Gender Does Not Affect Gender Pay Gap


We’ve probably all heard the expression “You get what you pay for.” This rings true for employers as well regarding the “gender pay gap.”

As we argue in a recent Heritage paper, employers pay for what they get. Despite claims that employers pay women less than men for the same work, an examination of wages across genders shows that factors such as education, experience, hours of work, industry, and career interruptions can explain away most of the “pay gap” between men and women. Other unobservable factors, such as non-cash benefits and personal choices, likely explain the small remaining difference.

Employers have little room for un-merited pay differences in today’s competitive economy. If they want to hire and retain the best employees, they must pay them according to their productivity. If they pay more than that, they will go out of business. If they pay less, their workers will jump ship to competitors. The Heritage report points out that “market forces compel employers to set pay on the basis of factors such as these that affect productivity. Businesses that pay their workers below their productivity see them accept better job offers from competitors.” Businesses have little economic room to discriminate.

Such factors cause pay differences in the federal government, where managers have no ability at all to discriminate. The General Schedule sets federal pay almost exclusively on the basis of seniority and grade—gender never enters into the mix. Nonetheless, the federal government still has an 11-cent pay gap. The Office of Personnel Management attributes this to “differences in occupational distribution.” The Heritage study finds that “females make up 75 percent of all federal social workers but only 17 percent of all general engineers. On average, federal social workers earn $79,569, while federal general engineers earn $117,894”—although male and female engineers earn virtually the same amount.

The pay gap goes beyond bad statistics. Many politicians use it to justify policies that would hurt women in the workforce, such as the Paycheck Fairness Act. This legislation would take away employers’ ability to pay employees based on their productivity, instead forcing employers to set pay based on standard objectives such as job title and years of experience. Forget performance-based pay or bonuses.

The current “you get what you pay for” system is fairer to workers and employers than one that makes recognizing job performance legally risky. Employers would certainly not respond to such a system by raising pay.

The post Gender Does Not Affect Gender Pay Gap appeared first on The Foundry: Conservative Policy News from The Heritage Foundation.

Study: Cronyism Increasingly Lucrative for Politicians and Businesses


(Photo: Justin Sullivan/Getty Images)

(Photo: Justin Sullivan/Getty Images)

Multibillion-dollar “economic development” deals are steadily shifting wealth from taxpayers to large corporations, state by state, according to a new study.

Researchers from George Mason University’s Mercatus Center reveal this is a fool’s game for states and taxpayers. The study reports:

  • As of 2013, Walmart had received at least 260 special state benefits worth more than $1.2 billion. For every 100 new Walmart jobs, an average of 50 existing jobs disappear as other retailers are crowded out.
  • Apple got $370 million in state tax breaks for setting up in North Carolina. With just 50 jobs created, that’s $7.4 million per job.
  • New York granted
    aluminum giant Alcoa free electricity for more than 30 years (estimated value: $5.6 billion). In return, Alcoa pledged to make a $600 million investment and promised not to fire more than 165 workers. Subsequently, New York raised taxes multiple times on its citizens.

Why do these dubious deals persist? Why keep dispensing public funds to pad private profits in ways that would make even the biggest of big spenders cringe?

Lotta Moberg, co-author of the Mercatus report, says crony behavior pays off for politicians … literally.

“As cronyism grows, the benefits that policymakers get from crony relations become increasingly lucrative, which creates a problem of adverse incentives,” Moberg said.

“Even if policymakers understand that targeted benefits are not good for the economy, they have the incentive to keep providing them as they benefit from it personally.”

Mercatus’ free marketers define cronyism as “the practice of exchanging favors between powerful people in politics and business.” Moberg and fellow researcher Christopher Coyne have said the practice “has become entrenched into the social fabric.”

Thanks to what Ronald Reagan biographer Craig Shirley calls “Obama Republicans,” blandishing public benefits on private corporations has more bipartisan backing than ever.

“They have bought into the oligarchy of big business and big government doing business together, at the expense of the little guy,” Shirley says of a long line of corporatist politicians.

Hence, red-state Texas awarded Berkshire Hathaway, led by liberal icon Warren Buffett, $803 billion in incentives.

Coyne and Moberg list four prescriptions to combat cronyism in the states:

  • Allow for current targeted benefits to expire, and abolish state programs that grant them on a regular basis.
  • Ensure targeted benefits cannot be granted by individual policymakers on an ad hoc or informal basis.
  • Broadly lower tax rates to encourage company investments and obtain a more efficient allocation of resources.
  • Cooperate with other states to form an agreement about dismantling targeted benefits.

