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Private schools extend lead in entrants to university

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The Internet is the most important development in the history of communication. The machine does not isolate man from the great problems of nature but plunges him more deeply.

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August 4, 2016

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A police officers stands watch by the forensics tent set up next to the park in Russell Square in central London, near the British Museum.

World

Officials: Somali Man Who Killed American in London Not “Motivated by Terrorism”

A police officers stands watch by the forensics tent set up next to the park in Russell Square in central London, near the British Museum.

Officials said a Norwegian man of Somali descent who killed one American woman and injured five others in London was “not motivated by terrorism.” The stabbing attack occurred in London’s Russell Square and the 19-year-old was arrested after the incident, authorities said.

Police officials described the attack as “random” and revealed the suspect emigrated from Norway to the United Kingdom in 2002 at about five years old.

“So far we have found no evidence of radicalization that would suggest the man in our custody is in any way motivated by terrorism,” Metropolitan Police Assistant Commissioner Mark Rowley, Britain’s most senior counterterrorism official said at a press conference. Mr. Rowley said the investigation indicates the attacker had “mental health issues” and “selected [victims] at random.”

Metropolitan Commissioner Sir Bernard Hogan-Howe said law enforcement’s “swift response undoubtedly helped to prevent more people from getting injured.”

While the woman who died was a 60-year-old American, the five injured people were British, American, Israeli and Australian. None of the injured victims had life-threatening injuries. Two remain in a hospital, while three others have been discharged.

“Our thoughts are with the victims and the families of those killed or injured in last night’s attack in London,” State Department Deputy Spokesman Mark Toner said in a statement.

August 4, 2016

Officials said a Norwegian man of Somali

Economy

Weekly Jobless Claims for Unemployment Rise More than Forecast

Weekly jobless claims, or first-time claims for unemployment benefits reported by the Labor Department.

The Labor Department reported Thursday weekly jobless claims rose by 3,000 to 269,000 for the week ending July 30, higher than the estimate for 265,000. The prior week was unchanged at 266,000.

The four-week moving average–which is widely considered a better gauge, as it irons out volatility–came in at 260,250, an increase of 3,750 from the previous week’s unrevised average of 256,500.

A Labor Department analyst said there were no special factors impacting this week’s initial claims and no state was triggered “on” the Extended Benefits program during the week ending July 16. This marks 74 consecutive weeks of initial claims below 300,000, the longest streak since 1973. However, longterm unemployment has reduced the pool of eligible applicants. Put another way, there are simply fewer people even eligible to apply.

The highest insured unemployment rates in the week ending July 16 were in Puerto Rico (3.3), Connecticut (2.7), New Jersey (2.7), Alaska (2.6), Pennsylvania (2.6), West Virginia (2.4), California (2.2), Rhode Island (2.2), Wyoming (2.1), Illinois (2.0), and Massachusetts (2.0).

The largest increases in initial claims for the week ending July 23 were in Michigan (+2,598), Illinois (+480), Ohio (+388), Vermont (+212), and Nevada (+68), while the largest decreases were in New York (-7,113), Georgia (-4,604), Oregon (-2,713), Alabama (-2,513), and Pennsylvania (-2,030).

August 4, 2016

The Labor Department reported Thursday weekly jobless

Hillary-Clinton-KY-Bernie-Sanders-Oregon

Policy

So-Called Crisis of Student Loan Debt is Really the Predictable Consequence of Government Subsidies

Democratic presidential front-runner Hillary Clinton, left, campaigns in Kentucky to fend off a challenge posed by Vermont Sen. Bernie Sanders, right. (Photos: AP)

Normally, leftists get upset if there’s a big industry that charges high prices, engages in lots of featherbedding, and manipulates the political system for handouts. But for some reason, when it comes to student loan debt and higher education, folks like Hillary Clinton think the answer is to shower colleges and universities with ever-greater subsidies.

