 |
|
|
|
|
|
|
|
||
 |
|||||||||
|
www.freedomandprosperity.org |
|||||||||
|
|||||||||
 |
|||||||||
|
The views expressed by Andrew Quinlan and Dan Mitchell on this weblog are solely their own and are not necessarily those of their employers, The Center for Freedom and Prosperity Foundation and The Heritage Foundation, respectively. |
|||||||||
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
The Market Center Blog |
||||||||||
|
Observations and insights on the global fight |
||||||||||
|
CF&P's Market Center Blog Archives |
||||||||||
|
Saturday, July 31, 2004 ~ 2:03 p.m., Dan Mitchell Wrote: Between 1997 and 2002, state and local governments increased K-12 spending by 39%. Even after adjusting for inflation and growth in pupil enrollment, real spending was up
nearly 17%. And it went up in every state, even those with strict tax and spending limits. So what did we get in return? ...The results are a direct refutation of the We Need More Spending chorus. Even a quick
glance shows that the results are all over the map: Some states show improvements despite lower spending increases while others spend more yet make no dent in their scores. Surely it's telling that, even after
jacking up its education spending by 46%, the top-spending District of Columbia improved its scores by no more than Florida, which is at the bottom of the spending chart but has been at the forefront of reforms
allowing choice and demanding accountability. ...The real problem is that, notwithstanding the $370 billion the states spend each year on K-12 public education, it remains a rare American monopoly. This election
year we are going to hear candidates calling for all manner of new education spending. The question so few of them--Republicans included--are addressing is this: Is there any other part of American life that
would receive tens of billions of more dollars if it kept showing no improvement in performance?
Saturday, July 31, 2004 ~ 7:05 a.m., Dan Mitchell Wrote: Wealthy nations and international organizations, including the World Bank, spend more than $55 billion annually to better the lot of the
world's 2.7 billion poor people. Yet they have scant evidence that the myriad projects they finance have made any real difference, many economists say. ...A recent in-house review of bank projects during the
past four to five years found that only 2 percent had been properly evaluated for whether they made a difference ... none of the studies were rigorous enough to measure whether the initiatives made a
difference, except for one that found it increased enrollment by a disappointing 1.3 percent. "The World Bank spent more than a billion dollars without knowing why they were doing what they were doing -
that's the tragedy,'' said Abhijit Banerjee, an M.I.T. economics professor and co-founder of the Poverty Action Lab.
Friday, July 30, 2004 ~ 3:06 p.m., Dan Mitchell Wrote: The European Union must undertake radical reform of its pension systems, raise the retirement age, reduce budget deficits, promote
citizen savings, enhance labor mobility, boost economic productivity and allow more immigration if it is to avert a looming fiscal crisis in the coming decades due to low birth rates and an ageing population,
European Banking Federation stated July 29. In presenting a major study the fiscal impact of the demographic situation in the 25 EU member states, the EBF insisted that it is not too late to make the
necessary changes but it said time was running out. "Unless action is taken now to budget for the increased welfare expenses, governments
may find it hard to avoid a disastrous spiral of higher taxes, social security contributions and borrowing," said Martin Hufner, an EBF
economist who presented the report: "The Ageing Population: a Threat to the European Union's International Role." ...The immediate impact of
the impending demographic problem will be even less economic growth than experienced in recent years, the EBF said. "This comes at a time
when potential growth in Europe is already a good 1 percent lower than that of the United States," said Hufner.
Friday, July 30, 2004 ~ 2:30 p.m., Dan Mitchell Wrote: Marta Andreasen tells her story like the accountant she is, in faint, deliberate tones that people strain to hear because she speaks as if she
is summarizing a spreadsheet. ...This month, the Association of Certified Fraud Examiners celebrated Andreasen at its annual conference in Las Vegas, where she accepted the Cliff Robertson Corporate Sentinel
Award for "choosing truth over self" by exposing government wrongdoing. The same week, she was arguing with European Commission functionaries about a disciplinary process dragging toward
a September finale. ...The accusations against Andreasen are also a little complicated. She was not suspended because of her withering criticism, which gained support from, among others, Jules Muis, the
commission's former internal auditor. He observed in a blunt internal memo that Andreasen's concerns appeared "factually substantive and
correct." In reality, she was suspended for violating Articles 12 and 21 of staff regulations: failure to show sufficient loyalty and respect. The
saga dates to May 2002, when she started alerting her bosses and then ultimately their bosses that the government computer software was vulnerable to error and fraud just five months after she started her job.
...said Andreasen, who is still on the payroll. "Had they followed my advice, today there would be effective measures in place, and the funds
would be protected. Instead, I was suspended, and the EC said they already knew about the problems."
Friday, July 30, 2004 ~ 1:58 p.m., Dan Mitchell Wrote: Revenues generated by Germany's investment tax amnesty in the first six months of 2004 continued to fall well below the Finance Ministry's
expectations, according to a report in the national media. Finance Ministry documents seen by German daily newspaper, Handelsblatt revealed that revenues accruing from newly declared offshore funds
reached €224 million in the first half of the year. This figure is likely to have disappointed Finance Minister Hans Eichel, who envisaged a €5
billion tax windfall this year from the scheme, which commenced in January. ...Under the amnesty, individuals declaring funds held abroad face a 25% tax on income from the capital if declared by the end of
2004. Between January 1 and March 31 2005 this penalty will rise to 35%.
Friday, July 30, 2004 ~ 1:37 p.m., Dan Mitchell Wrote: Republicans and right-wingers support taking the earnings of one American and giving them to farmers, banks, airlines and other failing
businesses. Democrats and left-wingers support taking the earnings of one American and giving them to poor people, cities and artists. Both agree on taking one American's earnings to give to another; they simply
differ on the recipients. This kind of congressional activity constitutes at least two-thirds of the federal budget. Regardless of the purpose, such
behavior is immoral. It's a reduced form of slavery. After all, what is the essence of slavery? It's the forceful use of one person to serve the purposes of another person. When Congress, through the tax code,
takes the earnings of one person and turns around to give it to another person in the forms of prescription drugs, Social Security, food stamps,
farm subsidies or airline bailouts, it is forcibly using one person to serve the purposes of another. ...Some might rejoin that all of this is a result
of a democratic process and it's legal. Legality alone is no guide for a moral people. There are many things in this world that have been, or are, legal but clearly immoral. Slavery was legal. Did that make it
moral? South Africa's apartheid, Nazi persecution of Jews, and Stalinist and Maoist purges were all legal, but did that make them moral? ...An argument against legalized theft should not be construed as an
argument against helping one's fellow man in need. Charity is a noble instinct; theft, legal or illegal, is despicable. Or, put another way: Reaching into one's own pocket to assist his fellow man is noble and
worthy of praise. Reaching into another person's pocket to assist one's fellow man is despicable and worthy of condemnation. For the Christians among us, socialism and the welfare state must be seen as
sinful. When God gave Moses the commandment "Thou shalt not steal," I'm sure He didn't mean thou shalt not steal unless there's a majority
vote. And I'm sure that if you asked God if it's OK just being a recipient of stolen property, He would deem that a sin as well.
Friday, July 30, 2004 ~ 12:15 p.m., Dan Mitchell Wrote: Even though about 50% of the officially measured gross domestic product in France, Germany and Italy goes through the state coffers,
the three find it increasingly difficult to pay their bills. It has long been argued that the high tax rates in these countries, particularly on the
margins, simply stall economic growth and depress tax revenues rather than boosting them. ...High taxation has another effect -- it drives a significant part of the economy underground, further reducing state
receipts. A European Commission report this month shows a strong correlation between high income and social taxes and the magnitude of the black market economy. "This problem can create a vicious cycle, as
the state is likely to increase taxes to compensate for the loss of income. However, as the tax burden increases, the incentive to perform and hire
undeclared work also increases," says the report. Doubters of supply-side economics please take note.
Thursday, July 29, 2004 ~ 7:10 p.m., Dan Mitchell Wrote: In California alone, the legislature has approved millions of dollars in state bailouts for districts that have experienced huge budget shortfalls
due to fraud, corruption, and fiscal mismanagement. Last year, Oakland Unified became the most notorious example of such mismanagement after the state took over the district and approved a record $100 million
state bailout. ...In New York, the chief financial officer for Roslyn schools, who was forced to retire and make restitution after allegedly embezzling $250,000 from the district, may have stolen as much as $1
million during her four years on the job. ...In the Fort Worth School District, Superintendent Thomas Tocco is still running the district even
after a contractor and school district administrator stole $10 million. Tocco learned about problems involving the district's contracting in 2000, after an internal audit showed management hadn't reviewed
invoices to make sure they matched up with the work that was done. Tocco and the board president discussed the audit, but the rest of the trustees didn't learn about it for 16 months. In the interim, the
contractor, Ray Brooks, won $2 million more business from the district. ...In Lancaster, Pennsylvania, Superintendent Ricardo Curry has
resigned and is the subject of federal, state, and local investigations into illegal hiring practices. He paid his unqualified girlfriend, sister, and
brother-in-law thousands of dollars in consulting fees for work they often did not even attempt to perform. For example, his girlfriend, Tamara DeShields, was paid $1,500 per day for consulting work in 2001
and 2002 for the Office of Teaching and Learning. ...At the federal level, a 2004 report from the General Accounting Office confirmed that the e-rate program, which each year provides schools with $2.5 billion
in subsidies for Internet services, has been fraught with fraud and abuse. Federal e-rate administrators and school districts around the nation have failed to monitor their e-rate contracts.
Thursday, July 29, 2004 ~ 5:14 p.m., Dan Mitchell Wrote: McNamara's most enduring stamp on the World Bank was his penchant for rewarding dictatorial regimes with generous funding. ...supporting
democratic regimes makes more sense, and is politically easier to defend. For example, development loans to democratic countries have a greater chance of actually reaching their intended recipients. Just last
month, Senate Foreign Relations chairman Richard Lugar cited estimates that $26 billion of the $130 billion loaned out by the Bank since its inception in 1946 had been misused. ...Without transparency
more countries will become indebted to the Bank as dictators embezzle money. This leaves the Bank subject to pressure from debt-relief groups like Jubilee 2000. Generally, there should be little support for such
pressure groups because they threaten to disrupt the availability of needed financing (from private as well as public sources) for sound governments and projects. Put simply, if people do not repay their loans
now, why should anyone ever lend to them again? ...Lending large amounts of money to tyrants reinforces their bad behavior and encourages pressure groups demanding debt reduction. This is the
unfortunate legacy of Mr. McNamara. Before we can dictate to others what to do with their money, taxpayers in developed nations need to take some stewardship with our own. It's time to heavily reduce the
lending power of the Bank.
Thursday, July 29, 2004 ~ 3:34 p.m., Dan Mitchell Wrote: In the 1980s war on drugs, the laws were stretched so that property that had been used for criminal purposes could be seized by law enforcement
even if the owner of that property was innocent. If a drug dealer rode in your car or your airplane, for example, it was subject to seizure, and
you would have to sue to get it back by proving you had no knowledge that a dealer had used it for illicit purposes. This was the case even if you had never been charged with any crime. The resale of impounded
property became a source of revenue—and corruption—for local police departments. Even in cases where there were actual criminal convictions, governments would often seize assets that were not related
to the crime or to compensating victims. In the mid-1990s, a bipartisan movement arose to reform the forfeiture laws, with conservative Republican Reps. Henry Hyde of Illinois and Bob Barr of Georgia
joining with such liberal Democrats as Reps. John Conyers of Michigan and Barney Frank of Massachusetts. They wanted to increase the burden of proof on the government when it seized property. As with
encryption, there was stiff opposition to reform from Janet Reno's Justice Department. What was Kerry's position? He thought U.S. asset forfeiture laws were working so well that he wanted to export them.
"We absolutely must push for asset forfeiture laws all over the planet," Kerry wrote in The New War. "In the words of one plainspoken
lawman, 'Get their ass and get their assets.'" There was, tellingly, no discussion at all of civil liberties issues. ...Kerry then expressed his belief
that bank customers are entitled to essentially zero privacy. "The technology is already available to monitor all electronic money
transfers," he wrote (emphasis added). "We need the will to make sure it is put in place."
Thursday, July 29, 2004 ~ 2:27 p.m., Dan Mitchell Wrote: Norwegians now stay home from work at a rate that is the highest in Europe, outdoing even the former titleholder, Sweden. "We have
become a nation of whiners," said Finn Bergesen Jr., director general of the Confederation of Norwegian Business and Industry, Norway's largest business trade organization. ...On an average day, about 25
percent of Norway's workers are absent from work, either because they have called in sick, are undergoing rehabilitation or are on long-term disability. The rate is especially high among government employees,
who account for half the work force. ...There are few penalties for chronic absenteeism. Most people who take sick leave receive 100 percent of their pay for a year... Few employees get fired, but, if they
do, unemployment benefits are generous. ...Just about everyone agrees that Norway's liberal welfare system plays a substantial role in the growing absenteeism...
Thursday, July 29, 2004 ~ 11:30 a.m., Dan Mitchell Wrote: Mr. Clinton did pass a tax increase in the summer of 1993, but only after Senate Democrats stripped out his new BTU tax and Senate
Republicans killed his spending "stimulus." The expansion stumbled in early 1993, no doubt partly on tax-hike uncertainty, then revived late in
the year. In 1994 stock markets were flat but interest rates actually rose throughout the year, peaking on the very day in 1994 that Republicans
took Congress. That turned out to be the real start of the 1990s boom. In economic policy, the rest of the decade was a stalemate between Mr. Clinton and the GOP majority on Capitol Hill. The Republicans
prevailed on a capital-gains tax cut and the balanced budget, which Mr. Clinton first resisted and then embraced in part to block (successfully)
GOP entitlement reforms. Congress actually cut discretionary federal spending in 1995, for the first time since 1981, and defense spending continued to fall. A kind of virtuous Beltway gridlock took hold, with
Washington doing little to get in the way of the private-sector's natural animal spirits. As the telecom and tech bubbles expanded, taxes from
rising capital gains and stock-option payouts boosted federal revenues to a post-World War II high as a share of GDP (20.9%). And with budget surpluses rolling in, both parties began to spend like liberals
once again after 1998.
Thursday, July 29, 2004 ~ 10:32 a.m., Dan Mitchell Wrote: The Hungarian government's plan to impose tax on interest income has the support of the main coalition party, the Socialists, according to a
report in the national media. Hungary does not currently charge tax on interest income... The Socialist Party has been considering a number of
new tax measures in recent weeks as it seeks to reconnect with its core working class vote. Among these proposals is a suggested increase in the top rate of income tax to 48% from 38%, and the reintroduction of
capital gains tax.
Thursday, July 29, 2004 ~ 8:14 a.m., Dan Mitchell Wrote: Sluggish growth and stubbornly high unemployment await the 12 countries that share the euro, according to an OECD report published
on Tuesday... the report warns that "income per capita is lower in the euro area than in the best performing OECD countries and the gap is
widening". Moreover, the economic recovery is expected to be slower in the euro zone than in other parts of the world, according to the Paris-based body.
Wednesday, July 28, 2004 ~ 11:15 a.m., Dan Mitchell Wrote: Behind all the emphasis on "intelligence failure" is a notion that surprises can be prevented. Some can and some can't. There are too
many possible targets and too many ways of attacking them for even the best intelligence agencies to discover all threats in time to keep them from being carried out. No quick-fix reorganization can change that.
