Independent Women's Forum - Research Areas > Economics (In General)

Housing Crisis a Matter of Perspective

info@iwf.org (Carrie L. Lukas) — Thu, 15 May 2008 08:58:00 EDT

It's obvious that the so-called housing crisis has created really hardship among some, particularly those who took out loans on bad terms and then had their property values fall. Some of those people are clearly sympathetic, while others are much less so, such as those who knowingly took on big risks or lied about their financial situation to get a loan.

But it wasn't so long ago that the media was talking about a crisis of another sort -- a "housing affordability" crisis -- since housing prices had climbed so high that many were priced out of the market.

As George Will writes, the decline in home prices is the solution to that crisis and the current alarm over the state of the housing prices is really a matter of perspective:

Do young couples struggling to purchase their first homes concur with the sudden consensus that the decline in prices is a national misfortune? The Economist reports: "Monthly payments on a typical house with a 30-year mortgage and 20 percent downpayment were 18.5 percent of the median family's income in February, down from almost 26 percent at the peak -- and close to the historical average."

By this measure of housing affordability, the "crisis" is welcome.

The housing perhaps-not-entirely-a-crisis resembles, in one particular, the curious consensus about the global warming "crisis," concerning which, the assumption is: Although Earth's temperature has risen and fallen through many millennia, the temperature was exactly right when, in the 1960s, Al Gore became interested in the subject. Are we to assume that last year, when housing prices were, say, 10 percent higher than they are now, they were exactly right? If so, why is that so? Because the market had set those prices, therefore they were where they belonged? But if the market was the proper arbiter of value then, why is it not the proper arbiter now? Whatever happened to the belief, way back in 2007, that there was a housing "bubble"? Or to the more ancient consensus that, because of, among other things, the deductibility of mortgage interest payments from taxable income, too much American capital flows into the housing stock?

Government intervention -- like the bailout bill currently underconsideration -- by definition will help some at the expense of others. A sliver of homeowners currently in distress will certainly be better off, but the millions who prudently waited to buy, anticipating a decline in home values, are among the losers. They have reason to be angry, and if this website is any guide -- www.angryrenter.com -- many are.

The Thom Hartmann Show: The Neighborhood Stabilization Act

info@iwf.org (Carrie L. Lukas) — Mon, 12 May 2008 15:12:00 EDT

IWF's Carrie Lukas joins The Thom Hartmann Show for a discussion on the housing bill, The Neighborhood Stabilization Act.

The Right Balance: Spare Consumers The High Costs of Bad Government Policy

info@iwf.org (Carrie L. Lukas) — Tue, 06 May 2008 12:11:00 EDT

Carrie Lukas joined the The Right Balance with Greg Allen to discuss the economy to

Big Government Band-Aids

info@iwf.org (Stacy Chin) — Fri, 02 May 2008 10:53:00 EDT

Allison Kasic and Carrie Lukas encourage policymakers to consider policies that will spur economic growth and job creation, rather than focusing on big government band-aids.

Listen to the podcast.

IWF Podcast: Government Band-aids

info@iwf.org (Allison Kasic) info@iwf.org (Carrie L. Lukas) — Fri, 02 May 2008 10:48:00 EDT

Allison Kasic and Carrie Lukas encourage policymakers to consider policies that will spur economic growth and job creation, rather than focusing on big government band-aids.

The Andy Caldwell Show: The Economy and Government's Role

info@iwf.org (Allison Kasic) — Tue, 29 Apr 2008 14:39:00 EDT

IWF Director of the R. Gaull Silberman Center for Collegiate Studies Allison Kasic joins The Andy Caldwell Show to discuss the economy and what role the government should play.

Network: KINF AM 1440
Program: The Andy Caldwell Show
Time: 6:00 - 6:30 am ET
Date: Tuesday, April 29, 2008

Spare Consumers the High Costs of Bad Government Policy

info@iwf.org (Carrie L. Lukas) — Tue, 29 Apr 2008 09:44:00 EDT

Townhall.com

The news stories appear daily: gas prices inch up from previous record-breaking highs; food costs soar and shortages spread in much of the world. When combined with the souring housing market, it's no wonder that so many Americans are pessimistic about the country's economic future.

