John Berlau for the Competitive Enterprise Institute: As with Obamacare, unintended consequences of [the 2010 Dodd-Frank financial reform law] almost immediately began to surface. First, there was a sharp reduction in free checking due to the price controls on debit card transactions from the Durbin Amendment. Then, community banks and credit unions - including some with close to zero foreclosures - found the “qualified mortgage” rules so costly and complex that they slowed down or stopped altogether the issuance of new mortgages. Then, with regard to a provision with no plausible connection to sound banking and finance, domestic manufacturers found themselves having to trace back numerous materials they utilize to determine if they had originated as “conflict minerals” from the Congo.

But the latest unintended consequence may be the one that bears the most striking similarity to Obamacare. Just as health insurance premiums and deductibles skyrocketed due to Obamacare's many mandates, so too may those of life, home and car insurance due to provisions of Dodd-Frank. Life insurance rates alone could soar by $5 billion to $8 billion a year, according to the respected economic consulting firm Oliver Wyman. ...

It has been said that under Obamacare, health insurance companies are no longer insurance companies, but public utilities. With Dodd-Frank, many insurance companies face regulation as if they were banks.



Mercedes Gonzalez for the Century Foundation: After the recent Supreme Court decisions in Fisher and Schuette, which ruled against race-based admissions, how can we attain adequate levels of diversity on college campuses without using race as a factor in the admissions process?

The most effective way to provide a conducive learning environment is for university officials to consider the applicant’s socioeconomic status, according to Richard D. Kahlenberg, senior fellow at [The Century Foundation] and author of The Future of Affirmative Action: New Paths to Higher Education Diversity after Fisher v. University of Texas.

Administrators at the University of Colorado Boulder have taken the lead in this method.

In 2008, Amendment 46 was brought before Colorado voters to decide whether to ban affirmative action policies across the state.

Before the vote, admissions officials at CU Boulder were put on alert that they may need to reform admission procedures, as affirmative action bans had passed in California, Washington, Florida and Michigan. In a rather proactive response, administrators frantically searched for race-neutral alternatives that could produce sufficient diversity. ...

Together, the collaborators designed the Disadvantage Index, which measures socioeconomic disadvantage, and the Overachievement Index, which determines the degree to which students have been able to overcome socioeconomic obstacles.

These indexes include a student’s native language, parents’ education level, family income level, student-teacher ratio, and percentage of students from the applicant’s high school eligible for free or reduced-price lunch.



Jordan Yahiro for the Tax Foundation: Crooked businessmen, albeit crooked, are still businessmen. They seek opportunities to maximize profit, and vast differences in state cigarette excise tax rates generously provide this opportunity. Cigarette packs are $3.20 cheaper in Virginia than in Rhode Island, offering smugglers a $32 profit margin per carton, and a $96,000 profit margin per van load. Subtract transportation and labor costs, and smugglers can pocket $95,500 for every delivery.

Penalties help to push back against this profit motive, but matter less to large scale, sophisticated operations, as they can invest substantial resources in minimizing the risk of being caught and profits grossly overshadow per-violation fines.

A few of these massive operations in Rhode Island have recently been exposed. Three years ago, four individuals were charged with illicit importation and sale of cigarettes, which cost the state $5.7 million in forgone tax revenue, and just last year, seven individuals were indicted for a two-year-long smuggling operation that cost the state $1.05 million in forgone revenue.

While these enforcement victories are fully commendable, the likelihood of the existence of other large-scale smuggling operations remains. Peter F. Neronha, U.S. Attorney for the District of Rhode Island, forebodingly remarked in regard to one of the most recent trafficking indictments, “Our work to defeat this type of fraud continues on many fronts. There is certainly more to come.”

Perhaps Rhode Island should consider a much simpler, cost-effective, surefire approach to combating illegal sales: lowering its cigarette excise tax rate, which is the third highest in the nation.