institute

2011 summer

M I MANHATTAN INSTITUTE FOR POLICY RESEARCH The mission of the Manhattan Institute is to develop and disseminate new ideas that foster greater economic choice and individual responsibility.

Dear Friends and Supporters,

“This is a defining moment.”

So said Congressman —at an event hosted by our partner think tank, e21—the day after President Obama made his mid-April speech criticizing the bold new budgetary framework put forth by the Republican leadership. We at the Manhattan Institute agree with Congressman Ryan: this is a defining moment. And our fellows are leading the effort to reveal the true scope of the ongoing fiscal crisis Lawrence J. Mone and propose practical structural reforms that can lead us out of the current mess. The status quo is neither defensible nor sustainable. The problems associated with the cost of government affect all levels of American society. States and cities, in particular—where we have had a histori- cal interest and expertise—are emerging as key battlegrounds in the fight to rein in spending by controlling the cost of public employment. For too long, actuarial practice and political sleight of hand at the state and local levels have obscured the true financial liabilities of public-sector employee pensions. Manhattan Institute senior fellows Josh Barro, Nicole Gelinas, Steven Malanga, and E. J. McMahon have consistently worked to expose the inadequacy of government accounting standards.

Monday, February 28, 2011

Sunday, May 29, 2011 Number 7 – Spring 2011

Dodging the Pension Disaster E.J. McMahon: Tweaks won’t reform NY state pension Josh Barro System needs overhaul to be defined-contribution. state senator in January 2009, his financial acumenn & When Dan Liljenquist began his first term as a Utah quickly earned him serious legislative responsibilities. A former management consultant for Bai By E.J. McMahon tee. As omo pointed out that public-pension costs are Company, Liljenquist was appointed by the Utah senate president, Michael Waddoups, to three budget- related committees; he was also made chairman of the Retirementcerns the andfreshman Independent might have Entities had Commitabout his new In his opening message to the Legislature, Gov. Andrew Cu Liljenquist remembers it, Waddoups pre-empted any con “exploding” across State. hing ever happens on the retirement committee.” has seen its annual bill rise from just over $1 billion a responsibilities: “Don’t worry,” Waddoups said, “not He certainly wasn’t exaggerating. alonension costs for other localities are doubling, tripling or Wednesday, April 20, 2011 decade ago to a projected $8.4 billion in fiscal 2012. Pe But then, in the early months of 2009, the stock market wentnsion into plan—which, free fall. Worried like most about states’, the iseffects invested the market crash would have on Utah’s public-employee pe even quadrupling over the levels of a few years ago. to project how much taxpayers wouldback have were to pay 0 million, in the past three years. It would be climbing heavily in equities—Liljenquist asked the plan’s actuaries s to The state’s own pension bill has increased 50%, or $50 on had not adopted a funding gimmick that will delay into the pension fund in order to compensateCalifornia for the stock-market Dreamin’ losses. About The figures Texas that Jobs came much higher in coming years if the Paterson pension administrati contributions by 2017-18. alarming: Utah was about to drown in red ink. Withoutllion reform, a year—an the state amount would equivalent see its contribution to roughly ses10% of government workers’ pensions rise by about $420 mi and “amortize” a projected $5 billion in By Steven Malanga d in rs, Mr. Cuomo is getting ready to present his long- Utah’s spending from its general and education funds. Moreover, those astronomical pension expen After months of preoccupation with other fiscal matte would continue to grow at 4% a year for the next 25 years, just to pay off the losses the fund had incurre A group of legislators recently made headlines awaited proposals for dealing with the pension-cost crisis. the stock market. when they traveled to Texas to learn why the Lone gher retirement ages, lower benefit levels and Star State has lately been generating the kind of job growth that the Golden State was once known for, and It also alarmed public employees, who feared that is also likely to address notorious abuses, such as even luring many companies that once made California their home. Among other things, the governor will reportedly propose hi This scenario alarmed lawmakers, and for good reason.y higher wages. Tapping into these concerns during increased employee contributions to retirement funds. He rising pension costs would limit the state’s ability to pa around a cost-saving reform plan: Utaher will a 401(k)- now overtime “spiking” and double-dipping. the 2010 legislative session, Liljenquist builtBut consensus every politician in California of either party ought s to the boundaries of defined-benefit pensions, it will to knowform that the answer to the state’s economic woes require all state employees hired after Junelies 2011 not toin chooseTexas, onebut inof California.two retirement Job migrationoptions—eith is a very sexy issue, and one blogger, relocation expert But if Mr. Cuomo’s plan begins and ends with change te’s pension system. Joseph Vranich, is even keeping an online list of firms that have exited California. But migration makes up style benefit plan, or a sharply modified pension plan withcostly costs for toUtah’s taxpayers taxpayers, capped and in willadvance. leave Themore re room