These economic reports reflect a glass-half-empty mentality. After all, March's 5.1 percent unemployment rate is still low by historical standards, and the current economic slowdown comes after six years of uninterrupted growth, which means the economy remains bigger than at any other time in history. Yet that doesn't mean that Americans shouldn't worry about our economic future. One real cause for concern should be the policies opportunistic politicians will pass in a rush to "solve" current economic challenges.

Consider what's being pushed by the House Majority in the name of addressing high gas prices. One piece of legislation being championed by Speaker Pelosi is the "Energy Price Gouging Act," which would expand the federal government's power to target anyone in the energy supply chain who "artificially inflates the price of energy." Those found guilty would be subject to fines and possible jail time.

The Federal Trade Commission already has the power to investigate charges of price gouging, and numerous government studies have failed to find any wrongdoing. But this legislation and the threat of harsh penalties against business executive could have a real effect on the marketplace by discouraging companies from doing business.

Consider what this could mean after a big natural disaster. With access to the region disrupted, transportation becomes more costly and supplies are scarcer. In a free market, prices play an important role in ensuring that supply meets demand. Prices jump, sometimes precipitously, which signals suppliers, both domestic and international, that it's worth making the extra investment to get their product to affected areas. High prices also encourage consumers to buy only what is necessary.

Legislation discouraging price adjustments would thwart this important process, which would deter suppliers from coming online, encourage overconsumption--even hording--in affected regions, and could result in shortages. One study examined this legislation's potential impact during the 2005 hurricane season (which included hurricane Katrina) and found it would have imposed $1.9 billion in economic costs.

Another proposal favored by Speaker Pelosi is to raise taxes on "Big Oil." Undoubtedly, there are countless inefficient tax deductions for favored industries that riddle the tax code. These should be scraped as a part of comprehensive tax reform. Yet it's illogical to assume that raising taxes on a company would encourage it to lower prices. Just the opposite should be expected: Taxes raise business costs and companies pass those costs on to consumers. In other words, Speaker Pelosi's tax hike would move gas prices in exactly the wrong direction.

Of course, while the Speaker wants to punish "Big Oil" with higher taxes, she wants to use the tax codes to reward "green" energy sources. The results of previous government efforts to tip the market in favor of politically correct energy industry players should give the public pause.

Republicans and Democrats alike have embraced subsidies for corn-based ethanol fuels, and the results are now being felt across the world. World food prices have risen by 83 percent since 2005, leaving many areas with shortages and relief organizations struggling to meet a rising demand for assistance. Studies have suggested that between a third and a quarter of the rise in prices is due to biofuel production. Ironically, the environment has been another loser in the push for ethanol. As Time Magazine recently detailed in its cover story, "The Clean Energy Scam," forests, wetlands, and grasslands-considered environmental jewels-are being destroyed in a rush to farm crops that can be turned into gasoline.

This history should give politicians some humility. Instead of attempting to micromanage the marketplace, policymakers should roll back unnecessary government intervention. Biofuels, solar, wind, and other alternative energy sources may have a big role to play in our future energy marketplace, but the government also needs to allow for more exploration for oil and the development of additional refining capacity. Instead of trying to pick winners and losers, the government should let the market work.

Speaker Pelosi's grab bag of energy proposals would be more likely to cause gas prices to rise than to bring consumers any relief. Instead of asking the government for help, Americans frustrated with rising prices-whether it's at the gas pump or in the grocery store-should ask politicians to first do no harm.

Don't Use Women To Justify Bad Economic Policy

info@iwf.org (Carrie L. Lukas) — Wed, 23 Apr 2008 10:53:00 EDT

Townhall.com

Senator Ted Kennedy feels sorry for women. In a report entitled "Taking a Toll: The Effects of Recession on Women," Kennedy laments: "It is now clear that our economy has sunk into a recession that threatens the wellbeing of countless American families. Yet despite their critical role in the workforce and in raising families, women and their vulnerability in economic downturns have received too little focus."

At first glance, American woman might thank the Bay State Senator for casting a spotlight on the precarious financial situation of many of our sisters. But a closer look reveals it is a classic, politically opportunistic document designed to advance the author's agenda while shedding little light on women's real economic challenges.

