A LETTER FROM THE PRESIDENT:
25 Years of Ideas in Action PRI’S
25 ANNIVERSARY
TH
Ideas have consequences. That simple but powerful belief served as the keystone GALA DINNER
for establishing the Pacific Research Institute 25 years ago. And as we celebrate this
silver anniversary, we can say with certainty that our ideas have indeed had
Thursday, September 23, 2004
important consequences. San Francisco
Over the years, we have probed the most significant policy dilemmas of the day,
With syndicated columnist
and anticipated future problems, in key areas – education, health care, business and
G e o rge Will
economics, and the environment. For 25 years, we have worked steadily on providing and other guest speakers
solutions in each of these areas, building a reputation for excellence and effectiveness.
Details to be announced
And in 1997, we added high-tech policy to our program.
on PRI’s website,
PRI’s research also stands apart for www.pacificresearch . o rg
its accessibility. We target our materials
to the general reader, the non-expert,
– Continued on page 2
Milton Friedman and others Debate the Prescription Drug Issue Better Days for California
On January 27 in San Francisco, PRI host- The Golden State’s future is already look-
ed a national event on prescription drugs ing brighter. Governor Schwarze n egger
and other current health-care issues, seems to understand what really needs
Border Wars: The Prescription Drug Battle to be recalled – bad ideas.
With Canada. The panel included Nobel Topping the list is, of course,
laureate Milton Friedman, PRI president r u n a way spending. As George Will
Sally C. Pipes, Congressman Gil pointed out, Californians have repeated-
Gutknecht (R, MN), and Dr. Don ly used initiatives to mandate spending
McCanne, president of Physicians for a Congressman Gil Gutknecht, Don McCanne, Milton that prevents sane budgeting, then used
National Health Program. Friedman, Sally Pipes, and James Glassman at the the recall to throw a tantrum about it.
prescription drug debate.
Dr. Friedman began by saying “The By the calculation of our senior
real issue, in my opinion, is the Food ”
prices will level. The congressman said fellow Steven Hayward, less than eight
and Drug Administration, which has Americans should pay more for prescrip- percent of the state budget can be
made the costs of approving a drug tion drugs than people in developing considered discretionary. The rest is on
”
intolerably high. countries like sub-Saharan Africa but automatic pilot, more so than the federal
Congressman Gutknecht, who favors added that “I do not believe that we budget, with mammoth expenditures
reimportation, responded that “my vision should be required to subsidize the starv- such as education exempted from the
is not that Americans will go online and ing Swiss. It is time for the Swiss to pay Gann spending limits that remain part of
buy their drugs from Canada or Germany ”
their fair share. the state constitution. Much could be
or any other country. My vision is that Dr. Don McCanne summarized his saved through competitive outsourcing
you will open up markets and ultimately position by saying, “Our model is to and privatization.
– Continued on page 9 – Continued on page 5
– 25 Years of Putting Ideas In Action, from page 1
the man on the street. It was the belief of we provide a step-by-step blueprint for PRI provides genuine policy leader-
our founder, Sir Antony Fisher, that the genuine policy reform. Most recently, we ship and it gets results. We ensure that
best way to change politics is to influence published a leadership guide for our ideas do have consequences –
the tide of public opinion. We accomplish California Governor Schwarzenegger. p r oviding all children with access to a
that by informing, educating, and Third, we empower both opinion quality education, removing barr i e rs to
empowering all individuals. leaders and the ge n e ral public. Our entrepreneurship and economic growth,
Our work is the application of core work is cited in Congress and in state- and encouraging high-tech innovation.
principles – freedom, opport u n i t y, houses across the nation. We are quoted At this milestone, we are tremen-
and individual responsibility – to the or published daily in leading media out- dously grateful to the very generous
everyday lives of all Americans. lets, from the Washington Post and New supporters who have made our work
Individuals have a basic right to decide York Times to the Los Angeles Times and possible, many since PRI’s founding. Not
where to send their child to school, Sacramento Bee. We are also widely only do we thank you for your financial
to enjoy the fruits of their labor, and to covered in the Spanish and Asian press. support, but we greatly appreciate your
make fundamental choices about how To serve as a resource for more encouragement and advice, particularly
to live their life. of the general public, we are continually at times when the road has not been an
It’s not just that government doesn’t expanding our community outreach. We easy one. You are a vital part of PRI, and
work well, or that the private sector have a speakers’ bureau that operates our success is your success.
