This Is the Only Economy That Could Rival China’s

William Wilson /

President Obama attended India’s Republic Day Celebrations as its chief guest—the first time a U.S. head of state has been given this honor. Bilateral discussions, however, were the main order of business for this trip, cut short by the death of Saudi King Abdullah. Talks likely focused, in their limited form, on a range of important defense and foreign policy issues; the economy should take a prominent place among them.

After a more than 10-year absence, I recently revisited India. I witnessed a “can do” spirit previously absent in that always just-about-to-break-through nation. While this was refreshing to observe, India still faces economic hurdles that are exceedingly difficult to surmount.

As recently as 1990, India’s per capita income was slightly higher than China’s. Today, China’s is approximately four times higher. According to The Heritage Foundation’s 2014 “Index of Economic Freedom,” India remains a difficult place to do business. It ranks 120th overall and 142nd in trade and investment freedoms.

Lower energy prices have helped the economy of late, but India has not run a budget surplus since independence in 1947. Only 3 percent of the population pays income taxes. Recapitalizing India’s inefficient state-run banks could cost 5 percent of GDP.

And running a business remains challenging. For example, firms with more than 100 employees must get government approval before they can lay off workers. India’s corruption and infrastructure problems are endemic.

That said, India remains the only economy with the potential to eventually match China’s. In terms of size and per capita income, India’s economy is approximately where China’s was in the late 1990s – a period where China begin to make a splash on the global stage.

India’s potential for growth is huge. Only 30 percent of the population is urbanized. As people leave the low-productivity farm sector, it presents a tremendous opportunity to increase productivity. India’s working-age population is expected to rise by 230 million by 2030. Since people save more during their working years, a rise in savings should boost domestic investment and economic growth.

Certainly India needs to increase the share of manufacturing employment. And the timing seems right for Prime Minister Narendra Modi’s new “Made in India” theme. Labor costs are rising rapidly in China, and Japanese firms are shifting to China-plus-one investment strategies.

American multinationals hope President Obama’s trip brings opportunity for them as well. While the Modi government has pledged it will no longer implement retroactive taxes on foreign firms, the law is still very much in place. The proposed uniform Goods and Services Tax would greatly help U.S. businesses because it would replace the myriad of local and state taxes. New Delhi must also improve patent protection and intellectual property rights. U.S. pharmaceuticals are losing billions from counterfeiting.

In Aesop’s story of the tortoise and the hare, the much slower tortoise eventually wins given its greater determination and endurance. While India and China have often been compared in this classic fable, India’s tortoise has consistently fallen further and further behind the Chinese hare. With growth slowing in China, however, and the hope for structural economic reforms in India, the tortoise may finally start to gain some ground.

Originally appeared on

The Next Frontier in School Choice - Daily Signal

The Next Frontier in School Choice

William Wilson / Lindsey Burke /

As we celebrate National School Choice Week, education-reform advocates would be wise to reflect on purpose of school choice as articulated by Milton Friedman, the father of the modern school choice movement. Friedman first proposed the concept of school vouchers in 1955, arguing that by introducing consumer choice into education, vouchers could help create a competitive marketplace. “Vouchers are not an end in themselves,” Friedman wrote in 1995; “they are a means to make a transition from a government to a market system.”

Friedman was likely even more innovative than education-reform advocates realize, because he saw that a real education market would create its own path, pushed along by market forces. Noting in 2003 that “there’s no reason to expect that the future market will have the shape or form that our present market has,” Friedman wondered: “How do we know how education will develop? Why is it sensible for a child to get all his or her schooling in one brick building?” Instead, Friedman proposed granting students “partial vouchers”: “Why not let them spend part of a voucher for math in one place and English or science somewhere else?…Why can’t a student take some lessons at home, especially now, with the availability of the Internet?”

Education savings accounts operate like the “partial voucher” that Friedman envisioned more than a decade ago, allowing families to seek out the best educational opportunities for their students—whether those be in a private or parochial school or a mix of non-traditional education options. Two states have already adopted ESAs, and numerous other state legislatures have considered them. ESAs constitute a critical refinement of Friedman’s voucher idea, moving from school choice to educational choice. The challenge for state policymakers is to overcome implementation issues, avoid constitutional roadblocks, and resist harmful regulations masquerading as “accountability.”

Expanding Educational Marketplace

As the first ESA program to be implemented in the United States, Arizona’s Empowerment Scholarship Accounts offer a useful example of how the accounts can work in practice. Under the Arizona law, passed in 2011, eligible families that opt not to enroll their children in a public school full time can access 90% of what the state of Arizona would have spent on their children if they had enrolled in the public-school system. The Arizona Department of Education deposits funds directly into a privately managed bank account, and parents can access the funds through a restricted-use debit card. The parents can then spend the money on any qualifying education-related service or provider they choose.

Parents can also save unused funds from year to year and roll the funds into a college savings account. These two features of ESAs—the ability of parents to completely customize their child’s education and save for future educational expenses—make them distinct from and improvements upon traditional school vouchers. ESAs empower parents with the ability to maximize the value their children get from their education services. And because they control how and when the money is spent, parents also have a greater incentive to control costs. In practice, therefore, ESAs work very much like Friedman’s “partial vouchers,” seeking to harness the way people naturally make spending decisions to create a competitive education marketplace.

