completing plants in four years. So while it is true that historically plants have been delayed in the U.S., it is also true that modern construction methods in industrialized economies are allowing plants to be built more efficiently. That should have been recognized.
• Assumes technological homogeneity. One of the real disservices to the American public of the current debate over nuclear power is that lack of discussion over the array of nuclear technologies available. While large, light-water rectors will likely remain the back-bone of the U.S. fleet; there are a host of other technologies that we should be discussing. Each has their own set of advantages for different applications. Not recognizing the impact that new technologies could have on the viability of nuclear power dismisses one of the greatest contributions that nuclear technology could have on America’s energy future.
• Overnight costs are misleading. The CAP study started with an overnight cost estimate as the basis from which to build its total cost models. The problem is it uses Florida Power & Light’s estimate as the basis for the study’s overnight costs. The problem is that using this estimate does not take into consideration the significant savings that should be achieved as additional plants are built. So while the FP&L plant may well cost $4,070/KW, future plants should cost significantly less as regulatory hurdles become more predictable, the supplier base matures, construction methods are honed, and economies of scale are achieved.
• So-called “all in” costs are misleading. The study attempts to calculate all of the costs associated with the plant, divide them by the amount of electricity the plant will produce to give an all-in cost for nuclear power. This is the exorbitant 25 to 30 cents per kilowatt hour that the report suggests. The problem with this mixture of fixed capital costs and variable costs is that it is based on what the cost for electricity would be in the year 2018, the year the plant comes on line. While the study recognizes that the current low cost of nuclear energy is largely because the plants are already paid for, it ignores the fact that the cost for nuclear energy at new plants would be drastically reduced once they are paid for. A more accurate way to assign all-in costs would be to describe all-in, lifetime costs. In other words, the actual cost to consumers should be spread over the life of the plant, which will likely be over 80 or more years.
• Variable costs are unnecessarily escalated. In addition to the capital costs, the study describes and assortment of variable costs. Like the capital costs, these estimates assign first year costs to the overall cost of electricity, rather than spreading those costs over the lifetime of the plant. Nor do they not allow for the possible downward price pressures that a shift in policy would produce. For example, it assigns a cost to building a workforce to operate the plant. While developing a workforce certainly has costs associated with it, the total cost of such activities should not be assigned to the all-in cost of electricity. They are investments that would be returned over time. Another interesting cost that is assessed is that for property taxes. To be sure, property taxes are an important source of revenue for local communities that host nuclear plants. The problem is that the study assumes that because the costs for the plant will be so high, so will the property taxes. If, however, costs can be kept down, than so to will taxes.
• Pursuing a least cost approach. One recommendation that is on spot is that the nation should pursue a least cost approach to meet its needs. The Heritage Foundation advocates a free-market approach to energy policy. It does not support subsidies for nuclear or any other energy source. The federal government should set a fair and predictable regulatory environment and allow all energy technologies to compete in the open market place.

Maybe the CAP folks are correct and the cost of nuclear energy is prohibitively expensive. Maybe other alternatives are the way to go for a clean, affordable energy future. As one who believes in the value of nuclear energy, I am fully supportive of removing all the subsidies and government preferences and allowing the market to decide. If Big Green is so confident, then they should be prepared to do the same.

Addendum: David Bradish at the Nuclear Energy Institute’s blog makes a very good point:

The study assumes a payback period of 40 years. That’s way too long. A new nuclear plant will probably be setup to pay back its loans for construction in 15-20 years and maybe faster depending on the financing agreements. Investors don’t wait 40 years to receive their money back and in fact 15-20 years is a long time for any investment. Changing this one assumption in the study basically cuts the cost of electricity from a nuclear plant in half and becomes more in line with the conclusions from the other studies I’ve seen.”

Barack Obama is trying to convince the American people that when it comes to his economic stimulus plan, “We’re guided by what works, not by any ideology or special interests.” But as the  New York Times reports today, nobody has any idea “what works.” First the Times reports:

Nearly every economist who spoke here agreed that a dollar invested in, say, a new transit system or in bridge repair is spent and respent more efficiently than a dollar that comes to a household in a tax cut.

Awesome. That’s good to know. There must be tons of great research to back this belief up. But then the Times reports:

There was concern, however, that the nation lacked enough “shovel ready” projects that could be ramped up quickly, generating jobs.

