On the Blog

Abusive Tax Policies Are to Blame for Corporations Going Overseas

Somewhat Reasonable - October 10, 2014, 9:15 AM

American companies that reincorporate abroad are not doing so to avoid paying taxes on U.S. earnings, despite the often misleading impressions left by the rantings of Senators Carl Levin, Dick Durbin, Elizabeth Warren, and others to the contrary. They are doing it to avoid paying U.S. taxes on earnings in other countries.

The United States is the only industrialized nation that uses a “worldwide” tax system, in which a U.S.-based corporation must pay taxes to our government regardless of where the corporation earns its money. Most of the rest of the world uses a “territorial” tax system, in which a corporation pays taxes only where it earns income.

For instance, Volkswagen and BMW pay taxes to the federal and state governments on income earned in the United States. If they bring that money back to Germany, where they are headquartered, Germany taxes none of it, because the United States has already taxed it. On the other hand, if a U.S.-based company earns income in Germany and wants to bring some of it back into this country, the company must pay federal tax even though the money has already been taxed in Germany.

This is a huge disadvantage to multinational corporations based in the United States and a big reason for corporate “inversions,” the word used to describe U.S. companies reincorporating in foreign countries. Compounding the disadvantage is this: The United States has the highest corporate tax rate in the industrialized world. The federal rate is 35 percent, and most states levy their own corporate tax on top of that.

The Tax Foundation earlier this year noted the combined (state and federal) average corporate tax rate in the United States is 39.1 percent, while the average rate is 25 percent among the 33 other nations in the OECD (Organization for Economic Cooperation and Development). OECD nations include Australia, Canada (this nation’s largest trading partner), France, Germany, Japan, Korea, Mexico, Sweden, and the United Kingdom.

In a recent interview with Budget & Tax News, Chris Edwards, director of tax policy at the Cato Institute, noted Canada has a net corporate tax rate of 15 percent—less than half the U.S. federal rate of 35 percent—and receives as much corporate tax revenue as a percentage of its gross domestic product as the United States receives.

“We don’t find companies trying to invert out of Canada or Ireland these days, because they have reasonable corporate tax policies,” Edwards said. “Left wingers like Durbin and [Sens. Carl and Rep. Sander] Levin talk about how government is losing money because of these inversions. The government is losing because their policies are inducing companies to move offshore.”

Pete Sepp, executive vice president of the National Taxpayers Union, also noted, “PricewaterhouseCoopers’ annual ‘Paying Taxes’ study shows that for a hypothetical medium-sized firm, the time and cost spent just on tax paperwork puts the U.S. 61st out of 189 countries. Somehow the chant of ‘We’re 61!’ doesn’t seem to have much appeal to a beleaguered business.”

Sen. Carl Levin (D-MI) has introduced a bill that would virtually end the ability of American companies to do inversions. So has Durbin (D-IL), who has seen the news that two Illinois-based companies, including Walgreen Co., the nation’s largest pharmacy chain, are mulling overseas mergers to do inversions. In response he has introduced the “Patriot Employer Tax Credit Act,” a bill his press statement says “would provide a tax credit to companies that provide fair wages and good benefits to workers while closing a tax loophole that incentivizes corporations to send jobs overseas.”

Notice the slam against the “patriotism” of companies that do inversions.

Lack of patriotism and “tax loopholes” are not the problem. The problem is a nation with the highest corporate tax rate in the industrialized world, a government that taxes income earned anywhere in the world, and an outrageously time-consuming and costly system just to pay taxes.

Until those problems are addressed, expect more U.S. companies to try to reincorporate outside the United States, and expect almost no companies outside the United States to try to reincorporate here.

Steve Stanek (sstanek@heartland.org) is a research fellow at The Heartland Institute in Chicago.

Categories: On the Blog

Wireless Taxes Growing Out of Control

Somewhat Reasonable - October 10, 2014, 9:00 AM

Wireless tax rates have reached all-time highs. Almost half the states nationwide now impose a wireless tax above 10 percent. According to a new report released this morning by the Tax Foundation, the national average, consisting of  the combined federal, state, and local taxes and fees on cell phone bills, has now reached as high as 17.05 percent. Broken down, this historically high tax rate is comprised of a 5.82 percent federal rate and an average 11.23 percent state-local rate. Even as revenue earned per wireless phone falls, taxes and fees continue to climb.

In a media release on the study, Joseph Henchman, Vice President of Legal & State Projects at the Tax Foundation argues that state and local legislators should look away from wireless taxes for new tax revenue.