The war against terrorism is a very different kind of war. The Soviet Union, with all its nuclear weapons, could be deterred by our nuclear weapons. But suicide terrorists cannot be deterred. They can only be
intercepted or killed. What can be deterred are countries that provide the support for terrorism. That means making such countries fear us more than they fear the terrorists. You don't get that with UN
resolutions or even by consulting our "allies" -- least of all allies who cut and run, like Spain and the Philippines. Wednesday, July 28, 2004 ~ 10:45 a.m., Dan Mitchell Wrote: A German Finance Ministry panel of academics has drawn up a proposal for a flat rate of income and corporate tax in a bid to boost
investment activity in Europe's largest economy. The proposal calls for a 30% flat rate of tax on all personal and corporate income with the
resulting shortfall in revenues to be offset with a 2% rise in Germany's 16% sales tax, Wolfgang Wiegard, a member of the panel and head of the government's five-member council of economic advisors, told
Bloomberg. Under the plan, tax-free allowances would also rise "substantially" whilst further sources of revenue could be found from reductions in tax breaks and subsidies.
Wednesday, July 28, 2004 ~ 10:02 a.m., Dan Mitchell Wrote: A new study has suggested that the UK Treasury could be forgoing some £40 billion in tax revenues per year as a result of the existence of
the so-called 'black economy,' the equivalent of 12p on the basic rate of income tax. ...By comparing what the self employed spend with their declared income, the researchers calculated that blue collar
self-employed workers report less than half of their income, whilst equivalent white collar workers declare 61p in every pound earned.
Wednesday, July 28, 2004 ~ 9:34 a.m., Dan Mitchell Wrote: The Organization for Economic Cooperation and Development's Committee on Fiscal Affairs has agreed on new provisions for the
exchange of information between national tax authorities that would prevent bank secrecy or domestic tax interests from being used as a basis to refuse to share information, the group announced July 23. The
OECD said the changes are outlined in the first major update of Article 26 under the OECD Model Tax Convention since 1977. ...In commentary to the revised Article 26, Austria, Belgium, and
Luxembourg all reserved the right not to include the bank secrecy paragraph in their tax conventions, while Switzerland said it has reserved its position on this issue. Austria said it will authorize the
exchange of information held by banks or other financial institutions for criminal investigations of tax fraud, however. Switzerland said its reservation about the bank secrecy provision would not apply in cases
involving fraud that would result in imprisonment in both contracting states.
Tuesday, July 27, 2004 ~ 2:30 p.m., Dan Mitchell Wrote: Even the most cursory examination reveals H.R. 3179 would expand Patriot Act powers without any built-in accountability and oversight.
One of its most troubling provisions involves new powers for searches ordered by National Security Letters. These can be used to demand access to individual or business records even absent a showing of
individual suspicion. There is no way either the target of the investigation or those on whom the letters are served can challenge them as too broad. The statute, in fact, makes it a crime for a recipient
to raise alarms in the press, or even to the Justice Department's inspector general or the relevant congressional committees that should exercise oversight. ...Conservatives well know a government
bureaucracy's appetite for power is never sated. Left unchecked, it will push the limits, mindless of the cost to our own freedom. Already, there
is an effort in Congress to remove the existing sunset provisions to the Patriot Act, though a 2003 Government Accounting Office report questioned whether the Act's powers were being misused to fight not
terrorism but run-of-the-mill crime. ...Congress should draw the line between the "tools" law enforcement really needs and those in the law
enforcement bureaucracy would simply like to possess. At the very least, Congress should resist the temptation to automatically approve the enforcement sector's newest requests without at least ascertaining it
really needs the powers it already has and is using them as Congress believed they would be used when they were approved.
Tuesday, July 27, 2004 ~ 1:01 p.m., Dan Mitchell Wrote: ...the official Medicare Web site notes with a touch of pride that the new policy will remove "confusing language" from the existing CIM that
"obesity is not considered an illness" (which actually is not confusing), it replaces this language with a paragraph of gobbledygook. Henceforth,
a Medicare "beneficiary" who is fat — which may cover up to 31 percent of the 41.3 million Americans on or eligible for Medicare — may
or may not be covered if they are fat enough to be considered "obese" (that is, really fat). Some medical conditions are covered, others aren't;
some procedures designed to reduce fatness are covered, others aren't, depending on whether they are "reasonable," "necessary" or
"integral." What's confusing is the new language, not the old. ...the usual army of lawyers and con artists waiting to take advantage of any
expansion in the size of the public trough are already rushing the gates. Lawyers who only recently were slapped down by the courts in their bid
to make McDonald's responsible for kids who scarf down too many Big Meals, have a new lease on life thanks to the position announced by Mr. Thompson.
Tuesday, July 27, 2004 ~ 12:14 p.m., Dan Mitchell Wrote: Last week José Manuel Durão Barroso said in the European Parliament "I want my team to include eight women". So far, five women are very
likely be sent to Brussels. ...Following a statement by Mr Barroso last week that he needs the governments of the member states to help get gender balance, Dutch press reports that The Hague may send a women
- former Transport Minister Neelie Kroes. Denmark may also send a woman - fisheries minister Mariann Fischer Boel, while Austria is considering foreign minister Benita Ferrero Waldner or health minister
Maria Rauch-Kallat. But in all three countries, these women face competition from a male candidate.
Tuesday, July 27, 2004 ~ 10:30 a.m., Andrew Quinlan Wrote: Thursday's meeting in Brussels between trade officials from Europe and the U.S. could possibly be the first step of the passenger-jet industry into
uncharted territories: the free market. As U.S. officials from two branches and two parties openly flirt with the idea of scrapping a 12-year-old trans-Atlantic agreement that has preserved subsidies to
Airbus and Boeing, Europe and America have an opportunity to win one for free trade and to take these two airliner giants off of the government dole -- if they have the political will to stand up to these
well-entrenched firms. ...The Export-Import Bank (Ex-Im) is neither a bank, nor does it have anything to do with imports. It is a government agency that loans money -- and underwrites private loans -- to foreign
buyers so that they will buy American. Aptly called Boeing's Bank, the Ex-Im has made the airliner giant its biggest beneficiary. For many years a majority of Ex-Im loans and loan guarantees -- measured in
dollar amounts -- have gone to support Boeing's overseas sales. One of President Bush's favorite lines is that the government cannot create
wealth and prosperity, but it can create the conditions for them. On this score, Mr. Bush would do well to scrap Ex-Im altogether. Aside from the
federal budget implications, Ex-Im distorts the U.S. economy in various ways. ...If Boeing is a prime example of public risk for private gain, then
Airbus is hardly a private company at all. Despite Airbus's complaints about the Boeing-Pentagon ties, BAE System's and EADS, Airbus's parent companies, get just about as much in defense dollars. Then
comes Airbus's best deal: launch aid. European governments "loan" Airbus money at cut rates for research and development, but if the
project doesn't pan out, the government forgives the loan. In short, EU governments are venture capitalists on Airbus projects. Over one-fourth
of the R&D for the new Airbus A380, according to U.S. government estimates, is government launch aid.
Tuesday, July 27, 2004 ~ 9:55 a.m., Dan Mitchell Wrote: The European economy that has over the course of the year achieved the most rapid improvement was Slovakia, which jumped 26 places
(from 77 to 51). Lithuania improved its ranking by 25 places (from 69 to 44). Other significant improvements were achieved by Poland (from 77 to 61), Latvia (from 51 to 36) and Hungary (from 35 to 22). In 2004,
Estonia remained the freest economy of the former communist bloc, having jumped from 16th to 11th place in the world. ...Looking at the level of economic freedom in Europe between 2000 and 2004, it is
evident that the "new" EU countries are catching up with the "old." The average ranking of the old EU members declined from 19 in 2000
to 20.9 in 2004. The average ranking of the new members from Central and Eastern Europe increased from 62.8 to 42.5. Their average rating rose from 6.6 to 6.9. The rating for the old 15 EU members, however,
fell from 8.2 in 2000 to 7.4 in 2004.
Monday, July 26, 2004 ~ 12:20 p.m., Dan Mitchell Wrote: ...both original rationales for tax cutting have been completely forgotten by virtually all Republicans. They now cut taxes willy-nilly
without any concern for economic impact. The vast bulk of tax cuts since 2001, in revenue terms, have gone for tax rebates, kiddy credits and other measures having no impact on marginal incentives. True,
rates have also been cut, but they are being phased in slowly, thus pushing off their economic benefits into the future. Moreover, the old starve-the-beast theory is completely dead. Not only do Republicans
make no effort to even restrain, let alone cut, spending, they have actually gone in the opposite direction and now raise spending for just about anything they think will buy them a vote. They have morphed into
a caricature of 1960s Democrats, but with even less concern for deficits than Lyndon Johnson had.
Monday, July 26, 2004 ~ 12:00 p.m., Dan Mitchell Wrote: Professor Vedder made an interesting point, which is that at state universities, and at federally-subsidized colleges and universities,
students are enjoying their high-end lifestyles at taxpayers' expense. Since the vast majority of students, even at state universities, come
from the top half of the income distribution, this represents a regressive social policy, in which taxes paid by the less-affluent are used to fund
the consumption of the more-affluent. ...I find myself persuaded by Professor Vedder that government subsidies to higher education serve primarily to drive up costs. I also am persuaded that subsidies serve to
increase the pleasure of the college experience for the already-affluent who make up the bulk of the students. The bottom line is that the contribution of higher education subsidies to the American Dream, of
access to education for the less affluent, is minimal, and possibly even negative.
Sunday, July 25, 2004 ~ 5:00 p.m., Dan Mitchell Wrote: In its zeal to put the east on an equal footing with the west as fast as possible, the German government created a society addicted to welfare
and other subsidies. The private sector withered, and by the mid-1990's the gap between east and west began to widen alarmingly. Now, with the jobless rate in some cities topping 20 percent and young people
continuing to leave for the west ...Having poured $1.5 trillion into the east since reunification in 1990, many Germans now regard this grand
project as a costly failure - one that could drag down the rest of the country. Sunday, July 25, 2004 ~ 7:00 a.m., Dan Mitchell Wrote: The association reports that the median-size residence in 1970 boasted 1,385 square feet of living space, while 24 percent featured four or
more bedrooms. Just 16 percent included 2 1/2 bathrooms or more. Now look at today's standard new single-family house. It boasts 2,123 square feet of living space. A total of 37 percent come with four
bedrooms or more, while 56 percent feature 2 1/2 bathrooms or more.
Sunday, July 25, 2004 ~ 6:15 a.m., Dan Mitchell Wrote: Hungarian Finance Minister Tibor Draskovics revealed on Thursday that he would be prepared to examine the possibility of a flat rate of
income tax... "I do not rule out the possibility that we apply such a simplified solution, especially as an option, an alternative," Draskovics
stated in a national television broadcast. ...However, Draskovics warned that such an idea would need careful consideration to ensure that a flat tax would not benefit those on high incomes to the detriment
of the poor.
Saturday, July 24, 2004 ~ 12:30 p.m., Dan Mitchell Wrote: The federal government is top-heavy with more layers of high-ranking bureaucrats than ever before, impeding the flow of information within
agencies and clouding the accountability of the officials who run them, according to a study to be released today. The study, conducted for the
Brookings Institution by government scholar Paul C. Light, found that the number of federal executive titles swelled to 64 this year. That's up
from 51 in 1998, 33 in 1992 and 17 in 1960. "It's a natural phenomenon of bureaucratic behavior, and if you don't pay attention to it it's like
kudzu -- it grows," said Light, a professor at New York University's Robert F. Wagner School of Public Service. ...Title creep may be good
for business card printers, but it is bad for agencies and taxpayers, Light said. Information about problems -- mistreatment of Iraqi prisoners by the military, say, or concerns about possible damage to the
space shuttle -- has to pass through more hands before it gets to the top. "It helps explain why information flows are sometimes so sluggish,"
Light said. "And it also explains why we can't hold anybody accountable for what goes right or wrong. There are just so many places that
decisions get made, or not made, that you can't really figure out who is responsible."
Friday, July 23, 2004 ~ 10:50 a.m., Dan Mitchell Wrote: France's ability to attract long term investment and stimulate economic growth continues to be hampered by the nation's high tax burden and
rigid labour market regulations, the International Monetary Fund has warned. In its annual assessment of the French economy, the IMF mission observed that "serious challenges persist to maintain France's
attractiveness for investment and secure long-term fiscal viability." "Indeed, a high tax burden and low employment rates, together with a
large deficit, and an impending demographic shock cast a shadow over long-term growth prospects," the report observed. The IMF proposed a
series of remedial reforms including "a steadfast reduction in public spending to eliminate budget deficits and make room for growth-enhancing tax cuts, and an acceleration of product market
reforms to increase competition."
Friday, July 23, 2004 ~ 9:30 a.m., Dan Mitchell Wrote: The Hong Kong government has issued a consultation paper on the future of the territory's estate tax, which may lead to the eventual
abolition of the levy. Among the measures up for consideration, the consultation proposes exemptions for non-Hong Kong domiciled investors, exemptions on certain classes of assets or complete
elimination of the levy. Hong Kong's estate tax laws are applied on a territorial principle, meaning tax is only levied on property situated within Hong Kong. However, this means that the deceased's nationality,
residence or domicile are completely irrelevant in determining whether or not an estate duty charge arises.
Friday, July 23, 2004 ~ 8:41 a.m., Andrew Quinlan Wrote: American men are struck by lightning six times as often as American women. Who is discriminating? Men are just 54 percent of the labor
force but they suffer more than 90 percent of all deaths on the job. Discrimination? Is it discrimination against whites when Asian Americans have their applications for mortgage loans approved a
higher percentage of the time than whites do, just as whites are approved a higher percentage of the time than blacks are? ...The fundamental problem is that our legal system allows one side to impose
huge costs on the other, at little cost to themselves. When a false charge of discrimination can force the accused to mobilize teams of high-priced
lawyers, but making that false charge brings no penalty to the accuser, this is virtually a guarantee of a flourishing industry of legalized
extortion. If I can spend $10,000 and impose a million dollars worth of costs on you, then the law is in effect enabling me to extort hundreds of thousands of dollars from you to go away.
Friday, July 23, 2004 ~ 7:12 a.m., Dan Mitchell Wrote: European Commission president Romano Prodi has warned about the dangers of having a referendum on the Constitution saying that if the
treaty is rejected it would be a "huge setback" for European integration. ...The left-leaning Italian also took the chance to reject
criticism, particularly from French socialists ...He pointed out that the Constitution has full employment and social progress as objectives of
the Union and that gender equality and minority rights are enshrined in the document.