Wait, what? I thought we were just told that as long as the government is doing the spending, that money  is “spent and respent more efficiently than a dollar that comes to a household in a tax cut.” Now all of a sudden, it matters whether or not the projects that government money is poured into is “shovel ready” or not? If a government project is not “shovel ready” does that mean government spending is no longer more efficient than tax cuts? The Times doesn’t tell us. But apparently that is because all these government spending loving economists have no idea what they are talking about. The Times reports:

What is more, the economists did not agree on the best projects to pursue. As Mr. Auerbach pointed out, after a generation of ignoring public spending in their research, the nation’s mainstream economists lacked the expertise to help guide the process. “We have not figured out the right course of action,” he said.

There were plenty of proposals at the three-day convention. Some argued for a big investment in broadband. Others proposed recruiting young people for two-year stints weather-stripping and upgrading privately owned and public buildings. Still others argued that government should step up subsidies for basic research and product innovation.

Got that? All the economists that Obama is listening to so that he makes sure “that the investments are made wisely and managed well” are just making stuff up. There is simply no research that exists to provide “the expertise to help guide the process.”

So we’re left with Rep. Paul Ryan’s (R-WI) truth: “Those aren’t stimulus. Those are ideological accomplishments in the guise of economic stimulus.“

(Post by Heritage Senior Legal Research Fellow Brian Walsh)

A new year, a new Congress, and already the march of overcriminalization is underway.

Without engaging this Congress in debate or meaningful committee oversight, Rep. Edolphus Towns (D-NY) is trying to ram through legislation–the Presidential Library Donation Reform Act of 2009 (H.R. 36)–that would make it a federal crime to fail to report a donation as small as $200 to a presidential library. The punishment? Up to five years (!) in federal prison.

If this is the precedent that the 111th Congress is setting for how it goes about creating and expanding federal criminal law, it is a terrible one. Few Members had even seen the bill by this morning, and none of the relevant committees have had the time to review it and offer their input. This is not the way that quality law gets made.

Indeed, it is precisely this type of legislative conduct that has resulted in the bloated number of crimes in federal law–over 4,450 offenses in the U.S. Code. And there are so many criminal offenses buried in regulations that Congress’s own research service has characterized the task of finding and numbering them to be impossible.

Organizations spanning the political and ideological spectrums are working together to solve this problem. They are in basic agreement that a lack of committee oversight–particularly by the two Judiciary Committees–and debate on new and expanded criminal provisions is a root cause of overcriminalization.

Hundreds of the criminal offenses already on the books criminalize conduct the average American would never dream is criminal; include no meaningful criminal-intent requirement to ensure that Americans do not become criminals inadvertently or by accident; and impose disproportionately harsh sentences in federal prisons, often for conduct that is not inherently wrongful.

Before voting on this or any other bill concerning the criminal law, Congress should engage in substantial committee oversight and debate to ensure that the proposed criminal provision:

• Addresses a real problem that is not being–and cannot be–addressed under existing law;
• Has a punishment that fits the crime (or so-called crime) that is consistent with the punishments imposed for similar conduct at the state level;
• Addresses a truly federal interest; and
• Includes meaningful criminal-intent requirements that will protect Americans who violate the law only inadvertently or without any knowledge that their conduct is unlawful or otherwise wrongful.

Lest they want more of the same to be part of their legislative legacy, Members of Congress should think twice and then three times rather than engage in any new criminalization born in haste.

In a few weeks, China will claim to have completed its economic survey and announce a growth rate for 2008. The only thing we know for certain is that figure won’t be accurate.

Today, the People’s Bank tipped growth of 9.3% for the year. The final official figure could be 9.1% or 9.4% but it will be close to that.

Today also brought a reason, courtesy of the official China Electricity Council, to think real economic growth was much lower. It put growth in power demand last year at only 5.2%.

Power demand numbers may not be entirely reliable, either, but we know something of the relation between official economic growth and power demand growth: in previous years, official power demand growth was much faster. It was 3.4 percentage points faster in 2007, 2.9 points faster in 2006, 3.6 points faster in 2005, and so on.

This year, however, we will be told economic growth is much faster than power demand growth. It’s certainly possible there was a change due to the global slowdown. But China is going to report economic growth only 2 percentage points lower than the blistering pace in 2007. That can hardly explain a full flip where power demand was considerably faster than the economy for years, but now is suddenly much slower.

