National Center for Policy Analysis is Idea Central

One of my favorite organizations for years has been the National Center for Policy Analysis. I often find myself too busy to spend time reading their articles or visiting their website, but every time I do they never disappoint. It seems everything I read of theirs provides a "eureka" moment and my understanding of the subject I am studying increases dramatically.

Recently I spent some time on their site and read an insightful article by the organization's Chairman, former Governor Pete du Pont (R-DE). du Pont (photo) was my choice for President in 1988 as the brilliant leader told people the truth about the problems the nation faced and the necessary policies to change the status quo. He told farmers in Iowa that subsidies was actually hurting agriculture both in the US and around the world and he told seniors that Social Security needed to be reformed in order for future generations to be able to benefit. He always told the hard truths, which may be why his candidacy didn't catch on. Even to this day I would gladly get on a Pete du Pont bandwagon.

In his recent article in Opinion Journal (from the Wall Street Journal), the former Governor pointed out that, if they thought things were bad under the Republicans in Congress, wait until the Democrats pursue their policy objectives. The following is a quick summary of two of their goals:

* Social Security. In ten years, Social Security will be paying out more than it is brining in, which will find the system in a crisis beyond rhetoric. We should obviously do something about it today. The Republicans wanted to look at options that empowered individuals to become investors in the economy by being able to have their "contributions" turn into real investments through private initiatives; resulting in an expanding economy, serious return on the money put into the system, and numerous other positive effectives. The Democrats are talking tax increases which will hurt job development when businesses are forced to match Social Secutiry tax and raising the age, which will discriminate against minorities who already suffer from the current system. The Democrats, in essence, desire more of the same policies that have failed for years.

* Tax Increases. The Republicans are opposed to such and point to long term economic expansion and low unemployment as examples of how the recent tax cuts have worked. Not only have they contributed to economic growth, they have led to revenue increases by spurring on taxable economic activity. While the Democrats want to exact huge largesse from every small economic action through excessive taxation, Republicans take a Wal-Mart approach, by making a little off of so much more activity. If the Democrats really want to reduce the deficit, they would never touch the tax cuts. They declare that taxes must go up, no matter how much harm they do. It isn't because of efficiency, but envy; because the Democrats simply seem to despise econonomic freedom.

The former Governor goes on to examine spending increases, protectionism, and more showing a clear difference between the two parties. Because of the President's veto pen and their slim majority in Congress, it is unlikely that the Democrats will be successful in their policy objectives (except for the possibility of reversing the tax cuts and minimum wage increases), but what they will provide through their policy initiatives is a great road map of what the future will be if the Democrats ever win a governing majority and a sobering warning to everyone who would consider such an option.

The National Center is one of the greatest resources of ideas in the public policy market today and I'm glad that it is out there helping to successfully wage a war of ideas.

Public Funding of Elections Provide Predictable Results

Many have been crying for government funding of elections as a vehicle to make elected office more accessible for those who are not rich and to weaken the influence of money on the policy process. A new report by the Goldwater Institute indicates that may not be the case. The Goldwater Institute is a state public policy foundation for the state of Arizona and its recent report shows that public financing has empowered substantially more "big government believers" than supporters of smaller government to the process, according to the Director of its Center for Constitutional Government, Nick Dranias.

The report takes a rather objective look of the impact of public funding on candidates by grading and ranking state legislators based on their commitment to small government as demonstrated by the bills they supported. The institution's philosophy is best described as classical liberal, meaning that government simply should tax, spend, and regulate as little as possible. Like those report cards you received in school, the grading looks familiar -- an "A" for those who would vote like the organization's namesake (Barry Goldwater) and an F of those who reflect the views of the current sitting President, Mr. Obama.

Here are some of the facts from the study:

• As shown in the Institute's report, publicly-financed candidates in both the State Senate and House disproportionately receive failing grades.


• More publicly-financed candidates rank in the bottom half than in the top half.


• And publicly-financed candidates that rank in the bottom 10 are nearly double the number of publicly-financed candidates in the top 10.
  

The report went far and wide in its scope and its grading scale made the legislature's work very clear. The report was also quite thorough, going through over 1,200 bills, memorials, and resolutions introduced this pass session. It gives a solid framework for individuals to determine what work their elected officials are about: protecting taxpayers or exploiting them.
The National Center for Policy Analysis summarized the report by pointing out that, "Scores for the 49th Arizona Legislature remain around the 50 percent mark, indicating a near equal amount of votes that undermined liberty as upheld it. While legislators with the highest scores received a letter grade of A, it should be remembered that this rating represents a percentage score of 80, leaving much room for improvement. Likewise, these scores illustrate legislators' relative commitment to liberty. They are not absolute measures of a legislator's merit, and do not constitute any endorsement, says Dranias."

In my opinion, this study's findings should not surprise anyone. If one uses welfare to get elected (public funding), how can one expect them to hold a tough line on welfare for the general population once elected. That would be the epitome of hypocrisy. The moral legs necessary for supporting smaller government are wiped out by the power of government subsidies for these candidates. Like virtually every other area of discussion, more government in election funding is not the solution to our problems.