represent yet another missed opportunity to reform the sta isn’t perfect, of course, but it will be significantlyonly a small less part of the job gains or losses a state e ture, which is dauntingly complex,. encourages xperiences. By contrast, job creation through expansion of in the state budget for the real business ofbusinesses government. and the formation of new companies is far more responsible for job growth. California once knew The problem is not only the system’s cost but its basic struc how to create new jobs and new companies, and a few places in the state still do it fairly well. The answers to exposes taxpayers to open-ended financial risk and volatility But what about the other 49 states? The pension-cost excess and abuse, and needlessly California’s woes lie in those places, not in Texas. deep recession, when New Yorkers can least afford Utah, it seems, has thus narrowly escaped catastrophe. unlike Utah’s, these states’ efforts at pension reformched fined-benefit system, and it can’t be fixed by tweaking explosion is hitting nearly every one of them, too. And It’s no coincidence that the latest rise is occurring after a Over the last 15 years, California ranks as the third worst statefluence in the country in terms of job migration, with a it. This is not a bug but a feature of the traditional de e a track record of persuading the state are not being overseen by a management consultant. Rather, in most places, state legislators are overmat net outflow of jobs that is 1 percent greater than the benefit levels—especially when public employee unions havs improve. by savvy public-employees’ unions and by pension-fundpension managers reform wedded in 2010, to very the statusfew will quo. offerflow Their real, of in jobs long- into the state, according to the National Legislature to boost benefits whenever economic condition explains why, though 18 states enacted Establishmentsome sort of Time Series database. Texas, by contrast, is 10th best in the nation in that period, with a plus to defined-contribution plans, already the prevalent term relief to taxpayers. 1.3 percent inflow of jobs from other states. Based on Vran of jobs leaving California. ich’s anecdotal list, Texas is the biggest beneficiary Real structural reform would move government workers r beyond state capitals, because its consequences will retirement savings vehicle in the private sector. Concern about this impending crisis should extend fa e financial risks associated with providing affect much more than state balance sheets.While The those staggering kinds of burdeningnumbers all theof won’t payingother makeservices out retirement or thatbreak citizens an benefits economy, expect is theirwhat the NETS database also tells us is that With such a system, taxpayers would no longer bear all thement benefits would become both predictable and states that do a bad job attracting and holding onto busi increasingly preventing state and local officials from financ nesses also generally do poorly in other areas of guaranteed pension benefits. The tax-funded share of retirfit increases would be transparent. governments to perform. For example,economic Camden, performanceNew Jersey—one that matter of the more,most crime-ridden especially in citiesgenerating in the new businesses and in being home to firms easily understandable, and the real costs of proposed bene country—recently had to lay off nearlythat half expand its police rapidly. force costlyCalifornia, because benefits the for state’s provisionsinstance, public-sector ranks from 34th their unions, in contracts. the country in the ratio of jobs created by new w entrants, their legacy cost will be a gigantic businesses compared to jobs eliminated by firms going under. The Golden State created just 3.3 percent more the lesson of what the late Sen. Daniel Patrick including those representing police, were unwilling to cuttheir pension costs under control, they will putent the Even if New York’s current pension plans are closed to ne Moreover, should the states prove incapablejobs than of itgetting lost through business births and deaths in the 15 years covered by NETS. By contrast, Texas headache for decades to come. But we should at least heed hole, stop digging. squeeze on taxpayers across the country—forcingcreated 9.3 percent them wouldto more pay effectivelyjobsmore that in exchange way. transfer Texas for money also fewer didfrom governm better fiscally than California in jobs generated by local firms Moynihan called Political Economy 101: When you’re in a expanding compared to those contracting. The bottom line: Texas outpaced national job creation by 10 stitute’s Empire Center for New York State Policy. services—and possibly precipitate federal bailouts that percentage points since the mid 1990s, while California underperformed the nation, according to NETS. E.J. McMahon is a senior fellow at the Manhattan In responsible states to profligate ones. states Everyone, then, has a stake in understandingOne theme just is how obvious thest statesimportant—justand persistent got into this when what terrible you principles peruse mess, whereshoulddozens many animateof stories on California companies that have are going wrong in trying to rectify it,pulled and—perhaps up stakes inmo the past few years: Many are going somewhere else to lower costs, whether it’s a shipping any reform plan capable of both shoringcompany up state moving pensions HQ jobsand shieldingfrom Oakland the taxpaying to Phoenix, public. or a software maker leaving North Hollywood for Austin, or a visual effects studio leaving Venice, Ca., for Port St. Lucie and Vancouver.