The last time this happened was 1998, when China reported the Asian financial crisis caused power demand growth to drop to 2.8% while economic growth stayed at 7.8%. It is widely understood that true economic growth that year was far lower.

It’s 1998 all over again. True growth for 2008 won’t be clear even when all numbers are tallied, but our first glimpse says it was in the 7% range, at best.

Egyptian President Hosni Mubarak has called for meetings between the Israeli leaders and “Palestinian factions” as well as a ceasefire in the Gaza conflict. According to the CNN article, the Egyptian President “said the discussions would focus on avoiding an escalation of the violence, securing borders between Israel and Gaza”. The U.S. has supported Israel’s right to defend itself and respond to the terrorist threat of Hamas. It is important to remember that a cease-fire without being lasting and stable is catering to Hamas’ pledge to destroy Israel.

Heritage Foundation’s James Phillips, expert on Middle Eastern Affairs, recently published a WebMemo addressing this issue. In “Gaza Cease-Fire Must Halt Hamas Rockets” Phillips offers three principles which should guide U.S. policy on the conflict. He highlights that a cease-fire agreement must immediately and permanently end the rocket attacks by terrorist groups like Hamas. Secondly, there needs to be recognition of the moral difference in the way the conflict is being fought by both sides. Thirdly, international pressure should be put on the instigator of the conflict, Hamas. We need to see the actions of Hamas for what they are and understand the reasons for Israel’s provocation.

On December 10, Senate Democrats sent a letter to Illinois Gov. Rod Blagojevich writing: ““We write to insist that you step down and…under no circumstances make an appointment to fill the vacant Illinois Senate seat.” The letter further threatened that if Blagojevich ignored their warning, “we would be forced to exercise our Constitutional authority under Article I, Section 5, to determine whether such a person should be seated.”

Well now that Blagojevich has appointed Roland Burris to President-elect Barack Obama’s old senate seat, most Senate Democrats, led by Sen. Harry Reid (D-NV), are attempting to follow through on their threat. But as Sen. Dianne Feinstein explains, it would be unconstitutional for them to do so:

I can’t imagine the secretary of state countermanding a gubernatorial appointment. The question, really, is one in my view of law. And that is, does the governor have the power to make the appointment? And the answer is yes. Is the governor discredited? And the answer is yes.

Does that affect his appointment power? And the answer is no until certain things happen.

Feinstein added that if Burris isn’t seated “it affects gubernatorial appointments all over the country.”

One of the biggest challenges President-elect Barack Obama faces in the years to come is how to both enact “swift and bold” changes to public policy while still blaming President Bush for everything that is bad about the economy. Hence Obama’s press conference yesterday where he anesthetized Americans to the likelihood of “trillion dollar deficits for years to come.” Of course, Obama quickly blamed others for the massive shortfall, explaining: “When the American people spoke last November, they were demanding change - change in policies that helped deliver the worst economic crisis that we’ve seen since the Great Depression.“But then Obama completely failed to explain how his administration would rein in these deficits. The New York Times reports:

Mr. Obama declined to say on Tuesday whether the budget that his administration submits to Congress in February would be larger than the $3.1 trillion budget that President Bush submitted for the current fiscal year. He also did not offer any specific examples of how spending could be controlled, saying only that his advisers had been scouring the budget looking for programs that could be eliminated.

Scariest of all, is that Obama’s deficit warnings did not include any of the costs of his own trillion dollar stimulus plan. As we documented yesterday, Obama’s plan does contain some tax cuts, but only temporary cuts that have a proven track record of being completely ineffective at stimulating the economy.

In contrast to his very temporary tax cuts, Obama’s plan has hundreds of billions of dollars in new spending, the majority of which is destined to become permanent increases in federal spending. On Saturday, Obama promised to create 600,000 new government employees. Those salaries and lifetime government funded pensions will be with us forever. His proposed expansion of unemployment insurance to part-time workers will also be a permanent new government expenditure, as will the plan’s proposal to expand Medicaid benefits to out-of-work Americans.

The Democrats in Congress are also eager to include expansion of Medicare eligibility in any stimulus package. And then we haven’t even talked about Obama’s health care plan which will create a government run health care plan much like Medicare that any American can enroll in. Obama’s health care plan will force tens of millions of Americans out of their current coverage and into the government’s one-size-fits-all solution. The cost to taxpayers: $452 billion per year, or more than $6 trillion over a 10-year period.