works better. Both are true, of course, throughout California, grassroots out- We look forward to continuing our
but it’s not simply a matter of efficiency. reach in local cities, an expanding partnership over the coming year. In my
It’s a moral issue. It’s about freedom and student network, and initiatives to mar- 13 years at PRI, I have never felt more
human dignity. And everything PRI does ket our policy solutions via the Internet. optimistic and excited about the impact
is intended to defend and expand And fourth, our ideas are imple- we are having. I think you will be
freedom for individuals. mented. Many of our policy solutions pleased with our results in 2004!
We realize this is a lofty ambition. have been enacted as legislation, or
So what’s the real world evidence that have helped to halt bad legislation in its
we are achieving this mission? tracks. Most recently, we’ve helped
First, we consistently identify the defeat tax increases and union-backed
greatest threats to liberty. At the state education bills, and we are currently
and national level, we have targeted the influencing workers’ compensation
most intrusive legislation or proposals reform and a constitutional spending
from special-interest groups. Particularly limit in California. We are also receiving
in the areas of education and health care, national recognition for our ongoing
we have spotted and helped avert policy work to defeat single-payer health care
d i s a s t e rs in California that would surely and drug importation.
have spread across the nation. We are especially excited about this
Second, we craft practical solutions. year’s projects, which include a U.S.
It is not enough to criticize existing policy economic freedom index, our 10th
– every one of our products advances a annual environmental index, my book
solution. Through policy briefings, leg- on health care policy, several major
e
i s l a t iv guides, staffer briefings, editorial studies on education reform, and
board meetings, and media interviews, commentary on many high-tech issues.
2
PA C I F I C R E S E A R C H I N S T I T U T E , W I N T E R 2 0 0 4
National Recognition for Health-Care Solutions
“The lesson to be learned from Canada is not that cheaper
drugs are possible, but that price controls reduce the avail-
ability of critical life-saving drugs,” wrote PRI president Sally
C. Pipes in the Washington Post on September 21. The article
provoked a tremendous public response, overwhelmingly
favorable, and was sent out by Senator Rick Santorum to all
members of the U.S. Senate.
At a Capitol Hill press briefing on September 25, Sally
warned that reimportation of price-controlled drugs, a policy
Congressman Gil Gutknecht, Don McCanne, James K. Glassman, Milton
being pushed in Washington and by some state governors, Friedman, Sally C. Pipes and at the Border Wars Debate, January 27th.
will ultimately harm patients in Canada and the United States.
As Sally has noted, while Americans are flocking to Canada to
get inexpensive drugs, Canadians have for years been going • Each of Canada's 10 provinces maintains a formulary of which
in the opposite direction, desperately seeking new and neces- drugs are available. Many provinces allow fewer than half the
sary medicines that they can only obtain in the United States. new drugs the TPD has approved.
Reimportation and price controls, as Sally wrote in the
Washington Post, would mean that “drug companies would • One hundred new drugs were launched in the United States
have no motivation to research and develop ever newer and from 1997 through 1999. Only 43 made it to market in Canada
”
better drugs. The losers, she said, “would be both Americans in that same period and Canadians are still waiting for many
”
and Canadians – not to mention the rest of the world. She of them.
also noted that:
• Highly eff e c t ive drugs for arthritis such as Enbrel and
• Canada’sTherapeutic Practices Directorate (TPD) is a complex Remicade, long available in the USA, are listed by only two
web of barriers for drugs such as Glucophage XR. Canadian provinces.
• It takes twice as long to get crucial AIDS drugs approved
in Canada.