Some firms also say they are leaving because California’s state and local budget crunch has made government voracious. LegalZoom, the online company, is leaving for Austin because of a lengthy dispute with city government over taxes. One thing that sealed the move: When the firm’s 400 employees heard the company was contemplating leaving, some began aski media syndication company, has also contemplated leavingng to becauserelocate. of Meanwhile, a dispute over Creators taxes Syndicate, with the city the of Los Angeles that prompted an official of the company and its bureaucrats of acting like “Stalin’s apparatchiks.”to accuse the city of operating like a “banana republic” pire State, as elsewhere—rein- ing in public-employee pension and benefit costs, reforming the costly Medicaid program, cap- ping property taxes. However, as senior fellow E. J. McMahon wrote in the , Cuomo’s agenda is “a welcome change after years of drift.” One state that does, un- fortunately, continue to drift is California—the size of whose population and economy make it crucial to long-term American re- covery. But we remain confident that intelligent policy can bring California back from the brink. Our quarterly policy magazine, Happily, they have helped spark the movement now afoot City Journal, is doing its part. For the past two years, to improve the transparency of public-sector pension-fund City Journal has expanded its reporting on the origins of balances—and shortfalls. Moreover, with the real cost of California’s current problems, including sky-high budget taxpayer-guaranteed promises finally in plain sight, local deficits, unfunded pension liabilities, and the political in- leaders and citizens are standing behind the policies that fluence of the public-sector unions, as well as problems our research fellows have long favored: transitioning pub- in education, crime, and the public culture. Relying on lic employees from defined-benefit pensions to 401(k)-type the investigative prowess of veteran contributors Steven plans; bringing public health-care benefits into line with Malanga and Heather Mac Donald, as well as recruiting what is considered standard in the private sector; and re- some of the most savvy policy writers living in the Golden forming the collective bargaining procedures that have en- State, the City Journal California Project has generated abled and broadened the negotiating power of public-sector substantial interest and recognition, with essays reprinted unions. Much of our research on these issues can be found from coast to coast in newspapers such as the Wall Street on PublicSectorInc.org, which is fast becoming the focal point for a national conversation on restraining the growth of gov- ernment, restructuring public- employee retirement benefits, and enacting measures that will allow the U.S. economy to start growing again. Across the country, many state governments are taking serious steps to get their fiscal houses in order. Here in New York, Gover- nor Andrew Cuomo was able to pass a budget that actu- ally cuts taxes and reduces spending. To be sure, there is more to be done in the Em-

 Manhattan Institute President’s Update Steve Forbes

Paul Gigot (left), Brian Domitrovic, Robert Mundell

Left to right: Maria Bartiromo, Lewis Lehrman, Larry Kudlow, Lawrence Lindsey Econoclasts author Brian Domitrovic,

Journal and the Los Angeles Times, and has ignited seri- Journal and the Ronald Reagan Presidential Foundation ous discussions on the Internet. We are proud to be ex- to organize a daylong conference examining the 40th panding our online influence by adding a new page dedi- president’s legacy of economic leadership. We put the cated to our analysis and policy prescriptions concerning conference together to celebrate and commemorate California to our website (www.City-Journal.org), which the 100th birthday of one of the great political figures recorded more than 5 million unique visits last year. of the twentieth century. But we were also interested In charting a course for future economic in reminding people of the history of the “supply-side health, it is often instructive to look to the successes revolution,” when groups such as the Manhattan Institute of the past—and the Manhattan Institute did just that and publications such as helped this past March when we partnered with the Wall Street popularize what was then a new economic paradigm.

he Manhattan Institute proudly announces two new hires. In April, Michael TAllegretti joined our staff as director of our new Center for State and Local Leadership (CSLL). Allegretti comes to us fresh off a run for the U.S. Congress in the 13th District of New York. We are fortunate to have his talents, energy, and insight at the helm of the CSLL, where so many of our best ideas originate. The Center’s work is based on the belief that effective and efficient government is more than an end in itself; it lays the groundwork for an environment in which commerce, employment, and a rich civic life can flourish. These are values that Allegretti shares and that he has championed throughout a career that has taken him from the World Economic Forum to the Partnership for New York City.

Ben Boychuk will be coming on as a new associate editor of City Journal and will be working mostly on our California-related articles. Boychuk is the outgoing editor New Staff of the Heartland Institute’s School Reform News and was previously an editorial writer for Investor’s Business Daily and the Press-Enterprise in Riverside, California, as well as managing editor of the Claremont Review of Books from 2000-2004. He writes a weekly syndicated column for Scripps-Howard News Service and contributes regularly to the Sacramento Bee. Boychuk’s writing has also appeared in the Los Angeles Times, the Orange County Register, the San Diego Union-Tribune, , the Arizona Republic, Online, and elsewhere.