Moberg admits she knows of no leading state-level leader who has adopted or even advocated these reforms.

Indeed, University of Chicago economist Luigi Zingales sees post-modern America morphing into his home country of Italy—one of the sick sisters of Europe.

Public trust has been “eroded by a betrayal of pro-business elites whose lobbying has come to dictate the market, rather than be subject to it,” he said.

“This betrayal has taken place with the complicity of our intellectual class,” Zingales explains in his book, “A Capitalism for the People: Recapturing the Lost Genius of American Prosperity.”

Worse, cronyism is not necessarily illegal. And Moberg agrees with Zingales that such political “rent-seeking” is on the rise.

“Many of the observations of favorable regulations, subsidies, bailouts, loan guarantees and targeted tax breaks are quite recent and point to an unhealthy environment in government today,” Moberg said.

“It doesn’t have to be cash under the table—it can be a legal contract. But as an economist, I would say it’s draining the economy.”

Kenric Ward is a reporter for Watchdog.org, a national network of investigative reporters covering waste, fraud and abuse in government. Watchdog.org is a project of the nonprofit Franklin Center for Government & Public Integrity.

The post Study: Cronyism Increasingly Lucrative for Politicians and Businesses appeared first on The Foundry: Conservative Policy News from The Heritage Foundation.

Permanent “Bonus Depreciation” an Important Move Toward Tax Reform


The present tax system is biased against savings and investment in many ways. One of the most important is that, unlike other expenses, businesses must deduct capital expenses (such as for machinery and equipment) over many years rather than in the year incurred. This raises the cost of capital and reduces investment. Lower investment, in turn, harms productivity growth, international competitiveness, job creation and real wages. Sustainable real wage growth is only possible through productivity growth by internationally competitive businesses. Accordingly, the proper, neutral tax treatment of capital expenses is full expensing.

Internal Revenue Code Section 179, for example, allows smaller firms to expense capital costs and substantially mitigates the bias against investment by small firms. H.R. 4457, which has been reported out of the House Ways and Means Committee, would continue to allow annual investments of up to $500,000 to be expensed. Under present law, however, all but the smallest U.S. firms that make investments in the U.S. must routinely wait seven years—and sometimes 15 years—to fully deduct their investments.

The U.S. has not only the highest corporate tax rate in the world but one of the worst capital cost recovery allowance systems. Bonus depreciation reduces the tax bias against investment and reduces the competitive disadvantage that U.S. firms face by allowing firms to expense half of their capital costs.

Bonus depreciation is not really a bonus at all but moves tax policy substantially in the direction of a neutral tax base—a tax base that is neutral toward the decision about whether to invest or consume and neutral among different investment options. Markets, not the tax code, should dictate the level and composition of investment. The economic literature overwhelmingly supports the proposition that expensing is the “optimal” tax policy and would promote the highest rate of economic growth. Bonus deprecation moves the tax code more than halfway toward that goal.

Bonus depreciation is, in short, an extremely important step towards real tax reform. It should be permanently extended.

In the absence of congressional action, bonus depreciation will expire for investments after December 31, 2013, and the cost of capital for firms throughout the country will increase substantially. This tax increase would move us away from a neutral tax base. It will therefore reduce investment and have an adverse impact on productivity, competitiveness job creation, and real wages.

Some in Congress may perceive making bonus depreciation permanent as “too costly” given our current budget deficit. The initial cost of permanently allowing 50 percent expensing may appear substantial. The Joint Committee on Taxation scores bonus depreciation as reducing federal revenues $79 billion in fiscal year (FY) 2015 and $42 billion in FY 2016, but the revenue reduction steadily declines after the first year, and by FY 2020 it reaches a plateau of $10 billion to $12 billion annually in reduced revenues. This is a reasonable price to pay for a competitive tax system.

Moreover, these estimates dramatically overstate the degree to which bonus depreciation would actually reduce revenues. In the real world, businesses respond to major changes in tax policy. A lower cost of capital will increase investment levels and cause economic growth. Higher economic growth expands the tax base. A dynamic or reality-based score would show that bonus depreciation would reduce federal revenues less initially and actually raise substantial revenue in the out years.

