Issues 2012

The Manhattan Institute just released the latest in its Issues 2012 series of policy briefs, “Why Savings are Suffering: Fed QE3 Policy Costs Seniors.” Authored by MI senior fellow and former chief economist at the U.S. Department of Labor Diana Furchtgott-Roth, the report argues that while the Fed is hedging that people who have been saving during the economic downturn will start spending, the lower interest rates will hurt those who live on fixed incomes and rely heavily on their savings—most specifically, senior citizens.

“…When PolitiFact described a blatantly deceptive Obama campaign ad on Mitt Romney’s Medicare reform as “Mostly True.” The ad claimed that the Romney-Ryan plan “could raise future retirees’ costs more than $6,000,” when in fact the Romney-Ryan plan would increase future retiree’s costs by exactly zero, and in fact give them the opportunity to lower their out-of-pocket costs…”

Read the article on Forbes.com

“In Ohio, a study by the actuarial firm Milliman found that Obamacare will increase individual-market premiums by 55 to 85 percent in 2017, relative to what they would have been under prior law. A survey by the Physicians Foundation found that, if Medicare cuts physician fees by another 10 percent, as Obamacare’s Independent Payment Advisory Board effectively requires, 30 percent of doctors will place “new or additional limits on Medicare acceptance,” with 24 percent accepting no new Medicare patients altogether.”

- Avik Roy, NRO’s The Corner

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The White House has taken the unprecedented step of asking defense contractors to break the law by not sending required layoff notices to their employees just before Election Day.

Moreover, if defense contractors follow this illegal advice, the Obama administration is offering to pay the penalties and court costs they will incur — potentially $500 million or more — out of the Pentagon budget. This is all being done without congressional approval.

By asking companies to break the law, and promising to pay their penalties, the White House is giving a major gift to its current tenant.

Diana Furchtgott-Roth, Marketwatch.com

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Paul Howard

In a debate focused on jobs and the economy, Obamacare was a subheading.  But it shouldn’t be. It is already causing small employers, and employers with many low-wage workers to put off hiring or shift more positions from full time to part time to avoid paying Obamacare’s employer tax penalty.  It also effectively increases tax penalties for low-income workers, discouraging them from working and earning more.  In an economy where health care costs continue to take a big bite out of Americans’ take home pay, Obamacare will become an increasing drain on innovation and job creation.

The Manhattan Institute just released the latest in its Issues 2012 series of policy briefs, The Merits of a Territorial Tax System. Authored by MI senior fellow and former chief economist at the U.S. Department of Labor Diana Furchtgott-Roth and MI research associate Yevgeniy Feyman, the report analyzes the presidential candidates’ plans for reform and argues that cutting the corporate tax rate to 15 percent and moving towards a territorial tax system could attract billions of global investment dollars back to America.

“When the latest TANF extension expires in late March of 2013, Congress should fully reauthorize the program, making necessary changes and maintaining the measurable focus on work. Returning to the old days of welfare—when virtually any assignment counted as work—is a step in the wrong direction and a truly bad idea.”

Russell Sykes in the latest Manhattan Institute Issues 2012 Report

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Avik Roy on Forbes.com today:

The first presidential debate between Mitt Romney and President Obama was easily the wonkiest such debate I can recall in my lifetime. That’s great for the country. But even better was the fact Mitt Romney was able to correct a number of the misleading statements that President Obama has been making about Romney’s plans for health care and entitlement reform. Let’s review the details…

Nicole Gelinas:

Romney made a good point about the Dodd-Frank financial-reform law, e.g. that it enshrined five big banks as “too big to fail.”

This point is correct in that the law allows the Financial Stability Oversight Council (FSOC) to designate Systemically Important Financial Institutions (SIFIs), including the nation’s five largest banks.

The implication is that the government will be responsible for ensuring that they don’t fail, so if they do fail, it is the government’s fault, and the government would have to make up for that. This issue not just domestic, but one of foreign policy.

To wit: right now, we see Europe devoting tremendous sovereign resources to help Spain bail out its banks. If Europe is taking this tack, it expects America to do so if and when it is necessary in the future, and the Dodd-Frank law does not discourage this thinking.

It is surprising and gratifying that Romney, who doesn’t often mention Wall Street, brought up the financial system largely on his own and got into a little bit of detail.

Romney should make his point into a big speech about what it means for capitalism in general to have a financial system that is immune from market discipline.