It appears that such a market may be beginning to take shape in Arizona. Early analyses of the Arizona program indicate that parents are using the money to purchase a wide variety of educational services and products. In 2013, the Friedman Foundation for Educational Choice examined how families are using their ESA funds, using restricted data from the Arizona Department of Education. The analysis found that families chose a wide variety of private schools for their children, including Montessori schools, parochial schools (Protestant, Catholic, and Jewish), single-sex schools, Waldorf academies, and schools that cater to children with autism. Sixty-six percent of families used their ESAs solely to pay tuition at a chosen private school of choice, in a manner similar to a school voucher.

Notably, 34% of participants used their ESAs to purchase multiple educational products and services, including curricula, textbooks, private tutoring, therapy, and online educational options. Some families used these products and services to supplement their children’s private-school education, while others used them to completely tailor their children’s education outside of any traditional school, public or private. In addition, 26% of ESA funds were unspent through the first quarter of 2013, suggesting that families were saving a portion of their funds in anticipation of future education-related expenses.

Parents are overwhelmingly satisfied with the enhanced educational choice that ESAs provide. In 2013, the Friedman Foundation surveyed Arizona families with ESAs to measure the levels of parental satisfaction. (All of the survey respondents had children with special needs.) The respondents unanimously reported being more satisfied with the education they purchased for their child with the ESA funds than with their child’s prior public school: 71% of respondents reported being “very satisfied” with their ESAs, 19% were “satisfied,” and 10% reported being “somewhat satisfied.” Not a single parent reported being dissatisfied, or even having “neutral” feelings about the program.

Administrative Challenges

As promising as these ESA programs seem to be, they present novel implementation challenges. After Governor Jan Brewer signed the Empowerment Scholarship Accounts into law in 2011, the Arizona Department of Education had to answer difficult questions about how to run the program: How would it determine which products and services would qualify for ESA funds? Was the department responsible for ensuring the quality of qualifying products and services? How would it prevent parents from using the ESA debit cards on non-qualifying purchases?

Navigating these issues was a complex and difficult process. Over time, the department worked through these issues and used the experience to develop an impressive handbook detailing how the ESA works, the history of the program, student eligibility, parents’ rights and responsibilities, education providers’ responsibilities, qualifying purchases, and reporting requirements, among other details. The handbook will be of particular interest to policymakers considering ESAs in other states.

However, there are some areas of implementation where the department is in need of improvement. Enrollment in Arizona’s ESA program nearly doubled from 692 students in 2013-14 to about 1,300 in 2014-15, but nearly half of the 2,300 applicants were rejected, indicating either that the state needs to re-evaluate its eligibility criteria or that the department was inappropriately rejecting qualified applicants. The department blamed “uninformed” families, but a prominent nonprofit that helped families apply say that’s “insulting” and “misleading.”  The Hispanic Council for Reform and Educational Options (HCREO) claimed that, even after they had screened applicants to ensure eligibility, the department rejected three-quarters of their roughly 600 applicants. HCREO also faulted the department for lacking Spanish-language translators, failing to return phone calls to parents, and scheduling ESA workshops during business hours when most low-income parents had to be at work.

HCREO recommended that the department make three changes to improve the application process: Create an online application, employ flex hours so that staff can be available outside of regular business hours, and ensure that staff members return phone calls. To its credit, the department’s website now allows applications via email. (Previously, applications had to be mailed, hand-delivered, or faxed—but the department’s fax machines were out of order during the final week of the 2014-15 application period, which may have prevented some families from applying in time.) Whether the department will implement the other suggestions remains to be seen.

Crucially, these implementation challenges occurred under an administration that was vocally supportive of educational choice and dedicated to providing good customer service. When the political winds shift, the department’s administrators may be less supportive of or even hostile to educational choice, as is the case in many state education agencies around the country. Bureaucrats who view the ESAs and other choice programs as inimical to their core mission may even work to undermine the programs.

Florida was the second state to create an ESA program. Their ESA law, called Personal Learning Scholarship Accounts, manages to avoid subjecting the program to bureaucratic inertia or political fortune. While publicly funded, the PLSAs are privately managed by the same non-profit scholarship organizations that participate in the state’s scholarship tax-credit program. The PLSA program was created in May 2014, and within six months of being signed into law, the state’s largest scholarship organization, Step Up For Students, had already approved ESA scholarships for more than 1,200 students.

It’s too soon to draw any firm conclusions, but there are several reasons to believe that Florida’s model of privately managed ESAs holds advantages over Arizona’s government-managed model. First, the non-profit scholarship organizations are less likely to be captured by opponents than is a government agency. The non-profits are dedicated to the scholarships, and the idea of school choice is built into their mission. Second, awarding scholarships is the primary mission of a scholarship organization but only an ancillary function of a state education agency—which means that not only will they be more dedicated to the concept but they can generate and retain best practices more easily. Third, scholarship organizations have the ability and incentives to be more flexible in their operation than government agencies, and therefore more responsive to the needs of families. The Arizona education department did not offer workshops for parents outside of regular business hours because employees were not paid for those hours. Non-profits can more easily implement policies like flextime.