Bonus depreciation is an enormous step in the right direction. It is not a new tax cut. It has been in place for property placed in service since January 1, 2008. Continuing this policy and making it permanent would be a major step toward true tax reform. Letting it expire, in contrast, would be a steep and economically harmful tax increase.

The post Permanent “Bonus Depreciation” an Important Move Toward Tax Reform appeared first on The Foundry: Conservative Policy News from The Heritage Foundation.

Suddes Rails Against Freezing Ohio “Green Energy” Mandates

Thomas Suddes has raged against a Republican proposal to freeze state renewable energy mandates in three consecutive editorials, imploring Governor John Kasich to drag his party further left as he did for Obamacare’s Medicaid expansion.

Suddes, an Ohio University journalism professor and editor at Cleveland Plain Dealer parent company Northeast Ohio Media Group, wrote on May 24 that Senate Bill 310 (SB 310) “is a first-class ticket – backwards.”

SB 310, as passed by the Senate, is like telling the Wright brothers, before their first flight, to give it a rest,” Suddes explained in one of his characteristically goofy similes.

In the eyes of Suddes and most of Ohio’s other newspaper editors, forward progress means bigger government — in this case, through a “green energy” regime that forces Ohioans to subsidize costly fossil fuel alternatives.

SB 310 would freeze for two years the electricity mandates that were among Democrat Governor Ted Strickland’s crowning achievements. Passed in 2008 with wide Republican support, the mandates have been a boon to members of Ohio Advanced Energy Economy and other businesses profiting from state manipulation of the market.

“The Columbus Dispatch reported Friday that Kasich is believed to have told the General Assembly’s GOP leaders that he’d veto S.B. 310 if it reached his desk, at least in its current form,” the Plain Dealer editorial board wrote on May 2. “Good for Kasich. That’s leadership. That’s spine.”

“It’s also a sharp contrast to the special-interest groveling that state Senate Republicans are demonstrating by trying to railroad S.B. 310 through the legislature,” Suddes and the other editors added.

Not included on the list of media-loathed special interest groups: WK Solar, which went bankrupt in 2012 with a remaining balance of over $1 million on state loans totaling more than $10 million.

Sen. Kris Jordan (R-Ostrander) introduced a bill in 2013 to repeal the 2008 Renewable and Advanced Energy Portfolio Standard (RAEPS), whose benefits “green energy” advocates tout by framing public spending as found money. Despite expressions of support from Ohio Senate leaders including Sen. Bill Seitz (R-Cincinnati), the proposal went nowhere.

SB 310 was a leadership-supported alternative to tweak and freeze the requirements instead of repealing them entirely, but even that proved too much for Gov. Kasich, whose government “job creation” rhetoric is a big hit with the likes of Thomas Suddes.

“The antics of Ohio’s Republican-run General Assembly are undercutting the job-creating efforts of Republican Gov. John Kasich,” Suddes wrote in his May 18 column.

Suddes has continued predicting disaster-movie outcomes if the green mandates aren’t allowed to ratchet up as they were designed to, even after SB 310 was weakened to include a two-year freeze instead of a permanent freeze.

“What S.B. 310 really says is that Ohio can just keep on, keepin’ on, no worries. So if, perchance, emphysema, or worse, hijacks your lungs because of belching Ohio power plants, that’s mere collateral damage: Regrettable, but cheap power is cheap power,” Suddes warned in his May 11 editorial.

“No broken eggs — no omelet; no sooty lungs — no juice.”

Despite belching out silly far-left screeds week after week, Suddes in published not only in the Plain Dealer but also in The Columbus Dispatch and Dayton Daily News. Suddes was the chief legislative correspondent at the Plain Dealer — Ohio’s largest newspaper –from 1982 to 2000.

The post Suddes Rails Against Freezing Ohio “Green Energy” Mandates appeared first on Media Trackers.

The One Policy That Would ‘Devastate’ Restaurants, According to Carl’s Jr. CEO


The chief executive of CKE Restaurants—parent company of Carl’s Jr. and Hardee’s—says the Obama administration is anti-business and the outlook isn’t getting any better.

“Basically, everything this administration has done has been anti-business,” Andy Puzder told Fox News’ Stuart Varney.

Puzder, who wrote a book called “Job Creation” and spoke to The Foundry in 2011, cited the push for a minimum wage hike as one of the greatest threats facing restaurants.