President’s Message is published twice a year by the Sally has carried this message around the country with
Pacific Research Institute (PRI). more than two dozen interviews on talk radio in recent
months, meetings with editorial boards, and a series of
PRI is classified by the IRS as a 501(c)(3) non-profit
articles onTech Central Station.
organization. PRI relies upon contributions from
foundations, corporations, and individuals for its support. She has also spoken at many public events, including
Town Hall meetings organized by The Saturday Evening Post
Pacific Research Institute for Public Policy in Detroit and Boston, and meetings of the California
755 Sansome Street, Suite 450,
Pharmacy Association, National Association of Health Care
San Francisco, CA 94111
Phone: 415/989-0833 Fax: 415/989-2411 Underwriters, and the Pharmaceutical Research and
Email: info@pacificresearch.org Manufacturers of America.
Sally is helping to dispel the myth that “single payer”
www.pacificresearch.org
health care, a euphemism for state control, is good for con-
sumers. As a Canadian, she speaks with a special credibility.
– Continued on page 10
3
Poor Grades for California’s Public Education System
When decisionmakers and the public The Re p o rt Card a n a l y zes 19
evaluate education policies, they often indicators, including California’s school
suffer from a lack of data and a big- accountability system, test scores,
picture context. Information may be education spending, and crime. The
unavailable or distorted by government report found that while the state has
education bureaucracies. Media stories made improvements in some areas,
usually focus on a particular aspect of a many more reforms are needed in order
specific education program but fail to to raise student achievement to
give a broader context. acceptable levels.
PRI has a remedy for this one-dimen-
sional approach – its California Education • On the 2002 National Assessment of
Report Card: Index of Leading Education Educational Progress (NAEP) reading
Indicators, Third Edition, by Lance T. Izumi exam, only 21 percent of the state’s
with Matt Cox, published in August. fourth graders scored at or above a • In 2002, 59 percent of entering California
Daniel Weintraub of the Sacramento proficient level. State University freshmen had to take
Bee said that the Report Card’s “compre- remedial courses in English and/or
he n s ive analysis is the perfect place for • California’s graduation rate, which math. That six out of 10 incoming
parents, educators, policymake rs, and compares the number of high school students needed remediation is shock-
interested citizens to go for one-stop graduates with the number of ninth ing given that the CSU takes the top one
shopping on the latest data on funding, graders four years earlier, was less than third of high-school graduates. CSU
testing, and accountability in California.
” 70 percent. chancellor Charles Reed warns that “a
”
whole generation of kids can’t read.
– Continued on page 11
A Blueprint for the New Governor
In his new role as California’s gov e r- Benjamin Zycher; Tom Campbell, dean of the Haas Business
nor, Arnold Schwarzenegger is facing School; and Reason Public Policy Institute’s Citizen’s Budget.
numerous challenges and endless The Guide provides many key recommendations, the most
o p p o rt
unities. To help him navigate the important and immediate of which are:
m a ny policy choices and craft a strong
vision for the state, PRI released its • Adopt a constitutional state tax and expenditure limitation
California Leadership Guide two days • Reform the state’s workers’ compensation system
after the recall election. • Repeal the Health Insurance Act of 2003 (SB2)
The Guide provides a clear, practical, • Undertake school finance reform
and non-partisan strategy for bringing about immediate poli- • Reform the California Public Utilities Commission
cy reform in the areas that will result in the greatest improve-
ments for the state. Several of these reforms are well underway, and PRI is
Edited by PRI policy fellow Andrew M. Gloger, the Guide serving as a practical and timely resource for lawmakers and
features contributions from PRI policy staff; senior fellow opinion leaders.
4
PA C I F I C R E S E A R C H I N S T I T U T E , W I N T E R 2 0 0 4
– Better Days for California, from page 1
But there is fierce opposition. Also on the list of reasons to leave
CalPERS, the state employees retirement California is the law that allows any
system that controls billions, private attorney to file suit, even without
is being pressured by union bosses and a client, for practically any reason. Small
state Controller Steve Westly, among businesses are particularly vulnerable to
o t h e rs, not to invest in companies that this abuse, which the state Attorney
priv a t i ze government services. ”
General has called “extortionate.
d
Po l i t i c i ze investing is such a bad idea Recent legislation makes small
that even liberal newspapers editorial- b u s i n e sses even more likely to face
i zed against it. State Treasure Phil shakedown lawsuits. A bill by
Angelides told report e rs that There may Assemblywoman Ellen Corbett, backed
be instances where jobs can best be by the National Organization of Women
”
provided by the private sector. There are and the California Labor Federation,
indeed thousands of such instances. The would make employers liable for sexual
trouble is, California seems determined harassment of employees by customers .
to drive away jobs of all kinds. With sexual harassment now construed
G overnor Arnold Sch wa rzenegger and Sally C.