Constitutional Challenges 

Before they can tackle any administrative challenges, policymakers in some states must address a constitutional challenge to the taxpayer funding of private education. While the United States Supreme Court has ruled that publicly funded school vouchers are constitutional under the First Amendment’s Establishment Clause, most state constitutions contain a version of the so-called “Blaine Amendment,” which bars state aid to parochial schools. In addition, most state constitutions also contain an older “compelled support” clause, which forbids compelling taxpayers to support religious institutions through public funding.

Arizona’s ESA law survived a Blaine Amendment challenge, despite the fact that the state supreme court previously struck down a voucher law on those grounds. The court distinguished the ESAs from vouchers because the latter “set aside state money to allow students to attend private schools” whereas under the ESA law, “the state deposits funds into an account from which parents may draw to purchase a wide range of services” and “none of the ESA funds are pre-ordained for a particular destination.”

It is an open question, however, whether other state supreme courts that have adopted more restrictive interpretations of their Blaine Amendments will find that distinction compelling. Currently, the Florida Education Association is challenging the constitutionality of the state’s nascent ESA law under the state constitution’s Blaine Amendment and other provisions.

Policymakers could avoid the constitutional uncertainty altogether by funding the ESAs privately, through tax credits, rather than through government allocation. This approach would have the added benefit of avoiding the compulsion inherent in all taxpayer-funded programs. As Milton and Rose Friedman wrote in Free to Choose, “Voluntary gifts aside, you can spend someone else’s money only by taking it away as government does. The use of force is…a bad means that tends to corrupt the good ends.” Conflicts in public education over issues such as political agendas, teaching evolution, and sex education spark social conflict in part because citizens are forced to pay for the promulgation of ideas with which they disagree. Shifting to a model of education funding that allows taxpayers to choose what forms of education they will financially support with their own money would likely reduce social conflict over these programs.

Two existing laws already embody some elements of the tax-credit-funded ESA model, and they can help point a way forward. As noted, Florida’s publicly funded ESA program is privately administered by the same non-profit scholarship organizations whose donors receive dollar-for-dollar tax credits for their contributions to scholarships. In addition, New Hampshire’s scholarship tax-credit law includes an ESA-style provision that allows homeschoolers to spend scholarship funds on a variety of educational products and services similar to those permitted by the Arizona and Florida ESA laws.

Reducing Regulatory Threats

In addition to placing them on firmer constitutional ground, funding ESAs through tax credits could also reduce the threat of harmful regulations.

In a generally well-meaning effort to impose “accountability,” some policymakers have attempted to regulate school choice programs as they regulate district schools, including by mandating state tests. However, rules designed to regulate a monopoly like a public-school system are not appropriate for a market. Beyond basic health and safety regulations, top-down accountability measures are generally unnecessary at best and harmful at worst. Centralized standards, especially in the form of state testing mandates, induce conformity that can undermine the innovation and diversity that give educational choice its value. Whereas government-run schools are primarily accountable to elected school boards and unelected state education bureaucrats, private education providers are accountable directly to parents, and the same market forces that place competitive pressure on other kinds of businesses operate on these education providers as well.

Research indicates that privately funded school-choice programs are less likely to be overregulated than publicly funded programs. A 2010 study by Andrew J. Coulson of the Cato Institute found that direct government expenditures, “but not tax credits, impose a substantial and statistically significant additional regulatory burden on participating private schools.” In May 2014, a study by Andrew Catt of the Friedman Foundation found that scholarship tax-credit laws generally imposed very few additional regulations on schools when first enacted and over time.

At least two reasons explain why scholarship tax-credit programs are less likely to be over-regulated. First, as with tax deductions and tax exemptions, policymakers are less likely to attach strings to tax credits than to public expenditures, since the money never actually comes into the state treasury. Second, scholarship tax-credit laws enable supporters of school choice to organize so that they can more effectively fight harmful regulations: Scholarship organizations can help both scholarship recipients and the donors mobilize against potentially harmful legislation. Educational-choice programs are therefore more likely to be politically sustainable in the long run if they are privately managed and privately funded.

Visionary But Practical

Most school-choice programs offer significant but not revolutionary changes to the traditional educational model. But true educational choice, and the educational market it could help foster, promise to radically improve education for many children. As Milton Friedman observed, “not all ‘schooling’ is ‘education,’ and not all ‘education’ is ‘schooling.’” Charter schools and voucher programs still conflate the two, but education savings accounts embody a more expansive understanding of education.

ESAs offer several key advantages over traditional school-choice programs. Because families can spend ESA funds at multiple providers and can save unspent funds for later, ESAs incentivize families to economize and maximize the value of each dollar spent, in a manner similar to the way they would spend their own money. ESAs also create incentives for education providers to unbundle services and products to better meet students’ individual learning needs.

For our nation’s education system to incorporate this key insight, states must rethink at the most basic level how to fund education—a process that will not be without challenges. Like other educational-choice policies, ESAs face administrative challenges, constitutional obstacles, and regulatory threats. And while not conclusive, the relative experiences of Arizona and Florida may suggest that private administration of an ESA program will be more efficient and effective than government management. While government-funded voucher laws have had a mixed record in state courts, educational-choice laws that are privately funded through tax credits have a perfect constitutional record thus far. And empirical research suggests that educational-choice laws are less likely to be over-regulated when they are privately funded.