Thursday, July 22, 2004 ~ 11:05 a.m., Dan Mitchell Wrote: Microsoft's announcement Tuesday of the largest dividend payout in history, $32 billion, followed by a 2% jump in its share price yesterday,
is one of those headline-making events that illustrates a larger change. Reacting to last year's tax cut, American companies and investors are
rediscovering the virtues of the dividend, which in turn is encouraging investment and powering economic growth. ...In paying out a hefty chunk of its cash hoard to shareholders in December, the company was
clearly concerned with the possibility that John Kerry might be elected President and carry out his promise to return dividends to their former
status as ordinary income (thus raising the dividend tax back to the nearly 40% Clinton-era top rate from today's 15%). ...critics of the Bush
dividend tax cut said ...corporations don't consider the taxes that their investors face when making decisions about whether to retain earnings
or pay them out. Furthermore, stock prices wouldn't be affected. ...Well, just as the rising level of dividends and Microsoft's behavior give the lie
to this theory, it's worth noting that the stock market hit bottom in March 2003 and began to recover once the tax cut looked like a political certainty. It passed in May. Stock prices reflect the present
value of future corporate earnings, and if investors are able to keep more of those earnings it's no surprise that they would value stocks more highly.
Thursday, July 22, 2004 ~ 9:37 a.m., Dan Mitchell Wrote: A record-breaking new class-action lawsuit against Wal-Mart claims that this retail chain discriminates against women, for which of course
vast millions of dollars are being demanded. ...Back during the 1980s a similar charge was brought against Sears, even though no one could find a single woman in all the hundreds of Sears stores who had been
discriminated against -- just numbers that were different as between women and men. When you broke down the numbers, it turned out that women were not equally represented among people who sold
automotive equipment or construction materials. It also turned out that many women had no interest in selling automotive equipment or construction materials, and had turned down opportunities to do so.
...The most blatant fact about male-female differences is often ignored by those on the hunt for discrimination: Women have babies. That usually means interruptions in careers and different choices of careers
beforehand, because some occupations can stand interruptions better than others. ...People without the slightest knowledge of economics or
the slightest experience running a business will boldly assert that women are paid only 75 percent -- or some other percent -- of what men make
for doing exactly the same work. Think about it. If an employer could hire four women for the price of hiring three men, why would he ever hire men at all? Even if the employer was the world's biggest sexist, he
could still not survive in business if his competitors were getting one-third more output from their employees for the same money.
Thursday, July 22, 2004 ~ 6:30 a.m., Dan Mitchell Wrote: Because the cowboy melded the aristocratic virtues of honor and indifference to material things with the democratic values of
self-reliance, discipline, and independence, this myth appealed deeply to our national character. Freedom imposes burdens--isolation, inequality,
and anxiety about whether our choices are wise. The cowboy ideal stimulates in us the vigor to attempt difficult new tasks. When foreigners see us as cowboys, they are not mistaken. As a people, we
still exhibit a high degree of courage, independence, aggressiveness, competence, and spirit. Diplomatic Europeans have responded to tyranny over the latest century mostly with accommodation, like the
townspeople in High Noon. Cowboy Americans, on the other hand, have hungered to confront and defeat tyrants, in real life as in legend. Our Western experience--love of freedom, little deference to wealth and
status, an idealistic drive for justice, and a willingness to be ferocious toward these ends--continues to drive much of what is best about America. Thursday, July 22, 2004 ~ 2:00 a.m., Dan Mitchell Wrote: Why does the German Agenda 2010 exist? Why have the EU countries invented the Lisbon process? Why are the governments in Italy and France discussing major changes in the pension systems? Why did New
Labour not roll back the reforms of the Thatcher governments? The answer is simple, yet almost never mentioned: The European Social Model is not sustainable. ...From the outside, globalization pushes for
change. ...Great possibilities that are opened by globalization ...also create a radically more tough competition. To increase our growth and create better jobs we have to get vastly more competitive. The
enlargement of the EU shows this clearly, as does the debate about jobs moving to Asia. If European jobs that move shall be replaced by better ones as in the US, we have to lower the heavy burden of high taxes.
Wednesday, July 21, 2004 ~ 6:05 p.m., Dan Mitchell Wrote: When it comes to government spending, Britain is unique in Europe, but not for the reasons most readers of this paper would suppose: Tony
Blair's government is the only one in Europe that is raising public spending as a proportion of national income year after year. ...In three years' time, government spending will rise to 42.3% of GDP. This
increase means that in eight years, public spending is planned to grow by a colossal £236 billion ($441 billion) a year -- or 38% after inflation.
...Poor value for money has an economy-wide impact. Over the last two years, three quarters of net new jobs have been in the public sector. Transferring resources from the high-productivity private sector to an
unreformed public sector will reduce overall productivity growth. ...The central mission of the Blair government was to transform the performance of Britain's public sector, just as the previous Conservative
governments had transformed its economic performance. But spending has become a substitute for reform, which will in turn be an increasing drag on economic growth and living standards.
Wednesday, July 21, 2004 ~ 5:19 p.m., Andrew Quinlan Wrote: If we consider only the 20 most protected industries, US trade barriers cost domestic consumers more than US$44 billion each year. American
firms must also bear the added costs of trade barriers, causing many to relocate to less costly environments. The US import quota on cane sugar has doubled the price for domestic users and has helped drive
numerous candy manufacturers out of the country. In 2003, for example, Kraft Foods Inc. moved its Life Savers plant from Michigan to Quebec, taking about 600 jobs with it. ...The lingering mercantilist
fallacy that exports are good and imports are harmful to the economy is the foundation for America's continued insistence on trade barriers. Repeatedly endorsing the dogmas of reciprocity and "level playing
fields," as US Trade Representative Robert Zoellick and the Bush administration have done, perpetuate these myths and foster a political culture that is hostile to open markets. Thus in order to bring about
freer trade-or at the very least avoid erecting additional trade barriers or doling out more government handouts-the administration must take
a bold and principled stance that free trade is its own reward. In fact, should the US simply abandon its anti-dumping laws and import restrictions unilaterally, the welfare of the average American would be
much higher as a result.
Wednesday, July 21, 2004 ~ 3:45 p.m., Dan Mitchell Wrote: Where did the notion of compulsory leftist party registration in Hollywood come from, anyway? ...Personal accountability can be a
foreign concept when you have a publicist to get you out of any jam. Taxes are easier to swallow when you bring in $10 million a film. Marxism sounds vaguely groovy and compassionate when you live in
the Hollywood Hills, as opposed to under any of the regimes responsible for between 85 million and 100 million deaths in the last century. Celebs
like to see it as a heightened global consciousness--excluding global realities like, say, terrorism--and make their scheduled appearances for
the television cameras on Skid Row, dishing out turkey and green beans for the homeless.
Wednesday, July 21, 2004 ~ 12:21 p.m., Dan Mitchell Wrote: Before we buy into this socialist agenda, we might check out just what happens when health-care services are "free." Let's look at our
neighbor to the north -- Canada. The Fraser Institute, a Vancouver, B.C.-based think tank, has done yeoman's work keeping track of Canada's socialized health-care system. It has just come out with its
13th annual waiting-list survey. It shows that the average time a patient waited between referral from a general practitioner to treatment rose from 16.5 weeks in 2001-02 to 17.7 weeks in 2003. Saskatchewan had
the longest average waiting time of nearly 30 weeks...in some instances, patients die on the waiting list because they become too sick to tolerate
a procedure. Houston says that hip-replacement patients often end up non-ambulatory while waiting an average of 20 weeks for the procedure, and that's after having waited 13 weeks just to see the
specialist. The wait to get diagnostic scans followed by the wait for the radiologist to read them just might explain why Cleveland, Ohio, has become Canada's hip-replacement center. ...about 10,000 doctors left
Canada during the 1990s. Compounding the exodus of doctors is the drop in medical school graduates. According to Houston, Ontario has
chosen to turn to nurses to replace its bolting doctors. It's "creating" 369 new positions for nurse practitioners to take up the slack for the
doctor shortage. ...Health care can have a zero price to the user, but that doesn't mean it's free or has a zero cost. The problem with a good
or service having a zero price is that demand is going to exceed supply. When price isn't allowed to make demand equal supply, other measures
must be taken. One way to distribute the demand over a given supply is through queuing -- making people wait. Another way is to have a medical czar who decides who is eligible...
Wednesday, July 21, 2004 ~ 11:39 a.m., Dan Mitchell Wrote: Health and Human Services Secretary Tommy Thompson says, "Obesity is a critical public health problem in our country."
Wednesday, July 21, 2004 ~ 11:00 a.m., Dan Mitchell Wrote: Back in 1985, the Coca-Cola Co. made a major mistake. It decided to get rid of its classic cola drink and replace it with something sweeter
called New Coke. ...there was a vast outcry and the company was forced to dump New Coke and bring back the old formula. Republicans have made a similar mistake in adding a prescription drug benefit to
Medicare. ...the data all not only show Republicans have reaped no political benefit from the Medicare expansion but are losing support because of it. Ironically, those who will benefit directly from the new
drug subsidies, the elderly, are most hostile. In the process, Republicans have thrown away whatever credibility they had for fiscal responsibility
and are now actively opposed by many conservatives disgusted by their budgetary profligacy. ...Republicans are now starting to realize - as Coca-Cola did - that they messed up big time. As columnist Robert
Novak reports, "Senior administration officials privately admit that last year's prescription drug bill was a disaster substantively and
politically." It is here where we really see the difference between the public sector and the private sector. When Coca-Cola executives realized they made a big mistake, they switched gears, brought back
Classic Coke and eventually deep-sixed New Coke. They had no choice in a competitive market. But government officials never admit error. So Republicans seem intent on slogging the benefits of a new drug benefit
that will cost trillions of dollars for people who don't like it. But there may be hope. According to the National Journal, Democrats in
Congress promise to "repeal and replace" the drug plan next year. It notes this wasdone in 1988 after Congress passed a catastrophic health
coverage bill that seniors rebelled against. If Republicans are smart, they will take Democrats up on their offer and kill the drug bill before it becomes cemented in place for all time.
Wednesday, July 21, 2004 ~ 10:15 a.m., Dan Mitchell Wrote: Freedom means having personal responsibility and the ability to make certain choices about everyday living that should not be dictated by the
government. It is not the job of the state to make sure people are happier, healthier, and more productive by making decisions for them. Babysitting citizens by wasting taxpayer funds and police resources to
ensure that people don't buy too much cold medicine and that they use the right kind of child booster seats is out of control. This year's leading
nannies are California, Colorado, Georgia, Iowa, Idaho, Massachusetts, and New Jersey. ...Georgia and Iowa had a brilliant idea by requiring
not only seatbelts but also car booster seats for young children. There are specific requirements for what qualifies as a booster seat, sending
parents shopping if theirs doesn't measure up. In addition to spying on cars, Iowa's got an eye on medicinal purchases. Iowa residents can only purchase two packages of cold and allergy medicines containing
pseudoephedrine, the active ingredient in Sudafed, because it's used to make crystal meth. Someone may have a bad cold or be a tightwad enjoying a good sale - does that make them a criminal? Having a cold
might not be a crime, but smoking indoors has become one in Massachusetts and Idaho. Both banned smoking in public places, with Idaho allowing exceptions for bars, tobacco stores, bowling alleys, and
hotels. ...States need to focus on real criminals and allow people the freedom to make choices. As George Bernard Shaw said, "Liberty means responsibility. That is why most men dread it."
Wednesday, July 21, 2004 ~ 8:45 a.m., Andrew Quinlan Wrote: Along with these class actions are individual suits, such as the one filed by the family 19-year-old Ryan Pisco against Coors. Pisco drank, drove
while drunk, and recklessly exceeded the speed limit. He crashed and died. Which, his family claimed, was Coors' fault because of its sponsorship of sporting events that Ryan allegedly attended. These
lawsuits constitute gross judicial abuse. Millions of people drink without undue effect. The problem is drinking irresponsibly and sometimes illegally, not drinking. But foolish behavior cannot be blamed on
advertising. Most alcohol consumed around the world isn't even advertised. Changes in advertising in America and overseas have had no measurable impact on total consumption. When kids explain why
they drink, they cite their parents and peers, not ads. ...In its 2003 Report on Alcohol Marketing and Advertising, the Federal Trade Commission discovered "no reliable basis to conclude that alcohol
advertising significantly affects consumption, let alone abuse." Moreover, the commission "found no evidence of targeting underage consumers." The Department of Health and Human Services
recommended against restrictions on alcohol advertising in a report to Congress. The agency observed no significant relationship between advertising and consumption. Private studies reach the same result.
Explains John Calfee of the American Enterprise Institute: "Invariably, empirical research finds no effect of advertising on the total amount of alcohol consumption."
Wednesday, July 21, 2004 ~ 12:27 a.m., Dan Mitchell Wrote: To balance his budget, Manville had decided to eliminate nearly every nonacademic program the Saugus schools offer. That will mean an end
to 13 middle- and high-school sports, from hockey -- in which Saugus High is the reigning state champion -- to football to golf. It will mean an
end to cheerleading. An end to the student newspaper. An end to the Model UN, the marching and jazz bands, the student council. ...There are 3,200 kids in the Saugus public schools. Even under next year's
reduced budget, the town will be spending $6,700 per student. That isn't the highest amount in America and it isn't the lowest. But it ought to be
enough to provide a solid education, though perhaps without frills like lacrosse and Model UN. If it isn't enough, maybe the fault lies not with stingy taxpayers or ungenerous town businesses, but with a
dysfunctional model for schooling American children. How much education might $6,700 buy, for example, if public schools didn't operate as virtual monopolies, all but immune to competition? Or if
principals were free to hire, fire, and pay teachers on the basis of skill, not seniority? Or if the one-size-fits-all model were scrapped, and every
public school were turned into a charter school? Or if the funds that pay for education were funneled through parents instead of school committees?
Tuesday, July 20, 2004 ~ 2:15 p.m., Dan Mitchell Wrote: The European Union member states agreed July 19 to postpone until July 1, 2005, the implementation of a long-awaited and highly
controversial cross-border tax on interest income from savings accounts. The EU law will take effect provided Switzerland ratifies a separate agreement to impose a savings tax on income earned by EU
citizens with Swiss bank accounts. ...The commission also recognized that, if Switzerland does not implement the law, the EU savings tax will
not take effect. "If the Swiss reject it, the whole deal will collapse," the commission official said. "But we do not think that will happen as the
Swiss government and banking industry are very happy with this deal as they can maintain bank secrecy." In the Swiss banking industry, the new
cross-border tax has been dubbed "the dummy tax" because they believe there are numerous loopholes that will make it easy to avoid.
Tuesday, July 20, 2004 ~ 1:47 p.m., Dan Mitchell Wrote: The Brussels body is trying to build up support among EU governments for a ground-breaking scheme to create common rules for corporate
taxation within a limited number of EU states. ...This would fall short of imposing minimum tax rates - a long term goal of Paris and Berlin. But
it would create a common set of rules within participating countries for calculating companies' tax burdens by harmonising the corporate tax
base. ..."We should not have an overnight harmonisation of direct taxes but we should take a step in this direction," Gerhard Schröder, German
chancellor, told the FT last week. "The first one could be to harmonise the tax base."