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

The Uninsured and Emergency Rooms

Rarely would one expect to find anything interesting from an agency called the National Center for Health Statistics (NCHS), but a report on how emergency rooms are used and by types of groups is creating quite the stir among advocates of government health care and ammunition for opponents of socialized medicine. NCHS is the nation's primary health statistics agency and its new report suggests that the perception of our emergency rooms being dominated by the uninsured is based more on fiction and propaganda than on fact and reality.

The prominent use of the emergency room by the uninsured was one of the most frequently heard arguments for the President's socialized medicine program. Since people know they can get treatment there without paying immediately (if at all), they would fill up the room regardless of how small the need. The argument goes on that this care costs so much more and when done for non-emergency needs, it creates a disruption of care for those who really need emergency treatment. Devon M. Herrick, a health economist and senior fellow at the National Center for Policy Analysis, believes the data from the NCHS paints a very different picture.

So who are the biggest users, those most likely to misuse, and even abusers of emergency rooms? According to NCH,S it is a group that already has government health care...individuals in the Medicaid system. Here are some other findings:

• Approximately 32 percent of these Medicaid enrollees used the emergency room at least once during a 12 month period in 2007. Meanwhile, those with private health insurance were only about half as likely (17 percent) to go to an ER, and a similar number (around 20 percent) of the uninsured did the same in that time frame.
• Medicaid enrollees were three times more likely than those with private insurance and twice as likely as those who are uninsured to go to the ER twice in that past year.
• There are approximately 120 million ER visits made in the United States each year. These make up approximately 11 percent of all ambulatory visits.

One thing that there is little debate among health care professionals is that many of these 120 million ER visits could be better handled in other environments (such as a doctor's office, emergency clinics, etc.). Dr. Stephen Nichols, a regional medical officer for Schumacher Group, says "In general, 5 percent to 25 percent of patients who visit an emergency department in a community hospital have non-urgent complaints that could easily have been addressed in an outpatient setting," The Schumacher Group contracts for emergency department services at community hospitals.

The Heartland Institute in its report on the uninsured and their use of emergency rooms, quotes Dr. John Dunn, an emergency room specialist from Brownwood, Texas who noted that "Thirty percent to forty percent are emergencies or urgent care and deserve treatment within a reasonable time. But it is care that could be seen to in an urgent care clinic or a well-equipped office, though the patients probably are better off in the emergency department."

Why are Medicaid patients the most likely to use the ER in a less responsible manner? It simply comes down to the economic way of thinking. People with private insurance pay significantly more in co-pays for using an emergency room over a clinic or doctor's office. Therefore, avoiding the Emergency Room makes economic sense to them as consumers. Obamacare will essentially have all Americans treated similarly to the current Medicare patients. As a result, one can expect ER abuse to explode once socialized medicine goes fully into effect. This NCHS study not only weakens the argument for socialized medicine, but would be a devastating blow if facts still mattered in public policy debates.

The war on the working class continues

I personally hate conspiracy theories. like most, I hear such and my eyes begin to glaze over and I eagerly wait for the person to stop talking so I can move on to another conversation. However, there is something about the Obama administration that makes it very difficult to not question the intent, as well as the consequences, of their policy choices.

Recently Eric Holder, the Attorney General of the United States, gave the commencement address at Boston University at which he told the students about the wonderful and "progressive" reforms that came out of bad economies. Essentially, he is arguing that major actions by government can only happen under the worse possible economic circumstances, because people are otherwise fine with the status quo. Holder's remarks reminded me of White House Chief of Staff Rahm Emanuel who quipped, "You never want a serious crisis to go to waste," Emanuel then went on to discuss the major changes you can make in just such an environment.

Essentially these high ranking public officials are sounding a mantra of more problems leading to more change. With such a philosophy, it should not be a surprise that we continue to see policies that are contributing to the continued destruction of the economy. Unemployment is at the highest level in over a quarter of a century, the national debt is growing at over $1 trillion dollars a year (in the early 1980s the accumulated debt of the US government was only making that mark for the first time), and inflation looms around the corner as cheap money is being produced to pay for this massive government expansion.

Particularly harmful will be the President's far reaching health care reform legislation, which will require small businesses to provide health insurance to their employees. It is being marketed by the administration as having a minimal adverse effect because this burden will be offset by a tax credit for each of the covered employees. Without such, it is unlikely the bill would have ever navigated through the Congress. However, with the federal government's incredible appetite, that will like be modified as the law is implemented. Even without a single change in the current law, the present credit is already arbitrarily reduced as a business grows, essentially discouraging employers from hiring more workers or increasing their salaries. Devon Herrick and Pamela Villareal (both of the National Center for Policy Analysis) have noted that this bill is going to clearly undermine job growth and be particularly harmful to higher paid workers.

The tax credit is suppose to be helpful to small firms. Businesses in select industries that have 25 or fewer employees will quality for a tax credit worth up to 35 percent of the employer's contribution to health insurance during the period of 2010 to 2014. After 2014 this is how the picture looks:

• Although employers may qualify for a 50 percent health insurance tax credit for the first two years, they must pay for at least half of the expense.
• Employers will have to make these purchases through newly formed "health insurance exchanges" in order to qualify. It is yet to be seen if these will be competitive. Since they are largely government controlled (and potentially monopolistic), it is highly unlikely.
• Than the law begins to get sticky and companies will likely slip through the tax credit cracks when it comes to being qualified as employers must have fewer than 11 workers, earning an average of $25,000 or less, in order to qualify for the full tax credit. Therefore the law is punitive towards individuals who make more than $25,000 a year. This is not affluent by anyone except the government.
• Finally, the credit is not available to sole proprietorships and their family members, yet this is one of the most common type of small business in the United states.