Summer 2011  he Institute’s Center for Legal Policy (CLP) has long focused on civil litigation, but in the last couple of years, it has Tbroadened its focus to look at other legal mechanisms being used, without democratic accountability, to regulate busi- ness and inhibit its growth. In the field of corporate law, shareholder activists have increasingly sought to use their equity voting power to force changes in business behavior, motivated less by concern about corporate profitability than by their own political and social points of view, an effort enabled by legal changes in the 2010 Dodd-Frank financial reform law. To explore these trends, in January the Institute unveiled its new website ProxyMonitor.org, which features a database with information on all shareholder proposals submitted to Fortune 100 companies since 2008. The first publicly available source synthesizing such information for easy use, Proxy Monitor is designed to become a hub through which investors, reporters, academics, and policymakers can access information on shareholder involvement in corporate governance. Through June, CLP director James Copland has authored a report and seven separate “findings” exploring how shareholder activism has varied over time and across industries, as well as delving into the leading sponsors of shareholder proposals, including labor union pension funds and “socially responsible” investors. Proxy Monitor has gained significant attention from relevant online media, including CNBC.com, Reuters, Westlaw Business, Boardmem- ber.com, Chief Executive Online, and .

Ultimately, the tax-rate reductions and simplification

of the Reagan administration helped spark decades ort EP

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n Peter W. Huber order to reignite the great American growth machine. E Senior Fellow Manhattan Institute for Policy Research

Since the start of the financial crisis, our focus No. 7 March 2011 March 7 No. at the Institute has been on proposing and developing C E P E CENTER FOR ENERGY POLICY AND THE ENVIRONMENTN S T I T U T E AT THE MANHATTAN I ideas to get our economy growing again. As Reagan Institute Manhattan by Published said while campaigning for the presidency in 1980, we believe that we can “not stand by and watch this great over nuclear power, senior fellow Robert Bryce has country destroy itself under mediocre leadership that been reminding people that a new generation of smaller drifts from one crisis to the next, eroding our national nuclear reactors powered by the safer fuel thorium are will and purpose. The time is now … to recapture our about to come on line. As he wrote in the New York destiny, to take it into our own hands.” One key policy Daily News, “The nuclear age is far from over.” Peter area with a crucial part to play in the growth of our Huber again made clear how innovation can reduce the economy—and which is far more within our power to cost of power and change the way we use it. In his control than often understood—is energy. report Broadband Electricity and the Free-Market Path Energy policy has been in the news of late, to Electric Cars, Huber argues that instead of subsidizing whether because of Japan’s damaged nuclear power impractical battery technology that will end up inside the industry or rising gas prices here at home. Too often, car, investment in the nationwide electric grid, financed discussions about how to increase supply and reliability, by utilities and capital markets, can be the best path to while decreasing energy’s cost, are dominated by mobilizing a fleet of fully electric cars. utopian dreams and political gimmickry. By contrast, the The discovery of vast reserves of domestic scholars associated with our Center for Energy Policy natural gas in recent years holds the promise of reshaping and the Environment (CEPE) add calmer voices and fact- America’s energy discussion and has far-reaching based analysis to the energy debate. For example, with implications for our local economies, the transportation the disaster in Japan understandably raising concerns sector, and even national security. As Bryce pointed out

 Manhattan Institute President’s Update New manhattan institute books

William E. Simon Fellow Kay Hymowitz’s latest book, Manning Up: How the Rise of Women Has Turned Men into Boys (Basic Books), struck a nerve in the culture and became a bona fide hit. Hymowitz appeared in national and international media to discuss the dramatic changes in the lives of young people across the globe. She appeared on NBC’s Today Show, FOX & Friends, C-SPAN’s BookTV, and ABC’s World News Now. An excerpt in the Wall Street Journal received more than 1,000 comments online. The Journal asked Hymowitz to respond to these comments, which she did, before participating in a live web chat. The Times of London featured Hymowitz and her book on its March 13 magazine cover.