The report begins by highlighting opinion polls revealing growing economic anxiety. More Americans are concerned about the economy today than they were a year ago, and a majority expects things to get worse. In keeping with the report's theme, women are gloomier about the economic situation than men are. The report intones "women in particular feel profoundly anxious about their economic future" and "recent polling data show that women are more likely than men to say they are very worried about the economy."

Is this really a sign that women are being disproportionately affected by the economic downturn? A look at the Gallup poll cited in the report reveals an alternative explanation. Women were more concerned about the economy last year too, and it's not just the economy that worries women. As the poll's summary details: "Other areas for which Gallup finds significant gender differences -- all with women more concerned than men -- include healthcare, crime, the environment, drug use, the possibility of terrorist attacks, unemployment, and hunger/homelessness."

In other words, women worry more than men about everything. It shouldn't take extensive polling or Congressional research to reach this conclusion. Any psychology student-or anyone who has a mother or wife, for that matter-could tell you that women tend to be our worriers.

The report also cites the unemployment numbers as evidence that women are particularly burdened by the economic downturn. Yet while women's unemployment rose faster than men during the past year, women's unemployment started at a lower level. And today, adult men and women's unemployment rate is both 4.6%.

Any uptick in unemployment is concerning since it represents real hardship and frustration for people who desire productive work. Yet there's something condescending about Sen. Kennedy's decision to single out women and cherry pick data in an attempt to advance his big government agenda.

Undoubtedly, there are ways in which women are more vulnerable in tough economic times, especially single women with children. Yet the policies that will help women find gainful employment and help them make ends meet are the same policies that will help the broader economy.

Senator Kennedy offers a laundry list of government programs and regulations that he claims will help women. But he ignores these proposals' costs. For example, he wants to require employers to provide employees paid sick leave. It sounds like a good idea: Everyone understands the need to take time off from work due to illness. But such a mandate imposes costs on employers and discourages job creation. Similarly, increasing unemployment benefits or providing more generous welfare programs may sound like pure acts of charity, but they have real implications for the economy, discouraging people from finding and taking jobs.

Unemployed workers who are struggling to find jobs don't want government handouts. They want a growing economy that offers opportunity and rewards work. Instead of focusing on government band-aids, Senator Kennedy should consider policies that will actually spur economic growth and job creation.

Lower taxes and less regulation, for example, would actually have an impact on businesses, encouraging new investment and expansion. Congress needs to embrace trade liberalization, which has served as an engine of economic growth and lowered prices on countless goods.

While Washington could take positive steps to help the economy, policymakers should also first do no harm when it comes to the economy. Members toying with legislation to mandate a reduction in carbon-emissions, for example, should consider the costs of such an effort to the economy. While the relationship between carbon emissions and changes in the global temperature remain uncertain, we know that carbon-capping legislation would act as a significant drag on the economy, discourage job creation, and all for little if any environmental benefit.

Senator Kennedy may try to convince women that he can be their economic savior, but smart women know that government tends to create more problems than it solves.

IWF Podcast: Campus Living Wage Mandates

info@iwf.org (Halima Karzai) info@iwf.org (Allison Kasic) — Mon, 07 Apr 2008 13:27:00 EDT

Halima Karzai and Allison Kasic discuss campus living wage mandates.

Podcast Alert: Cap and Trade

info@iwf.org (Allison Kasic) — Fri, 28 Mar 2008 12:02:00 EDT

Over on the podcast page, Carrie Lukas and I discuss the economic impact of cap and trade policies. Give it a listen here.

IWF Podcast: Economic Polices on Climate Change

info@iwf.org (Allison Kasic) info@iwf.org (Carrie L. Lukas) — Fri, 28 Mar 2008 10:27:00 EDT

IWF's Allison Kasic and Carrie Lukas discuss the economic impact of cap and trade policies.

Static Scoring vs. Dynamic Scoring

info@iwf.org (Allison Kasic) — Wed, 19 Mar 2008 11:23:00 EDT

The Center for Freedom and Prosperity wraps up their three-part series on the Laffer Curve with this gem on dynamic scoring:

If you need to catch up, check out part one (Laffer Curve theory) and part two (Laffer Curve evidence).