The policy implements an ugly trade off for firms that would like to do more for their employees. As the company's average pay goes above $25,000, the credit is withdrawn at a rate of 4 percentage points for every additional $1,000 in average pay. Eventually it is completely withdrawn once the average pay reaches $50,000. In addition to this, the credit is also incrementally withdrawn for each increase in the size of the business beyond 10 workers (regardless of average pay), and it disappears once the firm reaches 25 workers.

Therefore this legislation will mandate businesses to pursue low wage workers and avoid those who enjoy better skills and typically receive higher pay. It may also simply force employers to avoid the costs of having many employees by choosing technology over workers (which has a higher initial cost, but would clearly become cheaper over time in the new health care environment). Another option could find companies pursue vendors (particularly overseas) in order to avoid these prohibitive employee costs entirely.The war on the working class continues.

Kevin Price is a nationally syndicated columnist and host of the Price of Business on CNN Radio. Learn more about him and his activities at www.PriceofBusiness.com.

Why Economic Freedom Matters

Economic freedom is one of my favorite topics and the one that is discussed the least by politicians in this country. Everyone on every news channel discusses all types of "freedoms" -- many without Constitutional legs, but the one that is clearly seen in our governing document (by the Tenth Amendment and the limited powers in Article I, Section 8) is largely ignored. Politicians do not discuss economic freedom and those in the media have no idea why such even matters.

The National Center for Policy Analysis (NCPA) brought some excellent information on this topic from several different resources to my attention. The Federal Reserve Bank of St. Louis has released a new study called "Economic Freedom and Economic Growth in the US States." That report notes that there is a definite link between such freedoms and employment growth. Other studies have come to similar conclusions, but Michael D. LaFaive (Director of the Mackinac Center's Morey Fiscal Policy Initiative) notes that the thing that makes the Federal Reserve's study significant is its findings on labor markets. The authors write: "In addition, we find that less restrictive state and national government labor market policies have the greatest impact on employment growth in U.S. states."

Having had come from Michigan originally, I am always saddened by stories of that state's continuous decline. LaFaive states that the findings of the study only translates into more bad news for the Great Lakes State. Michigan has one of the worse labor environments in the country. It is not only a closed union shop state, but the epitome of big labor out of control. It is simply much easier for a business to move capital (and jobs) than to subject itself to the highest wages, biggest employee benefits, and toughest "pro-labor" regulations of any state in the Union. These type of policies have forced businesses to leave the state, which has created a revenue shortage, and has led Michigan to answer that problem by raising taxes even higher. Its $1.4 billion tax increase has made Michigan and even less friendly place for doing business, according to LaFaive.

These factors are among the reasons Michigan has consistently suffered from the highest unemployment in the country. The Fraser Institute and Pacific Research Institute have also chimed in on the decline of economic freedom in Michigan. In 2004, Fraser ranked Michigan 32nd among states in economic freedom. By 2009, it had dropped to 39th. Meanwhile, the Pacific Research Institute pointed out that the state fell from 27th in 1999 to 34th in 2004, and most recent, to 43rd (in its 2008 report). This rapid decline of freedom in Michigan has translated into economic ruin for the once great manufacturing giant.

LaFaive suggests several steps in reversing Michigan's economic slide, including:

• Put a halt on the state's new tax increases. Michigan has to develop ways of being more competitive in some areas than other states. Currently, Ontario, Canada does commercials boasting a lower tax rate than Michigan. That has to change if that state is going to attract job creators.
• The state should end entirely its repressive business tax and replace that with real spending cuts and other reforms. Again, the state has to develop ways to attract new businesses. Ending such a tax would certainly help.
• Forbes Magazine notes that all but one of the ten most prosperous states are right-to-work states. Michigan has to make it easier to fire and control employee expenditures, if that state is interested in businesses hiring more and increasing payrolls.
• Finally, Michigan has environmental laws that are among the most aggressive in the country. Michigan has to get its regulations in line with other states, if it is interested in job growth.

Michigan is in a state of crisis. Many other states are following a similar path (as is the nation, seen in businesses taking capital and move to other countries). It is imperative for policy makers on every level of government to recognize the relationship between economic freedom and jobs.

Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is also host of the Price of Business (M-F at 11 AM on CNN radio). Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

Federal laws are both too numerous and vague

The vast majority of Americans are unhappy with the working of Washington. The President and Congress have overwhelmed the American people with an incredible number of laws that are difficult for the voters and even policy makers to understand. Many bills are now passing Congress without being read by many, if not any, members. With so many bills coming out of Washington, DC, it should be no surprise that most Americans are unhappy with the results and find much of this legislation confusing.

The National Center for Policy Analysis has brought to my attention the work of two organizations that are working together to try and persuade Congress to stop writing criminal laws in such a manner that leaves innocent people vulnerable to unjust prosecution. One is the Heritage Foundation, which is one of the nation's premier conservative think tanks and the other is the National Association of Criminal Defense Lawyers. Together they prove true the adage that "politics makes strange bedfellows," since the latter organization is better known for its affiliation with liberal groups and causes.