Monday, April 25, 2011

Senior fellow Edward Glaeser’s book Triumph The Triumph of the City

By John Buntin thinkers on urban affairs -- and rightly so. of the City: How Our Greatest Invention Makes is one of the nation's most influential Harvard economist Ed Glaeser New York Times's Economix blog, and in essays for such s frequent posts to the In his academic papers, hi and City Journal, Glaeser addresses big questions in creative ways: "Do The New Republic ng Boom?," "When Are Ghettos Bad?" His writing is publications as Triumph of the City: How Our rly anticipated book, Mayors Matter?," "Can Cheap Credit Explaincomes Glaeser'sthe Housi eage (Penguin, $29.95). Us Richer, Smarter, Greener, Healthier, and vigorous; his perspective, fresh. Now arter, Greener, Healthier, and Happier Greatest Invention Makes Us Richer, Sm troduction. For those of us Triumph of the City will serve as a welcome in 's thoughts as a coherent For those new to Glaeser's work, else: a chance to see Glaeser who are avid Glaeser readers, it offers something ng big game -- namely, the iconic urban thinker of the Happier (Penguin Press) continues to garner body of work. Doing so reveals a thinker who is hunti twentieth century, Jane Jacobs. in 1961, politicians, urban planners, and The Death and Life of Great Americanreally -- Cities have seen cities through Jacobs' eyes. Her Since the publication of high-density neighborhoods and ion for diverse, mixed-use, attention. The book, which was excerpted in The academics -- virtually everyone who cares about cities, celebration of the "ballet" of street life, her admirat part of a shared vision of the "good" city. her animosity towards "monotony" all have become s subject is larger than Jacobs'. lenses (based in urban economics) and hi Glaeser's offers a different set of Janerio, Chicago, Bangalore, San places, , Detroit, Rio de lanta, Vancouver, and Hong Kong. It Atlantic and was one of that magazine’s cover His book discusses, among other ngapore, Houston, Tokyo, Dubai, At the city over the course of human Francisco, London, Mumbai, , Si that offers an account of the rise surprise:of Glaeser is a child of New is also a sweeping work of history, one he most frequently returns. This is (Hisno father, an architect who lived through history. Yet it is to Manhattan that llectually, growin up in there in the 1970s. York City, literally and inte an Der Rohe archives at the Museum of Modern Art.) stories in March, rose to No. 24 on the New Hitler's Third Reich in Berlin, oversaw the Mies V pe of city -- and warns of certain Triumph of the City sings the virtues of a certain tyr three generations, is it time for city Like Jacobs's classic, on for cities is different than Jacobs'. Afte perils. But Glaeser's prescripti vists to move toward a more market-friendly set of policies? planners, politicians, and urban acti York Times bestseller list, a rare achievement

Winners or Survivors? Glaeser writes of the city triumphant. It is worth lly, cities clearly are ascendant. A Jacobs wrote at a time when the city was how under remarkable attack. this claim is. Globa for a book about public policy. Favorable pausing for a moment to consider just ban areas, and demographers expect the percentage to rise majority of the world's population the next now twenty lives in years. ur by another ten percent over lf-evident. The past half-century has been hough, the city's triumph is hardly se and suburbanization, rising crime and race riots, busing reviews appeared in Sunday In the context of this country, t a terrible time for big, high-density cities. Freeways enaissance, evident in and, yes, destructive urban planning The so-called -- all combined urban r to undermine the and white flight, deindustrialization that Jacobs celebrated. out their "triumph." It's about their dense, mixed-use city and lively streetsston, New York, and Chicago, is not ab cities such as Washington, D.C., Bo Book Review, The New Yorker, the New York recovery from a near-death experience. cities in 1950 have lost at least a that eight of the ten largest U.S.risen in their place, but these are Glaeser acknowledges as much. He notes fty years. Of course, new cities haveebrates as marvels of productivity? fifth of their population over the past fi dense, big cities that Glaeser cel sprawling, car-centric urban areas. The Observer, and .

Tuesday, April 5, 2011

Ex-mayor Baker on government, God and Goliath

By Michael Van Sickler, Times Staff Writer

ST. PETERSBURG — God was looking out for Rick Baker when he was mayor of St. Petersburg. In his new book, The Seamless City: A Conservative Mayor’s Approach to Urban Revitalization that Can Work Anywhere, Baker posits he had divine help in trying to make St. Petersburg the best city in America. Tuesday, May 10, 2011 Baker got proof of this on April 1, 2001, the day he was sunset” — a natural phenomenon where the horizon flashessworn green. in office. Baker Attook dusk, this there as an was omen a rare meaning “green God flash was with him. America's Greatest Mayor? Adjunct fellow Rick Baker, former mayor of “Few messages would be as clear as the one I received on the eve of my first day in office,” he writes. by John Avlon