As Friedman said of school choice decades ago, this proposal is visionary but not impractical. Two states have already adopted ESA laws and more are likely to follow in the coming years. These laws hold great potential to expand educational opportunity and remake the entire education system in ways that better and more efficiently meet the needs of children.

Originally appeared on

How Can Conservatives Best Fight Poverty? - Daily Signal

How Can Conservatives Best Fight Poverty?

William Wilson / Lindsey Burke / Genevieve Wood /

Conservatives have great recipes for addressing poverty. But for those living in impoverished communities to become believers in those recipes we need more chefs – people and organizations in such neighborhoods living out the principles that work.

That’s how one of the country’s leading experts on urban renewal described the need for more entrepreneurial strategies to fight poverty. Bob Woodson is the president of the Center for Neighborhood Enterprise and I interviewed him at the Heritage Foundation’s Antipoverty Forum in November.  The annual gathering brings together researchers, policy leaders, expert practitioner, and communicators seeking “to help more Americans overcome poverty and social breakdown through effective principles in action.”

Woodson says he hasn’t been in a neighborhood where social entrepreneurs and healing agents don’t exist.  But, according to Woodson, “the qualities that make them effective also render them invisible because they aren’t protesting, they aren’t whining and complaining.  You’ve got to act like a Geiger counter and go and find them, they aren’t looking for you.”

Woodson is a man who knows of what he speaks. He’s also a great storyteller and persuasive communicator.  I encourage you to watch my full interview with him.

Ohio’s Obamacare Expansion Has Already Cost Over $2 Billion - Daily Signal

Ohio’s Obamacare Expansion Has Already Cost Over $2 Billion

William Wilson / Lindsey Burke / Genevieve Wood / Jason Hart /

Ohio Gov. John Kasich’s Obamacare expansion blew past projections in its first year, putting 471,452 Ohioans on Medicaid and costing taxpayers $2.1 billion.

Because enrollment has so dramatically exceeded Kasich administration estimates—the governor expected 366,00 to enroll by July 2015—the Obamacare money appropriated to pay for program benefits will be exhausted months early.

If recent enrollment and cost trends persist, Kasich’s Obamacare expansion will be more than $1 billion over budget by the time Ohio’s 2015 fiscal year ends on June 30. Actual Obamacare expansion claim expenditures reported by the Ohio Department of Medicaid are shown in the chart below.


In 2013, after the Republican governor unilaterally expanded Medicaid to able-bodied, working-age adults with no dependent children, his Medicaid director asked the Ohio Controlling Board to accept Obamacare funds for the expansion. Board members were warned the state Medicaid program would go bankrupt if they refused.

Led by a Kasich appointee, the quasi-legislative panel approved the Ohio Department of Medicaid’s request  to appropriate $2.56 billion for Kasich’s Obamacare expansion. The new federal spending was meant to cover benefit costs from Jan. 1, 2014, through June 30, 2015.

Based on Ohio Department of Medicaid expenditure reports, the state paid out $2.12 billion in Obamacare expansion claims from January through December of 2014. With enrollment racing farther ahead of state projections each month, monthly spending increased sharply throughout the year.

Gov. John Kasich of Ohio (Photo: Harry Walker/MCT/Newscom)

Gov. John Kasich of Ohio (Photo: Harry Walker/MCT/Newscom)

Benefit payments for Kasich’s Obamacare expansion cost taxpayers $301 million in December, $288 million in November and $290 million in October. Program expenditures averaged $266 million per month for the first six months of the 2015 fiscal year.

Unless Kasich’s Obamacare expansion abruptly breaks from a year-long trend, appropriated funding for the program will run out within the next month. The governor’s Office of Health Transformation did not immediately respond to questions about how this might be addressed.

The federal government is currently paying 100 percent of benefit costs, but Ohio will be on the hook for 10 percent by 2020. With the national debt exceeding $18 trillion and Republicans in control of Congress, federal matching funds for the Obamacare expansion are likely to be cut sooner.


Wisconsin Treasurer Fulfills Campaign Pledge by Laying Off Staff - Daily Signal

Wisconsin Treasurer Fulfills Campaign Pledge by Laying Off Staff

William Wilson / Lindsey Burke / Genevieve Wood / Jason Hart / Adam Tobias /

MADISON, Wis.—Newly elected state Treasurer Matt Adamczyk ran on a campaign pledge of cutting 80 percent from a $545,000 annual budget. A few weeks into his first term, he has, through layoffs, already gotten rid of his two-member staff.

Adamczyk also declined to fill an empty deputy treasurer position that was paying close to $107,000 a year in salary and benefits.

“I’m a big believer that in government it’s not our job just to give people jobs,” Adamczyk said.

The state has transferred most of the treasurer’s duties to other government agencies over the past several years, so Adamcyzk said he sees no need for the workers.

The only constitutional responsibility of the state treasurer is to sit on the Board of Commissioners of Public Land. The time commitment for serving on that panel, which provides funding to libraries and school districts, is usually two 15-minute phone calls per month, Adamczyk said.

He says he doesn’t think he’ll have a problem performing other tasks, such as promoting the state’s unclaimed property program and answering the phone.

“We don’t really get calls,” Adamczyk said. “The calls that we do receive, typically it’s the wrong number.”