According to a recent report they produced:

• Over twenty federal laws that went into effect in 2005 and 2006, to combat nonviolent crime, lack an adequate provision that one accused of breaking the laws must have had a "guilty mind," or criminal intent. Good law has always required such provisions. It is imperative that the government prove "both a guilty act and a guilty mind." Without such, bad judgment and even mistakes could become criminal.
• On that rare occasion when the Congress makes a new law that includes a provision for a "guilty mind," it is "often so weak that it does not protect defendants from punishment for making honest mistakes, or committing minor transgressions."

For centuries the legal code of most Western countries have required "criminal intent" as a part of all laws designed to fight crime. This was intended to make sure laws were created to protect the public good and not be used for political agendas, such as punishing political enemies rather than true threats to the general population.

Currently, the more conservative wing of the Supreme Court is beginning to question the legality of many of these laws and has expressed concern on how they can be used. They are focusing on three laws in particular. Justice Antonin Scalia sees these type of laws as a great tool for "headline-grabbing prosecutors" who want to shut down unpopular and maybe even unethical behaviors, but not necessarily criminal ones. These type of laws make populations fearful, prosecutors powerful, and people less free. Scalia has noted that the law is so vague that it could be used against a mayor for using his political influence to get a better table at a restaurant or against a salaried employee who calls in sick, but goes to a beach. These, of course are the kind of laws that are selectively applied and are begging for abuse.

It is interesting that, after centuries of writing laws that protect the rights of individuals and require proof of intent, that the Congress has forgotten this simple, but important, practice. It is time for the Congress to develop specific tests to make sure these laws comply with the letter and the spirit of the law.

Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is also host of the Price of Business (M-F at 11 AM on CNN radio). Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

Taxes on Wealthy lead to Pain for All

"Soak the rich" is a favorite battle cry for politicians seeking reelection and advocates of social justice, but in the end, it creates injustice for all. This will clearly be seen as a consequence of the recent health care bill, as well as with the President's ambitious efforts to dramatically increase the tax on capital gains.

Numerous major corporations have announced projected loses in the hundreds of millions of dollars due to Obamacare. These tax hikes will have an adverse effect on the capital stock and will undermine job creation among small businesses. You would think the Obama administration, which is presiding over the worse unemployment this nation has seen in over a generation, would do everything in its power to keep unemployment down. To look at the obvious consequences of Obamacare, however, one would think that increased job losses is a policy objective. But the damage does not end with the President's ambitious health care agenda, but is also seen in his desire to change the taxes on capital gains.

Pamela Villarreal, a senior policy analyst with the National Center for Policy Analysis, notes that:
The 2001 Bush tax cuts reduced the lowest marginal income tax rate from 15 percent to 10 percent and the highest from 39.6 percent to 35 percent. This tax situation led to a job creation environment that was one of the best in recent history and brought the US unemployment down to around 5 percent. Simply put, the cost of using an asset got smaller and the profit got higher. This led to business activity taking place that resulted in more jobs and more tax revenue (because revenue comes from business activities that take place, like the selling of assets).
President Obama proposes to raise the two top marginal rates to 36 and 39.6 percent beginning in 2011 for the highest-income earners while leaving the other tax brackets unchanged. This will be temporary, however and will be followed with additional changes in the brackets and the amount taxed.

Starting in 2013, Obamacare will impose an additional 0.9 percent Medicare tax on wage income for individuals earning more than $200,000 a year and couples earning more than $250,000.
To make matters worse, the new law imposes a 3.8 percent Medicare tax on unearned income, such as "rent, royalties, dividends and capital gains for the same high-income earners."
The Obama administration also wants to increase long-term capital gains tax rates from 15 percent this year to 20 percent in 2011 for the two highest tax brackets, and taxing dividends at ordinary income tax rates for those earning $200,000 a year or more.

So what kind of impact will this have on the most affluent? Villarreal suggests we should "suppose an individual owns $50,000 worth of stock that has accumulated an 8 percent capital gain and 3 percent dividend after one year:"

• By 2013, the tax on the $4,000 gain (just after one year) would be as much as $1,309, compared to $825 if we simply left taxes at the current rate.
• With the current tax rate on capital gains (15 percent), the tax on the sale of $50,000 in stock would be $825, and the after-tax rate of return would be 9.35 percent.
• If President Obama's proposed capital gains and dividends increases of 20 percent go into effect, along with the excessive new taxes that will come with Medicare, the tax bill rises to $1,352 and the after-tax rate of return falls to 8.38 percent (a drop of almost 1 percent).
• For ordinary dividends, a higher marginal tax rate and the new Medicare taxes could nearly double the individual's effective tax rate from 15 percent to more than 29 percent, essentially doubling the tax burden.