Rep. Paul Ryan (R-WI) had it right when he told the Wall Street Journal: “Those aren’t stimulus. Those are ideological accomplishments in the guise of economic stimulus.” The left has always wanted to permanently expand the size of the federal government and they know this recession is a great opportunity to accomplish that task. As Obama’s chief of staff Rahm Emanuel recently said, “You never allow a serious crisis to go to waste.”

Quick Hits:

• Sen. Dianne Feinstein (D-CA) is urging fellow Democrats to reverse their position and seat Roland Burris as President-elect Barack Obama’s replacement in the Senate.
• Financial records show that President-elect Barack Obama took big money from the man at the center of the “pay-to-play” deals involving New Mexico Gov. Bill Richardson.
• Russia’s shut down of natural gas supplies to Europe have hit France, Italy and Germany and caused cuts in electricity and heating in the Balkans.
• A $200,000 advertising campaign to promote atheism begins on London buses today.
• California could begin issuing IOUs, instead of tax refund checks, as soon as Feb. 1.

Good news, Mr. Gore. You no longer have to worry about polar bears arduously attempt to settle on a piece of breaking ice as portrayed in your documentary, An Inconvenient Truth. (The animated version Gore used in his movie can be seen at the 4-minute mark, to the tune of some strange Latin music, here.)

In any event, according to data compiled by Illinois’s Arctic Climate Research Center,

Thanks to a rapid rebound in recent months, global sea ice levels now equal those seen 29 years ago. Ice levels had been tracking lower throughout much of 2008, but rapidly recovered in the last quarter. In fact, the rate of increase from September onward is the fastest rate of change on record, either upwards or downwards.”

Is there any good reason for the polar bear to be listed under the Endangered Species Act? Senior Policy Analyst Ben Lieberman writes,

Its global numbers have increased substantially, from an estimated 8,000–10,000 in 1965–1970 to 20,000–25,000 today. Clearly, any warming that has occurred has not had an adverse impact on polar bear numbers. This is true of the polar bear populations in Alaska, Canada, Russia, and other nations.

Unfortunately, the requirements for listing have never been particularly rigorous. In the case of polar bears, it may only require speculation that continued global warming will reduce the amount of summer ice in the Arctic that the bears rely upon.”

It appears that the polar bears are in good shape. Maybe Gore should shift his full attention to whales.

Bill Beach recently appeared on Bloomberg TV to debate with Will Straw from the Center For American Progress on what should be done with the new Stimulus bill.

For more information on the Stimulus bill, visit our new “Rapid Response” page on the Economic Stimulus

A paper recently published by The Heritage Foundation outlined the threat to religious liberty posed by nondiscrimination laws that elevate sexual orientation to a “protected status” just like race or gender.

One of the cases used to illustrate this point involved a Methodist campground ministry in New Jersey that refused to allow a lesbian couple to rent one of its facilities for their civil union ceremony because of the ministry’s religious beliefs about marriage. The lesbian couple filed a complaint against the ministry for allegedly violating a civil rights law prohibiting discrimination in public accommodations. Because the ministry had opened its facilities to the general public, some argued that the ministry could not invoke its religious beliefs—“no matter how deeply held”—in limiting use of the facility for male–female weddings only.

Recently, the New Jersey Division of Civil Rights confirmed the threats outlined in Heritage’s paper by concluding that probable cause exists to pursue charges against the Methodist campground ministry. Although the decision does not end this particular case, it favors the view that legal recognition for same-sex unions and sexual orientation should trump religious liberties.

Of note, the decision was authored by the same New Jersey official, J. Frank Vespa-Papaleo, who headed a commission that recently recommended that New Jersey redefine marriage to include homosexual couples.

Despite the set-back, Brian Raum, an attorney for the Alliance Defense Fund, who represents the Methodist campground ministry, stated that his client would continue to fight for the right to honor its religious convictions. According to Raum, his client’s position remains unchanged: “A Christian organization has a Constitutional right to use their facilities in a way that is consistent with their beliefs”.

Just as Europe is in the midst of a particularly cold winter, Russia’s quasi-governmental gas giant Gazprom has turned off the gas taps to Ukraine, a major transit corridor for Russian gas into Europe. Gas shortages are being reported in several countries, including Romania, Bulgaria, Greece and the Czech Republic.