America's Climate Security Act Bad for the Economy

info@iwf.org (Allison Kasic) — Tue, 18 Mar 2008 14:07:00 EDT

A new study out last week looks at the economic impact of the America's Climate Security Act of 2007 (S. 2191). The bill would create an emissions cap designed to dramatically reduce the amount of CO2 that the United States emits (it aims to reduce U.S. greenhouse gas emissions 63 percent by 2050). The bill would create new fuel standards and is basically the "cap and trade" plan (it caps emissions and allows entities to trade the right to pollute). Unfortunately, the study found that the bill would have tremendous costs to our economy, including:

Gross Domestic Product would be reduced by $151 billion to $210 billion by 2020 and between $631 billion to $669 billion per year in 2030.
Americans would lose 1.2 million to 1.8 million jobs in 2020 and 3 million to 4 million jobs in 2030.
Household income would be reduced by $739 to $2,927 per year in 2020 and $4,022 to $6,752 per year in 2030.
Electricity prices would increase by 28% to 33% by 2020 and 101% to 129% by 2030, and gasoline prices would increase 20% to 69% by 2020 and 77% to 145% by 2030.

In short, the costs are severe, as explained by IWF's Carrie Lukas in a press release:

"This legislation, if passed into law, would cost the United States trillions of dollars in the coming decades and lead to the loss of millions of jobs," said Carrie Lukas, vice president for policy and economics at the Independent Women's Forum. "The average American family will see their income go down by thousands of dollars and their energy costs soar. Simply put this policy would be bad news for American families."

And the benefits to the environment are minimal:

"The saddest aspect of this legislation is that, if the global warming theory and current predictions are correct, than this won't make any meaningful difference in future temperature increases. The economic slowdown will leave us with fewer resources to invest in improving the environment or combating other challenges that may lie ahead," said Lukas. "Policymakers should not lose site of the unintended consequences of policies such as this and focus on ways to improve our environment without sacrificing our economy."

Check out the report here. IWF's press release on the study is available here.

America's Climate Security Act Bad for the Economy

Mon, 17 Mar 2008 10:25:00 EDT

For Immediate Release:                                                                        Contact: Carol Eberly
March 17, 2008                                                                                         202-349-5882 or
                                                                                                                      carol.eberly@iwf.org

(Washington, DC) - - The National Association of Manufacturers (NAM) and American Council for Capital Formation (ACCF) released a study last week on the economic impact of the America's Climate Security Act of 2007 (S. 2191), legislation which is designed to reduce U.S. greenhouse gas emissions 63 percent by 2050. The study found that this legislation would significantly impede economic growth in the United States.

"This legislation, if passed into law, would cost the United States trillions of dollars in the coming decades and lead to the loss of millions of jobs," said Carrie Lukas, vice president for policy and economics at the Independent Women's Forum. "The average American family will see their income go down by thousands of dollars and their energy costs soar. Simply put this policy would be bad news for American families."

The numbers in the analysis are staggering. Gross Domestic Product would be reduced by $151 billion to $210 billion by 2020 and between $631 billion to $669 billion per year in 2030. Americans would lose 1.2 million to 1.8 million jobs in 2020 and 3 million to 4 million jobs in 2030. Household income would be reduced by $739 to $2,927 per year in 2020 and $4,022 to $6,752 per year in 2030. Electricity prices would increase by 28% to 33% by 2020 and 101% to 129% by 2030, and gasoline price would increase 20% to 69% by 2020 and 77% to 145% by 2030.

"The saddest aspect of this legislation is that, if the global warming theory and current predictions are correct, than this won't make any meaningful difference in future temperature increases. The economic slowdown will leave us with fewer resources to invest in improving the environment or combating other challenges that may lie ahead," said Lukas. "Policymakers should not lose site of the unintended consequences of policies such as this and focus on ways to improve our environment without sacrificing our economy."

To view the comprehensive national and 50-state reports, please visit www.nam.org/climatechangereport or www.accf.org.

The Independent Women's Forum is a non-partisan, 501(c)(3) research and educational institution. Founded in 1992, IWF focuses on issues of concern to women, men, and families. Our mission is to rebuild civil society by advancing economic liberty, personal responsibility, and political freedom. IWF builds support for a greater respect for limited government, equality under the law, property rights, free markets, strong families, and a powerful and effective national defense and foreign policy. IWF is home to some of the nation's most influential scholars-women who are committed to promoting and defending economic opportunity and political freedom.