Tuesday, July 20, 2004 ~ 1:28 p.m., Andrew Quinlan Wrote: With eight former Eastern Bloc countries now inside the EU -- most with both lower tax rates and far lower wages than the EU's
pre-existing 15 member states -- a number of big employers are finding the threat of moving jobs east to be a powerful lever. They are using it
in their negotiations with formerly complacent unions in countries like France and Germany. In France at least, it seems the politicians haven't yet gotten the memo. Echoing Mr. Sarkozy's statements last week,
Budget Minister Dominique Bussereau called Bosch's demands "terrifying blackmail," saying that the measure was not in accord with the wishes of President Jacques Chirac and Prime Minister Jean-Pierre
Raffarin. French unions, meanwhile, are nearly apoplectic. The CGT, which represents Bosch's employees, says it is examining a possible legal challenge to the move. Unfortunately for the union militants, Bosch's
employees seem to have taken a more pragmatic line with their employer. ...The finance minister is playing to the gallery with his populist rhetoric, but the recent moves by Siemens in Germany and
Bosch in France show that employers in Europe -- and many of their employees -- are increasingly aware that they are no longer an audience captive to these performances. It is too soon to say that enlargement
has made reform inevitable, but the EU's inclusion in May of 10 new mostly tax-cutting, low-cost competitors to the cushy West European social consensus is already raising the costs of not reforming in
measurable ways.
Tuesday, July 20, 2004 ~ 12:23 p.m., Dan Mitchell Wrote: ...what supposedly began as an effort by states to recoup Medicare costs has turned into the government using its powers and resources to loot a
lawful private industry. The political class's subsequent addiction to tobacco money is undeniable. Yesterday the Journal reported that 30 states now place caps on appeal bonds with the self-serving goal of
"protecting the annual payouts made by major tobacco companies." Heaven forfend a tobacco company should go out of business. According to a March General Accounting Office report, 54% of the
$11.4 billion that states will receive this year from the settlement will be spent on budget shortfalls; 17% on treating smoking-related illnesses;
and a meager 2% on tobacco prevention. ...The Bush Administration, sad to say, hasn't shown much better leadership on the issue. Perhaps that's because it's been busy with a separate shakedown of the industry.
It was President Clinton's Justice Department that originally sued tobacco companies in 1999 after Congress nullified federal claims to the state windfall. But five years later, the bad decision to continue the
litigation belongs to the Bush White House and U.S. Attorney General John Ashcroft. ...this suit is by now no more about tobacco companies behaving badly than it once was about recouping medical costs. This is
about politicians trying to raise $280 billion by litigating what would amount to a tax hike on smokers. By funneling this tax hike through the
courts instead of the legislature, the government gets the benefit of more revenue without elected officials having to risk the political costs
of voting for higher cigarette prices. This is a clear abuse of the system, and coming from a President who likes to campaign against frivolous lawsuits, it also smacks of hypocrisy.
Tuesday, July 20, 2004 ~ 11:57 a.m., Andrew Quinlan Wrote: The Community Action Program, the War on Poverty's first (and worst) initiative, rests on a bizarre circularity in reasoning: that the poor must
become active in improving their lot by demanding more and better services and transfer payments of which they are the passive recipients. As a practical matter, the most spectacular action the program took
was the protracted mau-mauing of New York City's welfare offices, which resulted in loosened eligibility requirements, fatter welfare payments, and a huge expansion of the welfare rolls. This campaign
went a long way to destigmatizing welfare and establishing it as a right, as if it were reparations for victimization. In this way, Community Action contributed mightily to the long-term dependency that became a
defining, and debilitating, feature of underclass life. So too with another War on Poverty creation, the Legal Services Corporation, designed to
use the courts to change "the system." LSC tirelessly sued to raise welfare payments and expand eligibility -- so much so, to take only one
example, that a San Francisco affiliate boasted that its efforts had more than doubled California's welfare rolls between 1968 and 1973 and had
hiked the average grant by a third, costing the state over a quarter of a billion dollars. Erasing the distinction between the deserving and the
undeserving poor, LSC successfully sued to have the drug addiction and alcoholism of many of its clients declared a disability, qualifying them
for payments under the government's SSI disability insurance scheme, which thus often became a subsidy for vice. And LSC was equally successful in keeping public-housing tenants from being evicted when
family members dealt drugs or even murdered neighbors, making the projects increasingly anarchic for law-abiding residents.
Tuesday, July 20, 2004 ~ 11:23 a.m., Dan Mitchell Wrote: Hong Kong has retained the highest rating for economic freedom (8.7 out of 10), followed closely by Singapore (8.6 out of 10) in the latest
Economic Freedom of the World survey conducted by free-market think-tank, The Cato Institute. The United States tied for third place (8.2 out of 10) with New Zealand, whilst Switzerland, the United
Kingdom, Australia, Canada, Ireland, and Luxembourg rounded out the top 10. ...Botswana's ranking of 18th was by far the best among continental sub-Saharan African nations, the survey revealed, whilst
Chile, with the best record in Latin America, was tied with four other nations, including Germany, at 22nd. Other large economies achieved the following scores: Japan and Italy, 36th; France, 44th; Mexico, 58th;
India, 68th; Brazil, 74th; China, 90th; and Russia, 114th. ...The survey found that nations in the top fifth of the economic freedom ranking have an average per capita income of $26,100, compared to $2,800 for
countries in the bottom fifth. It also revealed that nations with greater economic freedom attract almost $11,000 of investment per worker, compared to $845 per worker in the most restricted economies.
Tuesday, July 20, 2004 ~ 10:03 a.m., Dan Mitchell Wrote: Austrian finance minister Karl-Heinz Grasser is calling for a bonus to be given to those countries that maintain budgetary discipline. ...He
suggests that those countries who stick to the rules - which demand that budget deficits be no greater than three percent of GDP - be rewarded.
"The EU could reward these countries with higher money for research", says the finance minister.
Monday, July 19, 2004 ~ 5:41 p.m., Dan Mitchell Wrote: ...the Russian Academy of Sciences (RAS) sent a list of questions to the UN's Intergovernmental Panel on Climate Change (IPCC), probing the
science of global climate change, as well as the potential impacts of actions designed to mitigate man's impact on the climate. The IPCC never replied. Despite the snub, the Russians continued to promote
scientific debate. In May, the RAS held a three day "Council Workshop" with 28 well-known experts, most of them academicians, in which they
debated all aspects--including science and policy--of the climate change issue. They concluded that there was a lack of scientific basis to many of
the claims on climate change reported in the popular press and on the costs of Kyoto Protocol, the treaty designed to regulate climate change. ...the British government, a firm supporter of the Kyoto Protocol,
suggested a high level delegation of scientists visit Moscow to discuss their views with the RAS. The Russians accepted, but also invited some
of those respected academics who are skeptical of the current alarmism over climate change. These included MIT's Richard Lindzen (who raises significant question about the current modeling of clouds used by the
IPCC), the Pasteur Institute's Paul Reiter (who challenges the notion that temperature increases will lead to more insect-borne disease), and Nils-Axel Morner of Stockholm University (who doubts evidence of
sea-level rise). The Russians sent a program to the British. The British objected to the program; in particular they were reluctant to participate
with several of the skeptics. ...It is especially shameful of the British to attempt limiting debate in a country that had science suppressed far too
often in the past. Doesn't Sir David remember Lysenkoism? Andrei Illarionov says he was "shocked" by the British attempts at "censorship."
Monday, July 19, 2004 ~ 4:17 p.m., Dan Mitchell Wrote: The root cause of Medicaid's problems is that the program is replete with perverse incentives from top to bottom. Every entity and individual
from the federal government, through state capitals, providers, all the way down to the patient not only has no interest in providing and consuming care efficiently, most are actually rewarded financially for
doing so inefficiently. ...The federal match that states receive is openended. No matter how much a state spends on Medicaid, the federal government will add on the pre-determined match rate. This
creates strong incentives for states to not only spend more on Medicaid, but also to be very creative with what constitutes "Medicaid" spending
so that they can maximize their match. A veritable army of highly paid lawyers, lobbyists, and consultants helps them do it. ...Medicaid unwittingly encourages patients to utilize high-cost emergency rooms
for routine (or what should have been routine) visits instead of a primary care doctor. If the cost to patients for ER use is nothing or close
to nothing, then it makes sense to visit an ER where appointments are not required, attention is immediate, and transportation via ambulance
is free. ...True Medicaid reform will not come until policymakers grasp the need to change the program's inherent perverse incentives. One way
this could be done is for Congress to block-grant the program in order to eliminate states' incentives to game the federal match. The other way
is to put dollars in the hands of patients, thereby tapping into the free market for medical goods and services, and the natural creativity and resourcefulness of consumers with their own money at stake.
Monday, July 19, 2004 ~ 12:30 p.m., Andrew Quinlan Wrote: Democrats aren't amused by Gov. Arnold Schwarzenegger's use of the mocking term "girlie men" to describe some lawmakers, although a
spokesman for the governor said no apology would be forthcoming. Schwarzenegger dished out the insult at a rally Saturday as he claimed Democrats were delaying the budget by catering to special interests.
Democrats protested that the remark was sexist and homophobic. "If they don't have the guts to come up here in front of you and say, 'I don't
want to represent you, I want to represent those special interests, the unions, the trial lawyers ... if they don't have the guts, I call them girlie
men," Schwarzenegger said to the cheering crowd at a mall food court in Ontario. ...Democrats said Schwarzenegger's remarks were insulting
to women and gays and distracted from budget negotiations. State Sen. Sheila Kuehl said the governor had resorted to "blatant homophobia."
Monday, July 19, 2004 ~ 11:04 a.m., Dan Mitchell Wrote: This week I am introducing new legislation that empowers workers with the freedom to choose a large personal account option for Social
Security, with no benefit cuts or tax increases of any sort, now or in the future. Through these large personal accounts, the bill would increase
future retirement benefits and cut future taxes for all workers. ...The plan maintains a strong safety net, as the accounts are backed by a federal guarantee that workers would receive at least as much as Social
Security promises under current law. The plan is voluntary. Anyone who chooses to stay in traditional Social Security would receive the benefits
promised under current law. Survivors and disability benefits would continue as under the current system. The proposal achieves solvency without benefit cuts or tax increases because so much of Social
Security's benefit obligations are ultimately shifted to the accounts. In fact, the official score of the chief actuary shows that ultimately, instead
of increasing the payroll tax to over 20%, as would be needed to pay promised benefits under the current system, the tax would be reduced to 4.2%, enough to pay for all of the continuing disability and survivors
benefits. This would be the largest tax cut in U.S. history.
Monday, July 19, 2004 ~ 10:55 a.m., Dan Mitchell Wrote: The Office of Thrift Supervision July 16 broke ranks with other federal bank regulators that have been developing amendments to Community
Reinvestment Act regulations by increasing the minimum asset threshold for thrifts that must undergo an extensive compliance examination from $250 million to $1 billion. The move drew strong negative reactions
from community groups, who called for a congressional response. ...In announcing its actions the OTS released a statement indicating that it
had acted in part to help reduce the overall regulatory burden for small thrifts that must comply with new anti-money laundering standards. The agency's "intent is to reduce the existing CRA examination and
reporting burden on the affected savings associations in order for these institutions to be able to dedicate scarce resources in areas requiring greater attention, chief among these being implementation of
anti-money laundering programs and Bank Secrecy Act compliance initiatives," the statement said. [America's Community Bankers], which had advocated the $1 billion small bank CRA exam standard,
applauded James Gilleran, director of the OTS, for parting ways with the heads of the other major bank regulators.
Monday, July 19, 2004 ~ 10:19 a.m., Dan Mitchell Wrote: Most of the financing for Social Security comes from deductions from workers' earnings and taxes on employers' payrolls. Closing the
financing gap means raising tax revenues or lowering benefits in one form or another. But that doesn't mean we have to raise payroll tax rates across the board; nor do we have to do radical surgery that would
alter the nature of the program....workers and employers don't pay Social Security taxes on any individual earnings over $87,900 a year ... we should boost the cutoff point by 2 percent more each year than
would occur under current law ...If the [death] tax is kept in place at the 2010 level (rather than being completely eliminated, as President Bush proposes), the revenues, if earmarked for Social Security, would
reduce the Social Security financing gap ...instituting a flexible payroll tax rate that would take effect later... This failsafe provision would be
activated automatically if Congress neglected to adjust revenues and expenses to changes in the estimates.
Monday, July 19, 2004 ~ 9:40 a.m., Dan Mitchell Wrote: In a major decision that turns obesity from a personal failure to a medical problem, Medicare announced Thursday that it would remove
barriers to covering anti-obesity treatments after 40 years of saying fat was not an illness and not covered. ...HHS officials say they can't
predict what this will cost Medicare because they don't know yet what it will be asked to cover.
Sunday, July 18, 2004 ~ 10:56 a.m., Dan Mitchell Wrote: One of the most famous moments of Margaret Thatcher's tenure as British prime minister was at the 1984 Fontainebleau summit, where she
secured the U.K.'s EU budget rebate after announcing: "I want my money back." The Iron Lady insisted she would not stand for British taxpayers being forced to subsidize continental farmers. ...If
"integration" were the real purpose of the EU budget, perhaps a case for "solidarity" could be made. But as usual, "solidarity" for Europe
turns out to be solidarity with French interests. The bulk of the EU's budget -- over 40% -- goes to fund agricultural subsidies. And the lion's share of that money goes in turn to French farmers. The EU's net
contributors -- Britain, Holland, Germany and Sweden -- announced in February their frustration with being made to fund others' special interests, and demanded the EU budget be capped at 1% of European
gross national income (GNI). If the commission wanted to spend more for one purpose, they said, it should tighten its belt elsewhere. Telling a
bureaucracy to cut back on spending other people's money, however, is asking it to forego its natural instincts. So instead the commission is
trying to raise a furor over Britain's €4 billion ($4.95 bn) annual rebate as a smokescreen for an increase in the EU budget to €160 billion a year from the €100 billion it currently spends.
Saturday, July 17, 2004 ~ 11:20 a.m., Dan Mitchell Wrote: Perhaps more than any other structural market reform unfolding today in Russia, pension privatization epitomizes both the enormous progress
achieved over the past decade and the equally huge obstacles still ahead on the road to "civilized" liberal capitalism. ...Along with the 13-percent
flat income tax and the privatization of agricultural and urban land, making a portion of the mandatory pension deduction the personal property of the worker and investing it for profit was a key item on the
list of structural market reforms that President Vladimir Putin set out to accomplish in his first term in office from 2000 to 2004. The government had outlined the reform by the second half of 2000, and in
February 2001, in nationally televised comments, Putin declared that "the current pension system has outlived itself." Four months later the
Duma approved the first three reform bills amidst a walkout by the Communist deputies and a protest demonstration by leftists outside the parliament building. Because of the extremely sensitive politics of the
reform, it was not until the summer of 2002 that the Duma passed the long and detailed federal law on a new pension system, and not until the fall of 2003 that implementation mechanisms and instruments were
finally approved. ...Yet there are many hurdles to overcome before such visions become reality. To begin, liberal critics find the reform excessively cautious. The 6-percent maximum accumulation fixed by the
Russian government is dangerously close to the minimum below which the funded system becomes "cost-ineffective." While still higher than in
most of Western Europe (let alone the United States, where no part of the Social Security tax may be privately managed), 6 percent is considerably lower than in Kazakhstan (10 percent of wages) and
Poland (9 percent), countries on whose 1998 and 1999 reforms the Russian privatization is closely modeled.
Friday, July 16, 2004 ~ 5:50 p.m., Dan Mitchell Wrote: The Latvian government has announced that it intends to reduce its corporate tax rate to 12.5%, which would bring it on a level with
Ireland, which currently has the lowest company tax rate in the European Union other than Cyprus...the change would not, however, take place for around two years. The news has been received with some
consternation in Ireland, with some observers expressing concern that lower business costs in the new EU member state could attract firms away from the Republic.