“I’m a big believer that in government it’s not our job just to give people jobs.”

Adamczyk said he’s also looking to return 25 percent of his $68,000 salary and partner with the Department of Motor Vehicles to mail information on the unclaimed property program with license plate renewal letters.

Adamczyk’s ultimately wants to eliminate the Office of the State Treasurer, and he has at least two Republican lawmakers in his corner.

Sen. Richard Gudex, R-Fond du Lac, and state Rep. Michael Schraa, R-Oshkosh, have begun circulating a bill for co-sponsorship that would let voters decide, through a binding referendum, whether to abolish the agency.

But history is not on Adamczyk’s side.

His predecessor, Kurt Schuller, campaigned on the same promise but was unable to get the Legislature to pass a resolution, drafted in 2011, to dissolve the department. A similar bill also failed to pass the Senate in the previous legislative session.

Scott Walker, governor of Wisconsin (Photo: Roj Wong/Newscom)

Scott Walker, governor of Wisconsin (Photo: Roj Wong/Newscom)

Adamczyk predicts taxpayers will see similar savings if the Legislature approves proposals Gov. Scott Walker made in his State of the State Address calling for the merger of the Wisconsin Economic Development Corp. with the state Housing and Economic Development Authority, and the Wisconsin Department of Financial Institutions with the state Department of Safety and Professional Services.

Laurel Patrick, press secretary for the governor, said Walker will outline other possible agency consolidations when he introduces his budget plan Feb. 3.

“I believe that government has grown too big and too intrusive in our lives and we must rein it in, but the government that is left must work. … We should demand a government that is more effective, more efficient and more accountable to the public,” Walker said recently.


How Gun Owners Reacted to a Lawmaker’s Gun Control Pitch - Daily Signal

How Gun Owners Reacted to a Lawmaker’s Gun Control Pitch

William Wilson / Lindsey Burke / Genevieve Wood / Jason Hart / Adam Tobias / Bruce Parker /

MONTPELIER, Vt.—Speaking at a large pro-gun rally at the Vermont statehouse this week, state Sen. John Campbell told law-abiding Vermonters they would need to undergo criminal background checks before buying guns.

“The major issue in this bill people are concerned with is expanding the background checks to all sales,” Campbell said. “There are people—probably 99.9 percent of the people here—who think the federal background checks are all you need, you don’t need to have it between personal sales.”

The Windsor County Democrat and Senate president pro tempore is sponsor of a bill that requires Vermonters to undergo criminal background checks before purchasing a firearm.

The bill exempts sales between immediate family members, law enforcement officers and agencies, and on-duty members of the U.S. Armed Forces.

Speaking to a packed room of gun owners arrayed in hunter’s orange, Chris Bradley, president of the Vermont Federation of Sportsmen’s Clubs, asked a question on the minds of many attendees.

“How the heck do you control a background check on a private sale when the only people who are going to be adhering to that law are people in this room, [who are] being penalized for taking their time and spending extra money to sell a gun to a lifelong friend? It’s absolutely ridiculous,” Bradley said.

When audience members had a chance to speak out, they objected loudly to the bill.

“Guns are not a hunting and sportsmen item only. We might want to collect them. We might want to shoot them. I have guns I haven’t fired. But I have a right to them, and I have a responsibility to be an armed citizen,” said one gun owner.

Erik Bailey, a resident of Jericho, declared that lawmakers who support Campbell’s gun-control bill would be serving their last term in the Legislature. The comment received cheers and thunderous applause.

“I’m giving them fair warning to polish their resumes because they’re going to need new jobs,” he said.

While Gov. Peter Shumlin didn’t attend the rally, Louis Porter, commissioner of Vermont’s Fish and Wildlife Department, read a letter expressing the governor’s views:

I know many of you came today to talk with lawmakers about proposals to put additional restrictions on gun ownership in Vermont. … While I am and will remain willing to discuss any proposals on this or any other matters with lawmakers, I believe the gun laws Vermont has in place now serve us well and I do not think we need additional laws.

With his sponsorship of background checks, Campbell faces a head-on collision with Vermont’s gun-rights culture.

Gun advocates estimate that more than 70 percent of Vermonters own firearms. And while the state arguably has the most liberal gun freedom of any state, FBI statistics indicate Vermont is the safest state in the nation, averaging 115 violent crimes per every 100,000 residents. About two gun-related killings occur in the Green Mountain State each year. Zero hunting accidents were reported in 2014.


Obama Drops the Pretense of Bipartisanship - Daily Signal

Obama Drops the Pretense of Bipartisanship

William Wilson / Lindsey Burke / Genevieve Wood / Jason Hart / Adam Tobias / Bruce Parker / Ted Bromund /

Let’s be grateful to President Barack Obama. In his State of the Union address, he dropped the pretense of bipartisanship and, by siding with the progressives, gave the nation what it needs: a clear choice. That’s the true American way.

One of the most tiresome things about the first six years of President Obama’s tenure was his fake bipartisanship. He often offered to work with the opposition, provided it was reasonable. But since to him only his own ideas are reasonable, the offer was meaningless.

His pretense was popular because it appealed to our love of bipartisanship: Americans like the idea that reasonable people can agree on the solutions to the contentious moral issues at the heart of politics. We’re a nation of problem solvers, and for the most part it’s served us well.