###

For additional information, or to schedule an interview with Carrie Lukas, please contact Carol Eberly at 202-349-5882 or carol.eberly@iwf.org.

The Michael Dresser Show: Economy, Rebates, and more.

info@iwf.org (Carrie L. Lukas) — Tue, 11 Mar 2008 13:56:00 EDT

IWF Vice President for Policy and Economics Carrie Lukas joined The Michael Dresser Show to discuss the economy, tax rebates, and more.

The Amy Oliver Show: Economics

info@iwf.org (Carrie L. Lukas) — Thu, 06 Mar 2008 14:58:00 EST

IWF Vice President for Policy and Economics Carrie Lukas joined The Amy Oliver Show to discuss the current economics.

Viewpoints with Lockwood Phillips: 2008 Elections

info@iwf.org (Carrie L. Lukas) — Thu, 06 Mar 2008 14:28:00 EST

IWF Vice President for Policy and Economics Carrie Lukas joins Viewpoints with Lockwood Phillips to discuss the presidential race.

Squeezing the Middle Class

info@iwf.org (Carrie L. Lukas) — Wed, 27 Feb 2008 12:12:00 EST

Townhall.com

With all the gloomy economic news, politicians from the left and the right want to project concern for middle-class economic anxieties. This led to a rare burst of bipartisanship and the cobbling together of so-called "stimulus" packages. The centerpieces is a tax rebate-which is really indistinguishable from plain old government handouts, since checks will be sent based on income and family size, without any real relationship to tax liability. Yet for all the talk about easing the financial pressures faced by the middle class, the government is still embracing policies that raise the cost of living and make it harder to pay the bills.

Consider the rising cost of food. According to the Bureau of Labor statistics, the cost of "food at home," or food purchased at grocery stores, rose by 5.6 percent between December 2006 and December 2007. This included big increases in some family staples: the cost of milk increased nearly 20 percent, cheese by 13 percent, and bread by more than 10 percent. Why are families seeing their food bills climb?

The government's energy policy shares the blame. Mandates that we use more ethanol have encouraged farmers to grow more corn, which can be used to create ethanol, and as a result farmers dedicated more of their farmland to this one crop. In 2007, twenty percent more acres were used for corn production than in 2006. The greater demand for corn made the price of corn-and products that depend on corn, such as poultry and beef-jump. But since the focus on corn left less land for raising other agricultural products, the price of commodities such as soybeans and wheat also rose to historic highs. If Congress continues to subsidize the production and mandate the use of ethanol, consumer food prices will continue to rise higher.

Heating and gas bills also increased last year. While Congress may provide additional short-term assistance for heating bills to those with the lowest income, policymakers are doing little to encourage an increase in our domestic energy supply. Policymakers still limit domestic exploration for oil and discourage the development of more refining capacity, even though these measures are among the most promising for bringing down energy prices over the long term.

In recent years, American families have been able to cut down on costs by taking advantage of the goods imported from overseas. Liberal elites may sneer at Wal-Mart, but there is a reason why so many families buy their everyday supplies from this retail giant: it saves them money. Wal-Mart leverages the global marketplace to bring in high quality goods at the lowest prices, which are then passed on to the consumer. As a result, the average American family saves an estimated $2,500 per year by shopping at Wal-Mart. Unfortunately, our progress in liberalizing trade has largely stalled, and, given the rhetoric of many presidential aspirants, may reverse in the next Administration. That's the wrong direction for American families. If policymakers want to raise living standards for the middle class, they need to maintain a commitment to trade liberalization.

A rebate of a few hundred dollars will certainly be welcome by families across the country, but it has no impact on their future financial prospects and therefore won't alleviate any feelings of economic insecurity. Workers want a growing, dynamic economy and a tax code that rewards work. Lowering marginal tax rates is the key to rewarding productive activity. For starters, Congress should make the existing tax cuts permanent so that workers will know that a big government-imposed pay cut isn't in their future. While Senate Democrats push to extend unemployment benefits as a part of the "stimulus," American families know that those out of work want jobs, not handouts. It may not sound like good progressive politics, but reforming our corporate tax code and lowering the corporate tax rate, which is among the highest in the developed world, would be among the best ways to encourage economic growth and job creation.

This stimulus package is a missed opportunity. Government can't spend its way into economic prosperity, but policymakers can reverse damaging policies that hinder growth and make life more expensive for American families.