She says the subsidies are for students, but I point out in this interview that the real beneficiaries are the schools that simply boost tuition and fees to capture any increase in student loans.

[brid video=”57456″ player=”2077″ title=”Dan Mitchell Government Created Student Loan Bubble”]

And I also pointed out that the colleges and universities don’t even use the money wisely.

Instead, they build bureaucratic empires with ever-larger numbers of administrators while money devoted to the classroom shrinks.

Sort of a pay-more-get-less business model.

Though that only works when there are government subsidies to enable the inefficiency and bloat.

But don’t take my word for it. According to a study published by the National Bureau of Economic Research (h/t: James Pethokoukis), tuition subsidies get captured by colleges and universities.

With all factors present, net tuition increases from $6,100 to $12,559 [and] the demand shocks — which consist mostly of changes in financial aid — account for the lion’s share of the higher tuition. …These results accord strongly with the Bennett hypothesis, which asserts that colleges respond to expansions of financial aid by increasing tuition. In fact, the tuition response completely crowds out any additional enrollment that the financial aid expansion would otherwise induce, resulting instead in an enrollment decline… Furthermore, the students who do enroll take out $6,876 in loans compared to $4,663 in the initial steady state. The college, in turn, uses these funds to finance an increase of investment expenditures from $21,550 to $27,338… Lastly, the model predicts that demand shocks in isolation generate a surge in the default rate from 17% to 32%. Essentially, demand shocks lead to higher college costs and more debt, and in the absence of higher labor market returns, more loan default inevitably occurs. …Our model also suggests that financial aid increases tuition at the bottom of the tuition distribution more so than it does at the top.

By the way, I closed the above interview by stating that I want to make colleges and universities at least partially liable if students don’t pay back their loans because that will create a better incentive structure.

Two scholars from the American Enterprise Institute addressed this issue in an article for National Review.

Just as government-subsidized easy money fueled a real-estate bubble in the 1990s and 2000s, boosting house prices while promoting unwise borrowing and lending, today government-subsidized easy money is fueling an education bubble — boosting tuition rates and reducing students’ incentives to choose education options smartly. …Like the brokers who caused the subprime-mortgage crisis, colleges push naïve students to take on debt regardless of their ability to repay, because colleges bear no cost when graduates default. A true solution requires a new financing system where colleges retain “skin in the game.”

The authors point out that default and delinquency are very common, but they point out that this is merely a symptom of a system with screwed-up incentives.

The high delinquency rate is a symptom of a wider problem — a broken higher-education system. Colleges are paid tuition regardless of whether their alumni succeed. They face little incentive to control costs when those costs can be passed on to students who fund them with government-guaranteed loans that are available regardless of the students’ ability to repay.

It’s not just whether they have an incentive to control costs. The current approach gives them carte blanche to waste money and jack up tuition and fees.

Between 1975 and 2015, the real cost of attending a private college increased by 171 percent while the real cost of public universities rose by 150 percent. If the tuition, room and board, and other fees at a four-year private college in 1975 were projected forward to 2015, adjusting for the average inflation rate, the cost of college in 2015 would have been $16,213. Instead, the actual cost in 2015 was $43,921. A large share of rising college costs can be attributed to expanded administration, new non-educational services, athletic programs, and government regulation. Colleges have economized by switching to part-time adjunct faculty. The American Association of University Professors estimates that roughly 3 out of 4 college courses are taught by adjuncts.

Amen. This is what I mean by the pay-more-get-less business model.

The solution, of course, it to make fat and lazy college administrators have to worry that their budgets will shrink if they continue to jack up tuition while providing sub-par education.

The key to controlling costs and student-debt burdens is to require colleges themselves to have “skin in the game” so they have strong incentives not only to provide a good education, but also to safeguard the financial solvency of their graduates. …With “skin in the game,” colleges will face pressure to control unnecessary costs and limit student indebtedness. Colleges will redouble their efforts to ensure that students graduate with the skills necessary to succeed in the job market. Resources will no longer be freely available for unnecessary non-educational university spending.