“I think you’ll see a lot of restaurants closing,” Puzder said. “I don’t think that restaurants can operate profitably if they’re paying a $15-an-hour minimum wage. I think you would see a devastating impact to the country.”

Seattle recently announced it would increase its minimum wage to $15 per hour. Obama supports a hike to $10.10 per hour, which Puzder also said would be harmful, citing a Congressional Budget Office analysis.

>>> Check Out: Obama’s Minimum Wage Hike Would Eliminate 500,000 Jobs

Puzder listed several government actions that have stymied growth in the restaurant industry: higher taxes, increasing health-care costs, rising fuel prices and an “unnavigable regulatory maze.”

“I don’t think the president is a bad guy,” he said. “But he does not have the experience or the background to understand what it takes to create jobs. And I think he interprets actions by businesses as negative for people when they’re really very positive. We’re just trying to create jobs and opportunities.”

The post The One Policy That Would ‘Devastate’ Restaurants, According to Carl’s Jr. CEO appeared first on The Foundry: Conservative Policy News from The Heritage Foundation.

Piketty’s Questionable Data


Thomas Piketty (Photo: IBO/SIPA/Newscom)

Thomas Piketty (Photo: IBO/SIPA/Newscom)

Thomas Piketty made some questionable choices in adjusting and presenting the data that underlies his bestselling economics tome, “Capital in the Twenty-First Century.” Chris Giles, economics editor of the Financial Times newspaper, published a detailed list of apparent fudges in Piketty’s data.

Giles’ most explosive accusation is that Piketty chose data sources that were friendliest to his own preconceived ideas. For example, both the United States and the United Kingdom have two potential data sources for wealth: estate tax records and surveys of living households. In the U.S., Piketty uses the household survey, which showed rising wealth concentration. But in the U.K., he chose to use the inferior-quality estate tax data, which also showed rising wealth concentration. If he’d flipped both choices, he would have found falling inequality in the U.K. and steady inequality in the U.S. Giles is correct when he says, “Choices matter.” Giles’ estimates of U.K. wealth inequality in recent ecades are much lower than Piketty’s, and Piketty will need to defend his choices if we are to believe that U.K. wealth inequality has been rising.

Piketty presents data showing that wealth inequality rose slightly in Sweden from 2000 to 2010. But his “2000” data point actually is 2004 data, and his “2010” data point actually is an average of 2005 and 2006. When Giles used the data from 2000, he found that inequality actually fell slightly from 2000 to 2006 (the last year available). Perhaps Piketty had a good reason to use the years he did, but he has not offered an explanation.

These questionable choices have been reported as “errors” or “mistakes,” but the questions about Piketty’s data pertain to the choices he made, not the minor goofs. Historian Phillip Magness presents Piketty’s summary data on U.S. wealth inequality alongside its pre-1970 source. The graphs tell very different stories. Perhaps Piketty’s adjustments were valuable and moved the data in the right direction. But it is incumbent on Piketty to explain those adjustments, and it is incumbent on the reader to understand that the data was uncertain and incomplete to begin with and then was adjusted as the author believed necessary.

Even the best data on wealth distributions is uncertain. One of Piketty’s central ideas is that the amount and concentration of wealth has been rising steadily since 1980. He contends that the same economic forces are at work now and he projects the recent changes into the future. But if there is substantial uncertainty about each estimate and disagreement among data sources, then “trends” are highly subjective. As Yogi Berra may have said, “Predictions are hard to make, especially about the future.”

So how should we read Piketty? As others have noted, Capital can be divided into three components: history, prediction and prescription. One can believe the history without agreeing with Piketty’s predictions about the future. And if Piketty’s predictions are correct, he’s still wrong to prescribe brutal, confiscatory taxation, because that would increase poverty and lower wages, especially in poor countries.

What is at stake in Giles’ critique is Piketty’s account of history. Piketty’s story makes broad claims about global trends in the 19th and 20th centuries. If the trends turn out to depend on making specific choices, interpolations and adjustments in his collection of data, then we might have to conclude that predictions are hard to make, even about the past.

The post Piketty's Questionable Data appeared first on The Foundry: Conservative Policy News from The Heritage Foundation.