It’s an interesting perspective in a book that BakerIn said a bold is intended new book, to Rickserve Baker, as a how-to the former guide mayorfor mayors of St. of Petersburg, Florida, St. Petersburg, Florida, has also been making other American cities. The chapters are divided intosmart, urban renewal that has John Avlon saying this lays out his vision for safety, homelessness, jobs. For each category, Bakertopics makes of the concern case that for his any approach mayor — made downtown, St. Petersburg public Republican beats more famous mayors for the title. At the end of the movie more seamless, where all parts of the city are safe, clean and have adequateThe services Candidate to accommodate the Upon hearing the news, momentarily stunned,, Robert he Redford turns around unexpectedly to his campaign wins a U.S. consultants Senate seat and in asks California. ‘What people who live there. waves in the urban-policy discussion with do we do now?’ He intermingles these urban policy treatises withIn his some own waystestimonials that’s where about the how new a city’s book fate can be Tuesday, April 5, 2011 determined by God. CMP directorPetersburg MayorEx-St. Rick Baker’sPetersburg Paul eight yearsmayorThe on SeamlessHoward Bakerthe job, pens turningCity begins. book a city It that is the many summationtestifies believed of had the seen former its best St. his book, The Seamless City: A Conservative days—with an aging population, decaying civic infrast “We should ask God for his blessings and protection,”vibrant Ba AmericanBy city ROB on SHAWthe upswing. ructure and simmering racial tensions—into a family spent almost every other Sunday attending servicesker at churchessaid.before “During throughout my first our few community,Congress years in office, and my soliciting their members to pray for our family andThe for turnaround our city’s He’sissuccess. so beenstark . a .that .mayor. Again, it almost He’s I believe currentlyseems that unreas Godinvolved hears with h Mayor’s Approach to Urban Revitalization Cities can fall apartto his fast—there’s list. a natural inertia thatonable tends toward that it couldcivic decay.have happened within a decade. the corporate and individual prayers of the city and responds to those prayers.” igher education. Now Rick Baker can add the title of author Turnarounds areThe harder man towho execute. led the They city ofrequire St. Petersburg constant forfocus, ni planning, and follow through. Earlier in the book, he states that during the mayoral campaign that got him elected, “when I needed it most, which is available for $27.95 this week. ne years has written a book called “The Seamless That Can Work Anywhere (Regnery). In March, God sent a sign that He was with me. I didn’t knowThat it is what Mayor Rick Baker achieved and this book offers his blueprint. faced the challenges of the next nine years.” readingthen, for but any IWith Americanwould the experience subtitle mayor of or many“A active Conservative similar urban moments citizen. Mayor’s It as offers ApprI insight into why I believe Rick Baker City,” The Seamless City is essential deserves to be knownBaker said as America’s he got the bestidea mayorfor the ofbook the aboutpast decade. two yeao ach to Revitalization That Could Work Anywhere Covering a broad terrain of his time as mayor from 2001 through 2009, the 282-page book touches on key Baker addressed the National League of rs ago when he was talking with another mayor. ,” turning points, such as the 2007 slashing of tents Otherfo mayors may“It struck be better me howknown. there’s After no all, good St. how-to Petersburg book is on only h the 68th largest city in the U.S. and the fourth-largest inhave Florida. been Butnice Bakerto have did for not me.” inherit a city that was already turning around, like many mayors Florida to build its new corporate headquarters in downtown,r the homeless easing by the police, community persuading tension Progress that followed Energy a ow to lead a city,” Baker said Monday. “It sure would who entered office after the urban renaissance of the 1990s. He did not have billion-dollar budgets or 2004 verdict clearing the city of liability in the shootingnational of attention. a blackFormer teenager,He didGov. the andJeb hard Bushredeveloping work wrote himself, the Midtown, foreword, inspiring one and a city there’s government a and its citizens to aim higher Cities; and in April, he served on a panel of the city’s most economically depressed areas. and believe thatas together well. they could achieve excellence. contribution from presidential hopeful Mitt Romney Perhaps recognizing it might be too soon, Baker treadsThe combination lightly inThere claiming of storiesis also any anda chapter-by-chapterspecific statistics lasting is compelling. legacy. guide on When how toBaker f took office, it took 2½ years to fill a moderated by CSLL director Michael Allegretti pothole in St. Petersburg.how to deal Whenwith everything he left, it wasfrom down public to safety to n ormulate an approach for running a city. That includes the mayor onlyname received a few. two regular reports—crime sta just a feweighborhoods days. At the outsetto redevelopment of his administration, to school programs, just to a "City Scorecard" was placed online so that every citizentistics could and view rainfall the vitalaverages. statistics When of Bakertheir left office, neighborhood.Baker The city’s says the34 agenciesFlorida League and 3,000 of Cities employees and the had Nati defined goals and a sense of mission they at the Heritage Foundation’s Resource Bank measured progresshands. against. Crime dropped dramatically, new businessesonal League invested of Cities in the will city, be museums putting copies in members’ opened and a major league ball-team settled in. The quality of life improved for all its citizens—most notably the core“Hopefully, African-American others will community find interest that in it,had too,” long said been B ghettoized, who found themselves in a at the University of South Florida. revived community re-christened “Midtown.” aker, who is now the director of innovation partnership conference in Dallas. s Rick Baker accomplishedIn the book, heall hasof this high while praise being for former a conservative city admini in an urban environment. “As a Republican Baker’s successor, Bill Foster. Baker declined Monday who is conservative both fiscally and socially,” he writes, “I governedstrator during Goliath my Davis, first term who as was a mayor fired last with month by these philosophies, although I did it without stressing a partisan approach.” to comment He did on notthe polarizedismissal. to prove a He also talks about a stadium’s role in the developm point—he was inclusive without compromising his inte thinks the Tampa Bay Rays should play in the future ideological rhetoric. grity, drivenent ofby aresults city, but instead in the of book divisive he doesn’t get into where h . He said the team shouldn’t try to go anywhere. e

“I like the stadium where it is,” the former mayor said.