The US already has the unwelcome distinction of having one of the highest tax rates of any industrialized country in the world. After Obama's pro-tax, anti-prosperity, agenda, we will likely be the world's number one tax collector among modern countries. For those who are more affluent, this will result in an after tax rate of return on this type of investment that would have the return on the profit be reduced by approximately 10 percent. The ironic result of such is that increasing the capital gains tax could actually lower government tax revenues (as witnessed in the past), because people will hold on to assets in order to avoid the tax. Remember, unlike the vast majority of people who sell things because they need to move, or they need a different vehicle, or there is some other cost driving necessity, the rich simply sit on the asset and wait until the tax environment changes. They can afford to do that and it is in their self interest. For much of the country, however, it leads to the depletion of jobs and even the hope of jobs.

Instead of increasing taxes on wealth creation (e.g., capital gains, taxes on businesses, etc.), this administration should consider dramatically reducing such barriers between people and jobs.

Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is also host of the Price of Business (M-F at 11 AM on CNN radio). Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

VAT is neither fair nor responsible

It is interesting how the left will take a politically popular idea and pervert it into something that will only further destroy a country that is already well down the road to serfdom. The latest example is the Obama administration's repeated statements that it is looking into the possibility of a Value Added Tax (VAT). This comes after almost two decades of millions of Americans advocating a "Fair Tax" instead of the current income tax system. Obama's apologists will state that they both are, after all, taxes on consumption. The similarities after that, however, largely evaporate.

The Fair Tax is a system that has been promoted for years by individuals who support limited government and greater voter participation in the political process. Today, less than half of all Americans pay federal income taxes. This reality has been like a continuous cold shower on a population that should be on fire because government is out of control. A "Fair Tax" would be a national sales tax on every good and service. Everyone would know that cost of government at every transaction. Millions of Americans who have been sleeping politically, would come to an abrupt awakening. Centerpiece in this strategy would be that this tax would replace the very destructive and archaic income tax system, which wages a direct war on wealth and job creation.

In addition to waking up a sleeping public to the depth of our fiscal crisis, this law would also allow us to tax illegal aliens in our country and those who are committing illegal activities. Drug dealers, prostitutes, and others involved in illegal actions would now contribute to the government and help pay for the law enforcement designed to keep them in check. Who else should pay for these crimes? Remember, they are all involved in illegal activities; they have their income completely tax free. This reform would allow us to take a financial "bite out of crime."

Then there is the Value Added Tax. Like the Fair Tax, it would tax consumption. In fact, it would tax every single step of the production of every single good. Unlike the Fair Tax, VAT would be in addition to our current income tax system. Furthermore, it is a hidden tax that is included automatically in the price of goods. Where the tax begins and the real price ends, the typical consumer will be unsure.

The National Center for Policy Analysis notes that "The VAT has been in use in European countries since the late 1960s, and has had a strong, negative economic influence, says (Pete) du Pont (former governor of Delaware and current national policy chairman of the organization): Before the European VATs were put into effect, the average tax burden in the European Union (EU) was 28 percent of gross domestic product (GDP), compared with the 25 percent in the United States. By 2006, with the VATs, the EU average tax burden was 40 percent compared with 28 percent in America."

In addition to that,”Average European government spending was about 30 percent of GDP when the VATs were instituted in the late 1960s." Today we see that European "government spending has grown more than 50 percent and now hits 47 percent of GDP." Debt in European government in 2005 "was 50 percent of GDP, compared with under 40 percent in America." The biggest tax of all on Europeans has been on job creation, according to du Pont, "Between 1982 and 2007, Europe created fewer than 10 million new jobs versus 45 million in the United States. Our economic growth was more than one-third faster, says du Pont." That is, by the way, the entire continent of Europe.

Access to revenue does nothing in terms of providing fiscal restraint, as we have seen in the case of VAT or the many tax increases we regularly see in this country. In fact, new taxes and increases in old ones have encouraged governments to tax more. The answer to America's fiscal problems are found in less taxes and, more importantly, less government.

Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is also host of the Price of Business (M-F at 11 AM on CNN radio). Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

Obama's Cap and Trade and Other Regulations will make Environment Worse

When I think of Cap and Trade and government efforts towards a better environment, I think of an interesting encounter I had while conducting seminars on Free Market economics. When I traveled Eastern Europe and the former Soviet Union, I was horrified by the pollution levels. Poland was particularly bad. I remember escaping to a large park because of the trees there actually made it easier to breathe. Much of the time my eyes simply watered and I coughed. It was miserable. I had a meeting with an economist in the Polish government and he noticed my distress. "What's wrong?" I said politely, "well, it seems I have caught something in your country." "Yes, we call it pollution, what do you call it in your country?" and smiled. I said, "why is it so bad?" He said, "well, it isn't because of the laws, we have the toughest environmental laws of any country in the world." Sure enough, I did my homework, and that was true at the time. He went on to say "the problem was recognized long ago by Aristotle who said 'What is common to the greatest number gets the least amount of care. Men pay most attention to what is their own; they care less for what is common; or at any rate they care for it only to the extent to which each is individually concerned. Even when there is no other cause for inattention, men are more prone to neglect their duty when they think that another is attending to it.'" He went on to say that he hoped that the moves the country was making towards free markets would lead to more ownership and better care of the environment.

Later, in another meeting he said, "the answer to these environmental problems are found in technology, not regulation." I liked the sound of that, so I asked him to elaborate, "as we recover economically, have more ownership, we will enjoy greater capital formation, which will lead to better and more efficient technology. That, more than anything else will reduce pollution." I casually responded, "I have never seen a poor country that wasn't polluted" and he responded back, "neither have I."