The Economic History Lessons We Never Learned


President Barack Obama and former Obama Administration Treasury Secretary Tim Geithner. (Photo: Olivier Douliery/MCT/Newscom)

President Barack Obama and former Obama Administration Treasury Secretary Tim Geithner. (Photo: Olivier Douliery/MCT/Newscom)

Are conservatives going to allow liberals to rewrite the history of the Great Recession, just as they so successfully did in writing the fictitious account of the Great Depression, which now appears in almost every American history text?

The central message of former Obama Treasury Secretary Tim Geithner in his new book “Stress Test,”  is that the bank bailouts and the Obama stimulus plan saved us from a second Great Depression.  President Obama recites that same line in nearly every speech he delivers.

This is what we call a  counterfactual – what might have happened if we hadn’t done what we did.  The left loves  counterfactuals, because - like “climate change” – they are impossible to refute.  No one can say for certain what would have happened in some parallel universe.

But getting the story right on this episode of history is a critical issue for American economic policy going forward.  We let the left write the history books on the Great Depression and it was an Aesops Fable. Most Americans, my 12-year-old included, are taught that FDR’s New Deal ended the Great Depression and moved millions of Americans out of misery.

Actually as Amity Shlaes shows in her classic book “The Forgotten Man,” and Burt Fulsom in “New Deal or Raw Deal” nearly every government regulatory bureau and spending program conceive during the Great Depression only lengthened the misery and disrupted the normal healing powers of a free economy. Eight years after the New Deal was launched, the unemployment rate was still in double digits, and it was not until the start of World War II, when millions of young men were put in military uniform and the nation mobilized for a global war, that the Depression ended.

Which brings us to the Great Recession in 2008 and its aftermath. What is highly inconvenient for apologists for the Obama blitzkrieg of government programs and debt in 2009 and 2010 is that at the start of his presidency, Barack Obama laid out his own counterfactual of what would have happened without the deluge of federal spending and debt.

According to the White House’s own calculations, the economy would have been better off today if the government had done nothing, rather than borrow and spend $6 trillion. The unemployment rate WITHOUT the stimulus was expected to be 5 percent today. Instead it is 6.3 percent and in reality closer to 10 percent.

Another way to put this is that if the labor force had not declined AND we had the 5 percent unemployment rate Mr. Obama says we would have had without the stimulus, there would be at least 10 million more Americans working today.

So, considering we are still 10 million jobs short and $6 trillion further in debt, here is another counterfactual to ponder: How much faster would the economy be growing today if we didn’t have the carrying cost of $6 trillion in debt to contend with? Think if we had used this money to finance a 21st century tax reform or for transitioning Social Security to a fully funded personal account system that has real assets building up each year, not a vault full of IOUs.

All this is important to remember as Geithner takes his faux victory lap around the country patting himself on the back for pulling America out of the financial abyss.

President Obama’s first chief of staff, Rahm Emanuel, let the cat out of the bag in the earliest days of the new administration by saying the president should never let a crisis “go to waste.” This burst of honesty was an admission that the left used the financial crisis as an excuse to do all the things it had wanted to do for years — redistribute trillions of dollars to their voters, reregulate the economy, build massive green energy projects, refinance the Great Society welfare state, rescue the unions with auto bailouts, print money in the trillions, and when the economy fails to perform, blame it all on George W. Bush.

The real story of the financial crisis of 2008 was a massive real estate bubble facilitated by easy money from the Fed, government policies through entities such as Fannie Mae and Freddie Mac that underwrite risky mortgage loans with near 100 percent loan guarantees, a Congress and White House that as Barnie Frank once famously put it “rolled the dice” on the housing market, and private banks, investors and home owners who got caught up in a speculation frenzy.  Then we asked the bad actors such as Barney Frank to fix it. And now we’re repeating all those inane mistakes once more, with government again guaranteeing 90 percent of new mortgages, many with recklessly low down payments.

Here we go again.  When we let the left write the history books, we never ever seem to learn from our mistakes.

 

Stephen Moore is chief economist at the Heritage Foundation. A version of this first appeared in Investors Business Daily.

The post The Economic History Lessons We Never Learned appeared first on The Foundry: Conservative Policy News from The Heritage Foundation.

Seeing Green, Local Governments Rebuff Efforts to Turn Off Red Light Cameras


(Photo: Getty Images)

(Photo: Getty Images)

Red light cameras have generated millions in revenue for towns and cities across the country, but they’ve brought plenty of controversy, too.

More than 500 municipalities are using red light cameras, which have proliferate, as have efforts to limit or ban them.