But politics aren’t like that. They’re about dilemmas to be handled and principles to be applied, not problems to be solved. Because of that, permanent victories are rare. Permanent battles are the norm. We say we want bipartisanship, but fortunately we don’t act that way.

A good bit of the democratic world does. In much of Europe, for example, politics have become extremely consensual. There are still political parties, but the differences between them have shrunk to the vanishing point. Germany is governed by a “grand coalition” of Christian Democrats and socialists; Britain by a coalition of Conservatives and Liberal Democrats.

But the best example of consensus politics in Europe comes from Sweden, where in December, six parties agreed to support the center-left government. Sweden’s prime minister said this was an example of the country’ “proud tradition” of working together.

That sounds nice. But actually, the deal was done to keep the Sweden Democrats, a populist party that wants to reduce welfare spending on immigration, from holding the balance of power. That’s politics when it’s dominated by a clubby, liberal establishment that denies choices which fall outside their narrow, approved range.

Of course, Sweden, Germany and Britain have parliamentary systems, and we don’t. But clubby consensus isn’t a product of a particular system: in the 1980s, across parliamentary Western Europe, you could vote communist. We have more lively politics here because our elite isn’t as dominant as the European one, and so hasn’t succeeded in smothering our differences.

And thank goodness for that. The clash of opinions isn’t guaranteed to produce truth, but elite agreement is almost certain to produce error. From campaign finance reform to the Vietnam War, some of our greatest failures have been backed by a political consensus.

In Europe, too, consensus breeds pushback. Across the continent, it’s spawning opposition parties — from the U.K. Independence Party to the anti-austerity Syriza in Greece — precisely because the establishment consensus is so narrow.

Nor has our lack of consensus been bad, on the whole, for America. True, the political warfare between the White House and Congress has hurt our military. But it’s helped to hold down spending and taxation and reduced the number of new laws, which is good for the private sector. Even the administration’s love of rule by administrative pen hasn’t eliminated that advantage.

What the president did last week was to offer a clear choice, without the rhetoric of phony bipartisanship. His party has suffered unprecedented losses. He came out punching with proposals designed not to pass, but to control the agenda and trip up conservatives.

That’s a good thing. For while the American people say they want bipartisanship, standing by your principles isn’t the sign of a broken system. It’s the sign of a genuinely competitive system that works — for all Americans.

Originally appeared on

Americans Are Rejecting Rule By Elites - Daily Signal

Americans Are Rejecting Rule By Elites

William Wilson / Lindsey Burke / Genevieve Wood / Jason Hart / Adam Tobias / Bruce Parker / Ted Bromund / Robert Moffit /

The majority of newly elected members of Congress are men and women who ran and won in direct opposition to President Obama’s policies. But there is more to their victory than a triumph over liberal policies. The 2014 election also represents a repudiation of an attitude and style of governance that has become entrenched in Washington’s political culture:  an arrogant, smug and ideologically driven elitism.

Elitist sentiments periodically slip out. Addressing a congregation of California’s beautiful people at a San Francisco fundraiser in 2008, then candidate Obama talked of “bitter” small town folks  who “cling to their guns and their religion.”

A self-righteous Attorney General Eric Holder described America as “a nation of cowards” because they did not discuss racial issues according to his standards.

Of course, the most recent example is  Professor Jonathan Gruber, the Massachusetts Institute of Technology economist who advised the White House during enactment of the Affordable Care Act, or “ObamaCare.”  He apologized in congressional testimony after his videotaped remarks surfaced demeaning American voters as “stupid.”

Gruber’s most offensive comment was this: “Lack of transparency is a huge political advantage. And basically, call it the stupidity of the American voter or whatever, but basically that was really, really critical for the thing to pass….Look, I wish …that you could make it all transparent, but I’d rather have this law than not.”

Remarkably, when the committee asked for his work product — the economic modeling funded by the allegedly dimwitted taxpayers — the professor told the committee to consult with his lawyer! Naturally, a committee subpoena quickly followed, and the drama continues.

There is  more to these episodes than  isolated displays of academic arrogance, pretensions to social superiority or smug self-righteousness. It is an anti-democratic spirit. The theme of Washington governance: You don’t know what is good for you, the bureaucratic experts and their academic apologists do, so get with the program!

The ongoing debate over “Obamacare” is perhaps the biggest case in point. There  is a wide  gap in perception on the Affordable Care Act  between most ordinary Americans and most health policy “experts” (such as academics, health industry leaders, “labor and consumer advocates”), a reliably “progressive” cohort.

Concerning Obamacare, in October 2011 the Kaiser Family Foundation, found that just 34 percent of the public had a favorable view of the law. A month later, the liberal Commonwealth Fund polled “experts” on the law and found that 89 percent of them favored the law’s continued implementation. On such hot button topics as the individual mandate, the potential of the law to control health care costs or improve quality, the Commonwealth surveys confirm “expert” enthusiasm.  As for the general public, other major surveys tell a very different story.

No wonder the administration and its allies are understandably frustrated. When exchange enrollment closed last April, President Obama declared the health care debate “over.” But the supposedly bovine masses refused to cooperate, and polls showed a continued slide in the law’s popularity.