Europe gets more than 40 per cent of its gas from Russia, although many European countries such as Poland are 100 percent reliant on Moscow for supplies. This isn’t the first time that Gazprom has engaged in energy-intimidation – it turned off the gas taps to Ukraine in January 2006 and heavily reduced supplies in March 2008.

Russia has tended to be a reliable energy supplier to Western Europe, choosing instead to specifically target former Soviet states such as Ukraine as it seeks to carve out a Russian-dominated sphere of influence in its near abroad. However, Western Europe has now been brought into this dispute as Austria and Hungary feel the fall out from this latest round of gas cuts.

Europe can no longer afford to stand idly by and hope that Moscow will continue to play fair with them in the future. This is all the more pressing considering that Europe’s energy-dependence on Moscow is growing. Europe can not allow itself to be boxed into a corner when dealing with Moscow on important foreign policy questions such as NATO enlargement, because it is scared of Russia turning off the energy taps.

Europe must now diversify its supply routes and seek reliable alternate sources of energy such as nuclear power. It must also coordinate a policy toward Russia which confronts, rather than accommodates, an increasingly aggressive Moscow.

The left loves to scare monger over the threat global warming presents to the United States. Last year the Natural Resources Defense Council put out a report claiming global warming would cost the U.S. $3.8 trillion annually. The report was full of fanciful assumptions and its conclusions had no basis in reality.

Actual scientists from MIT and Northwestern University recently examined annual variations in climate to determine the impact of temperature changes on national economies. And what did they conclude:

Our main results show large, negative effects of higher temperatures on growth, but only in poor countries. In poorer countries, we estimate that a 1?C rise in temperature in a given year reduced economic growth in that year by about 1.1 percentage points. In rich countries, changes in temperature had no discernable effect on growth. Changes in precipitation had no substantial effects on growth in either poor or rich countries. We find broadly consistent results across a wide range of alternative specifications.

U.S. News James Pethokoukis comments:

So if you do buy into the theory of man-made climate change, the next logical move would surely be to do nothing that would slow growth and technologcal advancement in rich countries — such as a cap-and-trade regulatory system or onerous carbon taxes — and do more to accelerate growth in poor ones through free trade and the exporting of democratic capitalism.

For more than three years, a diverse coalition from all quarters of the legal community has been pushing Congress to help restore Americans’ Sixth Amendment guarantee to assistance of counsel in all criminal prosecutions. This right has been steadily eroded since a Deputy Attorney General issued a memo in 1999 outlining how the Department of Justice should make prosecutorial decisions when investigating possible wrongdoing by companies and their employees. That attorney … Pressident-elect Barack Obama’s Attorney General appointee Eric Holder.

Criminal defense and civil liberties lawyer Harvey Silverglate writes in The National Law Journal:

Serious students of DOJ will recognize the overriding importance of the “Holder Memorandum.” The seemingly esoteric memo, issued by Holder in 1999, has seen relatively little discussion. But it has likely had more impact on the liberty of Americans and on respect for constitutional values than anything else Holder did during his stint at DOJ, and it may tell us much about his direction, if confirmed.

In his controversial directive to line prosecutors, Holder strongly suggested that, when deciding whether to indict a corporation — and indictment can be a death sentence for companies in certain businesses — they consider whether the company has “cooperated” in the investigation.
…
Put simply, the Holder Memo suggested that, by facilitating the ability of employees to continue working and to vigorously defend themselves, the company was demonstrating a noncooperative attitude that could get it indicted. It was a serious affront to the basic adversarial and rights-driven structure of the American legal system.
…
This attack on the individual defendants’ Sixth Amendment right to counsel caused Judge Lewis A. Kaplan of the Southern District of New York to dismiss, in June 2006, the massive federal fraud indictment brought against a group of former employees of KPMG in U.S. v. Stein, a groundbreaking ruling affirmed by the 2d U.S. Circuit Court of Appeals this past August. Kaplan denounced the government’s pressure on KPMG to show “cooperation” through both advising employees against seeking legal counsel and not paying the defendants’ legal bills. The government, Kaplan wrote, “let its zeal get in the way of its judgment. It has violated the constitution it is sworn to defend.”
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Holder was part of an increasingly unhealthy culture when he served in DOJ. It seems reasonable to request that the senators on the Judiciary Committee ask him whether he, like the president-elect, will be a change agent or will simply preserve the status quo. Based on recent history, it is far more important that the next AG respect the Constitution, rather than launch some new scorched-earth crusade against the evil-doer du jour.