The bottom line is that bad things happen when the visible foot of the government supplants the invisible hand of the market.

That’s what I basically was trying to say in the interview when I made the crack about a reverse Midas touch whenever there is government intervention.

The solution, of course, is to phase out the subsidies that have created the problem.

But (just as is the case with healthcare) that’s a challenge because of the inefficiency that is now built into the system. Consumers will be worried that tuition and fees will remain high, which will mean higher out-of-pockets costs for college.

So while I understand why politicians will be reluctant to address the issue, the longer they wait, the worse the problem will become.

P.S. This video from Learn Liberty, featuring Professor Daniel Lin, is a great (albeit depressing) introduction to the issue of how government handouts lead to higher tuition.

P.P.S. Is there a “bubble” in higher education? While government intervention and handouts definitely have enabled needlessly high tuition, I’ve explained that those high prices will probably be permanent so long as the subsidies continue.

P.P.P.S. Unsurprisingly, Paul Krugman doesn’t understand the issue.

August 4, 2016

When it comes to student loans and

Video

Dan Mitchell: Government Created Student Loan Bubble

[brid video=”57456″ player=”2077″ title=”Dan Mitchell Government Created Student Loan Bubble”]

CATO economist Dan Mitchell made the case during an interview with Charles Payne on Fox Business that government intervention caused the student loan bubble. The student loan bubble in the U.S. is being fueled by more than $1 trillion in college loan debt that has accelerated greatly under President Obama.

August 4, 2016

CATO economist Dan Mitchell made the case

A protestor rests next to their big government big mistake sign. (Photo: Reuters)

Policy

Debunking the Anti-Empirical Case for Bigger Government

A protestor rests next to their big government big mistake sign. (Photo: Reuters)

Does the economic chaos in Greece suggest that government should be bigger? Is Venezuela’s economic collapse evidence that larger governments boost growth? Should we learn from Italy’s pervasive stagnation that public sectors should be expanded?

Most people, looking at this real-world evidence, would quickly answer no to these questions.

But Eduardo Porter is not most people. Writing for the New York Times, he openly argues that government should be bigger. Much bigger.

Over the last six years, according to the Pew Research Center, four out of every five — or more — have said the government makes them feel either angry or frustrated. …These frustrated Americans may not fully realize it, under the influence of decades worth of sermons about government’s ultimate incompetence and venality. But there’s a strong case for more government — not less — as the most promising way to improve the nation’s standard of living.

He bases much of his column on the work of four left-wing academics.

Here’s his summary of their work.

The scholars laid out four important tasks: improving the economy’s productivity, bolstering workers’ economic security, investing in education to close the opportunity deficit of low-income families, and ensuring that Middle America reaps a larger share of the spoils of growth. Their strategy includes more investment in the nation’s buckling infrastructure and expanding unemployment and health insurance. It calls for paid sick leave, parental leave and wage insurance for workers who suffer a pay cut when changing jobs. And they argue for more resources for poor families with children and for universal early childhood education.

Improving productivity would be a very good idea. Indeed, producing more output per unit of capital and labor is basically how we become richer.

But while Porter and the statist academics might recognize that higher productivity is a good destination, the route they choose (bigger government, more punitive tax burden, additional regulation, lots of mandates, etc) will move the economy in the opposite direction.

If we want more growth, the best way to boost productivity is with capital formation and entrepreneurship. But leftists, with their fixation on inequality, are reflexively opposed to the types of tax reforms that enable more saving, investment, and risk-taking.

Instead, they want the suffocating embrace of the European welfare state.

They propose raising government spending by 10 percentage points of the nation’s gross domestic product ($1.8 trillion in today’s dollars), to bring it to some 48 percent of G.D.P. by 2065. …Here are some other things Europeans got from their trade-off: lower poverty rates, lower income inequality, longer life spans, lower infant mortality rates, lower teenage pregnancy rates and lower rates of preventable death. And the coolest part, according to Mr. Lindert — one of the authors of the case for big government — is that they achieved this “without any clear loss in G.D.P.”