But opponents are learning the cameras, like many government programs, are difficult to shut down.

In Colorado, a bipartisan group of state lawmakers supported a bill to shutter the state’s automatic enforcement camera program, including red light and speed cameras. Armed with a scathing audit that revealed serious flaws with the camera program in Denver and the support of the speaker of the House and other legislative leaders, state Sen. Scott Renfroe, R-Weld, thought he was on the brink of success.

Ultimately, his effort fell short.

Renfroe’s bill mustered only enough votes to pass the Senate. A House committee gutted the bill and instead called for a statewide study of existing red light camera programs, but even that version failed to cross the finish line before the session ended.

Even if it had passed, Gov. John Hickenlooper didn’t indicate he would sign it.

“It was no secret the governor did not want to make a decision on this bill, and, sadly for the citizens of Colorado, he convinced enough House Democrats to kill [it,]” said state Rep. Steve Humphrey, R-Severance, who sponsored the House version of the bill.

Speaker of the House Mark Ferrandino, a Democrat, said he was disappointed with the outcome.

The 10 cities in Colorado with red light camera programs are a small portion of the 503 communities nationwide that use the devices, according to the Insurance Institute for Highway Safety. Only nine states have bans on their use.

Support for and opposition to red light cameras tends to cross party lines. Small government Republicans and libertarian-leaning progressives have teamed up to fight the cameras in other states, too.

But support for red light camera programs comes from a collection of powerful interests. In Colorado, law enforcement groups wanted the cameras to stay, mayors from nine cities wrote a letter urging lawmakers to oppose the ban and companies that make them have employed teams of lobbyists.

Similar coalitions defeated legislation that would have banned red light cameras in Florida and Ohio.

In Florida, cameras have targeted drivers who were turning into the emergency entrance of a Miami hospital, and a report showed accidents increased at intersections where the cameras were deployed.

That’s part of the reason critics of red light cameras, such as John Bowman, say cameras won’t solve problems at unsafe intersections.

“Looking at standard traffic engineering practices, and making sure the intersections comply with those practices is really the way to go,” said Bowman, spokesman for the National Motorists Association. “But that also decreases the number of violations that are generated, which cuts into the revenue for the camera companies and the municipalities that use them.”

In some cases, municipalities have gone even further to take advantage of the cameras. A Watchdog.org investigation in Virginia last year found Virginia Beach was shortening the timing of yellow lights to generate more revenue from red light violations.

David Kelly, executive director of the National Coalition for Safer Roads, a nonprofit funded in part by a company that makes red light camera systems, doesn’t try to downplay some of the high-profile issues red light cameras have raised in certain cities.

But on the whole, he argues, they make roads safer.

“Traffic safety camera systems have been a successful tool for folks who are designing safety programs in their cities,” Kelly said. “These systems are saving lives and reducing crashes.”

He points to Roosevelt Avenue in Philadelphia, where the city installed cameras at two intersections in 2004 as part of an overall strategy to make the road safer after State Farm named it one of the most dangerous places in the county to drive. Since then, accidents at the intersections have declined, he said.

In places such as Denver and Virginia Beach, where problems have been identified, local officials should make changes to ensure safety is the top priority, Kelly said.

“It’s important to go in and not say, ‘Let’s just get rid of the entire program,’ but fix the individual problems,” Kelly said. “Make adjustments to it.”

Critics say local governments have little incentive to fix those problems because cameras generate much-needed revenue.

In Denver, the city government has yet to make any changes to its red light camera program, even after a 2011 audit questioned the cameras’ effectiveness.

“Because these programs were sold as public safety enhancements but are widely viewed as a cash grab, it undermines public trust to maintain photo enforcement programs that are profitable but whose safety impact has not been conclusively shown,” wrote city auditor Dennis Gallagher at the time.

But Denver has continued to collect revenue—more than $1.3 million during 2013 alone—from the cameras. Red light cameras in nine other Colorado cities brought in another $6.6 million for local governments’ coffers.

“Municipalities that use them get addicted to the revenue,” said Bowman.

Jenny Robinson, spokeswoman for AAA Mid-Atlantic, which has examined red light camera programs across several states, said the devices aren’t fundamentally good or bad. Like any machine, it depends on how they’re used.

Robinson said AAA has a set of guidelines to determine whether cities are using red light cameras for revenue or safety purposes, though the two goals often intersect.