I have done further research on other government efforts to reduce pollution and found more stories that point to private, and not government, solutions. For example, according to the National Center for Policy Analysis, 90 percent of all dollars spent on the Super Fund has actually gone to lawyers and not clean ups.

The Obama Administration's multi tiered policies of Cap and Trade, CAFE Standards, and "Cash for Clunkers" (which largely benefits foreign auto makers, rather than domestic) while taxing wealth and job creation (which will only lead to more poverty), will actually contribute to more pollution in the years to come. One may be able to argue that one could pursue the aggressive regulations he desires in a strong economy, but in our current situation he is begging for immediate economic ruin and long term environmental disaster.

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

Ten Ways to Improve Health Care Without Increasing Government

I have to preface this by pointing out that I remain convinced that the US Constitution -- that nifty document that politicians swear to defend -- is the first obligation to the health care debate. According to that document, the issue of health care is to be left to the states and the citizens. Health care is simply too important for the federal government to pursue. It requires many approaches to find a plan that would work. However, the reality is, the federal government already plays a huge role in health care. It has long been my contention that any discussion on reform should begin with the damage that government has already done.

Dr. John Goodman, President of the National Center for Policy Analysis, has written a report that addresses the government impact well and should be part of the debate. He examines ten different areas that should be addressed in any health care discussion.

1. Free the Doctor. "Medicare pays for more than 7,000 specific tasks, and only for those tasks. Blue Cross, employer plans and most other insurers pay the same way. Notably absent from this list are such important items as talking to patients by telephone or e-mail, or teaching patients how to manage their own care or helping them become better consumers in the market for drugs. Further, as third-party payers suppress reimbursement fees, doctors find it increasingly difficult to spend any time on unbillable services. This is unfortunate, since it means that doctors cannot provide the type of low-cost, high-quality services that are normal in other professions." Instead of merely behaving as repair providers, medical doctors should have incentives to restore their role of health care advisor.

Goodman goes on to point out that, in order to "change these perverse incentives, Medicare should be willing to pay for innovative improvements that save taxpayers money. And doctors and hospitals should be able to repackage and reprice their services (the way other professionals do), provided that the total cost to government does not increase and the quality of care does not decrease. This change in Medicare would almost certainly be followed by similar changes in the private sector."

2. Free the Patient. Goodman states that "many patients have difficulty seeing primary care physicians. All too often, they turn to hospital emergency rooms, where there are long waits and the cost of care is high. Part of the reason is that third-party payer (insurance) bureaucracies decide what services patients can obtain from doctors and what doctors will be paid. To correct this problem, patients should be able to purchase services not paid for by traditional health insurance, including telephone and e-mail consultations and patient education services. This can be done by allowing them to manage more of their own health care dollars in a completely flexible Health Savings Account." Some of these things seem very obvious to me. The health care system is plagued by a "penny wise, dollar foolish" approach to medicine.

3. Free the Employee. It is imperative to move the selling of health insurance from a "one size fits all" group approach to one in which people can buy want they want and, more importantly, take it with them when they leave.

4. Free the Employer. In the same vein, Goodman notes that employers should be allowed to be in a system where they can "make a fixed-dollar contribution to each employee's health insurance each pay period. Like 401(k) accounts, the health plans would be owned by employees and travel with them as they move from job to job and in and out of the labor market."

5. Free the Workplace. The system needs to be changed to allow greater flexibility in the purchase of insurance, which would encourage more people to get covered. For example, if an employee has a spouse with health coverage, it would be helpful if the employer could give another benefit. But, Goodman points out, "the law does not allow her employer to pay higher wages instead. On the other hand, a part-time employee might be willing to accept lower wages in return for the opportunity to enroll in the employer's health plan. The law does not allow that either." The answer is pretty simple, companies "should be free to give employees the option to choose between benefits and wages, where appropriate."

6. Free the Uninsured. People who must purchase their own insurance should receive the same tax relief as employees who obtain insurance through an employer. The way pre-taxing works is simple. The amount that is paid for health insurance is simply subtracted from gross wages for tax purposes. This would be a huge and cost effective benefit to individuals seeking coverage.

7. Free the Kids. The increase in the States Child Health Insurance Plan (S-Chip) will actually move 4 million kids into government health care programs where, as Goodman notes, "children have access to fewer doctors and medical facilities than children in private plans."

He argues that these limitations alone means that "incentives should be reversed. S-CHIP money should be used to encourage parents to enroll their children in their employer's plan or another plan of the parents' choosing."

8. Free the Parents. Goodman points out that, "Under the current system, a child could be enrolled in S-CHIP, a mother could be enrolled in Medicaid and a father could be enrolled in an employer's plan. However, medical outcomes are likely to be better with a single insurer." Instead, the system should be designed to support a single insurer. Therefore the government programs "should be used to subsidize private health insurance, so that low-and moderate-income families are able to see the same doctors."