Friday, July 16, 2004 ~ 11:30 a.m., Andrew Quinlan Wrote: ...a new study by Stuart Anderson of the National Foundation for American Policy reminds us that the contributions of skilled
foreign-born professionals and their offspring are no less important to the U.S. Without them the country would be hard pressed to maintain its
world-wide advantage in such fields as math and science. The report, titled "The Multiplier Effect," will be released on Monday and available
at www.nfap.net. Here are some highlights: More than half of the engineers with Ph.D.s working in the U.S., and 45% of the nation's computer science doctorates, are foreign-born. Children of immigrants
comprise 65% of the 2004 U.S. Math Olympiad's top scorers (13 of 20) and 46% of the U.S. Physics Team (11 of 24). At this year's Intel Science Talent Search, which recognizes the nation's top math and science
students, 60% of the finalists and seven of the top 10 award winners were immigrants or their children. Last year, three of the top four awardees were foreign-born. ...our economy benefits substantially from
immigration, in particular from H-1b visa recipients and their children. Any policy that would depress the influx or close off our borders altogether is not in America's long-term interest, especially in a world
where economic growth and competitiveness will depend above all on human capital.
Friday, July 16, 2004 ~ 10:19 a.m., Dan Mitchell Wrote: Critics in Congress say that strides have been made in the past three years to interrupt funding flows and that coordination among agencies
has improved. But because underground groups are finding ever more evasive ways to maneuver and to disguise assets, the problem remains critical. Charles Intriago, a former prosecutor who publishes
Miami-based Money Laundering Alert puts it bluntly: "Bottom line: It's a piece of cake [for a terrorist or other criminal] to move $10 million
into this country." ..."There's no meaningful guidance from government for the financial industry on how to detect and report terrorist
financing," said Joseph M. Myers, a lawyer who in January stepped down as a career staffer on the White House's National Security Council, where he was the day-to-day coordinator among various
federal agencies on the terrorism financing issue. ...John Byrne, head of compliance for the American Bankers Association, said even if Social
Security numbers could be easily verified, tracking terrorist dollars would still be hard. He points out that the men involved in the 2001 attacks used their real names to open bank accounts, and that the
money they shuffled around involved relatively tiny amounts of cash and seemingly ordinary transactions. "Terrorist financing cannot be
detected by banks," he said. "It's virtually impossible without intelligence from the government." ...The banking industry -- and Aufhauser -- have long complained that FinCen does little with the
millions of suspicious activity reports financial institutions are supposed to file, and that there is insufficient use of computer technology to
highlight troubling transactions. "Much of the information . . . is merely lodged like a book on a library shelf without a card-catalogue," said
Aufhauser in congressional testimony earlier this year. "In the absence of an express and pointed request from law enforcement, the information remains unexploited. ...In addition to suspicious activity
reports, which have no dollar threshold and are required whenever a transaction seems strange, banks also must file currency transaction reports for most cash transactions of $10,000 or more. The banking
industry wants to increase the threshold to $20,000, saying inflation has made the current amount too low. About 13 million currency transaction reports were filed last year. The ABA's Byrne and bank
regulators say the majority are useless as law enforcement tools. ...To U.S. bank regulators at the Fed, the FDIC and the comptroller's office,
well-publicized cases such as UBS, Hudson Bank and Riggs are isolated cases of banks unwittingly being used by criminals.
Friday, July 16, 2004 ~ 9:45 a.m., Dan Mitchell Wrote: But Fan and Fred don't have to complain themselves that HUD is making them lend too much to the poor. They can get still other
Members of Congress to do it instead. One such letter we've seen, from Republican Gary Miller of California, asks HUD Secretary Alphonso
Jackson "to reconsider" the "proposed rule that would increase the housing goals" of Fannie and Freddie. The letter frets that the rule
"could skew mortgage markets, resulting in a number of unintended consequences" -- i.e., lower profits. Simply put, Fan and Fred and their
supporters are trying to have it both ways: pretending that the companies are tribunes of the poor, even as they use their implicit subsidy to pad their bottom lines and raise their stock price for private
investors. Do the Members of Congress realize how foolish they look? Republicans like Mr. Miller betray their market principles and embrace
subsidies to please the home-builder and Realtor lobbies that are in bed with Fannie. And Democrats invoke the poor even as most of the federal subsidy they want to protect merely helps the rich get richer.
Friday, July 16, 2004 ~ 8:30 a.m., Dan Mitchell Wrote: For fiscal conservatives, the choice this election could hardly be more depressing. In the Republicans' corner is George W. Bush, who presides
over the most bloated federal budget in US history. Bush's profligacy has left in tatters the traditional GOP claim to fiscal rectitude. He has
uncomplainingly signed into law every pork-stuffed appropriations bill sent to him by Congress. He has flooded the government's books with red ink. And he has embraced new schemes for draining the Treasury,
including the largest expansion of the welfare state in decades -- the prescription-drug entitlement, which will cost, over the next decade,
more than half a trillion dollars. ...The Democratic standard-bearer has committed himself to dozens of costly campaign promises -- everything from expanded Amtrak service in rural areas to a new program for
preventing childhood obesity to $50 billion in additional aid to the states. According to the National Taxpayers Union Foundation http://cf.townhall.com/linkurl.cfm?http://www.ntu.org/ , Kerry's budget
proposals would add a breath-catching $226 billion to the federal budget in the first year of his presidency. Over a four-year term, they
would cost more than $621 billion -- a tab that would have to be paid either with steep new taxes, or by taking the government even more deeply into debt. The 2004 presidential race pits a big-spending
Republican Tweedledee against a big-spending Democratic Tweedledum. ...Bush's tax cuts aren't driving the deficit. Bush's reckless expenditures -- for which John Kerry, as a member of
Congress, is partly responsible -- are. The only way to stanch the red ink is to choke off extravagant federal spending. Alas, that is the one
thing that neither Tweedledee nor Tweedledum has any intention of doing.
Friday, July 16, 2004 ~ 6:30 a.m., Dan Mitchell Wrote: ...according to the proposal, "the EU and national VAT should appear as separate taxes on the invoices or receipts". ...And today's proposals
recognise that "the pace of progress towards harmonisation and ... the introduction of a new fiscal resource will depend on the underlying
political will". Brussels also notes, "a fully tax-based system is not realistic at this stage of EU integration and therefore not proposed".
Nevertheless, the Commission intends to draw up a roadmap "with a view to the introduction by 2014, of a genuine fiscal own resource". Other tax measures suggested in today's plans include giving the
Commission a share of energy taxes and a portion of corporate taxes.
Friday, July 16, 2004 ~ 4:07 a.m., Dan Mitchell Wrote: The Irish government decided on Wednesday (14 July) to push for Irish to become an official language of the European Union. ...If the status
were to be changed, it would join 20 other official languages of the EU. This would mean MEPs would have direct translation in all committee and plenary meetings in the European Parliament. However, there is
likely to be some resistance to the move as the EU is already struggling to meet its translation commitments since ten new countries joined the EU on 1 May bringing nine new languages with them.
Thursday, July 15, 2004 ~ 1:00 p.m., Dan Mitchell Wrote: ...when presidential candidate Kerry talked to the Chronicle editorial board, he said that he would not ask the Senate to ratify Kyoto. Now,
the Democratic Party has dropped support for Kyoto (a plank in the 2000 party platform) from the initial draft of the national platform for 2004. ...While Europeans generally see President Clinton as supporting
Kyoto -- after all, his administration signed the pact -- Clinton never sent the treaty to the Senate for ratification. Hence, it was never official
U.S. policy. More important, when Clinton left office, emissions were 14 percent higher than 1990 levels. Clearly, Clinton was never serious about meeting the Kyoto goals. Clinton, no fool, knew how compliance
with Kyoto would damage the U.S. economy. ...Maybe it is because Kyoto is more about hot air -- bashing America's big cars and affluence -- than it is about greenhouse gases.
Thursday, July 15, 2004 ~ 12:49 p.m., Dan Mitchell Wrote: Congressman Young admits that he opposed proposals for reform of the federal budget process that came to the floor of the House of
Representatives for several votes last month. But he denies that any of his subcommittee chairmen threatened the supporters of reform with the
loss of federal projects in their districts to get them to change their votes. ...As to Mr. Young's complaint that it is "preposterous" that
budget process reform is a fight for the soul of the Republican Party, that's really a matter of opinion. But we'd bet that most Republican voters would agree that when GOP leaders care more about their own
prerogatives than about reducing the size of government, the party is in danger of abandoning what it at least likes to claim is a core principle.
Thursday, July 15, 2004 ~ 12:05 p.m., Dan Mitchell Wrote: The debate over the burden of funding European Union programs for the next seven years hit a fevered pitch July 14 when the European
Commission put forward a plan that would require the United Kingdom to nearly double its contribution to the $100 billion EU annual budget and replace Germany as the bloc's biggest paymaster. In addition, it
would mean that the United Kingdom would have to pay five times as much as France does to the EU budget. ...Reflecting the overwhelming opposition to the proposal in their nation, the two British commissioners
in the EU executive body voted July 14 against the proposal. The rest of the 35-member Commission voted in favor. ...France's net contribution is minimal because it receives so much in EU agricultural subsidies.
Thursday, July 15, 2004 ~ 11:22 a.m., Andrew Quinlan Wrote: The minimum wage was increased from $2.65 to $2.90 in January 1979 and to $3.15 in 1981. The percentage of hourly wage workers earning
less than the minimum reached 5.6 percent by 1979 and 6.8 percent in 1981. The unchanged $3.35 minimum wage gradually became less burdensome as wages and prices rose during the strong 1983-89
expansion, so that by 1989 the percentage earning less than the minimum had fallen to 2.2 percent. But the minimum was then increased to $3.80 in April 1990 (and to $4.25 a year later) and the percentage
earning less than the minimum jumped to 3.8 percent in 1991. The economy was in recession during part of 1981 and 1991, however, so we cannot be entirely certain the increased minimum wage was the
main culprit. The effect of the most recent rise in the minimum wage is harder to ignore (although Kerry nonetheless ignores it). The minimum
wage was increased to $4.75 in October 1996 and to the current $5.15 a year later. What happened? The percentage of workers earning less than the minimum wage jumped from 2.5 percent (1.7 million) in 1995
to 4.2 percent (3 million) by 1997. The percentage of teens working for less than the minimum rose from 7.2 percent to 19.8 percent. ...Those displaced from job opportunities by a higher minimum wage have
another option: They often can and do work for less than the minimum wage. A higher minimum wage reduces the number of such jobs that are offered, leaving a larger number of low-wage job-seekers competing for
jobs that pay less than the minimum wage. ...Cutting off the lowest rung on the ladder of opportunity may please some members of labor organizations who stand much higher on the ladder, because it reduces
future competition for better jobs. But to describe an increased minimum wage as a compassionate gesture is the opposite of its most obvious effect. In reality, Kerry's proposal to raise the minimum wage to
$7 an hour would shove hundreds of thousand of young and unskilled American job seekers into dead end jobs that pay less than the minimum.
Thursday, July 15, 2004 ~ 11:03 a.m., Dan Mitchell Wrote: French President Jacques Chirac launched strong criticism July 14 of the European Central Bank, stating that its focus on controlling
inflation has been hurting economic growth opportunities across the European Union... "The European Central Bank cannot have price
stability as its sole and unique objective," Chirac said during a televised interview held as part of France's annual Bastille Day celebrations.
"This is one requirement, ... but there is also growth, and the management of European public finances, [which] depends on growth," Chirac said. ...European financial management policies focused on
ensuring price stability, rather than boosting economic growth, are "brutal," Chirac said, and in need of revision. By way of contrast, he
noted that the United States Federal Reserve "under the eminent direction of Mr. [Alan] Greenspan," has not hesitated to "take the necessary measures" to boost growth.
Thursday, July 15, 2004 ~ 10:30 a.m., Dan Mitchell Wrote: This achievement was also in part the result of spending restraint. Although budgetary outlays grew rapidly during the first years after the
crisis, the government was remarkably successful in holding down expenditure relative to GDP during 1999 2003. General government expenditures as a share of GDP are now around ten percentage points
below pre-crisis levels, but public service provision has not deteriorated, and wage and pension arrears have all but disappeared. The economic growth of the last five years has had a direct, positive impact on incomes and employment. By 2004, real wages and real
disposable incomes were well above their pre-crisis peaks, while the unemployment rate had fallen from over 13 per cent in 1998 to around 8 per cent. As a result, the proportion of the population living on
incomes below the officially defined subsistence minimum has fallen by roughly one-third since 1999.
Thursday, July 15, 2004 ~ 9:12 a.m., Dan Mitchell Wrote: A report by the World Economic Forum ranked the quality of education in Mexico 74th out of 102 nations surveyed, just behind Cameroon.
...Many Mexicans blame their teachers, or more precisely the National Education Workers Union, which represents 1.3 million educators. The trade union, the largest in Latin America, has created what critics
describe as a monstrous system of perks and patronage, including a practice that allows teaching positions to be inherited and sold for cash.
"It is a corrosive power," said Carlos Ornelas, an education scholar who has written extensively about the union. He said the organization's
might is behind the particularly short elementary school day -- only four hours of instruction -- and the lack of public information about how
individual schools are performing. The union also holds veto power over a curriculum that is handed down from generation to generation.
Wednesday, July 14, 2004 ~ 9:45 p.m., Dan Mitchell Wrote: The importance attached to social justice ("the rights of the poor man") is something peculiar to Europe: the development of the welfare state,
the intensity of fiscal redistribution are features specific to Europe. Taxation averages 42% of GDP in Europe, ranging between 38% and 53% depending on the Member State; it is only 28% in the United States
and Japan, ten points lower than in the least redistributive European State.... The European model ...prefers sustainable development to productivist growth. ...The globalisation of economic flows is an acute
problem for the European model of development: when regulation - one of its features, with such things as minimum wages, social protection and environmental standards - becomes too heavy, economic flows flee
Europe. To attract investments, European countries are tempted to engage in a fiscal and social competition which can end up with them abandoning the European model in favour of a more liberal [in the
European free-market sense] model. This competition has on occasion taken the alarming turn of organising fiscal and social dumping, with the development of tax havens for multinationals within the European
countries themselves...finding the way back to growth... means above all ensuring that the Lisbon strategy is implemented by giving it teeth:
investing in research, investing in higher education... The fundamental idea is to bring about a massive increase in budgetary spending on the
future. It also involves giving the Union an active industrial policy. ...remedial action is still at the heart of the European model: ...the creation of a European minimum income, would help to attenuate the
negative perception of Union action in social matters. ...professional social security could become the first European social right. ...A political Europe will have a cost: it cannot be deployed with unchanged
budgetary resources of less than 1% of European GDP. The Community budget needs to grow gradually beyond the own resources ceiling (1.24% of European GDP), which should be removed. These additional
resources will come in the first instance from transfers from the Member States. But they will also require the introduction of a first European tax: a supplementary company tax could be a good solution.