Carrie Lukas is the vice president for policy and economics at the Independent Women's Forum and author of The Politically Incorrect Guide to Women, Sex, and Feminism.

IWF Policy Brief #13: Congress Should Commit to Restraining Spending

info@iwf.org (Carrie L. Lukas) — Mon, 11 Feb 2008 16:51:00 EST

Executive Summary

As Congress considers how to boost the economy, they should begin by ceasing behavior that harms the economy: this means ending wasteful government spending and reforming entitlement programs to reduce the government's implicit debt.

Federal spending has been growing at a pace that outpaces inflation and population growth. While some of this growth can be justified as necessary to fund the war effort and national security activities, non-defense discretionary spending grew by more than a third in real terms since 1999.

Discussions of spending restraint often focus on eliminating government waste and frivolous earmarks-important goals to be sure. Yet the most important budgetary problem facing the government is the growing cost of entitlement programs. Already more than half of the federal budget is on autopilot. Social Security and Medicare alone consume 40 percent of the federal budget. As the baby boomers retire, the costs of these programs will swell. If nothing is done to address their costs, spending on other programs (including defense) will be crowded out, taxes will have to rise dramatically, or we will incur massive new debt.

Policymakers should act soon to control spending, both by ending government waste and by reforming entitlement programs.

Can the Government Keep Us Safe?

info@iwf.org (Allison Kasic) — Thu, 07 Feb 2008 16:06:00 EST

Bryan Caplan (via Tyler Cowen) lays out some stats that cast a shadow of doubt on how effective government regulation is at ensuring a safe work environment for American workers.

Eminent Domain and Economic Growth

info@iwf.org (Allison Kasic) — Wed, 30 Jan 2008 11:54:00 EST

Since the controversial Kelo v. New Londoncase in 2004, 42 states have passed some restriction on the practice of eminent domain on the behalf of private developers. Critics argue that such restrictions harm the economy. A new study from the Institute for Justice finds that such claims have no grounding in reality. The Wall Street Journal reports:

First, the report assigns each state to one of three categories according to the level of reform implemented after Kelo: "strong," "moderate" or "none." Then it compares the data for construction jobs, building permits and property-tax revenue before and after the effective dates of the reforms for each state. The verdict: So far, there has been no discernable hit to economic activity from the restriction of eminent domain, even in those states with the broadest reforms.
This result isn't surprising. Developers love eminent domain because it's easier to snap up land when government forces owners to sell -- no unpleasant dickering over price, etc. Local politicians likewise believe they are best positioned to pick winners and losers and to shape the future of their cities.
But private development went along very nicely for two centuries before politicians began seizing one person's property for the benefit of another private citizen. Sometimes the marketplace adapted in amusing ways, as when major building projects were forced to go up around, or even on top of, older buildings. But in the absence of the coercive state, buildings still got built.

The full report is available here.

IWF Podcast: Economic Stimulus Package

info@iwf.org (Carrie L. Lukas) info@iwf.org (Allison Kasic) — Wed, 23 Jan 2008 15:37:00 EST

IWF's Carrie Lukas and Allison Kasic discuss the proposed economic stimulus package and the general state of the American economy.

A Common Vision of the Problems Our Economy Faces

info@iwf.org (Carrie L. Lukas) — Mon, 10 Dec 2007 12:20:00 EST

Human Events

According to today's conventional wisdom, bipartisan agreement is all but an oxymoron. Yet when thoughtful policymakers and analysts take a broad view of the challenges facing the U.S. economy, there's a surprising amount of commonality.

At a policy forum held by the Independent Women's Forum this week, speakers from the Democratic Governor of Arizona, Janet Napolitano, and a Brooking Institute scholar to former Republican Governor of Michigan, John Engler, and an American Enterprise Institute analyst identified key priorities and goals for government. They agreed that while there's much to celebrate with the United States economy, massive challenges loom.

Our broken immigration system burdens states with high healthcare and law enforcement costs due to the massive illegal population. Yet that same immigration system keeps out some of the world's most highly skilled workers (many of whom have been educated in the United States), the very workers whom companies crave.

