Did Deregulation Cause the 2008 Financial Crisis? No.

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It’s a common refrain on the Left that deregulation caused the 2008 financial crisis.

This view “is completely erroneous,” Heritage’s Norbert Michel writes in a new report.

This myth “has only allowed Congress to further expand regulators’ authority to micromanage financial companies’ activities, and Americans are not better off because of it.

In fact, regulations have only increased over the last century. Many of the laws cited as decreasing regulations actually increased government micromanagement of financial firms.

This ever-expanding regulation hasn’t actually solved the problems they set out to address, Michel argues. “Financial regulators have increasingly micromanaged financial firms’ activities despite the fact that this approach has repeatedly failed to prevent financial market instability.”

In a separate report, Michel debunks liberal misconceptions about the Glass-Steagall Act. This New Deal-era banking regulation (which was modified in the late 1990s) aimed to separate commercial and investment banking. This was supposed to address a fundamental cause of the Depression, even though “the combination actually strengthened banks.”

What do you think? Will more government regulation of the financial industry benefit consumers and protect the economy?

These Principles Can Unify the Conservative Movement


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“Self-identified conservatives are at odds with each other,” Heritage scholar Bob Moffit writes:

What American conservatism means today, who defines it, and who is or is not a “true” conservative, is the flashpoint of bitter controversy. So, too, is the ever-shifting definition of that broadly despised thing called “The Establishment.”

But there is a North Star that should simultaneously guide and unify American conservatives: fidelity to the Constitution and a clear understanding of what Alexander Hamilton called the “new political science” undergirding it.

Moffit points to 19th century conservative Orestes Brownson as a model for thinking about today’s challenges. A defender of the Constitution, Brownson addressed many of the same issues we face 150 years later: debt and spending, career politicians, economic freedom, religious freedom, and marriage and family.

Restoring a focus on first principles can unite conservative principles, Moffit concludes: “fidelity to the Constitution and the transmission of the best of the past to future generations is the unending task of American conservatism.” Our movement, he says,

is characterized by the primacy of constitutionally protected personal and political liberty, a reverence for religion and tradition, gratitude for the many gifts of preceding generations, and deference to the nation’s organic communities, what the great Edmund Burke called the “little platoons” of society.

What do you think? Do you agree that conservatives should unify around America’s founding principles?

Watch Jim DeMint on LevinTV Thursday Evening


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Jim DeMint on LevinTV

Jim DeMint, right, records an episode of LevinTV with host Mark Levin. Photo: Even Hughes

Heritage President Jim DeMint sat down with Mark Levin earlier this week for an hour-long interview.

The wide-ranging discussion touches on conservative principles, the fight against the Washington establishment, the future of the country, and more.

Tune in Thursday after 9:00 p.m. Eastern at LevinTV.com. (Subscription required.)

Heritage’s Ed Haislmaier Predicted the Latest Bad News on Obamacare


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Back in March, Heritage expert Ed Haislmaier predicted that major insurers would start withdrawing from offering Obamacare coverage:

a number of carriers, most notably UnitedHealth Group, have incurred significant losses from offering exchange coverage and have publicly stated that they are reassessing the extent to which they will continue participating in the exchanges…

With [Obamacare’s reinsurance] subsidy soon ending, more carriers will likely be taking a hard look at whether it remains financially feasible for them to continue offering exchange coverage.

The Daily Signal reported last week:

Health insurance giant UnitedHealth Group opted out of most Obamacare health exchanges on [April 19] after a review of its first-quarter earnings suggested the exchanges would be a risky investment…

Abandoning Obamacare exchanges is not new for insurance companies. Last year, the nation’s third largest health insurance provider, Aetna, decided to pull subsidized health plans from Kansas, Utah, and Washington, D.C.

North Carolina’s largest health care provider, Blue Cross Blue Shield, recently pulled plans from New Mexico’s exchange, and is considering a withdrawal from North Carolina’s exchange in 2017.

Obamacare’s heavy regulations and skewed subsidy structure limit the viability of the insurance market, Haislmaier wrote in January. He urged lawmakers to:

  • abolish Obamacare’s onerous regulations
  • ditch Obamacare’s individual and employer mandates, and
  • replace its subsidies with a straightforward tax benefit.

Do you think Obamacare can and should be repealed?

Here’s What’s at Stake with a Constitutional Convention Called by the States


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“Under Article V of Constitution, Congress, upon application of two-thirds of the states, must call a convention for proposing amendments,” Heritage legal scholar John Malcolm explains:

Proponents argue that an Article V convention, completely bypassing Congress, the President, the courts, and the federal bureaucracy, would give the states and the people a more direct role in determining how much power the federal government should have and whether some of its existing power should be returned to the states and the people. The process specified in Article V raises many questions that require careful consideration: how such a convention would work, what types of amendments it might produce, and whether some of those amendments would successfully rein in the federal government and reinvigorate federalism. With or without such a convention, however, it remains vitally important that we continue to maintain an overriding focus on holding Congress, the President, and, by extension, federal agencies accountable for the decisions they make today.

One major question about an Article V convention–which has been suggested recently by both conservatives and progressives as a means to bypass an intransigent Congress–is about whether it can be limited to advancing conservative ends:

An Article V convention might propose an amendment to restore or expand the liberties of the American people, but it also could propose an amendment that diminishes the liberties of the American people, or of some of the people. While it is no doubt true that the ratification process itself, requiring support from three-fourths of the states (38 at present), decreases the likelihood of some radical proposal ultimately becoming part of our Constitution, it is worth recalling that 27 of the 33 proposed amendments that have been sent to the states for ratification achieved the requisite number, and that was before the age of the Internet and social media–driven campaigns that can dramatically increase public pressure on those who are considering such an amendment and reduce the time devoted to thoughtful reflection.