Wednesday, July 14, 2004 ~ 7:30 p.m., Dan Mitchell Wrote: Immigrants from Mexico and the Dominican Republic, raising their children in the battered neighborhood of Bushwick, they were the people
bilingual education supposedly serves. Instead, one after the other, they condemned a system that consigned their children to a linguistic ghetto,
cut off from the United States of integration and upward mobility.... Five years earlier, in the rectory of another church only a few blocks away, another group of immigrant parents voiced the identical
complaints about bilingual education - that the public schools shunted Latino children into it even if those pupils had been born in the United
States and previously educated in English, and that once the child was in the bilingual track it was almost impossible to get out. An association
of Bushwick parents, virtually all of them Hispanic immigrants, had gone as far as suing in State Supreme Court in a futile attempt to reform the bilingual program in local schools. ...The foes of bilingual
education, at least as practiced in New York, are not Eurocentric nativists but Spanish-speaking immigrants who struggled to reach the United States and struggle still at low-wage jobs to stay here so that
their children can acquire and rise with an American education, very much including fluency in English. ...As a candidate for mayor, Michael R. Bloomberg assailed the status quo in bilingual education and called
for its replacement with English-immersion classes. His pledge rested on firm ground. Reports commissioned by Chancellor Ramon Cortines in 1994 and Mayor Rudolph W. Giuliani in 2000 concluded that children
qualified for mainstream classes more rapidly coming from English as a Second Language programs than from bilingual ones. ...Michael Gecan, a national organizer for the Industrial Areas Foundation, [stated]
"...we've been concerned about the bilingual effort. This is a large vestige of the old school culture. It remains in the system. And it's
intensively guarded by the local politicians and the teachers' union."
Wednesday, July 14, 2004 ~ 4:24 p.m., Dan Mitchell Wrote: France is the worst European Union member state when it comes to implementing and abiding by EU single market rules with Germany,
Italy, and Greece just behind, the European Commission said July 13. ..."This is a disappointing performance that will make it ever harder for
the EU to improve its competitiveness and economic performance and match our main competitors such as the United States," said Commission official Sue Binns.
Wednesday, July 14, 2004 ~ 12:12 p.m., Dan Mitchell Wrote: The big issue in fiscal policy is how much a government is going to spend -- that is the key economic cost. How government spending will
be financed and the choices made between borrowing and taxation are only of secondary concern. ...The fixation with government borrowing and deficit rules, however, is a distraction from the much more
important questions of how much a government should spend and whether it will yield results that exceed the costs of the resources used. The EU's Economic Growth and Stability Pact has done little to curb
the level of public spending and the size of the public sector in the euro-zone. The European Central Bank estimates that government expenditure in the euro zone as a percentage of gross domestic product
hardly budged in recent years, still accounting for almost half of national income. And it is this level of government spending that is at the heart of so many of the structural problems that create slow growth
and high unemployment in Europe.
Wednesday, July 14, 2004 ~ 10:45 a.m., Dan Mitchell Wrote: In particular, Mr Barroso offered an olive branch to Socialist members of the parliament by insisting that "in my scale of values, social policy
comes way above economics". He added: "It will not be acceptable, as we push for more competitiveness, to change the social spirit of
Europe." ...Mr Barroso yesterday also rejected calls for sharp cuts in the proposed European Union budget, as advocated by the six biggest
net contributors. Following the EU's enlargement to 25 member states, he said cuts would send the wrong signal to the 10 newcomers.
Wednesday, July 14, 2004 ~ 6:09 a.m., Dan Mitchell Wrote: Pressing for a common EU corporate tax base, France and Germany have hinted that countries with low tax rates should receive limited
Brussels aid, piling on the pressure for countries like Estonia. ...it appears that Poland has now given its tacit backing. Polish Finance Minister Andrzej Raczko told the Journalists that harmonization is
necessary for business to run in Poland, Germany and France, adding, harmonisation "is an issue Poland also should be interested in". ...it was
Estonia that came directly into the firing line of French finance minister Nicolas Sarkozy who pressed the link between assistance and tax rates.
"I am thinking of our Estonian friends who have put their tax rate at zero. How can you ask for lots of structural funds and have a fiscal policy at zero. Who can understand that?"
Tuesday, July 13, 2004 ~ 10:38 a.m., Dan Mitchell Wrote: Senator Edwards talks about the need to provide health care for all, but that didn't stop him from using a clever tax dodge to avoid paying
$591,000 into the Medicare system. While making his fortune as a trial lawyer in 1995, he formed what is known as a "subchapter S"
corporation, with himself as the sole shareholder. Instead of taking his $26.9 million in earnings directly in the following four years, he paid himself a salary of $360,000 a year and took the rest as corporate
dividends. Since salary is subject to 2.9% Medicare tax but dividends aren't, that meant he shielded more than 90% of his income. ...Mrs.
Heinz Kerry's finances remain largely a closed book, since she has so far refused to release her tax returns. What we do know so far is that she
has prepaid $750,000 in federal taxes on $5.1 million in income for 2003 -- an effective tax rate of 15%. ...Even if one takes a conservative
estimate of her net worth, say $1 billion, an income of $5.1 million means a paltry return of just 0.5%. More likely, the majority of her
investment income is sheltered within trusts so that tax is deferred until she or her family actually wants to spend it. Again, perfectly legal, but
this is a luxury that the average middle-class professional working for a wage does not have. ...So when John Kerry and John Edwards say that
they want to tax the wealthiest Americans, let's be clear about what they really mean. They want to tax the most productive people at higher marginal rates and close loopholes for corporations, while they
themselves dodge taxes by exploiting loopholes they plan to preserve.
Tuesday, July 13, 2004 ~ 10:08 a.m., Dan Mitchell Wrote: ...too many teachers think they are doing black students a favor by feeding them grievances from the past and telling them how they are
oppressed in the present -- and how their future is blocked by white racism. These are the kinds of friends who do more damage than enemies. Why endure all the hard work, self-discipline and self-denial
that a first-rate education requires if The Man is going to stop you from getting anywhere anyway? People who have been pushing this line for years are now suddenly surprised and dismayed to discover that many
black students across the country regard academic striving as "acting white."
Tuesday, July 13, 2004 ~ 8:02 a.m., Andrew Quinlan Wrote: The underground economy results from many factors, including criminal activity. But the bulk of it arises from ordinary businessmen and
workers who are evading taxes and government regulations. The OECD downplays the importance of taxes and puts most of the responsibility on regulation. However, other studies have found that high tax rates
are the most important factor in stimulating growth of the underground economy. "In various surveys, the tax burden has always been identified
as the main cause for the growth of the shadow economy," according to Schneider and Enste. Their analysis found that a 10 percentage point increase in the tax burden would cause the underground economy to
rise by 3 percent of GDP. A Federal Reserve study found an even higher response, with an increase in the tax rate from 9.3 percent to 10 percent
leading to a 1.5 percent rise in underground output. A recent IMF study found that the composition of taxation was very important. High taxes on small businesses and the self-employed were most likely to lead to
underground economic activity. "Raising tax rates too high drives firms into the underground economy," the study concluded.
Tuesday, July 13, 2004 ~ 7:26 a.m., Dan Mitchell Wrote: According to reports, French Finance Minister, Nicolas Sarkozy has expressed opposition to suggestions that he should boost the country's
economy by cutting taxes. "In a period of economic slowdown, we automatically think of stimulating (the economy) by spending or by cutting taxes. These instruments, which have been tried and tested
before - we should not use them," he told the Senate.
Monday, July 12, 2004 ~ 2:22 p.m., Dan Mitchell Wrote: Germans are having to work longer hours. And not just Germans. The French, who in 2000 trimmed their workweek to 35 hours in hopes of
generating more jobs, are now talking about lengthening it again, worried that the shorter hours are hurting the economy. In Britain, more than a fifth of the labor force, according to a 2002 study, works longer
than the European Union's mandated limit of 48 hours a week. Europe's long siesta, it seems, has finally reached its limit - a victim of chronic economic stagnation, deteriorating public finances and competition
from low-wage countries in the enlarged European Union and in Asia. Most important, many Europeans now believe that shorter hours, once seen as a way of spreading work among more people, have done little to
ease unemployment. "We have created a leisure society, while the Americans have created a work society," said Klaus F. Zimmermann, the president of the German Institute for Economic Research in Berlin.
"But our model does not work anymore. We are in the process of rethinking it." ...Nearly all of these trends turned negative in the
1990's, as productivity growth rates collapsed, especially in comparison with the United States. For a decade, Europe has been stuck in a period
of chronic slow growth. ...To be sure, Europe's dogged pursuit of free time goes on. Sweden is undertaking a two-year study of the social effects of a 30-hour workweek - proving that Thorstein Veblen and his
theories about the leisure class still exert a bigger pull on the European imagination than Adam Smith does.
Monday, July 12, 2004 ~ 12:45 p.m., Dan Mitchell Wrote: For almost 20 years now Continental Europe has promised to introduce structural reforms, to get its economic act together and to contribute
adequately to global growth, but to no avail: Europe is still lagging behind and the most recent projections show that the euro zone is not pulling its weight in supporting the world recovery. ...Centralization,
government intervention, paternalism and dependability make what many Europeans call, often not without a sense of pride, a "social
market economy" as opposed to the "wild" American market economy. Appealing to "social markets" is also a convenient justification for the
inability to go after overprotected lobbies. ...Perhaps Continental Europe likes its "culture" of "social markets," with sluggish growth,
paternalistic government, extensive safety net, short work hours, the protection of insiders and a subsidized countryside. Maybe, may be not. One cannot help but feel a deep pervasive sense of dissatisfaction in
Europe, for the scarcity of opportunities, for excessive bureaucracy, heavy taxation and slow pace of innovation.
Monday, July 12, 2004 ~ 10:53 a.m., Dan Mitchell Wrote: An important and serious argument is going on in Washington about whether taxes on Americans' incomes should stay where they are or
dramatically rise, and whether government spending should continue its accelerating growth. We know what Democrats think. They despise tax cuts and believe government spending should be higher. Washington
Republicans, on the other hand, are unsure of themselves. They used to be for lower taxes and smaller government; now they seem to want bigger spending even if it means higher taxes, abandoning Reagan
conservatism for '60s liberalism. ...With the help of three liberal Republicans (Olympia Snowe and Susan Collins of Maine and Lincoln Chafee of Rhode Island), and one who should know better (John
McCain of Arizona), the Senate, with 51 votes, adopted a rule that if passed in the House will end all the Bush tax cuts and ensure that no
new ones are enacted. Pay as you go, or "Paygo," is a budgeting rule requiring any revenue lost as the result of a tax cut, or spent through
the enactment of new entitlement programs, to be paid for either by raising other federal taxes or reducing other federal entitlement spending. ...Paygo is simply a plan to raise taxes back to the pre-Bush
level (or higher) and make sure they are not reduced in the future. That enough Republicans would vote for Paygo to ensure Senate passage recalls third-party 1968 presidential candidate George Wallace's
suspicion that when it comes to money, "there's not a dime's worth of difference" between Democrats and Republicans. If the Paygo battle
allows that to become a truth, the Republican Party won't matter much any more.
Monday, July 12, 2004 ~ 9:40 a.m., Dan Mitchell Wrote: Europe's track record throughout the 20th century was one unbelievable disaster after another. European countries blundered their
way into two world wars -- from which every country involved emerged worse off than before, with a continent devastated and its people hungry amid the rubble. Both times American food fed them. The two
biggest ideological disasters of the 20th century -- Communism and Fascism -- were both created in Europe. Both of these blind fanaticisms
led to innocent civilians being killed by the millions, during peacetime as well as in wars. ...Like so many people who have been sheltered from
the harsh realities of life and not forced to stand on their own two feet, Western Europeans have been able to indulge themselves in illusions.
The most unrealistic of these illusions has been that we can just talk our way out of international threats with "negotiations," treaties and UN
resolutions. That approach was tried for two decades after the First World War. That is what led to the Second World War. France was the worst. In the 1920s, its foreign minister Aristide Briand negotiated
much-ballyhooed agreements renouncing war -- agreements that won him the Nobel Prize but did nothing to deter war. In fact, such things lulled peaceful countries into a dangerous complacency that
emboldened aggressor nations. France's record of cowardice and betrayal of its allies during the 1930s, was climaxed by its own surrender to Hitler after just six weeks of fighting in 1940. At the 11th
hour, France appealed to the United States, which was not in the war at that point, for military equipment -- that is, for the kind of "unilateral"
American intervention at which the French would sneer so often in later years.
Monday, July 12, 2004 ~ 8:10 a.m., Dan Mitchell Wrote: The Dutch EU presidency is pushing for a more flexible EU working time directive to be adopted before the end of its presidency in December. The EU working time directive, adopted in 1993, sets a
maximum of 48 working hours a week for employees in the EU. Several member states, among them the Netherlands, have had severe problems with the directive after the European Court of Justice ruled in 2000 and
2003 that time spent on call at the workplace constitutes working time. This means that doctors and firemen enjoying resting hours quickly reach the 48-hour maximum - causing huge extra expenses particularly
for public sector employers. ...The Dutch want a decentralised system whereby each member state to be able to decide for themselves what they define as working time, the Minister for Social Affairs Aart-Jan De
Geus said. Sunday, July 11, 2004 ~12:30 p.m., Dan Mitchell Wrote: ...the United States applies uniquely complex rules to the foreign activities of its corporations. These rules are so complex that, for
example, four-fifths of Dow Chemical's 7,800-page federal tax return relate to its foreign investments. ...the biggest item in the House and Senate bills is a tax cut for manufacturers, which would add a large
distortion to the tax code. The House bill would reduce the tax rate for manufacturers from 35 percent to 32 percent while the Senate bill would create a special deduction. That would increase tax code
complexity and put manufacturers into a separate lobbying camp less interested in overall tax reforms. Many other industries add great value to the U.S. economy such as financial services. Shouldn't tax policy
encourage growth in those industries as well? ...There is a better way. If the House and Senate can't reconcile their different bills, Congress
should start fresh with a simple across-the-board corporate tax rate cut. That would provide a direct competitive response to the recent decline
in tax rates around the world. The average corporate tax rate for the 30 major industrial countries has fallen from 38 percent in 1996 to just 30
percent today. By contrast, U.S. corporations face a rate of about 40 percent, including the 35 percent federal rate plus an average state rate of 5 percent.
Sunday, July 11, 2004 ~ 11:52 a.m., Andrew Quinlan Wrote: Too few government regulations are subjected to rigorous cost-benefit tests, even when required. Many government agencies do not take the
requirement seriously, act in good faith or present accurate data. The regulators have a strong incentive to underestimate the true costs of
their regulations. ...there is a solution. In recent years, Congress has established the right of "private course of action," whereby individuals
can sue an agency not adequately enforcing some civil rights or environmental laws. The courts have been empowered to compensate lawyers who prevail in these suits for the fees and associated litigation
expenses in order to encourage private enforcement of these laws. Congress should expand the right of "private course of action" to allow
any individual or group to sue an agency for issuing a regulation the benefits of which do not exceed the costs. If the private party is able to
prove, by a reasonable standard, that a regulation is not cost-effective, that party would be entitled to normal legal fees plus the fees of professionals who did the necessary technical work. The agency issuing
the faulty regulation should be required to pay the awarded fees out of its own budget. In addition, the agency would be required to withdraw the regulation or reissue it to operate in a cost-effective manner.