No doubt, the administration’s academic allies look at these polling results and conclude that the American people are like self-destructive children who just don’t know what’s good for them. The hated Tea Party opponents must be seen as the worst of the rejectionists, acting like crazed World War II Japanese soldiers, marooned on a desolate island, refusing to accept their inevitable defeat.

For “progressives,” the Affordable Care Act is, after all, the latest stage in a linear historical process, marked by the milestones of Medicare and Medicaid, in which steadily expanding government control over health care is a positive eventuality; a presumption fueled by a curious mixture of arrogance and mysticism.

While the White House is desperately trying to distance itself from Professor Gruber’s videotaped gaffes, the recent controversy should not obscure a larger and more profound truth: ObamaCare epitomizes the progressives” long-lived and unshakable faith in large centralized government. It satisfies an ideological urge to guide and direct complex sectors of the modern economy, like the huge health care sector, through rigorous central planning based on academic and bureaucratic expertise. The modern administrative state we have today — rule by detailed regulation — is their creation. It is inherently elitist.

In short, the progressives’ faith in government is buttressed by a deep and abiding skepticism of the capacities of ordinary Americans to govern their own lives. Professor Gruber’s attitude is, in fact, more widely shared among Washington’s professional and policy elites than one might imagine. Many of his colleagues are firmly committed to the concentration of power to micromanage the decisions of millions of Americans in their personal health care choices, ranging from the kinds of plans they can get, to the kind of medical and preventive treatments they must have, to how their health dollars are to be allocated.

ObamaCare does all of that, of course, and more. Most health policy analysts, with the exception of the few conservative or libertarian dissidents, strongly favor this regulatory governance, though quite a few would also prefer, as President Obama himself once declared, a more straight-forward government monopoly over Americans’ health care, technically called a “single payer “ system.

Americans don’t like ObamaCare. But the regulatory behemoth grinds on relentlessly, even at the expense of the rule of law. If ObamaCare’s employer mandate is politically problematic, suspend it; if Congressmen want a special subsidy for their health insurance, provide it; if federal health exchanges need taxpayer subsidies, make them up. Meanwhile, run up more spending, higher taxes and bigger debt.

Do Americans really want to be governed like this? Sen. Barry M. Goldwater (R-Ariz.) responded 50 years ago, when he issued his clarion call to Americans to “resist the accumulation of power by those who claim they know best.”

In the 1964 election, most Americans ignored Goldwater’s warning about arrogant bureaucratic elites. In the 2014 election, the Arizonan’s basic message appears to have resonated  with the public. We are still a self-governing nation, and elections have consequences. For the new Congress, stopping bureaucratic lawlessness will be Job One.

America’s Founders got it right: If you like your ruling class, you can keep your ruling class.

Originally appeared on

Why Is the United States’ Economic Freedom Ranking So Low? - Daily Signal

Why Is the United States’ Economic Freedom Ranking So Low?

William Wilson / Lindsey Burke / Genevieve Wood / Jason Hart / Adam Tobias / Bruce Parker / Ted Bromund / Robert Moffit / Ed Feulner /

IndexCartoon_FodenIf you were to rank all the countries of the world based on their level of economic freedom, you’d think the United States would be a shoo-in for first place, right? Surely we would be at least somewhere in the top five.

We’re not. We’re not even in the top 10.

Because this isn’t a hypothetical question. Every year, the Heritage Foundation and The Wall Street Journal release a detailed, country-by-country policy guide known as the Index of Economic Freedom. The news for the United States had been getting a little worse each year over the last several editions.

Notice I said “had.” The steady decline charted by the United States since 2008 was, I’m glad to report, halted this year. The 2015 index shows that our score ticked up a bit. And we were the only economy in North America to improve. The scores for both Canada and Mexico declined in the latest edition.

The United States still stands at No. 12 globally. Not a bad finish on a list of 178 countries, but still we’re trailing Hong Kong, Singapore, New Zealand, Australia, Switzerland, Canada, Chile, Estonia, Ireland, Mauritius and Denmark. The question is, why?

As recently as 2008, the United States ranked seventh worldwide, had a score of 81 (on a 0-100 scale, with 100 being the freest), and was listed as a “free” economy (a score of at least 80). Today, it has a score of 76.2 and is “mostly free,” the index’s second-tier economic freedom category.

Before explaining why, let’s look at how the editors of the index determine the scores. Each country is evaluated in four broad areas of economic freedom:

First, rule of law. Are property rights protected through an effective and honest judicial system? How widespread is corruption — bribery, extortion, graft and the like?

Second, limited government. Are taxes high or low? Is government spending kept under control, or is it growing unchecked?

Third, regulatory efficiency. Are businesses able to operate without burdensome and redundant regulations? Are individuals able to work where and how much they want? Is inflation in check? Are prices stable?

Fourth, open markets: Can goods be traded freely? Are there tariffs, quota or other restrictions? Can individuals invest their money where and how they see fit? Is there an open banking environment that encourages competition?

For the most part, Americans can be proud of how the United States does on these measures. For example, we’re well above the world average on property rights (though they’ve been “uneven,” the index editors note, with courts having to step in when the executive branch has overreached). Our average tariff rate is low (1.5 percent). Our labor market is flexible.