His point about people not starting banks in their garages, though, is less promising. We need more small start-up banks, and there is no reason good regulations could not encourage people to start one-branch banks to grow and compete with larger banks. Otherwise, we have an oligopoly in finance.

Paul Howard:

Romney made the critical point that Obamacare takes $716 billion from Medicare - not to make it more effective or sustainable, but to pay for new health insurance subisidies for the uninsured on state health insurance exchanges.  The Medicare cuts will also make 15% of Medicare providers unprofitable in the short term, and 40% unprofitable in the long term.  This will translate into reduced health care access for seniors as providers stop accepting Medicare coverage. 

On other side of the ledger, which Romney did not mention, the CBO estimates that the exchange subsidies and Medicaid expansion will cost $200 bilion annually by 2020, and grow at 8% annually.  This is hardly “bending the curve” of health care costs that President Obama initially promised.  Furthermore, states’ ability to invest in critical infrastructure projects and education is being strangled by the rising state share of Medicaid costs. Obamacare does nothing to reverse this trend, and in fact is set to make it much worse.

Diana Furchtgott-Roth:

Mitt Romney said that the amount of money that President Obama has wasted on green jobs programs could have hired two million teachers.  Green jobs programs are truly a waste—of the 33 energy loan guarantees or grants made under the Energy Department’s programs, 26, or almost 80 percent, have filed for bankruptcy or have missed production goals.

Plus, as I show in my new book, Regulating to Disaster: How Green Jobs Policies Damage America’s Economy, green energy is more expensive and raises Americans’ utility bills. Generating a megawatt hour of electricity from natural gas in 2015 will cost between $49 and $79. A megawatt hour from onshore wind will cost between $75 and $138, and from solar photovoltaic will cost between $242 and $455.

The debate over the wind industry’s key tax-credit—scheduled to expire at the end of the year—is heating up as the November election approaches. Mitt Romney has said that, if elected, he will let the credit expire. President Obama wants to extend it: In his speech at the Democratic National Convention last month, he declared, “thousands of Americans have jobs today building wind turbines.”

The Manhattan Institute just released the latest in its Issues 2012 series of policy briefs, “Subsidizing Big Wind: The Real Costs to Taxpayers.” Authored by MI senior fellow Robert Bryce, the report argues that wind-jobs are too expensive to be sustainable. If Big Wind can’t survive without federal subsidies, it doesn’t deserve to be in business.

The Manhattan Institute just released the latest in its Issues 2012 series of policy briefs, “WALL STREET AND DODD-FRANK: The Right Questions to Ask the Candidates.” Debate moderator, PBS’s Jim Lehrer, should consider deploying a few questions to encourage the contenders to break the silence. Authored by MI Senior Fellow, Nicole Gelinas, the report suggests thirteen questions on financial regulation for Wednesday’s presidential debate. A few of those questions include:

For President Obama:
If the Dodd-Frank law fixed Wall Street, how would you explain that just this May, 52 percent of potential voters told pollsters that they had little or no confidence in the financial industry – not much different from the 55 percent who had such little faith in the industry in the weeks after Lehman Brothers collapsed?

For Governor Romney:
You favored the idea of a government-funded “managed bankruptcy” for General Motors and Chrysler even before Obama took office and pursued such a course.[i] Do you think that large financial firms, too, should have to go through such a “managed bankruptcy” process, with creditors as well as employees taking substantial losses? In other words, is it fair to treat one industry different than the other?

For both candidates:
A lot of people like the Facebook social-media website. But they are upset that Facebook’s stock-market listing earlier this year seemed to fall prey to insider manipulation, causing big losses for small investors. Do you think the stock market gives all investors a fair shake? If not, how would you fix i

Today on NRO’s the Corner, Nicole Gelinas writes:

Conventional wisdom holds that the National Football League lockout of unionized referees will hurt Mitt Romney, because the lockout reminds union workers and former union workers in swing states that owners and their agents are often incompetent when it comes to understanding what exactly workers do. Skilled workers, they might remember, are not just interchangeable cogs, something that managers often don’t get. 

There is another way of looking at it, though…

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National Review Online, Nicole Gelinas

“Romney needs to understand that voters are not just mercenary beasts looking for whichever candidate will help get them a better pay packet.

Voters care about the world around them; they care about what corporate-bailout culture — a culture that predates Obama — has done to their country. And they’re angry about it…”

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