Sunday, July 11, 2004 ~ 9:32 a.m., Dan Mitchell Wrote: ...stricter emissions regulations clearly increase consumer energy prices and Clear the Air is hawking those which by its own admission are by
far the most expensive. If my utility bill increases, I'll grumble but I can afford it. You probably can, too. It's the poor who will suffer, especially
the elderly ones. They are most likely to turn off air conditioners during heat waves when the bills are the highest and their bodies can least adjust to the heat. Last August in France, a mind-boggling 15,000
people died during a single heat wave. By the standards of much of the U.S., temperatures weren't that high. But air conditioning is rare in France, even in hospitals and nursing homes. Why? Because taxes
pushed by the French equivalents of Clear the Air drove up energy costs.
Saturday, July 10, 2004 ~ 3:36 p.m., Dan Mitchell Wrote: The gun-control movement is in trouble internationally. From Britain to Australia to Canada, promises of lower crime rates from gun control
have turned into the reality of historic increases in crime. While the normal knee-jerk solution is to press for even more controls, once guns
are banned the explanation that the laws failed simply because they did not go far enough becomes almost humorous. ... Take the United Kingdom: with new data showing violent crime soaring, Britain's home
secretary announced legislation this month that would impose an outright ban on many toy guns. Britain has already banned just about every type of weapon that a criminal might want to use. Handguns were
made illegal in 1997, and nearly every other firearm (even BB guns) is now subject to a complex regulatory regime. ...The government just reported that gun crime in England and Wales nearly doubled in the
four years from 1998-99 to 2002-03. The serious violent crime rate soared by 64 percent, and overall violent crime by 118 percent. The violent crime rate in England and Wales now stands at twice the rate of
that in the United States. ...Meanwhile, violent crime in the United States has fallen much faster than in Canada, and murders in Canada have gone up slightly, while falling in the United States. ...The United
States also locks up many more criminals: nearly 500 out of 1 million Americans are serving time behind bars as compared to about 150 per 1 million in the other English-speaking countries. America, quite simply,
keeps more bad guys behind bars where they cannot commit crimes. Repealing gun control laws might not solve the crime problems in the United Kingdom and Australia overnight, but the exploding crime rates
(including gun crime) in countries that have banned all guns shows that we can add gun control to the list of government planning efforts that do not live up to their billing. Its failures have become too
overwhelming to ignore.
Saturday, July 10, 2004 ~ 12:15 p.m., Dan Mitchell Wrote: That sunny tourist town last year earned the dubious distinction of passing perhaps the most stringent "living wage" ordinance in the
country. It demands that businesses pay a minimum of $8.50 an hour, increasing to $10.50 by 2008. (The federal minimum wage is $5.15.)
Unlike "living wage" rules in about 100 other cities, Santa Fe's goes beyond public contracts and applies to any private business with more
than 25 employees. A labor-friendly state judge ruled against a business challenge to the ordinance last month, and the law is now in effect.
...The laws of economics suggest that the consequences will not be what this law's proponents expect. Companies with 30 or 35 employees will
lay off staff to get below 25. Others will let go of their least-skilled workers and demand more from those who remain. More than a few will leave town, or refuse to expand. The Santa Fe Chamber of
Commerce says it's already heard of eight businesses canceling plans to move to, or expand in, the city. The real wages of this policy, as everywhere it's been imposed, will be fewer lower-income workers with
jobs.
Saturday, July 10, 2004 ~ 11:35 a.m., Dan Mitchell Wrote: School choice has become such a potent issue in Colorado that anti-voucher votes can now earn you a primary opponent. Just ask
Mark Cloer, a GOP state representative from Colorado Springs who buckled under union pressure and cast the deciding vote against a voucher bill earlier this year. The incumbent is now facing a strong
pro-choice challenger with Republican establishment backing. "There are also going to be a number of Democrats who will have a hard time getting themselves re-elected unless they make election time
commitments to get a voucher bill passed," says Bob Schaffer, a GOP candidate for the U.S. Senate who also heads the pro-voucher Colorado
Alliance for Reform in Education. "Black pastors and Latino inner-city community leaders who are fed up with 70% minority drop-out rates in
Denver public schools will make certain of it." ...In the fall, Washington, D.C., will add its own a voucher program to a list that already includes
Cleveland and Milwaukee. Missouri, South Carolina, New Jersey and Utah are among the states currently considering tuition vouchers to help underprivileged children escape to better schools. Small cracks in
the edifice, perhaps. But cracks all the same.
Friday, July 9, 2004 ~ 4:11 p.m., Dan Mitchell Wrote: Simply put, the ICC will not recognize the constitutional rights we as Americans are guaranteed. And while Mr. Annan and his ICC
supporters criticized the Bush administration for trying to "undermine international law," the architects of the ICC were writing new
international laws to protect themselves. The "Agreement on the Privileges and Immunities of the International Criminal Court" — ratified with the assent of only 10 nations — provides the ICC immunity
from "every form of legal process." The "property, funds and assets" of the ICC "shall be immune from search, seizure, requisition,
confiscation, expropriation and any other form of interference." The ICC and its assets are "are exempt from all direct taxes" including local
taxes and customs. ICC members have declared themselves immune from "personal arrest or detention"; "legal process of every kind"; and
"immigration restrictions." In addition, the "salaries, emoluments and allowances" of the judges, prosecutor, deputy prosecutor and the
registrar of the ICC are "exempt from taxation."
Friday, July 9, 2004 ~ 1:00 p.m., Dan Mitchell Wrote: The Russian government is committed to lowering the country's tax burden and introducing a "stable and predictable" tax structure,
Deputy Finance Minster Sergei Shatalov told a Moscow conference July 8. ..."Taxation should be as simple as possible, and should not be excessive. We need to adapt legislation to European counterparts--our
courts will find themselves in a difficult situation without clear legislation," Shatalov said. Lowering taxes should improve Russia's industrial competitiveness, and over the next two years a number of tax
changes will be finalized, he said. While the tax burden was 35 percent of gross domestic product when reforms began, the figure has now fallen to 31 percent, he added. ...The Duma will continue discussing
amendments to the Unified Social Tax (UST), he noted. Employers pay UST, which includes social security, medical insurance, and pension payments, on behalf of employees. The reduction of UST effective Jan.
1, 2005, from 34.5 percent to 26 percent would encourage business to openly show salary schemes, he said, estimating that 35 percent of all salaries in Russia are currently paid off the books. Shatalov said the
reduction in UST at first would mean a major loss of funds to the federal budget, although the loss would be gradually compensated by legalization of salaries.
Friday, July 9, 2004 ~ 11:41 a.m., Andrew Quinlan Wrote: Edwards' specialty was suing when babies were born with brain defects, which he -- like other lawyers cashing in on junk science and gullible
juries -- blamed on the failure of doctors to have had those babies delivered by Caesarian section. Since then, Caesarian operations have increased greatly, but without reducing those birth defects that Edwards
and others had blamed on a lack of Caesarian deliveries. Studies validated by leading medical authorities, here and overseas, have found no such link between birth defects and a lack of Caesarian births.
Meanwhile, lawyers like John Edwards could laugh all the way to the bank. Like so many liberals who talk about "bringing down the cost of
health care," John Edwards has in fact been driving up the cost of medical treatment. "Defensive medicine," such as unnecessary
Caesarian operations, is not cheap. Defensive medicine protects doctors from slick lawyers far more than it protects patients. Senator Edwards
has already shown the same blithe disregard for facts as a politician that he showed as a lawyer. He has used the old liberal claim of "hunger
in America" during this year's primary campaign, even though studies show no such thing -- and in fact show obesity to be more common in the lower income brackets.
Friday, July 9, 2004 ~ 10:53 a.m., Dan Mitchell Wrote: A federal judge has ruled that the accounting firm BDO Seidman does not have to turn over dozens of confidential documents in its fight
against government accusations that it sold abusive tax shelters, giving the firm a partial victory. ...The documents are protected by rules governing the confidentiality of written communications between
lawyers and their clients, Judge Holderman wrote in his decision. Accounting firms have said that they are protected by such rules, known as attorney-client privilege, but the government has sought to challenge
claims to that privilege in its investigation into tax shelters. ...[The judge's] ruling contrasts with recent decisions in other tax-shelter cases
that have reinforced the government's efforts to compel firms to turn over scores of documents. In one case involving the government's investigation into the accounting firm KPMG, a federal judge in
Washington wrote in May that Brown & Wood's favorable opinion letters were "an orchestrated extension of KPMG's marketing machine" for abusive tax shelters.
Thursday, July 8, 2004 ~ 12:49 p.m., Dan Mitchell Wrote: ...opaqueness is quite ordinary in the parliament. If you look at the voting record, there is little evidence of specific votes cast by the MEPs.
Because roll-call voting is quite rare, the majority of votes are conducted by the show of hands or electronic voting, both untraceable methods. This is often used as a technique to avoid having to take
strong stances on issues that might later be revealed by opposing parties or candidates. ...One MEP believes his fellow members prefer to keep
their constituents in the dark. David Bowe, a 15-year veteran of the EU Parliament, says, "There is no systematic desire to let the general public
know what is going on in here. MEPs don't want their level of activities noted by the public."
Thursday, July 8, 2004 ~ 11:56 a.m., Dan Mitchell Wrote: ...leaked documents from the European Commission have revealed plans to end the UK's special budget rebate and make London the
biggest net contributor to EU funds. ...paying 0.51 percent of its GDP, compared to 0.35 and 0.31 percent for Italy and France respectively. The idea of losing the three billion euro rebate - famously won by the
then prime minister Margaret Thatcher in 1984 - will cause great concern in London. Current prime minister Tony Blair has vowed to defend the rebate and he knows that if Brussels is seen to be taking
money back from the British taxpayers, his battle to win over a sceptical public on the European Constitution will be even harder.
Thursday, July 8, 2004 ~ 10:34 a.m., Andrew Quinlan Wrote: ...common sense and the placement of the cameras not in the most dangerous intersections but rather in the most heavily traveled in order
to maximize fines, tells the story. It is all about money. ...The first study, by North Carolina A&T State University's Transportation Institute,
concluded after extensive analysis, that the 18 red light cameras in use on Greensboro thoroughfares may very well cause more accidents rather than fewer. According to the study, while wrecks overall were
found to be decreasing, their incidence at intersections with surveillance cameras was increasing. ...The other recent study analyzed the impact
of speed cameras in London, England, and found that over hundreds of locations at which the surveillance devices were employed, the number of accidents had increased rather than decreased. At many other sites
studied, accident rates remained the same.
Thursday, July 8, 2004 ~ 9:58 a.m., Dan Mitchell Wrote: The Hong Kong Securities and Futures Commission reported on Tuesday that total assets managed by funds in the city surged 80% in
2003 compared to the previous year's total. According to the figures, which include asset management and advisory businesses, in addition to private banking firms, total assets rose to HK$2.947 billion in 2003
from HK$1.635 billion in 2002. Within this total, licensed corporations reported HK$2.317 billion worth of assets and accounted for 79% of the total fund management business. ...The survey found strong interest
from overseas funds which amounted to HK$1.860 billion, representing 63% of the total assets in the fund management business.
Thursday, July 8, 2004 ~ 8:27 a.m., Dan Mitchell Wrote: Hungary's ruling Socialist Party revealed on Tuesday that it wants to increase taxes for the wealthy in order to pay for improvements in
welfare programmes ...Party officials announced at a news conference that they are seeking to reintroduce a capital gains tax, and to increase
the top rate of income tax on salaries above 6 million forints ($29,680) per year to 48% from the current level of 38%. Since suffering badly at the polls in the recent elections to the European Parliament, the
Socialist Party is seeking to reach out to its core working class vote, a policy reflected in earlier draft proposals promising a more "assertive leftist economic policy."
Wednesday, July 7, 2004 ~ 4:15 p.m., Dan Mitchell Wrote: As a unanimous "yes" from member states is needed for the constitution to become EU law, how would the Schroeder-Chirac axis circumvent a
British "no"? An attempt to formally expel Britain is doubtful. She has many friends -- "New Europe" -- that value her as an important
counterweight to the Franco-German bloc, and as a net contributor to the EU budget -- set to reach £6 billion ($11 billion) in 2006 -- is very much needed in the expanded EU of 25. Instead a deal might be made:
In exchange for Britain withholding her "veto" over the constitution and allowing the French et al to press ahead with their "core Europe,"
Britain would be allowed to negotiate a special place for itself within the EU -- for example continued access to the single market and the free movement for its citizens across Europe -- while the others pursue
greater integration.
Wednesday, July 7, 2004 ~ 10:45 a.m., Dan Mitchell Wrote: ...state and local authority over education has been gradually usurped by the federal government, which has no constitutional authority to run
or dictate to local schools. But as Washington has gradually claimed more power over education, the states have been able to exercise less and have been forced to succumb to increasing amounts of federal
regulation in exchange for federal dollars taken from its citizens in the first place. ...It's the "one-size-fits-all, we-know-what's-best-for-you-
Wednesday, July 7, 2004 ~ 2:22 a.m., Andrew Quinlan Wrote: Those who cannot remember the past are condemned to repeat it, so goes the adage attributed to George Santayana. That is a timely
admonition for Congress, which is about to consider a new version of an old - and failed - concept in dairy policy: the compact. ...Reps. John McHugh, Tom Reynolds, Bob Etheridge and Bernie Sanders have
introduced the so-called National Dairy Equity Act (NDEA). A Senate companion bill was introduced by Sens. Arlen Specter, Hillary Rodham Clinton, Jim Jeffords and Chuck Schumer. The proposal takes the futile,
and feudal, model of the expired Northeast Interstate Dairy Compact, mutates it and expands it nationwide at a cost of $2 billion annually. ...The results are predictable: enormous cost for consumers and
taxpayers, and economic chaos for dairy farmers. ...Congress would do well to study the history of the Northeast compact before taking seriously the NDEA. But if nothing is learned from that history lesson, a
bit of current events might put the NDEA plan in context. This enormous new subsidy program for milk producers is being proposed precisely as farm gate milk prices have hit a new record high, with retail
milk prices having reached $4 per gallon in some areas. ...This resurrected compact scheme essentially establishes a floor under this inflated price, but would deny consumers any benefit from potential
price decreases. Quite simply, the NDEA is not a good idea - now or ever.
Wednesday, July 7, 2004 ~ 1:35 a.m., Dan Mitchell Wrote: Speaking last week, Japan's new vice-finance minister, Koichi Hosokawa, reopened the debate surrounding a possible hike in the
country's consumption tax in a bid to help solve a growing fiscal crisis. ...Noting that Japan's debt represents more than 90% of its gross
domestic product, he warned: "I think we are in a critical situation as to whether Japan can afford to let its debt-ridden finances continue".
Therefore it is important that the public debate into the raising of additional revenues, particularly through a possible hike in the 5% consumption tax, should continue, Hosokawa told a regular press
conference. ...However, Prime Minister Junichiro Koizumi dismissed the suggestion out of hand and vowed not to increase consumption tax whilst he remained in office.