As for a return to politics, Baker said it’s not on his i in the next few years,” he said. mmediate radar. “I would never say never, but at least not

Summer 2011  The Manhattan Institute

Remembers Mabel Weil

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E e Institute mourn the & & Ten Reasons Why naTuRal Gas Will Fuel loss of Mabel S. olicy The FuTuRe

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for over 20 years. We No. 8 April 2011 April 8 No. C E P E extend our condolences to her family: her husband, the

CENTER FOR ENERGY POLICY AND THEAN ENVIRONMENTINSTITUTE AT THE MANHATT

Published by Manhattan Institute Manhattan by Published Honorable Leon Weil; and their three children—Kate, Jerry, and Carrie—and their families. Mabel joined the Manhattan Institute in 1989 and demonstrated a in an April CEPE report, Ten Reasons Why Natural Gas Midas touch on her many and varied projects: she was Will Fuel the Future, recent estimates put the quantity of a strategic planner, exhibited superior policy judgment, U.S. natural gas resources at 2,074 trillion cubic feet, the and was the perfect ambassador for our work. While energy equivalent of over 350 billion barrels of oil, or Mabel wore many hats at MI, her role as friend and about three times as much as the proved oil reserves of confidant is the one that her colleagues will miss the . Yet exaggerated concerns over the environmental most. She was a mentor and inspiration to us all. effects of the drilling process have hamstrung efforts to take full advantage of this abundant, cheap, and must prepare for the possibility of its full implementation relatively clean domestic source of energy. on the best possible terms. Among the law’s mandates is In New York, a moratorium on development of the requirement that every state set up an Internet-based the state’s shale gas resources has been in place since exchange where consumers can buy health insurance last December. We asked Professor Timothy Considine of by 2014. If a state fails to do this, the federal govern- the University of Wyoming to do a study that examines ment will swoop in and establish the exchange itself. the potential economic benefits of renewed natural gas State legislators across the country are currently drafting drilling in the Marcellus shale formation, which reaches legislation to create exchange frameworks. CMP direc- from West Virginia and Ohio across and into the southern tier of New York. His findings: the typical Marcellus well generates about $4 million in economic benefits while generating, at worst, $14 thousand in economic damages from environmental impacts. The report predicted that an end to the moratorium would spur the creation of 15,000 to 18,000 jobs in the southern tier and western New York, regions that lost a combined ort P

48,000 jobs between 2000 and 2008. e r “If Governor Cuomo were to ask my advice about

lifting the moratorium, I would tell him to lift it,” said rogress P former Pennsylvania governor Ed Rendell at the paper’s edical

June release event. “I endorse the findings in Professor M Building a Market-Based HealtH-insurance Considine’s report.” excHange in new York No. 13 April 2011 April 13 No. As our Center for Medical Progress (CMP) schol-

Paul Howard Senior Fellow ars have argued, last year’s federal health-care law’s nu- Manhattan Institute for Policy Research merous mandates threaten to burden our economy and C M P C E N T E R F O R M E D I C A L P R O G R E S S A T T H E M A N H A T T A N I N S TITUTE

undermine the quality of health care. Some, such as the Published by Manhattan Institute individual mandate to buy health insurance, may even be unconstitutional. But so long as the law stands, we

 Manhattan Institute President’s Update 22011011 n April 27, the AlexanderManhattan Institute held its 11thHamilton annual Alexander Hamilton Award Award Dinner. DinnerThis year’s dinner Ohonored Joel Klein, former New York City schools chancellor, who is now an executive vice president of News Corporation; and Mortimer Zuckerman, cofounder, chairman, and CEO of Boston Properties, chairman and editor in chief of U.S. News & World Report, and publisher of the . For the 11th anniversary of the Hamilton Award Dinner, we were privileged to have several past honorees in attendance, including Herman Badillo, Roger Hertog, , Ed Koch, and .