There are several assertions here that cry out for correction (poverty indices should measure actual poverty rather than income distribution) and elaboration (is inequality bad when all income classes in America have more income than their counterparts in Europe?), but the most absurd claim is the “coolest part” aboutEurope making government bigger without sacrificing prosperity.

This is absurd. Living standards in Europe (even Western Europe) are far below American standards. And even though convergence theory tells us that poorer nations should grow the fastest,Europe no longer is closing the gap with the United States.

Indeed, the gap is actually widening.

So how does Porter justify his anti-empirical statements? For evidence of his remarkable assertion about European growth, Porter’s column includes this chart, which (we are supposed to believe) shows that “many countries where government has grown the most have also experienced stronger economic growth.”

In reality, though, this chart merely shows the long-established relationship known as Wagner’s Law, which is that politicians figure out how to redistribute lots of money once nations become comparatively wealthy.

If Porter bothered to follow the academic evidence, he would see that nations can enjoy rapid growth and become rich during periods with small government and free markets, but growth slows considerably once politicians impose high tax rates and lots of redistribution.

By the way, Porter’s column contains two rather interesting accidental admissions. He confesses that a) a value-added tax is necessary to finance big welfare states (and one of the academics cited by Porter has explicitly acknowledged this point), and b) he admits that income taxes impose considerable economic damage.

Europe’s reliance on consumption taxes — which are easier to collect and have fewer negative incentives on work — allowed them to collect more money without generating the kind of economic drag of the United States’ tax structure, which relies more on income taxes.

Porter is completely correct about the role of the VAT in enabling much bigger government. This helps to explain why I’m so fixated on smothering every VAT proposal in its infancy, even when proposed with ostensibly good intentions (for instance, the Rand Paul tax plan and Ted Cruz tax plan).

Though he seems to be implying that a VAT isn’t bad for the economy. This is nonsense. First, the VAT enables bigger government, which necessarily damages the economy becausecapital and labor are divertedfrom the more productive and efficient private economy.

And a VAT also is bad for the economy because it drives a wedge between pre-tax income and post-tax consumption. Which is exactly the same argument against payroll taxes and income taxes on wages and salaries. The only accurate argument he could make is that VATs don’t do as much damage, per dollar raised, as income tax systems thatinclude double taxation of saving and investment.

But I’m digressing.

Let’s close by re-focusing on the main topic of whether more government spending is associated with better economic performance.

I could cite research by the World Bank to show that Porter and his academic buddies are wrong. I also could share research from the European Central Bank. Or plenty of other sources.

But I (not-so-humbly) think these two videos from the Center for Freedom and Prosperity are the best summary.

Here’s the empirical evidence on government spending and growth.

And here’s the empirical evidence on the growth-maximizing size of government(hint: much smaller than Porter suggests).

[brid video=”57452″ player=”2077″ title=”The Empirical Evidence Against Big Government”]

If this hasn’t exhausted your interest in this topic, click here for my entire four-part video series on the economics of government spending.

[brid video=”57453″ player=”2077″ title=”The Rahn Curve and the GrowthMaximizing Level of Government”]

August 4, 2016

CATO economist Dan Mitchell destroys Eduardo Porter

Then-Secretary Hillary Clinton, left, works from a desk inside a C-17 military plane following her departure from Malta, in the Mediterranean Sea, bound for Tripoli, Libya, Oct.18, 2011. Former Libyan dictator Col. Moammar Gaddafi, right. (Photo: Kevin Lamarque - Associated Press)

Opinion

Lessons From the Deep State

Then-Secretary Hillary Clinton, left, works from a desk inside a C-17 military plane following her departure from Malta, in the Mediterranean Sea, bound for Tripoli, Libya, Oct.18, 2011. Former Libyan dictator Col. Moammar Gaddafi, right. (Photo: Kevin Lamarque – Associated Press)

On the eve of the Democratic National Convention, WikiLeaks — the courageous international organization dedicated to governmental transparency — exposed hundreds of internal emails circulated among senior staff of the Democratic National Committee during the past 18 months.