Despite our massive spending on elementary and secondary education, too many of America's children receive a mediocre education that simply does not prepare them to compete with their peers internationally. Scores released just this week on the International Student Assessment show that U.S. 15 year olds ranked 17th out of the 30 countries in the Organization for Economic Cooperation and Development (OECD) in science and 24th in math. The United States is clearly failing to prepare much of the next generation to participate and contribute to our increasingly knowledge-based economy.

The United States also has the second highest corporate tax rate of the OECD countries. U.S. tax rates not only demand too much of companies' money, but too much of their time. The tax code is so needlessly complex that companies waste billions of dollars attempting to comply while minimizing their liability. Regulations also stifle business. In particular, well-intentioned laws like the regulatory regime known as "Sarbanes-Oxley," which increased penalties for corporate malfeasance, mandated internal audit systems, and made executives personally and criminally liable for public financial reports, has cost companies billions and made America a less attractive climate for business.

Demand for energy is growing at a rate that outstrips supply. Government impedes the development of domestic sources of oil but decries our dependence on foreign sources of oil. Our nation's entitlement programs, lead by Medicare and Social Security, which together consumer close to a trillion dollars each year, commandeer too large a share of our public resources and will only become more expensive as the baby boomers retire. Overwhelmingly experts agree that our healthcare system, which ties insurance coverage to employment, puts people at risk and helps fuel rising healthcare costs.

The consequences of all these failures of government policy are becoming more pronounced as the rest of the world becomes more competitive and our economy becomes more global. Companies frustrated with high labor costs, a dearth of skilled workers, stifling regulations, or onerous taxes can often choose to locate elsewhere. While U.S. citizens take for granted our economic preeminence, China's rapidly growing economy will soon rival that of the United States.

The United States needs to address our business climate, encourage innovation, and ensure that the next generation has the skills to keep our economy growing. Policymakers across the political spectrum recognize that the existing system fails in many important areas.

Of course, diagnosing our problems is the easy part. And clearly conservatives and liberals tend to quickly part ways once they begin discussing the details of how to solve these problems. Yet it's important to remember that even in this age of supposedly fierce partisanship, there are areas of agreement and the desire for a growing, dynamic economy is shared by Republicans and Democrats alike.

Ms. Lukas is the director of policy at the Independent Women's Forum. She is the author of "The Politically Incorrect Guide to Women, Sex, and Feminism" (published by Regnery, a HUMAN EVENTS sister company).

Is Globalization Really the Evil Monster People Think it is?

info@iwf.org (Anne Trenolone) — Tue, 27 Nov 2007 13:00:00 EST

I heard an interesting commentary piece on NPR, to be exact it ran on Marketplace, last evening that links in well with IWF's upcoming event: Success in the Global Economy: An Agenda for the 110th Congress which is focusing on the US economy in the context of globalization.

The piece notes an article that ran in The Wall Street Journal, "A Globalization Winner Joins in Trade Backlash" that contains this eyebrow raising statistic:

The latest Wall Street Journal/NBC News poll conducted earlier this month found that 60% of voters nationwide agreed with the statement that "foreign trade has been bad for the U.S. economy.

Of note is that the Marketplace commentary offered up by Paul Krugman was not exactly what I expected. Krugman is a columnist for The New York Times whose latest book is called The Conscience of a Liberal and his warning to Democratic presidential candidates is "Cool the Globalization Rhetoric". The intro to the piece sums it up this way:

A funny thing's happening on the way to the Democratic presidential nomination. The Wall Street Journal pointed it out the other day. Iowa voters are worried about the after-effects of globalization. So worried that the major Democratic candidates are working overtime talking down free trade. Globalization is turning into a hot-button campaign issue. Republicans are having their problems, too.
But commentator Paul Krugman says, its effects on the U.S. economy are overblown.

Krugman himself offers this:

Let's start with the idea that globalization makes it impossible for American workers to earn good wages. The facts say otherwise.

Both pieces offer a good picture of the globalization debate at the grassroots level.

FOX News' Your World with Neil Cavuto:Is Sen. Clinton unfairly bashing economy to win votes?

info@iwf.org (Carrie L. Lukas) — Mon, 19 Nov 2007 16:56:00 EST

Carrie Lukas joins Your World with Neil Cavuto to discuss whether Senator Clinton is unfairly bashing the economy to win votes by comparing today's economy with The Great Depression.