The Manhattan Institute is an In terms of impact on policy, no- organization of grown-ups who body rivals what the Manhattan focus on the problems of America Institute does.—Joel Klein and America’s cities in a serious and tough-minded way. —Mortimer Zuckerman tor Paul Howard’s new report, Building a Market-Based made in our nation’s capital and in statehouses around Health-Insurance Exchange in New York, is influencing the country that will leave an indelible mark on the a fast-moving aspect of the health-care debate in Albany short- and long-term growth prospects of our economy. and other state capitals. In his report, Howard recom- As it was at the dawn of the supply-side revolution, the mends that states take advantage of the advent of the ex- choice now is clear: Will we allow ourselves to drown changes to include market-based, or “consumer-driven,” in a sea of red ink brought on by fiscal profligacy, health-care options. He suggests an exchange that in- inflationary health- care mandates, unfunded liabilities, cludes individual health savings accounts (not currently and soaring energy prices, or will we restore fiscal sanity permitted in all states) and that acts as a clearinghouse by addressing the root causes of our debt crisis? rather than as an overly strict regulator—in order to re- It is our sincere hope that our leaders will opt for duce costs, increase consumer choice, and, ultimately, the sensible path of restoring fiscal sanity and promoting a improve health. growth agenda. Remember, we have been through crises Already, Howard was asked to make the case for before and survived. With your continued support, we his reforms in Albany at a roundtable discussion hosted by will tackle these challenges and get our economy back on State Senator Kemp Hannon, chairman of the New York the path to prosperity. State Standing Committee on Health; and State Senator As always, I appreciate your contribution to James Seward, chairman of the New York State Standing the ideas and work of the Manhattan Institute. This is a Committee on Insurance. The CMP will continue to weigh defining moment. We won’t let it pass. in on this debate as it evolves. Sincerely, At the Institute, we are keenly aware that the policy choices made at this defining moment have the potential to alter the course of our nation’s history. Over Lawrence J. Mone the next weeks and months, many decisions will be President

Summer 2011  Manhattan Institute Fellows

Brian C. Anderson Edward Glaeser Steven Malanga Editor, City Journal Senior Fellow, Center for State and Senior Fellow Local Leadership Senior Editor, City Journal William Andrews Contributing Editor, City Journal Contributing Editor, City Journal James Manzi David Gratzer, M.D. Senior Fellow, Center for Energy Policy Herman Badillo Senior Fellow, Center for Medical Progress and the Environment Senior Fellow Richard Greenwald Edmund J. McMahon Rick Baker Senior Fellow, Center for State and Local Leadership Senior Fellow, Empire Center for New York State Policy Adjunct Fellow, Center for State and Local Leadership Marie Gryphon John H. McWhorter Senior Fellow, Center for Legal Policy Contributing Editor, City Journal Josh Barro Victor Davis Hanson Walter B. Wriston Fellow Judith Miller Contributing Editor, City Journal Contributing Editor, City Journal Michael Knox Beran Stephanie Hessler James Piereson Contributing Editor, City Journal Adjunct Fellow Senior Fellow and Director, Center for the American University Claire Berlinski Paul Howard Contributing Editor, City Journal Senior Fellow and Director, Peter Reinharz Center for Medical Progress Contributing Editor, City Journal Lester Brickman Managing Editor, Medical Progress Today Visiting Scholar, Center for Legal Policy Peter D. Salins Peter W. Huber Senior Fellow, Center for State and Local Leadership Robert Bryce Senior Fellow, Center for Medical Progress, Senior Fellow, Center for Energy Policy Center for Energy Policy and the Environment, Troy Senik and the Environment Center for Legal Policy Contributing Editor, City Journal James R. Copland Howard Husock Fred Siegel Senior Fellow and Director, Vice President, Policy Research Contributing Editor, City Journal Center for Legal Policy Contributing Editor, City Journal Senior Fellow, Center for State and Local Leadership Managing Editor, Point of Law Kay S. Hymowitz Guy Sorman Theodore Dalrymple William E. Simon Fellow Contributing Editor, City Journal Dietrich Weismann Fellow Contributing Editor, City Journal Contributing Editor, City Journal Harry Stein Stefan Kanfer Contributing Editor, City Journal Daniel DiSalvo Contributing Editor, City Journal Senior Fellow, Center for State and Sol Stern Local Leadership George L. Kelling Senior Fellow Adjunct Fellow, Center for State and Local Leadership Contributing Editor, City Journal Richard A. Epstein Visiting Scholar Andrew Klavan William J. Stern Contributing Editor, City Journal Contributing Editor, City Journal Ted Frank Adjunct Fellow, Center for Legal Policy John Leo Michael Totten Editor, Point of Law Senior Fellow, Center for the American University Contributing Editor, City Journal Contributing Editor, City Journal Diana Furchtgott-Roth Editor, Minding the Campus Jacob Vigdor Adjunct Fellow, Center for State and Local Leadership Adjunct Fellow Heather Mac Donald John M. Olin Fellow Marcus Winters Nicole Gelinas Contributing Editor, City Journal Senior Fellow, Center for State and Local Leadership Searle Freedom Trust Fellow Contributing Editor, City Journal Myron Magnet Luigi Zingales Editor-at-Large, City Journal Contributing Editor, City Journal

Lawrence Mone, President Michael Barreiro, Vice President, Operations Lindsay Craig, Vice President, Communications & Marketing Howard Husock, Vice President, Policy Research Vanessa Mendoza, Vice President, Development

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