At a time when Democratic Party officials were publicly professing neutrality during the party’s presidential primaries, the DNC’s internal emails showed a pattern of distinct bias toward the candidacy of former Secretary of State Hillary Clinton and a marked prejudice toward the candidacy of Sen. Bernie Sanders. Some of the emails were raw in their tone, and some could fairly be characterized as failing to respect Sanders’ Jewish heritage.

The revelation caused a public uproar during the weekend preceding the opening of the Democratic convention in Philadelphia last week, and it caused the DNC to ask its own chairwoman, Rep. Debbie Wasserman Schultz, to resign. When she declined to do so, President Barack Obama personally intervened and implored her to leave. She submitted to the president’s wishes, gave up her public role as chair of the convention and eventually resigned as chair of the DNC late last week.

In order to take everyone’s eyes off this intrusive and uncomfortable bouncing ball, the leadership of the DNC, in conjunction with officials of the Clinton campaign, blamed the release of the DNC emails on hackers employed by Russian intelligence agents. Many in the media picked up this juicy story and repeated it all last week.

Clinton promptly named Wasserman Schultz as a campaign consultant and complained that the Russians are trying to influence the presidential election. She did not complain about the unfairness manifested in the emails, complete with their religious prejudice; she only complained about Russian President Vladimir Putin’s helping Donald Trump.

But the Russians had nothing to do with it.

Last week, William Binney, a 30-year career official at the National Security Agency turned whistleblower, revealed the unthinkable. Binney, who devised the software that the NSA has used to capture the contents of emails and cellphone conversations of all in America but resigned from the NSA because of the unlawful and unconstitutional manner in which the software was used, told a Philadelphia radio audience that the DNC hacking was most likely done by NSA agents.

Why would the NSA hack into DNC computers, and why would the NSA leak what its agents saw?

Here is where the deep state meets the political world. The deep state consists of intelligence, military, law enforcement and administrative agency personnel who aggressively protect their own interests, which transcend elections. Stated differently, many of these folks remain in opaque positions of power, and the governmental departments and agencies for which they work continue to expand, no matter which party wins the White House or controls Congress.

The deep state stays in power by a variety of means, some of which are lawful and not the least of which was visited upon the DNC last week. Binney knows the inside workings of NSA computers because he designed them. He knows how easy it would have been for any of the NSA’s 60,000 agents, many of whom have great antipathy toward Clinton, to employ their skills to frustrate her drive toward the presidency.

The intelligence community’s antipathy toward Clinton has two general sources. One is her misuse of emails containing state secrets. Among the top-secret emails that the FBI discovered on Clinton’s non-secure private servers were some that revealed the names of U.S. intelligence agents operating undercover in the Middle East. Because Clinton emailed secrets to others who the FBI found were hacked by hostile foreign intelligence services and because she used a non-secure mobile email device while inside the territories of hostile governments, her “extremely careless” use of her emails resulted in the termination of the undercover work of those whose cover she caused to be revealed. Many in the intelligence community also suspect that in some cases, U.S. undercover agents lost their lives because Clinton failed to keep their identities secret.

The other source of intelligence community antipathy to Clinton stems from her secret war waged against the late Libyan strongman, Col. Moammar Gadhafi. When she waged that war — using intelligence, not military, personnel — with the approval of the president and a dozen members of Congress, she exercised her authority as secretary of state to grant exemptions to a U.N. arms embargo of Libya. She wanted Libyan militias to have heavy-duty, military-grade arms with which to topple the Libyan government.