Chief candidates for relocation are as eye movements and gestures, one
Pipes at transition team dinner the night before
employers who have seen workers’ could expect plenty of lawsuits. the inauguration.
compensation costs sky r ocket. The High taxes, brutal regulations, and
transition team and other policy staff are
system has become an out-of-control high electricity costs will also drive out
advising the governor and legislators on
cash cow and a sinecure for lawyers and employers, along with the state's
worke rs’ compensation reform, a state
chiropract o rs. It should be limited to miserable credit rating. The root cause is
constitutional spending limit, and
”
paying only legitimate, not “ p r oximate, not any one politician, recalled or not.
education policy. PRI will continue to lead
claims by workers. The governor is It is bad ideas, and their all-too-evident
the way toward a more free and
pushing for major reform of the system, consequences.
prosperous California.
and PRI is very active in providing analy- If we are to turn California around,
sis and recommendations. we must abandon nanny-state ideas such
The “play or pay” health-care plan is as government-run health care, confisca-
really an offer employers can't refuse. tory taxes, and the multiple measures
Senate Bill 2, to go into effect January 1, that punish businesses and worke rs
2007, will force companies with more alike. Reforms must be keystoned
than 50 employees to provide worke rs around smaller, more accountable
with health care and those with more g overnment and personal responsibility.
than 200 to provide health care also for PRI is working tirelessly to advance
worke rs’ families. This provides a power- those ideas. PRI president Sally Pipes
ful disincentive to business expansion. served on Governor Schwarzenegger’s
5
Events 2003
Peter Brimelow speaking at the February 20th debate with Lance Sally Pipes with Chris Kelly and Clark Judge at the April 15th conference.
Izumi and Kent Mitchell.
FEBRUARY 20 APRIL 15 JULY 16
Breakfast Debate: Are Teacher Unions Conference: Regulating Wireless in Breakfast Debate: In Search of Bigfoot:
Destroying American Schools? California: Bill of Rights... or Wrongs? Assessing the Ecological Footprint of
Peter Brimelow, author, Co-sponsored by California Chamber Humanity
The Worm in the Apple, of Commerce, Qualcomm, San Jose Dr. Steven Hayward, PRI senior fellow
and Silicon Valley Chamber of Commerce, and
Kent Mitchell, president, TechNet, and Verizon Wireless Dr. Mathis Wackernagel,
United Educators of San Francisco director of Sustainability Program,
APRIL 21 Redefining Progress
MARCH 14 Breakfast Discussion: 2003 Index of
Breakfast Speech: American Power in an Leading Environmental Indicators, Eighth AUGUST 28
Age of Global Terrorism Edition Breakfast Debate: Regulating
Joseph S. Nye, Jr., dean, With Steven Hayward (AEI/PRI fellow), Telecommunications in California: Are We
Harvard University Kennedy Sally Pipes (PRI president), and Joel Losing the Signal?