“Accessing content on our phones these days is easier than ever before, but paying cell phone bills remains difficult for many,” said Joseph Henchman, Tax Foundation Vice President of Legal & State Projects. “Instead of singling out wireless services with stealth tax increases, state and local governments should seek more neutral and less disruptive sources of revenue.”

According to CTIA, a wireless industry trade group, around 326 wireless device connections exist in the United States today (this number includes devices like smartphones, feature phones, tablets and personal wireless hotspots). In addition, according to the National Center for Health Statistics, around 41% of U.S. households have only wireless phones in the second half of 2013, indicating a move away from traditional landlines.

Scott Mackey of KSE Partners, co-author of the report argues in the media statement that wireless taxes are regressive and pose a threat to wireless network development.

“Wireless taxes and fees are regressive and have a disproportionate impact on poorer citizens,” said Scott Mackey of KSE Partners and co-author of the report. “Excessive taxes and fees may reduce low-income consumers’ access to wireless service at a time when such access is critical to economic success.”

Additionally, targeted cell phone taxes may slow investment in wireless infrastructure by lowering consumer demand for wireless service. “The reduced demand impacts network investment, because subscriber revenues ultimately determine how much carriers can afford to invest in network modernization,” adds Mackey.

In the report, Wireless Taxation in the United States 2014, the authors examined state, local and federal wireless taxes, creating state and local tax rankings. Below is a review of some of these findings:

The report finds that:

  • The five states with the highest state-local rates are: Washington State (18.6 percent), Nebraska (18.48 percent), New York (17.74 percent), Florida (16.55 percent), and Illinois (15.81 percent).

  • The five states with the lowest state-local rates are: Oregon (1.76 percent), Nevada (1.86 percent), Idaho (2.62 percent), Montana (6.00 percent), and West Virginia (6.15 percent).

  • Four cities—Chicago, Baltimore, Omaha, and New York City—have effective tax rates in excess of 25 percent of the customer bill.

  • The average rates of taxes and fees on wireless telephone services are more than two times higher than the average sales tax rates that apply to most other taxable goods and services.

  • States favor the taxes because they can raise revenue in a relatively hidden way.

With wireless taxes growing out of control, legislators should take another look at Wireless Tax Fairness Act, a bill designed to slow the growth of these taxes. The Act would put a five-year moratorium on discriminatory state wireless phone and data service tax increases. Although this wouldn’t prevent governments from creating new taxes and fees on all communications, it would disallow them from targeting any one service. A five-year freeze would slow the rate of tax increases while allowing more time to create a new taxing system for wireless that is more carefully developed, fair, and non-disruptive.

High wireless taxes drag down both consumers and the wireless market, deterring innovation and infrastructure improvements, while disproportionately affecting minority and low-income populations. Many of these groups support lower wireless taxes. As an example, according to a MyWireless study conducted by McLaughlin & Associates partnered with Penn Schoen Berland, nine in ten Hispanics believe the wireless tax rate should be the same or less than the taxes they pay on general goods and services.

Placing a moratorium on these discriminatory tax hikes would benefit the economy and consumers.

Categories: On the Blog

No, A Carbon Tax Cannot Create Jobs, Jobs, Jobs

Somewhat Reasonable - October 09, 2014, 8:02 PM

A tax on carbon dioxide emissions would destroy far more jobs – and wealth – than it would create, despite the well-intentioned hopes of Forbes.com contributor James Conca.

In a Forbes.com article titled “Can A Carbon Tax Create Jobs, Jobs, Jobs,” Conca argued a carbon dioxide tax would result in a net increase in jobs if the tax revenues were spent wisely. Key to this hopeful prognosis, Conca asserted, is the requirement that a newly imposed tax on carbon dioxide must be revenue-neutral, with carbon dioxide tax collections being offset on a dollar-for-dollar basis by tax reductions in other sectors of the economy.

Conca never explained how merely shifting tax burdens from one sector of the economy to another creates jobs and wealth. Instead, he simply cited three short articles and one longer paper written and published by liberal activists. On important policy issues of the day, however, blindly deferring to self-serving papers written by liberal activist groups, such as the notorious Center for America Progress, is a recipe for disaster. Yes, that is the same Center for American Progress that championed Solyndra and promised Obamacare would lower healthcare premiums, create jobs, and make American families richer.

There are many reasons – economic and otherwise – why a tax on carbon dioxide is a bad idea. Let’s examine just two of the economic reasons.