But the CIA and others warned her that she was arming terrorist groups, which was potentially lethal for some American intelligence personnel and which is a felony under federal law. One of those groups may have used Clinton-authorized, embargo-free weapons to assassinate Christopher Stevens, the U.S. ambassador to Libya, at Benghazi. Clinton disregarded the CIA’s advice and didn’t worry about anyone’s finding out about it because she thought her emails would remain secret.

Binney’s conclusion that the NSA and not the Russians hacked the DNC is further supported by official White House silence. Last year, when Chinese intelligence agents hacked U.S. government computers and accessed personnel records of millions of federal government employees, the White House lodged long and loud protests with Beijing. This time, there have been no such protests to the Kremlin.

What does all this tell us?

It tells us that Hillary Clinton continues to be the queen of deception. It tells us that some of those in whose hands we repose our freedom for safekeeping do not wish to see her in the White House because of her demonstrated lawlessness and indifference to their work. And it recalls to our attention the danger and power of the deep state and its willingness to break the laws it has sworn to uphold.

August 4, 2016

Last week, William Binney, a 30-year career

Polls

Polling the “Trump Effect”: Republicans Cannot Blame Nominee if They Lose

House Speaker Paul Ryan, R-Wis., left, holds a news conference on Capitol Hill on March 17, 2016. Republican presidential candidate Donald Trump delivers a foreign policy speech at the Mayflower Hotel in D.C. on Wednesday April 27, 2016. (Photo: Reuters/Brendan Smialowski/AFP/Getty Images)

There has been a lot of talk about whether an electoral disaster with Donald Trump at the top of the ticket would trickle down-ballot and jeopardize the Republican majorities in the U.S. House and Senate. Alarmists on the Right and opportunists on the Left have been making this claim since the Republican primary got underway.

The truth is that Mr. Trump and Republican congressional candidates are enjoying the support of two similiar but nevertheless different voting coalitions. Further, the political impact is disproportionately beneficial to Republican House and Senate candidates. To put it simply, Republican candidates down ballot are getting more from the Trump coalition than Mr. Trump is getting from the traditional Republican coalition.

Let’s take a look at some of the data and demographics.

Republican have a small edge on the generic ballot (in polling interviews conducted from July 31 to August 2), while Mr. Trump trails Mrs. Clinton by roughly 0.2 points. On the generic ballot question, there are far more undecided independents (29%) and the Republican edge is only about 7 points. On the other hand, Mr. Trump crushes Mrs. Clinton among independent voters 50% to 39%, with far fewer undecided voters.

Meanwhile, only a slim 3% of self-identified Republicans say they will vote for the Democratic candidate in their district, while roughly 7% say they will vote for Mrs. Clinton. But Mr. Trump takes roughly 11% of Mrs. Clinton’s party juxtaposed to 4% defecting on the generic ballot, though that’s down from 17% at the start of last week.

In other words, Republican lawmakers are getting more of their traditional party coalition (base) and a few less independents and Democrats than Mr. Trump. But they benefit on the margins among certain groups of Trump voters. Some of these voters may not have voted in the last ten years, yet now describe themselves as “Extremely Enthusiastic” about voting for Mr. Trump in November.

Who are these voters?

Not surprisingly, many are the working class white voters making less than $49,000 per year who either did not show up for Mitt Romney in 2012 or voted Democratic. Indeed, some say they haven’t voted either since George W. Bush or before. But even this is too simplified and describes only a piece of the Trump coalition.

Consider some of these voters’ primary choices. While Mr. Trump is enjoying the support of roughly 14% of voters who backed Sen. Bernie Sanders, the number of these voters backing generic Republicans on the generic ballot is statistically insignificant.

Consider race and ethnicity. Mr. Trump slightly outperforms Republicans on the generic ballot among self-described Hispanics, earning 32% of the vote to just 26% for generic Republican candidates. This is worth repeating in light of the media focus on his performance among minorities, specifically Hispanics.

