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HKS in the News June 25, 2012

1. A Georgia Town Takes the People’s Business Private (Donahue) New York Times

2. Members of Congress trade in companies while making laws that affect those same firms (Thompson) Washington Post

3. Voter Suppression Returns (Keyysar) Harvard Magazine

4. The Case for Compromise (Thompson) Harvard Magazine

5. 5 housing markets where renting beats owning Wall Street Journal

6. An emerging democracy requires more than just elections (Kayyem) Boston Globe

7. Senator Kerry’s closeness to Obama draws fire (Nye) Boston Globe

8. Wisconsin proves the lie of Pew pension numbers Baltimore Post-Examiner

A Georgia Town Takes the People’s Business Private

New York Times

June 24

Quoted: John Donahue

Topic: City government and privatization

… With public employee unions under attack in states like Wisconsin, and with cities across the country looking to trim budgets, behold a town built almost entirely on a series of public-private partnerships — a system that leaders around here refer to, simply, as “the model.”

Cities have dabbled for years with privatization, but few have taken the idea as far as Sandy Springs. Since the day it incorporated, Dec. 1, 2005, it has handed off to private enterprise just about every service that can be evaluated through metrics and inked into a contract. …

Hovering around the debate about privatization is a basic question: What is local government for? For years, one answer, at least implicitly, was “to provide steady jobs with good wages.” But that answer is losing its political tenability, says John D. Donahue of the John F. Kennedy School of Government at Harvard. “A lot of jobs in government are middle-class jobs that in the private sector are not middle-class jobs,” he says. “People aren’t willing to support conditions for public workers that they themselves no longer enjoy.”

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Members of Congress trade in companies while making laws that affect those same firms

Washington Post

June 23

Quoted: Dennis Thomson

Topic: Insider trading and Congress

One-hundred-thirty members of Congress or their families have traded stocks collectively worth hundreds of millions of dollars in companies lobbying on bills that came before their committees, a practice that is permitted under current ethics rules, a Washington Post analysis has found. …

“If you have major responsibility for drafting legislation that directly affects particular companies, then you shouldn’t be trading in their stock,” said Dennis Thompson, a professor of public policy at Harvard University’s John F. Kennedy School of Government and author of “Ethics in Congress: From Individual to Institutional Corruption.” “Committee chairs especially shouldn’t be in the position of potentially benefiting from trades in companies that stand to gain or lose from actions the committee takes.”

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Voter Suppression Returns

Harvard Magazine


Commentary by: Alexander Keyssar, Wiener Center

Topic: Voter suppression

The 2012 election campaign—for Congress as well as the presidency—promises to be bitterly fought, even nasty. Leaders of both major parties, and their core constituents, believe that the stakes are exceptionally high; neither party has much trust in the goodwill or good intentions of the other; and, thanks in part to the Supreme Court, money will be flowing in torrents, some of it from undisclosed sources and much of it available for negative campaigning.

This also promises to be a close election—which is why a great deal of attention is being paid to an array of recently passed, and pending, state laws that could prevent hundreds of thousands, perhaps millions, of eligible voters from casting ballots. Several states, including Florida (once again, a battleground), have effectively closed down registration drives by organizations like the League of Women Voters, which have traditionally helped to register new voters; some states are shortening early-voting periods or prohibiting voting on the Sunday before election day; several are insisting that registrants provide documentary proof of their citizenship. Most importantly—and most visibly—roughly two dozen states have significantly tightened their identification rules for voting since 2003, and the pace of change has accelerated rapidly in the last two years. Ten states have now passed laws demanding that voters possess a current government-issued photo ID, and several others have enacted measures slightly less strict. A few more may take similar steps before November—although legal challenges could keep some of the laws from taking effect.

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The Case for Compromise

Harvard Magazine


Commentary by: Dennis Thompson

Topic: Politics and compromise

Compromise is difficult, but governing a democracy without compromise is impossible. Anyone who doubts either the difficulty or the necessity of compromise need only recall the heated politics of the summer of 2011 in Washington, D.C., when a sharply divided Congress confronted the need to raise the sovereign debt limit of the United States. Compromise appeared to be the only way to avoid further inflaming the financial crisis and risking an unprecedented governmental default on the debt. With the approach of the August 3 deadline (after which the government would no longer be able to pay all its bills), many observers doubted that any compromise could be reached in time.