Cities should pay vendors a flat fee instead of a per-ticket fee, which removes any incentive for the red light camera companies to increase the number of tickets, she said. They also should also use the cameras sparingly, as part of an overall crash reduction plan that targets specific intersections and is used with other traffic engineering efforts.

“The equipment has to be tested; we have to know that it is accurate,” Robinson said. “The governments that operate these camera programs need to be continually testing and monitoring, and they should be making that information available to the public.”

State legislatures have made little progress in killing the cameras, but voters have opposed them 28 of the 31 times the issue appeared on a local ballot.

Eric Boehm is a reporter for Watchdog.org, a national network of investigative reporters covering waste, fraud and abuse in government. Watchdog.org is a project of the nonprofit Franklin Center for Government & Public Integrity.

The post Seeing Green, Local Governments Rebuff Efforts to Turn Off Red Light Cameras appeared first on The Foundry: Conservative Policy News from The Heritage Foundation.

To Attract Investment Dollars, Americans Need a Leader, Not a Cheerleader


President Obama recently hosted executives from foreign-based businesses at the White House to highlight the benefits of investment in the United States. NPR described the event as “President Obama makes a sales pitch for the U.S.”

The event is part of a disturbing trend in U.S. trade and investment policy that seems to be all talk and no action. Business leaders in the United States and abroad are smart enough to base their investment decisions on economics, not sales pitches. However, the U.S. economic environment is increasingly hostile to investment. Whether it’s uncertainty related to the implementation of Obamacare, the boom in federal regulations, or tax policies driving U.S. companies overseas, the United States is becoming a less attractive place to do business.

Instead of leading cheers about how attractive the U.S. economy is to potential investors, here are four proposals President Obama could submit to Congress that would show leadership in actually making the United States more attractive to potential foreign investors:

  1. Reform or repeal the Jones Act, which restricts foreign investment in shipping companies that transport cargo on vessels within the United States;
  2. Remove ownership limits on foreign investment in U.S. airlines, currently capped at 25 percent;
  3. Reduce the corporate income tax rate, the highest in the world; and
  4. Adopt policies that reverse the ongoing decline in U.S. economic freedom.

Foreign investment is a great benefit to Americans, accounting for 5.6 million U.S. jobs. But to attract more foreign investment dollars, Americans don’t need more taxpayer-paid cheerleaders, salesmen, and PR campaigns. We simply need more economic freedom.

The post To Attract Investment Dollars, Americans Need a Leader, Not a Cheerleader appeared first on The Foundry: Conservative Policy News from The Heritage Foundation.

6 Small Towns With Big Government Problems


Out-of-control government, most common to Washington, D.C., can trickle down to small towns, too.

Here are six examples:

1. Air fresheners, tassels, and rosaries beware!

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Mountain View, Colo., population 512, issues more “obstructed view” citations than much larger Denver, Aurora and Boulder combined. The town expects 43 percent of its budget—a whopping $575,000—to come from court fees.

2. Cash cams gone wild

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Since 2011, the township of Piscataway, N.J., population 50,482, has used red-light cameras to issue 55,396 citations and collect $4,710,415 in ticket revenue.

3. Like it never happened

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The city clerk in Pleasant Hill, Calif., population 33,831, failed to produce City Council minutes for a whole year, leaving residents unable to reference or track official city actions.

4. Town not as sleepy as it seems

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An audit found that officials in Huntington, Texas, population 2,105, collected pay for thousands of hours they either didn’t work or weren’t supposed to. Records found that officials also falsified traffic citation records to collect fines higher than those imposed by the court.

5. Hooray for consistency—or not

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The city of Ada, Okla., population 17,097, has banned the use of tobacco products on public property. The ban also includes e-cigarettes, even though they contain no tobacco.

6. A very big vehicle for a very small town

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The police department of Preston, Idaho, acquired a mine-resistant ambush-protected military-grade vehicle previously used on the streets of Iraq and Afghanistan. It seems an unusual fit for a tiny town of just more than 5,145 in southeastern Idaho, where the crime rate is far below the U.S. average and the town went about eight years in between homicides.

Andrew Collins and Bre Payton are reporters for Watchdog.org, a national network of investigative reporters covering waste, fraud and abuse in government. Watchdog.org is a project of the nonprofit Franklin Center for Government & Public Integrity.

All photos courtesy of Thinkstock. 

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