The coalition is far more diverse than even I expected and indicates Mr. Trump could win by a larger margin than any of us anticipate if he and his campaign manage to attract more higher income, suburban Republicans and independents than he currently is now. Regardless, rhetoric again isn’t matching reality. Polling data indicate the “Trump Effect,” at least as a net negative to Republicans, is a lot of hype.

Of course this could change. But as of now, if the Republican Senate majority is no more after November, those who lost cannot blame their party’s nominee. However, if they are able to come together in one broader, more powerful coalition it would be a political force to be reckoned with.

August 3, 2016

There's no polling evidence of a negative

House Speaker Paul Ryan, R-Wisconsin, at a press conference during the Republican Party of Wisconsin 2016 State Convention at the KI Convention Center in Green Bay, Wisconsin, on Saturday, May 14, 2016. (Photo: AP)

Elections

Establishment Strikes Back: Tim Huelskamp Defeat Sends Clear Message

House Speaker Paul Ryan, R-Wisconsin, at a press conference during the Republican Party of Wisconsin 2016 State Convention at the KI Convention Center in Green Bay, Wisconsin, on Saturday, May 14, 2016. (Photo: AP)

With 100 percent of precincts reporting, three-term Rep. Tim Huelskamp was defeated in his primary by OB-GYN Roger Marshall 56% to 44%. The Republican Establishment made the incumbent in the 1st Congressional District of Kansas a prime payback target after he broke with them on key votes over the debt ceiling, amnesty and budget gimmicks.

With the backing of the Chamber of Commerce, the Kansas Farm Bureau, the Livestock Association and the National Sorghum Producer’s Association, the Establishment-backed Marshall easily outspent his conservative counterpart in the $3 million dollar congressional race.

“Governing was on the ballot in KS-1 and voters spoke clearly,” the chamber’s national political director Rob Engstrom said in a statement Tuesday night.

The Establishment ironically painted him as an Washington insider who “betrayed” the state by getting kicked off of the Budget and Agriculture Committees in 2012. An ad funded for by EASFund even called Rep. Huelskamp “Washing-Tim.”

[brid video=”57310″ player=”2077″ title=”Tim Huelskamp Betrayed Kansas”]

Another ad produced and funded by Ending Spending Action Fund hit Rep. Huelskamp calling him a “20-year politician,” not a farmer. In a statement sent out even before the Associated Press had called the race Tuesday night, the group, which supports fiscally conservative candidates, took credit for Huelskamp’s defeat.

“People regularly overuse the word ‘historic’ — but this actually is. Incumbents very rarely lose, which tells us that voters are demanding that Republicans in Congress work together to advance a fiscally conservative agenda to actually end out-of-control spending — not just grandstand,” said Brian Baker, the fund’s president.

Meanwhile, the anti-tax and spend Club for Growth Action, as well as the pro-liberty and limited government Americans for Prosperity, the National Rifle Association and Texas Sen. Ted Cruz, all supported Rep. Huelskamp. However, the political consulting firm, who employ’s Sen. Cruz’s campaign manager, worked for Mr. Marshall.

“House Speaker Paul Ryan deliberately worked to undermine Huelskamp’s re-election bid and his allies spent over $1 million against him. To succeed, these DC insiders had to mislead voters into thinking that Huelskamp had a liberal record and that his opponent was a conservative,” said Senate Conservatives Fund President Ken Cuccinelli. “Speaker Ryan should be held accountable for his actions here. He not only refused to support Huelskamp in this race, but he broke the promise that he made to the House Freedom Caucus to support Huelskamp’s efforts to rejoin the House Agriculture Committee.”

Rep. Huelskamp rode the tea party wave to victory in 2010 and, as member of the House Freedom Caucus, was a thorn in the side of Washington Republicans and congressional leadership. Former House Speaker John Boehner, R-Ohio, had him thrown off of those committees for not backing the party leadership on the aforementioned votes.