School of Government Schwartz (AEI fellow) James Conran, chairman,
Co-sponsored with the Bay Area Co-sponsored and hosted by the California Small Business Association
Kennedy School Alumni Council and American Enterprise Institute, and
the Public Policy Institute of California Washington, D.C. Raymond Gifford, president,
Broadcast live on C-SPAN Progress and Freedom Foundation
MARCH 20
Breakfast Speech: Reaffirming Intellectual JUNE 4 SEPTEMBER 4
Property in an Information Age Breakfast Debate: California’s Economic Breakfast Debate: Thinking Outside the
James E. Rogan, under secretary of Recovery: How Does the State Return to Boxes - A Discussion of Affirmative Action
commerce for intellectual property, Fiscal Solvency? Ward Connnerly, chairman,
U.S. Patent and Trademark Office Alan J. Auerbach, Robert D. Burch American Civil Rights Coalition
Co-sponsored by Intel Corporation Professor of Economics and Law, and
University of Berkeley, and the Eva Jefferson Patterson, executive
APRIL 10 director of the Burch Center for Tax director, Equal Justice Society
Breakfast Debate: Bush Tax Cuts: Growing Policy and Public Finance, Co-sponsored by the Federalist Society
the Economy or Growing the Deficit? and – Continued on Page 8
Clark Judge, director, William E. Simon, Jr., co-founder,
White House Writers Group William E. Simon and Sons
and
Chris Kelly, of counsel,
Baker & McKenzie
6
PA C I F I C R E S E A R C H I N S T I T U T E , W I N T E R 2 0 0 4
PRI in the News and on the Road
MEDIA HIGHLIGHTS
ABC New York Sun
Associated Press New York Times
Atlanta Journal-Constitution The Oregonian
CBS Marketwatch Sacramento Bee
CNN Financial San Francisco Chronicle
CNN Headline News San Jose Mercury News
Detroit News and Free Press TechCentralStation.com
Discovery Channel United Press International
Investor’s Business Daily USA Today
Los Angeles Times Wall Street Journal
MSNBC Washington Post
Peter Thiel speaking at the December 16th breakfast.
Miami Herald Washington Times
National Review Weekly Standard
National Review Online Yahoo! Finance
SPEAKING ENGAGEMENTS AND CONFERENCE EXHIBITS
Accelerating Change Conference, Stanford
Association of Private Enterprise Education
Berkeley Haas Business School Debate: “The Social Responsibility
of Business Is To Increase Profits”
Bipartisan Commission Technology Subcommittee Hearing,
Stanford University
California Association of Health Care Underwriters
California Senate Select Committee Hearing on Central Valley
Economic Development ”
Saturday Evening Post Town Hall Forum, “Health Care at the Border.
Capitol Hill Briefing on Health Care, sponsored by the Galen Institute
Freedom Communications University, Boca Raton
International Privacy and Security Conference
National Conference of State Legislators, San Francisco
Philanthropy Roundtable Conferences, San Francisco and San Diego
Progress and Freedom Foundation’s Technology Summit, Aspen
San Jose Taxpayers Association, San Jose
”
Saturday Evening Post Town Hall Forum, “Health Care at the Border,
Detroit and Boston
Society of Environmental Journalists
University of Buffalo School of Informatics: Media Law
John Stossel and Fritz Maytag at the January
Young Republican Federation 4th Annual Tax Revolt
30th breakfast.
7
– Events 2003 from Page 6
Recent Releases OCTOBER 9
Breakfast Speech: Great Cities, Great Ideas
EDUCATION
Gavin Newsom, San Francisco Board of Supervisors
CA Education Report Card: Index of Leading Education
Indicators, Third Edition by Lance T. Izumi with Matt Cox
Free the Universities: Reforming
Higher Education to Keep Pace with
the Information Age by Ryan Amacher
and Roger Meiners
No Place To Learn: California’s School
Facilities Crisis by K. Lloyd Billingsley
James Bovard, Sonia A rrison, John Gable, and Lisa Mac Lellan at
the November 12th book reception.
“California’s Education Clearinghouse” – new website feature
NOVEMBER 12
BUSINESS AND ECONOMICS Book Reception: Terrorism and Tyranny: The Dangers to Civil
California Leadership Guide 2003
Liberties in America
edited by Andrew Gloger
James Bovard, author
A Brighter Future: Solutions to Policy
Issues Affecting America’s Children
edited by Lawrence J. McQuillan
TECHNOLOGY
Canning Spam: An Economic Solution to Unwanted Email
by Sonia Arrison
Telescam: How Regulations Harm Consumers
by Stephen Pociask
Sally Pipes with Charles Murray and Peter Thiel at the November
Being Served: Broadband Competition in the Small and 19th book reception.