9. Free the Chronically Ill. For this particular issue, Goodman provides a comprehensive approach: "Under current regulations, insurers are not allowed to adjust premiums to reflect higher expected health care costs. This encourages insurers to seek the healthy and avoid the sick before enrollment. After enrollment, insurers have an incentive to over-provide care to the healthy and under-provide to the sick. These incentives need to be reversed. For example, in the Medicare Advantage program, the government pays higher premiums for seniors with more expensive health needs. This encourages insurance companies to create specialized plans - especially for chronic illnesses - that compete with each other." The solution? "Chronic patients also need to be able to manage more of their health care dollars directly. For example, 'Cash and Counsel' programs in many states allow home bound, disabled Medicaid patients to hire and fire the vendors who provide them with services." Programs such as this provide almost 100 percent patient satisfaction.

10. Free the Early Retiree. "Most baby boomers will retire early, before eligibility for Medicare. Two-thirds will not get health insurance from their former employer and even those who have been promised employer coverage may see those promises broken, since there is almost no prefunding of benefits. Under current law, an employer can include early retirees in its regular health plan, but cannot contribute to more economical, individually owned plans." In the spirit of the portability argument mentioned before, the government should make it easier for individuals to have many options and to take them with them wherever they go. This would enhance competition and drive down prices.

Ten simple steps that would expand the availability of coverage and actually lower the costs for all concerned. This is simple common sense, which is why the government is not seriously weighing these type of reforms.

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

The Next Major Financial Concern Could be College Tuition

For decades the cost of college has roughly been double or even triple the pace of inflation. The increases in recent years have been so fast and high, many are concerned that we are about to witness another bubble in America similar to the housing one that we have yet to fully recover. Recently, I saw from theNational Center for Policy Analysis (NCPA and they quote extensively, Naked Law) that there are many indicators that this bubble is about to burst.

• The cost of going to college is now doubling every nine years, on average, because there are typically eight percent increases each year.
• Because the government has made it extremely easy for students to get money (and even "more money" in increases) thanks to the government, supportive parents and immediate gratification, colleges have made frequent tuition hikes their primary vehicle for solving their money problems. While fund raising has flatlined and investments have plummeted, students have quietly turned over more and more money to Uncle Sam.

Students are accomplishing this expensive right of passage called college by borrowing more now than ever in the history of higher learning. In fact, according to NCPA, the number of students who graduate with over $25,000 in debt has tripled in the last decade alone. Furthermore, 2/3rds of today's college students borrow money to pay for college and they take on a debt of $23,165 on average.

Some of the behaviors being deployed by for-profit colleges in their quest for dollars are disturbing. Some have gone so far as to paying homeless people to take out federal loans to enroll with no intention of attending. These loans are very easy to acquire because of the government's backing, clever schools are getting these people to enroll and giving them 10 percent of the action. In the end, what you have, is a $20,000 loan paid to the school and a $2,000 "stipend" for the homeless person -- thanks to the generosity of the federal government in the form of tuition payments.

Colleges and universities are continuously arguing that they "need more dollars." Yet it appears that these institutions have spending problems that are similar to the government's. This is seen in the fact that university presidents have a salary that is sky high, while we have a historically weak economy. USA Today has reported that 23 presidents of private colleges made more than $1 million in 2008, while 110 more made over $500,000. This is a new phenomenon, linked to the "trough" mentality pervasive in these schools in the way they look at the federal government. As of 2002, there were no "million dollar" university presidents.

Higher education is a perfect example of government out of control and how public dollars artificially increase demand and leads to enormous waste without accountability. Market sensibilities need to be brought to colleges and universities today.

The Party of Diversity should Support Diversity of Power

There is something funny going on. The "narrow minded" people on the Right are sounding more like their liberal counterparts when it comes to the issue of diversity. "Diversity" has been the battle cry of the left for decades. It has been (oddly) the driver behind multiculturalism and political correctness and has long been held among the most important of "liberal values."

Unfortunately, limiting diversity to the way we view ethnic and other social groups is only scratching the surface. Diversity is defined as "the state or fact of being diverse" "difference," "unlikeness," "variety," and "multiformity." In other words, "diversity" stands for more, much more.

Diversity can be used in the way we approach virtually every issue. In the name of diversity, we should allow each state of the Union to develop its own minimum wage policies. Michigan, for example, may want to help the city of Detroit and let them develop a minimum wage that is lower than the rest of the state in order to combat its 20 percent plus unemployment. Same with East St. Louis, Il (30 percent unemployment); Camden, NJ (32 percent), and others. I would be fine with the Federal Government ending minimum wage laws entirely. Short of that, the Feds should mandate the states to create their own minimum wage laws and let the problem solving begin. It is insane to have a federal government on the other side of the country set a minimum wage for areas that are desperate in attracting employers and opportunity.

Environmental regulations would be another great place to move back to the states. Instead of a "Super Fund" designed to clean polluted areas devised by the Feds and (according to the National Center for Policy Analysis) 80 percent of the dollars going to lawyers, or "one size fits all" regulations that put small business into bankruptcy, the states should be the leader in establishing regulations. They would set rules that would protect wildlife and nature, while placing humans and employment as the number one priority. From the competition of the states in public policy we would learn the best ways to develop sound policies.