“There’s a liberal cabal in Washington trying to purge the Republican Party of conservatives,” Adam Brandon Chairman, FreedomWorks PAC said in an email Wednesday morning. “They’re spending big money in Republican primaries to stop principled conservatives from winning.”

While the Republican Establishment clearly sent a message to their members not to break away from party leadership, the conservative groups who have been instrumental in supporting those candidates are sending one back.

August 3, 2016

With 100 percent of precincts reporting, three-term

Economy

ISM Report on Business: Service Sector Growth Slows in June

(Photo: Reuters)

The ISM Report on Business, the Institute for Supply Management’s gauge of service-sector growth declined to 55.5 last month from 56.5 in June. The reading also fell short of the expectation for a reading of 56.

“According to the NMI, 15 non-manufacturing industries reported growth in July,” said Anthony Nieves, CPSM, C.P.M., CFPM, chair of the Institute for Supply Management (ISM) Non-Manufacturing Business Survey Committee. “The majority of the respondents’ comments reflect stability and continued growth for their respective companies and a positive outlook on the economy.”

SERVICE SECTOR NDUSTRY PERFORMANCE

The 15 non-manufacturing industries reporting growth in July — listed in order — are: Arts, Entertainment & Recreation; Educational Services; Accommodation & Food Services; Real Estate, Rental & Leasing; Retail Trade; Utilities; Health Care & Social Assistance; Public Administration; Finance & Insurance; Management of Companies & Support Services; Transportation & Warehousing; Wholesale Trade; Construction; Information; and Professional, Scientific & Technical Services. The three industries reporting contraction in July are: Other Services; Agriculture, Forestry, Fishing & Hunting; and Mining.

Readings above 50 indicate expansion, while those below point to contraction.

ISM^® NON-MANUFACTURING SURVEY RESULTS AT A GLANCE COMPARISON OF ISM^® NON-MANUFACTURING AND ISM^® MANUFACTURING SURVEYS* JULY 2016
	Non-Manufacturing						Manufacturing
Index	Series Index Jul	Series Index Jun	Percent Point Change	Direction	Rate of Change	Trend** (Months)	Series Index Jul	Series Index Jun	Percent Point Change
NMI^®/PMI^®	55.5	56.5	-1.0	Growing	Slower	78	52.6	53.2	-0.6
Business Activity/Production	59.3	59.5	-0.2	Growing	Slower	84	55.4	54.7	+0.7
New Orders	60.3	59.9	+0.4	Growing	Faster	84	56.9	57.0	-0.1
Employment	51.4	52.7	-1.3	Growing	Slower	2	49.4	50.4	-1.0
Supplier Deliveries	51.0	54.0	-3.0	Slowing	Slower	7	51.8	55.4	-3.6
Inventories	54.0	55.5	-1.5	Growing	Slower	16	49.5	48.5	+1.0
Prices	51.9	55.5	-3.6	Increasing	Slower	4	55.0	60.5	-5.5
Backlog of Orders	51.0	47.5	+3.5	Growing	From Contracting	1	48.0	52.5	-4.5
New Export Orders	55.5	53.0	+2.5	Growing	Faster	2	52.5	53.5	-1.0
Imports	53.0	54.0	-1.0	Growing	Slower	6	52.0	52.0	0.0
Inventory Sentiment	63.0	62.5	+0.5	Too High	Faster	230	N/A	N/A	N/A
Customers’ Inventories	N/A	N/A	N/A	N/A	N/A	N/A	51.0	51.0	0.0
Overall Economy				Growing	Slower	84
Non-Manufacturing Sector				Growing	Slower	78

* Non-Manufacturing ISM^® Report On Business^® data is seasonally adjusted for Business Activity, New Orders, Prices and Employment Indexes. Manufacturing ISM^® Report On Business^® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries.

** Number of months moving in current direction.

August 3, 2016

The ISM Report on Business, the Institute

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