Medium-Sized Business Market by Sonia Arrison
NOVEMBER 19
Book Reception: Human Accomplishment – The Pursuit of
ENVIRONMENT
Excellence in the Arts and Sciences, 800 B.C. to 1950
Index of Leading Environmental Indicators, Eighth Edition
Charles Murray, author
by Steven Hayward with Ryan Stowers
Attorneys General Versus the EPA by DECEMBER 16
Sally C. Pipes and Benjamin Zycher Breakfast Speech: The Decline of America
Peter Thiel, Clarium Capital Management
Saving Endangered Species Privately:
A Case Study of Earth Sanctuaries by
Michael De Alessi
8
PA C I F I C R E S E A R C H I N S T I T U T E , W I N T E R 2 0 0 4
PRI’s Experts Are Front and Center on California Economy
California’s dismal economy and huge minor revisions to the workers’ comp Union-Tribune, San Francisco Chronicle,
budget deficit have been front and center system that will save employers about San Francisco Business Times, and other
in the news. Lawrence J. McQuillan, $3 billion a year. But more needs to be outlets drove home the message that
director of PRI’s Business and Economic done and PRI is continuing to play a California can’t tax its way back to pros-
Studies, and Andrew M. Gloger, public lead role by advising the new adminis- perity. And PRI’s Cal-STAMP statistical
policy fellow, have provided unwavering t r a t i o n’s efforts to implement more model of the California economy prov i d-
free-market analyses in high-profile substantial reform. ed estimates to the California State
op-eds, radio, television, and print inter- Assembly Republican Caucus of state
views. They have also given advice • PRI and the Howard Jarvis Taxpayers job losses from a Democrat-proposed
to governors and state legislators. Association sponsored an open letter in half-cent sales tax increase. These and
Highlights include: the Sacramento Bee, “Statement of other efforts by PRI helped hold the line
California Economists in Opposition to against all but one tax increase in this
• As a result of his ongoing work on a ”
Tax Increases, signed by 42 prominent year’s budget – the vehicle-license-fee
state constitutional amendment to limit California economists, including Milton h i ke ordered by Davis which was ov e r-
the growth of state taxes and spending, Friedman, A rthur Laff e r, Benjamin turned by the legislature after Governor
Lawrence was named to Gov e r n o r Zycher, and PRI’s Lawrence McQuillan. Schwarzenegger took office.
Sch wa r ze n e g g e r’s task force for a The letter was presented in open testi-
constitutional spending limit. mony before the California Commission • PRI’s experts regularly advise state gov-
on Tax Policy in the New Economy. e r n o rs, mayors, legislators, business
• Throughout 2003, Lawrence and leaders, trade associations, and many
Andrew have written frequently on • Additional pieces in National Re v i e w other opinion leaders.
workers’ compensation reform. Prior to Online Financial, Los Angeles Ti m e s ,
the recall, the legislature also passed Orange County Re g i s t e r, San Diego
– Milton Friedman and others, from page 1
place the health-care system under a global budget and index about the Canadians who come to the United States to get
”
that to some reasonable means of inflation. “We're paying far drugs that aren’t available in their country?”
more on health care than any other nation, and we can afford Ms. Pipes added that “price controls are bad for people in
”
comprehensive health care for absolutely everyone. the U.S., and I think that we need to focus on getting rid of
PRI president Sally Pipes responded by linking the ”
price controls Europe, Canada, and in Great Britain.
global budgets of Canadian health care, which she knows first Panelists also tackled other causes of high drug prices.
hand, to the provincial drug formularies. “With the price- Congressman Gutknecht drew applause from the standing-
control system in Canada, between 1997 and 1999 only 43 out room-only crowd when he said that “at some point we have to
of 100 drugs that were approved for use here in the US made deal with this unbelievably expensive tort liability system we
it onto the Canadian formulary because the government deter- ”
have in the United States.