But in many other areas, the United States could be doing a lot better. “The anemic post-recession recovery has been characterized by slow growth, high unemployment, a decrease in the numbers of Americans seeking work, and great uncertainty that has held back investment,” the editors write.


Other weak spots include:

Regulations: Since 2009, more than 150 new major rules have been introduced. The annual cost exceeds $70 billion. And more are on the way.

Health care: Implementation of the so-called Affordable Care Act has reduced competition in most insurance markets, and it remains a drag on job creation and full-time employment.

Size of government: The top individual income tax rate is 39.6 percent (versus 29 percent in Canada). The United States has one of the world’s highest corporate tax rates: 35 percent (more than twice Canada’s 15 percent rate). Government spending tops one-third of our annual gross domestic product (the value of all the goods and services our nation produces).

“Overall, the U.S. economy continues to underperform,” the editors write. Is that our destiny? To underperform? Or can the United States regain its lost ground and prove that it can be a leader in all areas of freedom?

I’m convinced that we can, but only if we’re willing to hold our elected officials accountable and demand change. It’s up to us.

Originally appeared in the Washington Times.

Kentucky County Sees Instant Impact of Right-to-Work Law - Daily Signal

Kentucky County Sees Instant Impact of Right-to-Work Law

William Wilson / Lindsey Burke / Genevieve Wood / Jason Hart / Adam Tobias / Bruce Parker / Ted Bromund / Robert Moffit / Ed Feulner / Ben Smith /

Six weeks ago, a Kentucky county passed a right-to-work ordinance in hopes of attracting new businesses. It already appears to be working.

Warren County, Ky., adopted the countywide right-to-work ordinance on Dec. 19, after it became clear the state wasn’t going to move in that direction. Right-to-work laws prevent unions from having workers fired for not paying union dues. The Kentucky Legislature enacted home rule in 1978, leaving it up to local communities to make such decision.

“When our local leaders came to us and said without right to work we are sending away 75 percent of out-of-town job prospects, I knew we had to act,” said Warren County Attorney Amy Milliken. “Since we passed the ordinance, in the past six weeks, we’ve had two site selectors and one international site selector.”

Milliken, a self-identified Democrat, spoke at a Heritage Foundation event this week about right-to-work laws and their impact on unions. She was joined by James Sherk, senior policy analyst in labor economics at The Heritage Foundation, and Perry Bowman, a United Auto Workers member and founder of Union Conservatives.

While Bowman focused on the statewide fight for a right-to-work law in Michigan, Milliken talked about her own efforts at the country level.

“I am very proud of Warren County,” Milliken told the audience after listing several statistics. She discussed the unique ability that counties have in Kentucky to take such actions.

The state legislature enacted home rule in 1978 because “they knew [counties] were best suited to handle what our constituents needed,” Milliken said.

Supporters of right-to-work laws say Kentucky would benefit from more factories, such as this Toyota manufacturing plant in Georgetown, Ky. (Photo: Charles Bertram/Lexington Herald-Leader/

Supporters of right-to-work laws say Kentucky would benefit from more factories, such as this Toyota manufacturing plant in Georgetown, Ky. (Photo: Charles Bertram/Lexington Herald-Leader/

After the panel, Milliken addressed her current fight against the Democratic-controlled Legislature in Frankfort and Attorney General Jack Conway.

In an interview with The Daily Signal, Milliken said, “[Conway] has painted himself into a corner. While arguing against home rule in Warren County, he now faces a different problem for Jefferson [County].”

“Jefferson wants a local ordinance on minimum wage,” she said. “Is the attorney general going to fight against that?”

Milliken said several other counties are following suit. She predicted more than “1 million Kentuckians will be under right-to-work laws soon,” she said

She also stressed that her goal is not anti-union. “This ordinance forces unions to go back to their original functions, not what it has become today.”

In Michigan, the fight for a right-to-work law played out at the state level. According to Bowman, the new Michigan law, signed by Gov. Rick Snyder, R-Mich., in 2012, took away the compulsory dues for workers. With its removal, workers can choose whether to join unions or bargain with management independently.

“It is time for unions to embrace free-market principles and reorganize to be more service based than a mandate,” Bowman, the UAW worker, told the Heritage audience.

Bowman blasted what he believed to be outdated practices on unions’ behalf. Demonstrating his point, Bowman focused on the Michigan Education Association in his home state.

“Teachers unions used taxpayer money to deny their members freedom of choice,” he said.

Heritage expert Sherk released a report finding that unions charge higher dues and give their top officers larger salaries when they can force workers to pay dues.

“When their customers have no choice about paying unions don’t make satisfying them their first priority,” Sherk says, noting in the study that “Union financial reports reveal that they charge workers roughly 10 percent higher dues and pay their full-time top officers $20,000 more annually in states with compulsory dues.”

Sherk’s report argued that with right-to-work laws, unions must earn workers’ support through voluntary dues. This requires them to compete for workers’ dollars, which leads to lower dues and pressures unions to hold down costs—including officer salaries.

“I’m an economist, and I find the notion that getting rid of unions’ monopoly power would hurt workers bizarre,”  Sherk added.

Sherk summed up his thoughts stating he “didn’t think that union officers are selfish,” but that monopolies tend to put their institutional interests ahead of their customers.  Sherk added that “it is the customers’ freedom not to buy their product that drives businesses—and unions—to put the customer first.”