Tuesday, July 6, 2004 ~ 2:45 p.m., Dan Mitchell Wrote: The U.S. Constitution is based on the premise that we are a sovereign nation and we need not obey any power unless authorized in the
Constitution. The Europeans, on the other hand, are rapidly abandoning their national sovereignty in favor of an international bureaucracy called the European Union.... Clinton signed the International Criminal
Court treaty, which would have locked us into a global judicial order. He urged us to accept the Convention on the Rights of the Child, which would have set up a global committee to monitor the way parents raise
their children. Clinton and former Vice President Al Gore were big fans of the Kyoto Protocol to the Convention on Climate Change, which would have set up a global tribunal to control our energy use. Clinton
and first lady Hillary Rodham Clinton demanded the Convention on the Elimination of All Forms of Discrimination Against Women, which would have created a global commission of feminist "experts" to
regulate gender issues in our laws, customs, education and wages. Finally, the Convention on the Law of the Sea would have created an international seabed authority to control and distribute the mineral
riches under the seas. Each of these Clinton-supported treaties would have grabbed a big slice of our sovereignty, but fortunately they were never ratified. ...Our Declaration of Independence is, in essence, a
declaration of U.S. sovereignty. Freedom in the United States depends on it and on avoiding European mistakes. U.S. citizens must never accept any governing authority higher than the U.S. Constitution.
Tuesday, July 6, 2004 ~ 12:10 p.m., Dan Mitchell Wrote: Most of the people who come here, legally or illegally, undoubtedly do so just to better themselves, as immigrants have done for centuries. But
people who crossed an ocean to get here came here to become Americans, not to remain foreigners, much less to become America haters. The difference today is that organized activists and a
multicultural ideology that has become dogma among educators and the media combine to keep foreigners foreign in language, culture and allegiance. ...
Tuesday, July 6, 2004 ~ 11:27 a.m., Dan Mitchell Wrote: Silvio Berlusconi's tax-reform plan is, without doubt, the most sensible and ambitious reform proposal in Western Europe since Margaret
Thatcher's day. The Italian prime minister -- the head of what is now the longest-serving government in postwar Italy -- wants to reduce the
number of tax brackets to just two from five, and lower the top rate to 33% from 46%. That's the good news. The bad news is that Mr. Berlusconi has been talking up this reform since before he was elected
prime minister. He has trotted it out repeatedly since, but so far it has yet to get off the drawing board. ...it's hard to avoid the conclusion that
the odds against Mr. Berlusconi's making it through his electoral term have lengthened considerably in the last few days. To his credit, Mr.
Berlusconi now says he'd rather go down fighting for a "noble cause" -- supply-side tax reform -- than to abandon reform in order to hold his
increasingly fractious coalition together. We'd prefer to see him succeed, but we can't help but feel that he's made that more difficult, not easier, by waiting for a crisis moment to unfurl his standard.
Tuesday, July 6, 2004 ~ 10:07 a.m., Dan Mitchell Wrote: ...since March 2003, when the Department of Homeland Security became responsible for immigration and border patrol, 13 foreign
journalists were detained and deported in a similar manner in that year, all but one at the Los Angeles airport. The visa requirement itself and the treatment of journalists by American authorities are deemed
untenable by the American Society of Newspaper Editors and by Reporters Without Borders. Both organizations have sent letters of protest to Tom Ridge, who heads the Department of Homeland Security,
as well as to Secretary of State Colin L. Powell and Attorney General John Ashcroft. Possibly as a result of this concentrated action, Robert Bonner, the commissioner of Customs and Border Protection, recently
announced that journalists arriving without an I visa may be allowed a one-time entry but should be advised that they must apply for it for any
future journeys. ''We are an open society,'' Bonner declared, ''and we want people to feel welcome here.'' This claim could be disputed by American businesses, which have lost $30.7 billion in the last two years
because of visa delays and denials for their foreign partners and employees, according to a survey sponsored by eight business organizations.
Monday, July 5, 2004 ~ 4:15 p.m., Dan Mitchell Wrote: In 2001, almost half of the money US companies earned money outside of that country - 47 percent - was accounted for in offshore tax havens
such as the Cayman Islands, which has no corporate income tax, said Martin Sullivan, a former US Treasury Department economist, citing Commerce Department data. ...Coca-Cola, the world's largest
soft-drink maker, manufactures syrup in two Irish plants owned by Coke's Cayman-based subsidiary, Atlantic Industries. Coke, based in Atlanta, saved $500 million in US taxes last year by earning 63 percent
of its income through foreign subsidiaries, according to its 2003 annual report. Intel, the world's biggest computer chipmaker, uses a Cayman
subsidiary to run plants in Ireland, which has a 12.5 percent corporate income tax. Intel, using its offshore units, avoided $792.6 million in US taxes from 2001 to 2003, according to SEC filings.
Monday, July 5, 2004 ~ 2:37 p.m., Dan Mitchell Wrote: The new European Constitution will be signed in Rome on 20 November in the same palace the founding Treaty of Rome was signed in 1957, the
Italian prime minister has said. ...The original Treaty of Rome established the European Economic Community - which will be replaced by this new Constitution.
Monday, July 5, 2004 ~ 11:44 a.m., Dan Mitchell Wrote: Once upon a time, in a Congress far, far away, Republicans believed in smaller government. But you sure wouldn't know it from last month's
budget-reform fiasco on the House floor. On June 25, by an astonishing vote of 326 to 88, the GOP-controlled body rejected the Family Budget Protection Act, which would have removed the bias toward greater
spending inherent in the current Congressional budget process. Even among Republicans, the bill lost 131 to 88. The Members also nixed the Spending Control Act, a less ambitious bill that Budget Committee
Chairman Jim Nussle championed to impose spending caps, by a vote of 248 to 146. ...Republicans should understand that, principle aside, sooner or later they are setting themselves up for a political fall. If
Republicans won't campaign against spending to reduce the federal deficit, they will soon find themselves on the defensive on taxes. And if they ever vote for a tax increase, they can soon expect to find
themselves back in the minority.
Monday, July 5, 2004 ~ 10:15 a.m., Andrew Quinlan Wrote: American businessmen who've invested in China shrug off being called "Benedict Arnold CEOs" by Democratic candidate John Kerry, and
insist they aren't worried about what a President Kerry could do to international trade. It's not that they think his campaign pledges aren't
loopy. But they doubt that he has any serious intent to fulfill them. ...The fact that Mr. Kerry even compares U.S. businessmen who invest abroad
to Benedict Arnold, a general who defected to the English during the American Revolution and is known as the worst traitor in U.S. history, should give an indication of his mindset. Everyone I met here countered
that John Kerry has been mostly a free trader in his 16-year Senate career, which is true. But it might be foolhardy to ignore that lately he's
been pretty consistent in demanding that other countries adopt the red tape the U.S. has pushed to protect U.S. organized labor. He did it again just last week, when he repeated to a group of Hispanic
lawmakers in Washington that he would like to rewrite the North American Free Trade Agreement (Nafta). The fact that he has convinced himself that this goes down well among U.S. Hispanic voters
suggests he has really bought into the unions' protectionist demands. ...Notwithstanding the casual dismissals of Kerry stump speeches, it should give pause that Mr. Kerry, once a free trader, is now singing a
different tune. If he now believes that the rise of such countries as China and India threatens U.S. jobs and endeavors to counter that "threat,"
he could do damage to the international economy and make everyone worse off. It is always good to keep in mind the warning of the 19th century French liberal thinker Frederic Bastiat: "If goods do not cross
borders, armies will." Moreover, Mr. Kerry sounds like a maudlin protectionist, concealing his wish to cripple other countries' competitiveness under a cloak of concern for their labor and
environmental wellbeing. If you're going to be a protectionist, man, at least be an honest one like Pat Buchanan.
Monday, July 5, 2004 ~ 10:00 a.m., Dan Mitchell Wrote: Joaquin Almunia, the European Commissioner for Monetary Affairs, has expressed his interest in Franco-German plans to introduce an
EU-wide minimum corporate tax. Commissioner Almunia told Belgian paper l'Echo over the weekend that he favours a minimum tax for companies accross the EU. When asked whether an EU-wide minimum
rate would be a possibility, Mr Almunia replied, "from my point of view, that could be a solution". ...France, Germany and Sweden - countries
with corporate tax rates ranging from 35 to 40 percent - fear that companies will shift their investments away from their economies to the East. So they are keen to see minimal corporate tax levels in the EU.
..."Old" member states such as the UK and Ireland also strongly oppose any moves by the EU to harmonise tax. As EU decisions on taxes have
to be taken by member states unanimously, agreement on the issue seems to be a long way off.
Monday, July 5, 2004 ~ 7:30 a.m., Dan Mitchell Wrote: The French parliament has adopted new measures that will give people tax breaks on financed purchases in a bid to help boost consumer
spending and economic growth. The plans announced by the French Finance Minster Nicolas Sarkozy last month will result in a tax cut worth 25% of the interest paid on consumer loans in 2004 and 2005
with an annual limit set at Euros 600. ...Many analysts have welcomed the move, suggesting that the tax cuts will help encourage more spending rather than saving in France's stagnant economy, and boost
profits in the banking sector.
Sunday, July 4, 2004 ~ 11:40 a.m., Dan Mitchell Wrote: For the second time in six weeks, Cosby attracted wide media attention with public criticism of black youngsters. Cosby was cheered on
Thursday when he told a group of black activists in Chicago that young African Americans are the "dirty laundry" that many would prefer he
not criticize despite their poor grammar, foul language and rude manners. "Let me tell you something," Cosby, one of America's most
admired men, told the group. "Your dirty laundry gets out of school at 2:30 every day, it's cursing and calling each other [the N-word] as
they're walking up and down the street. They think they're hip. They can't read. They can't write. They're laughing and giggling, and they're going nowhere."
Saturday, July 3, 2004 ~ 12:17 p.m., Dan Mitchell Wrote: As the European Union (EU) uses World Trade Organization membership as a threat against Russia, evidence is mounting that the
EU itself is failing to uphold its end of the Kyoto Protocol bargain. ...Despite the crafting of a treaty highly favorable to EU nations, data from Germany, France, England, and many other European nations
show the EU itself is not abiding by the treaty it is attempting to foist onto Russia. ...Of particular significance, the British Sustainable Development Commission (SDC) reported on April 13 that stronger
than expected economic growth "more characteristic of American society" will prevent the United Kingdom from complying with its Kyoto goals unless drastic changes are made to the British economy.
Claiming "there is no evidence" that England's "pattern of economic development is making people happier or giving them a better quality of
life," the SDC is calling for a significant tax hike on already expensive British gasoline prices to stunt the economy and thereby reduce greenhouse gas emissions.
Saturday, July 3, 2004 ~ 10:29 a.m., Dan Mitchell Wrote: Too often today, however, government is not serving liberty but is at war with it, telling us that it knows best, that it will decide for us.
...When the Founders spoke of liberty, they meant that each of us has a right to plan and live his own life, as he thinks best, to pursue happiness
in his own way, by his own lights, provided that in doing so he respect the equal rights of others to do the same. ...Yet the more we ask government to do for us, the more we undermine that vision. Every time
government creates a new program "for our own good," it forces us all to a common vision of the good. Take Social Security. Do you want to
retire at 55? Sorry, too early. We've decided that you can retire at 62, but at a reduced rate. Do you want the government to pay for your child's education? Here's the school you have to use and the curriculum
your child must study? No thanks, you say, you'll send your child to a private school instead, where you have a choice of programs? You'll still have to pay for the public system.
Friday, July 2, 2004 ~ 4:54 p.m., Dan Mitchell Wrote: The publication 'Structures of the taxation systems in the EU' issued Thursday by Eurostat provided for the first time tax revenue data for
the ten new member states and for Norway, and additional implicit tax rates (i.e. average effective tax rates) on corporate income, on capital and business income of households and on energy consumption.
According to the report, substantial differences exist between member states in terms of total tax burden. Sweden recorded the highest tax-to-GDP ratio (50.6% in 2002), followed by Denmark (48.9%),
Belgium (46.6%) and Finland (45.9%). The lowest ratios were observed in Ireland (28.6%), Lithuania (28.8%), Latvia and Malta (31.3% each) and Cyprus (32.5%). ...generally, the new member states have a lower
share of direct taxes in relation to total tax revenues and a higher share of indirect taxes and social security contributions. In 2002, Poland (18.7%), Slovenia (20.2%) and Slovakia (22.6%) recorded the lowest
shares of direct taxes, compared to 33.1% for the EU25, while Denmark (60.5%), the United Kingdom (44.2%) and Finland (42.9%) had relatively high shares of direct taxes.
Friday, July 2, 2004 ~ 10:38 a.m., Dan Mitchell Wrote: Germany must reform labor law, improve competition policy and allow greater market entry in a host of sectors if it hopes to beat down
stubborn unemployment and boost the role played by small and medium-sized companies in the national economy, according to a report released June 30 by the Organization for Economic Cooperation and
Development. ...The OECD suggested that regulatory reform can play a key role as Germany addresses the combined woes of unemployment, high public spending, and aging populations.
Friday, July 2, 2004 ~ 9:14 a.m., Dan Mitchell Wrote: A group of eight small offshore and onshore jurisdictions has called for anti-money laundering and terrorist financing initiatives to be
established and implemented by the World Trade Organisation, of which they are members, rather than the Financial Action Task Force, of which they are not. Led by Antigua and Barbuda, the group comprises
Fiji, Guyana, Papua New Guinea, the Solomon Islands, Belize, the Maldives, and St Kitts and Nevis. Speaking to Bloomberg, Antigua and Barbuda's ambassador to the WTO, John Ashe explained the reasoning
behind the request: "We face a double whammy - we don't participate in drafting the rules so our concerns are not taken on board, and to implement them is a costly exercise."
Friday, July 2, 2004 ~ 12:30 a.m., Dan Mitchell Wrote: Comprehensive tax cuts should not be the sole means for Russia to achieve its ambitious growth targets ...an International Monetary Fund
report has recommended. ...the IMF's report as part of Russias Article IV consultation cautioned against a sudden fiscal loosening, and warned
that the policy could drive up inflation and ultimately de-stabilise the economy. The notion that cutting high tax rates will quickly spur capacity enhancing investments finds little support in international
experience, the report noted. Although the IMF broadly supported the reforms, its report argued that extra demand should not be added to the economy at such a favourable point in the economic cycle and that the
reforms should not be achieved at the expense of increased risks to macro-economic stability.
Thursday, July 1, 2004 ~ 11:11 p.m., Dan Mitchell Wrote: Foreign-owned assets in the United States increased $986.8 billion to $9,633.4 billion with foreign direct investment valued at current cost,
and they increased $1,348.2 billion to $10,515.0 billion with foreign direct investment valued at market value. Foreign holdings of U.S. securities other than U.S. Treasury securities, excluding official
holdings, increased $604.4 billion to $3,391.1 billion. Foreign holdings of U.S. stocks increased as a result of a price appreciation and net
foreign purchases. Foreign holdings of U.S. bonds increased as a result of net foreign purchases, exchange-rate appreciation of foreign currencies, and price appreciation. U.S. liabilities to private foreigners
and international financial institutions reported by U.S. banks increased $368.8 billion, to $1,887.2 billion.
Thursday, July 1, 2004 ~ 10:55 a.m., Dan Mitchell Wrote: Illegal trafficking in cigarettes can generate enormous profits and is purportedly a multibillion dollar a year enterprise. As cigarette taxes
increase, so do the incentives for criminal organizations to smuggle cigarettes into the United States. Cigarette smuggling results in lost tax
revenues, undermines government health policy objectives, can attract sophisticated and organized criminal groups, and could be a source of funding for terrorists.
|
||||||||||
 |
||||||||||