”
mined that the price for these drugs was too high, said Pipes. A video and written transcript of Border Wa rs are
“We often hear politicians talking about American seniors available on the PRI website, www.pacificresearch.org.
going to Canada to get their drugs. How often do we hear
9
PRI Releases New Paper on Telecom Policy in California
Telescam: How Telecom Re g u l a t i o n s One of the greatest problems in
Harm California Consumers shows that telecom is not market failure, but govern-
California consumers are experiencing ment failure. Public policies are currently
an annual decline of $120 per average set to help weak and inefficient business-
household in economic output because es instead of encouraging efficient
of poorly crafted telecommunications investment and real competition that will
regulations. help consumers. Telecommunications
Written by TeleNomics president investment has declined 40 percent in
Stephen Pociask, the study recommends the last two years and this has resulted in Re g u l a t o rs should reevaluate
that poli cymake rs work to lift the compli- job and revenue losses. current policies and encourage facility
cated and market-distorting regulations California Competitive Lo c a l i nvestment, rather than encouraging
that are causing job losses as well as Exchange Carriers (CLECS) are aban- freeloading and widespread dependency
significant declines in innovation. doning their built facilities and flocking on handouts. State regulators should
Given that the Federal to rent the Incumbent Local Exchange t a ke advantage of the expanded power
Communications Commission (FCC) Carriers’ (ILEC) facilities. This trend to given to them by the FCC and implement
Triennial Review Order gave state bodies rent, rather than build, accelerated rational wholesale telecom prices. This
more regulatory power in this area, PRI when the California Public Se r v i c e would benefit consumers by encouraging
has been working to make sure the Public Commission lowered UNE-P prices by investment, creating jobs, and stimulat-
Utilities Commission (PUC) will seriously 40 percent. This is evidence that rates ing economic growth in California.
consider the results of this study while are predatory and harming facility-
making its upcoming decisions. based investment.
– National Recognition, from page 3
PRI supports policies that: These and many other issues will be examined in Sally
Pipes's forthcoming book Miracle Cure: How to So l v e
• allow those currently uninsured to have more choices and America’s Health-Care Crisis and W hy Canada Isn’t the
easier access to health care. Answer. In basic terms for the general reader, it answers the
most common questions Americans have about why our
• m a ke health care portable and establish tax equity for health-care system is broken and how it can be fixed.
those who choose to buy health care outside of their place In collaboration with Tech Central Station, PRI has
of employment. embarked on a massive public outreach campaign, consisting
of speeches, editorial board meetings, and television and
• provide seniors with more effective and affordable pharma- radio interviews in cities across the nation. Through these and
ceuticals through discount cards. other efforts, PRI will educate the mainstream public,
demolish the myths perpetuated in the media, and ultimately
• promote the development and wide deployment of new help to shape policy so that health-care decisions are returned
technology, for health care of the highest possible quality. to the consumer.
• d e c e n t r a l i ze government bureaucrats and empower
consumers to make key choices about their own health care.
10
PA C I F I C R E S E A R C H I N S T I T U T E , W I N T E R 2 0 0 4
Lance Izumi (second from left) and Teacher Assistance Corps colleagues at a meeting in Boise with Idaho
Education officials.
– Poor Grades, from page 4
Students with deficient knowledge The Report Card makes a variety of • Author Lance Izumi was asked by the
are less likely to take difficult courses and recommendations, including: U.S. Department of Education (USDOE)
that’s the case in California. In 2000, the to participate as part of Secretary of
last year in which statistics are available, • comprehensive use of the state’s Education Rod Pa i g e’s “Te a ch e r
only 35 percent of California high-school rigorous academic content standards ”
Assistance Corps. The Corps is made up
graduates had taken first-year chemistry, of a small group of national teacher
a proportion that ranked California next • requiring all low-performing schools quality experts who, along with USDOE
to last among the states. Only 56 percent to be part of the state accountability personnel, are visiting all 50 states to
of high-school graduates had taken program review teacher quality plans and offer
geometry compared to the national aver- recommendations for improvement.
age of 74 percent and the Texas average • implementing a school-choice accounta-
of 95 percent. bility option like the one used in Florida • The U.S. Department of Education is
California’s poor performance is crit- considering using the Report Card as
ical since, according to a federal study, • reforming the collective barga i n i n g the model for a national education
the intensity, quality, and difficulty of a process for teachers report card.