This is exactly what the Founding Fathers had in mind. They saw the United States as a "nation of nations." This is why they developed the Tenth Amendment and limited the federal government to only seventeen powers in Article I, Section 8 of the Constitution. They believed this dispersion of power would not only protect our freedoms, but lead to the best ideas to solve problems, having the best opportunity to be developed. Other states would voluntarily adopt policies that worked and would avoid those that didn't. Furthermore, this diversity of power would protect all the states from becoming too big. If taxes became too high and regulations too oppressive, people would leave such states in mass. It is the ultimate example of "checks and balances."

Diversity should not be preserved in a monolithic federal government, but promoted through fifty unique and strong states. Advocates of diversity should be fighting for states' rights more than any other special interest group.

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. Eric Bolling of Fox News and Fox Business says that Price’s Blog “is very influential and moves the blogosphere.” Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

Opposition to Obamacare Should be Unconditional

Recently I received a request from a very well intended and concerned individual about the health care debate. She wanted me to promote a provision that would have a "whistle blower" provision as a part of the socialized health care bill. It is a great measure that those who want to protect our health care system should support, but avoid like the plague at this time. Meanwhile it is the type of provision that Obama, Reid, and Pelosi hates and they hope and pray that conservatives pursue such with a passion. The reason for this is simple -- it legitimizes the role of the federal government in the health care debate. Once we concede to this type of discussion, there is no longer a question as to whether there will be a socialized health care program, but what it will look like.

I hear people say, "government spending needs to be lower before we pursue such an ambitious program," or "the number one priority is unemployment and until it is below a certain level, we should not be even discussing health care," or other conditions that some deem necessary before we begin a health care debate. Our view must be different. Our opposition to this health care proposal should be unconditional. There should be nothing the federal government can do to make it worthy of consideration. The reasons for this are numerous, here are just a few:

• Socialized medicine destroys innovation and will throw our health care into a new Dark Ages.


• The federal system our republic is built on intended for issues like this to be addressed exclusively by the states and not the federal government. To date states like California, Oregon, Massachusetts, and Hawaii have attempted such programs and they have all been complete failures. Hawaii's socialized health care program almost put the entire state into bankruptcy and had to be discontinued in seven months.


• Socialized medicine has not worked in other countries and, where applied, is noted for rationing and shortages. The average wait time to see a specialist in Canada after a general physician has noted a health care issue requiring further attention is 17 weeks (approximately four months). This is more than enough time to turn an early detected cancer into one that is inoperable. According to the National Center for Policy Analysis, women with breast cancer have a 14 percent higher survival rate in the United States than in Europe. Breast cancer mortality is 52 percent higher in Germany than in the United States, and 88 percent higher in the United Kingdom. Breast cancer mortality is also 9 percent higher in Canada than in the US. Less than 25 percent of US women die from breast cancer. In Great Britain, it's 46 percent; France, 35 percent; Germany, 31 percent; Canada, 28 percent; Australia, 28 percent, and New Zealand, 46 percent.


• Finally, and most important in my opinion, socialized health care is unconstitutional. Our constitution limits the federal government to 17 specific powers and none of them include health care. The argument that the government is already doing many things beyond the mandate of the Constitution does not justify further expansion. The line must be drawn some where. This is the time and this is the place.

If those who oppose socialize medicine engage in the debate by discussing provisions "necessary" to make it "work," the battle is over and we lose. We must stand opposed to socialized health care and do so without exceptions.

Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

Billionaire Envy

One of the things I can't stand in our modern culture is billionaire envy. That's right, billionaire envy. I get tired of social activists, politicians, or even common citizens who take pop shots at the 700 or so people who fall in the billionaire category. Heck, most of these people even attack mere millionaires, and I simply don't get it. These self-appointed parents want to tell us that the rich make "too much" and that the super affluent "need" to share the wealth with the rest of us.

Maybe it is because I have seen too many rags to riches stories, maybe it is my gut belief that economic freedom should be protected, or maybe it is because my wife and I combined have eight kids. That's right, eight kids (no, we are not Mormon, its a long story). Any way, with all these kids I hear constantly that it "isn't fair" that Stephen has this or Liz has that. My response to such childish behavior is to ask, "what can you do to get what he or she has?" Do you honestly expect me to take what they have away from them and give it to you? What incentive would you have to work harder or do more if I did the same to you? I want all my kids to be successful and I can't achieve that goal by punishing any of them for their success. I believe this common sense approach to child rearing transcends into governing. The more we encourage people to succeed, the greater the likelihood of more people succeeding. It is as simple as that.

VH1 recently did a show about the lifestyles of billionaires and it pointed out that Bill Gates makes $4 million a night while sleeping. I'm suppose to be envious of this. Instead, it makes me wonder how I can achieve the same thing. I believe that is healthy ambition, which is what has made this country so great.

Does that mean that I don't believe the rich should pay their fair share? The truth is they do and then some. According to the National Center for Policy Analysis, the top 1 percent pay 35% of the nation's taxes. This is excessive and punitive. It doesn't make sense. I tell these critics of the wealthy to grow up, go out, and make more. After that they can share their wealth as they so desire and stop getting the government to do the redistributing for them. If they shifted a little envy towards healthy ambition, they could do so much more good than merely criticizing those who are successful (many of whom give millions and billions to charity).

By the way, I'm not super rich, but I certainly would like to be some day. It is our nation's historic respect for that desire that has made America so prosperous.