Be sure to read Malcolm’s whole article, which reviews the legal and practical arguments both for and against an Article V convention.

The Heritage Guide to the Constitution has more about Article V and its meaning.

Do you think amending the Constitution is the best way to advance freedom?

Heritage Ed Meese, Ed Feulner, and Jim DeMint Mourn Justice Scalia’s Passing


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“I am greatly saddened by the passing of Antonin Scalia, who was a great friend and one of the most outstanding justices on the Supreme Court,” said Edwin Meese III, former U.S. Attorney General and Heritage’s Ronald Reagan Distinguished Fellow. “He was a historic jurist, an exceptional legal scholar, and a stalwart defender of the Constitution as it was given to the nation by our Founders. He fulfilled President Reagan’s greatest expectations by his commitment to the rule of law and his personal integrity. My deepest sympathy to his wife, Maureen, and to the rest of his wonderful family.”

Added Heritage Founder Ed Feulner: “He was more than just a first-rate Supreme Court justice. He had a deep and abiding commitment to the Constitution and to applying its principles to the cases that came before him. He didn’t ‘legislate from the bench’ or come up with imaginary loopholes to bring about some political result. He did what any justice should do, regardless of personal preference: He applied the law as written. The nation is far better for his three decades on the Court.”

Heritage President Jim DeMint called Scalia “one of the wisest judges in our history, whose passion for our Constitution inspired countless others. He had a sharp intellect and an inquiring mind. His fidelity to our founding principles and the rule of law will be sorely missed on our highest court. He will be very difficult to replace. We pray that God may comfort his family at this difficult time, guide our political leaders in selecting his successor — and that he may rest in peace.”

Here’s What Heritage Is Focusing on This Week

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Every week, The Heritage Foundation prioritizes which policy issues it should focus on. Here’s what we’re targeting this week:

  • Energy: There’s a bipartisan push in Senate to pass an energy bill that President Obama could sign. Heritage’s Nick Loris talks about why it’s a bipartisan handout to special interests: “The legislation, which totals more than 400 pages, allegedly attempts to avoid controversial provisions that would cause partisan divide. But the bill is full of provisions that should be cause for concern for American taxpayers… They are activities that do not need to involve the federal government, an entity not particularly good at picking industry winners and losers or at planning for future workforces. Not only do these spending initiatives waste money, but they distort the market by dictating where investments flow, taking labor and capital away from potentially more promising endeavors.”
  • ISIS Combat Operations: Last Friday, Secretary of Defense Ash Carter announced the U.S. is looking “for opportunities to do more and there will be boots on the ground.” He made his case in a Politico op-ed where he also outlined plans for 1,800 troops to deploy to Iraq. There are already US troops in Iraq in the form of military advisers and special forces. This move runs counter to the Obama narrative that ISIS is in retreat and ISIS can be defeated without american combat forces. In The Philadelphia Inquirer, Heritage defense expert Jim Carafano warned that adding forces incrementally cannot substantially address the current threat of ISIS.  
  • School Choice: Last Saturday started National School Choice Week, in which there will be rallies across the nation and more than 16,000 events in all 50 states and the District. Heritage hosted an expert panel Wednesday on new research that highlights the impact of choice in education, which includes homeschooling, private schooling, education savings accounts, etc. Last week, Sen. Ted Cruz (R-TX) introduced a bill in the Senate for a universal education savings account (ESA) program. Heritage has pushed for this approach, with ESAs being one of our top education priorities. Congress is in the unique position to make ESAs universally available to students in the District of Columbia, which Cruz’s proposal would do.

What do you think about these issues?

Congress Pushes Overdue Criminal Justice Reforms

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Measures introduced in both the House and the Senate would enact important criminal justice reforms, Heritage legal scholar John Malcolm writes.

Heritage has been working for a decade to reform the bloated federal criminal code, which includes more than 300,000 separate criminal regulations. Many of these regulations, Malcolm writes, “criminalize activities that no reasonable person would think were wrong, such as transporting water hyacinths or walking a dog on a leash longer than six feet.”

Moreover, conviction today generally doesn’t require what’s known legally as mens rea—a guilty mind. They can be convicted for breaking a law they didn’t know existed and had no intention of violating. The new proposals before Congress would change that.

Read more Heritage research on the importance of mens rea reform.

This Quote from Paul Ryan Sounds Familiar


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Last week, Rep. Paul Ryan (R-WI) made his first speech as Speaker of the House of Representatives. His opening remarks laid out his vision: “No more favors for the few. Opportunity for all—that is our motto.”

That sounds familiar. Earlier this year, The Heritage Foundation and Heritage Action for America released a report called Opportunity for All, Favoritism to None. This initiative lays out a conservative roadmap for the future.

It’s encouraging to know the new Congressional leadership is paying attention. We will work with Speaker Ryan going forward to ensure he understands the conservative solutions to America’s problems.

How to Reform Social Security’s Disability Insurance Program


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Social Security’s Disability Insurance program has become “a massive system that provides benefits to one out of every 20 working-age individuals,” Heritage’s Rachel Greszler writes.

“Despite its size and expense, the program fails to keep millions out of poverty,” she adds. And its trust fund will be exhausted next year.

“SSDI could better protect the disabled from poverty and improve the program’s long-run finances through a flat benefit linked to the federal poverty level,” she concludes.

Do you think Social Security’s disability program needs reform?

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