high-school curriculum is the most
i m p o rtant factor in determining whether The Report Card has generated • Lance was recently interviewed for a
that student will earn a college degree. keen interest among the media and major upcoming segment on education
This poor student performance has policymakers: reform for the Discovery Channel, in
occurred despite increased government association with the New York Times.
spending. In 2002-03, total K-12 funding • It has been featured in the Or a n g e
per pupil from all sources (federal, state, County Register, National Review Online, • PRI’s education research was used dur-
and local) came to approx i m a t e l y and San Francisco Business Times. ing a nationally broadcast Town Hall
$9,200, a nearly 29-percent inflation- Meeting in Sacramento with ABC
adjusted increase over the amount spent • In August PRI drew a large audience NEWS’s Peter Jennings.
10 years earlier. of legislative staff e rs and education
o fficials for a seminar at the state
capitol, co-sponsored by the Howard
Jarvis Association.
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PRI's Golden Fleece Award Exposes Waste, Fraud, and Abuse
PRI’s California Golden Fleece McQuillan and Gloger documented the institute’s union
Award recognizes wasteful and p r o p a ganda campaign in “A Ta x- Funded Union Lo b b y ”
outrageous state or local spend- (Orange County Register, August 8). Their work led to the com-
ing programs and regulations plete defunding of the Institute in Governor Arnold
that fleece Californians. Schwarzenegger’s budget for fiscal year 2004-2005.
California Victim Compensation Program Workers’ Compensation System
February Award December Award
A u t h o rsAndrew Gloger and Lawrence McQuillan exposed According to McQuillan and Gloger, California’s system
the financial mismanagement that led to the program’s bank- overly rewards doctors and encourages litigation and exces-
ruptcy, after spending its reserve fund of $96.7 million over the sive filing of minor claims – unnecessarily costing businesses
past four years. Since 1999, annual revenues have grown by billions and depriving truly injured workers of satisfactory
eight percent while payments have increased by 45 percent, compensation.
largely due to fraudulent or ineligible claims and excessive California companies pay, on average, 94 percent more
benefits. Through bad management and reckless spending, the than neighboring Nevada, 184 percent more than Oregon, and
program has become a pork barrel for government worke rs, 259 percent more than Arizona. The number of disability
therapists, and lawyers. It wasted millions of dollars that claims in California is nearly three times the national rate.
should have gone to help genuine victims of crime. Legislation was signed in fall 2003 to fix the system’s
McQuillan and Gloger’s op-ed on the program, titled flaws, but it did not go far enough. McQuillan and Gloger rec-
“Bureaucratic Bungling Hurts Victims of Crime” (Los Angeles ommend a second round of reforms, detailed in their recently
Times, February 13), prompted Kelly J. Brodie, executive offi- released briefing “How To Fix California’s Broken Workers’
cer of the Victim Compensation Program, to resign. It also ”
Compensation System. They provide a five-point agenda for
helped prompt a reorganization of the program to the benefit reforming the system, and their recommendations are now
of crime victims. p a rt of the public debate surrounding Gov e r n o r
Schwarzenegger’s current drive to reform workers’ comp.
University of California Institute for Labor and Employment Andrew Gloger has met with members of the governor’s staff
August Award to provide advice and policy recommendations regarding the
governor’s reform proposal.
”
This little-known “think tank, based at UCLA and UC
Berkeley, has been a driving force behind organized labor’s suc- The California Golden Fleece Award has become a strate-
cessful political movement in California. It has provided aca- gic weapon in PRI’s fight to hold legislators accountable for
demic cover for legislative victories including paid family leave, their actions and to protect the interests of California business
changes in overtime rules, a living-wage law, and most recent- owners, taxpayers, and consumers. PRI welcomes ideas for
ly a “play or pay” health-care bill. The institute has received $21 future awards. Please contact Andrew Gloger at
million from taxpayers since its inception in July 2000. agloger@pacificresearch.org.