The usual suspects on the left are very concerned that Obama is pushing too many temporary tax cuts and not enough government spending in his constantly evolving stimulus package. But how much money can the federal government really pour into public spending? Harvard professor Ed Glaeser notes:

While the mechanics of a payroll tax cut are simple, spending hundreds of billions wisely on infrastructure is hard. Currently, the federal government spends about $40 billion a year in transportation, and another $20 billion on other forms of infrastructure. There is a case for significantly increasing this amount. Our roads do need repairing, and it makes sense to invest more in a downturn when unemployment is high. But even doubling the current federal infrastructure expenditure, a vast increase, would represent only 8 percent of a $750 billion package.

The country needs to invest steadily and wisely on infrastructure, not rush hundreds of billions of dollars out the door. Really expensive projects, like the Big Dig, can take many years to plan, permit, and build. Our roads require ongoing maintenance, not a big push. Moreover, fairness and economic efficiency dictate that infrastructure should generally be paid for by users, not general tax revenue. It is appropriate that gas taxes pay for federal highway aid. Using general revenues to build highways means more subsidies for carbon-emitting cars. The country should take infrastructure investment seriously, but infrastructure spending is unlikely to be sound stimulus.

Also at Harvard, Greg Mankiw posts a reader’s thoughts on the stimulus:

I work for the DoD and when the Department of Homeland Security was established,we helped them with many things, not the least of which was contracting. To make a long story short, you cannot juice up a government agency’s budget by tens of billions (or in the case of the stimulus package, hundreds of billions) and expect them to be able to process the paperwork to contract it out, much less oversee the projects or even choose them with any kind of hope for success. It’s like trying to feed a Pomeranian a 25 lb turkey. It’s madness.

It was years before DHS got the situation under control and between the start and when they finally assembled a sufficiently capable team of lawyers, contracting officials, technical experts and resource managers, most of the money was totally wasted. Now take the DHS situation and multiply it by 20 and you’ve got the Obama stimulus package. Even if they hand the money to existing governmental agencies, the situation will be the same. Those existing agencies are working full time administering the budgets they have. They can’t just add a zero at the end of each contract and be done with it.

The left wants the government to spend money for the sole sake of spending money. Our economy can’t afford all that public spending to crowd out private investment today and our children can’t afford all that debt in the future.

Heritage Senior Research Fellow for Middle Eastern Affairs James Phillips on what principles should guide U.S. policy regarding the Gaza crisis:

• A cease-fire agreement must include and immediate and permanent end of rocket attacks by Hamas and other extremist Palestinian groups. A return to the status quo ante, in which Hamas felt free to launch rockets at Israeli civilians while hiding among Palestinian civilians, is unacceptable.
• Legitimizing the false moral equivalence between terrorist attacks aimed at murdering civilians and counter-terrorist actions taken by a democratic government to protect its citizens must be avoided. Israel has taken precautions to minimize civilian casualties by employing precision-guided weapons and warning Palestinians to stay clear of targets. Talk about a “cycle of violence” that conflates the actions of both adversaries only clouds the situation and encourages Hamas and other terrorist groups to continue their illegal and immoral attacks.
• The focus of international pressure should be put on Hamas, which instigated the crisis, not on Israel. Hamas will seek to prolong the fighting as long as possible to mobilize popular support for its radical agenda in the Arab and Muslim worlds, transform itself into the “victim” of Israeli “aggression,” and politically undermine moderate Arab governments that have supported peace negotiations with Israel. Until Hamas has been defeated and its radical ideology discredited, there is no hope for a genuine peace in the Middle East.

Phillips concludes:

Hamas has tightened its barbaric grip on Gaza since its violent 2007 coup against the Palestinian Authority and now holds 1.5 million Palestinians hostage to its ruthless drive to destroy Israel. The long-term goal of American policy should be to free these hostages from the draconian rule and endless violence promoted by Hamas. Therefore it is important that the current crisis be resolved in a manner that undercuts the capacity of Hamas to continue its cynical and destructive policies.