The spirit of compromise was in short supply. Only at the last moment—on the evening of July 31—was President Barack Obama able to announce that leaders in both the House and the Senate had reached an agreement. Congress and the White House would now compromise. Yet criticism of the compromise abounded on all sides. The best that supporters could say for it was that its terms were less bad than the consequences of doing nothing. The episode stands as a dramatic reminder that compromise is the hardest way to govern, except all the others.

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5 housing markets where renting beats owning

Wall Street Journal

June 25

Cited: Research from the Joint Center for Housing Studies

Topic: Home ownership vs. renting

Despite the incentives to buy now, including record-low interest rates and depressed prices, sales of single-family existing homes slipped 1.5% in May from a month earlier, according to data from the National Association of Realtors.

The drop, which came during the historically busy spring season, suggests the housing market has a way to go to recover. If anything, the ranks of American homeowners are dwindling. The homeownership rate in the U.S. fell slightly from 66% to 65% during the first quarter of 2012—the lowest in 15 years, according to the latest data by the U.S. Census. (It peaked at just over 69% in 2004.)

Renters, meanwhile, have more inventory to choose from as owners who are unable to sell their homes often have no choice but to find tenants, says Dan McCue, research manager at Harvard University’s Joint Center for Housing Studies. The number of single-family homes for rent or being rented grew by two million units from 2006 to 2010, according to a JCHS report released this month, and McCue says the number has likely grown since then. “One third of all rentals are single-family homes,” he says.

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An emerging democracy requires more than just elections

Boston Globe

June 25

Commentary by: Juliette Kayyem, Belfer Center

Topic: The role of the judiciary in democracies

This is hardly a week when we need to be reminded that judges and, in particular, Supreme Court justices, have a profound impact on politics. While the current court may seem extreme in its willingness to enter the political fray on immigration and health care, it is not a new charge: High courts around the world have been wreaking havoc on their countries’ political systems for a long time.

The obvious fact that judicial systems are an essential aspect of democracy is all too visible in Egypt today. It turns out that the third branch of the Egyptian government had a different take on all the euphoria over Tahrir Square. If the actions of the Egyptian military merely hinted at the old adage that power, once captured, is rarely relinquished, the Egyptian courts have proven it. And the mess in Egypt presents a question for international organizations that support judicial reform in post-conflict countries: What if the problem isn’t that there is no capable judiciary but, actually, that the judiciary is utterly, and frustratingly, capable?

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Senator Kerry’s closeness to Obama draws fire

Boston Globe

June 24

Quoted: Joseph Nye

Topic: Senator John Kerry and the Obama administration

Since he was elevated to the leading foreign policy position in Congress three years ago, John F. Kerry has been on the road a lot. He has brokered runoff elections in Afghanistan, shuttled between warring factions in Africa, and patiently sat through marathon tea-drinking sessions with recalcitrant Middle East dictators, all to advance the Obama administration’s top ­foreign policy goals. …

“He has played a very constructive role by being another voice on foreign policy but one that is in tune with the administration,” said Joseph Nye, a professor at the Kennedy School of Government at Harvard University.

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Wisconsin proves the lie of Pew pension numbers

Baltimore Post-Examiner

June 24

Cited: Research from the Mossavar-Rahmani Center for Business and Government

Topic: Pensions

Take a look at Wisconsin’s public pension system to find out everything you need to know about how big this catastrophe really is. The Pew Center on the States recent “Widening Gap” update claims only the Badger State was 100 percent funded, as of 2010. But applying standard accounting calculations, similar to those private pension funds use, reveals the hard truth: 60 percent funded with guaranteed debt of $55 billion that citizens must pay to receive no government services or benefits of any kind.

In fact, pension fund managers desperately trying to get returns imposed by politicians actually are putting public workers’ pensions at higher risk and increasing the chance that things will get even worse than economists say. Three studies released last month by the Harvard Kennedy School Mossavar-Rahmani Center, the Federal Reserve Bank of Cleveland and by economists at Maastricht and Notre Dame universities prove beyond doubt that municipal and state pension plans are unsustainable and in need of “drastic reform.” Actual numbers for Wisconsin and the nation show what is happening. In “Solid Performer” Wisconsin in just four years, pensions lost more than $10 billion in assets and had negative “earnings” of $1.8 billion while paying out more than $16 billion. At the same time total acknowledged pension obligation increased by more than $10 billion.

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This selection of media appearances is compiled by the Office of Communications and Public Affairs.

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