First, Conca concedes that higher taxes are economically harmful. His solution is to reduce taxes in other sectors of the economy. The problem is the same liberal activist groups who want to implement carbon dioxide taxes oppose corresponding tax cuts. The Center for American Progress, for example, says carbon dioxide tax revenue should be given to the renewable energy industry rather than returned to the American people.

Curiously, the Center for American Progress fails to disclose that it is funded by the renewable energy industry and its founder and chairman of the board has a long and successful career as a renewable energy lobbyist. Conca must first convince his liberal activist group allies to not pilfer carbon dioxide tax revenues before he can plausibly argue that carbon dioxide tax revenues would be returned to the American people. (Good luck on that, by the way, because the Center for American Progress argues very strongly that the renewable energy industrymust get to keep the tax spoils rather than government returning the tax money to the American people.)

Second, even in the unlikely event that government returned carbon dioxide tax revenue to the American people on a dollar-for-dollar basis, this would be revenue-neutral for government but not for the American people. The entire purpose of a carbon tax is to raise the price of inexpensive coal and natural gas so high as to become more expensive than carbon-free wind and solar power. However, if the carbon tax fulfills its goal of raising coal and natural gas prices higher than wind and solar prices, energy providers will no longer use coal and natural gas and energy producers will therefore pay little if any carbon tax.

As a result, consumers will pay dramatically higher energy prices but receive little if any compensating tax cuts in return. American families’ net disposable income will drop, which will reduce spending and destroy jobs in all other sectors of the economy. The only beneficiary of this energy-policy Ponzi scheme will be the renewable energy industry. This explains why the renewable energy industry-funded Center for American Progress supports the Ponzi scheme so much.

No credible economists claim that reducing American households’ disposable income will grow the economy and create jobs. Yet taxing carbon dioxide sufficiently to reduce carbon dioxide emissions will by purpose and designdramatically raise energy costs in a manner that will substantially reduce American household income while generating few corresponding tax rebates. Economically, all that will be accomplished will be poorer American families, economy-wide economic contraction, jobs destroyed in virtually every American industry, and a Solyndra-style transfer of wealth from hard-working American consumers to incompetent, uncompetitive, politically connected renewable energy companies.

It is a nice thought, James Conca, but no, a carbon tax cannot create jobs, jobs, jobs.

[First published at Forbes.]

Categories: On the Blog

Ban on Internet Access Taxes Should be Retained

Somewhat Reasonable - October 09, 2014, 2:41 PM

The Permanent Internet Tax Freedom Act is common-sense Internet policy that is a long time coming. Internet access taxes are particularly damaging to the growth of the Internet economy by placing an unnecessary burden on consumers. A permanent Internet access tax moratorium would help broadband access and development expand while reducing the need for government broadband spending. The moratorium is currently set to expire November 1, but legislation is now moving through Congress that would permanently extend the moratorium.  The bill, titled the Permanent Internet Tax Freedom Act (PITFA), was written by Judiciary Chairman Bob Goodlatte (R-VA) and co-sponsored by 138 Republicans and 76 Democrats.

While most states are currently covered under the moratorium, taxpayers in the states currently imposing these taxes could see their Internet bills decrease. If passed and signed into law, PITFA would make the ITFA moratorium permanent and force these seven states to cease imposing taxes on Internet access. These states are able to impose these taxes due to a “grandfather clause” in IFTA that allowed the states that already imposed the tax to keep them. These seven states, include Hawaii, New Mexico, North Dakota, Ohio, South Dakota, Texas and Wisconsin.

While the seven states will see a drop in tax revenue, experts do not expect the end of the tax to be a budget busting problem. According to Stateline, the seven states and their local governments stand to lose about $500 million annually in revenues, which while not insignificant only represents a small portion of most state budgets. Wireless services are already taxed higher than almost all other goods and services, the Tax Foundation found that almost half the states nationwide now imposing a wireless tax above 10 percent. The wireless consumers in seven states that would be freed from Internet access tax under PITFA, allowing them to expand their Internet services or use the savings elsewhere in the economy.

Making the Internet access tax moratorium permanent is a necessary step in promoting wider access to the Internet while keeping the cost down and eliminating discriminatory taxes. As the Internet has become one of the driving forces behind economic growth across the United States, ensuring affordable access for businesses and consumers is crucial. The Internet Tax Freedom Act Coalition, a group including telecom companies, tax watchdog groups and free market think tanks sent a letter in June to Chairman Goodlatte supporting his work to pass the Permanent Internet Tax Freedom Act.

Dear Representative Goodlatte,

The Internet Tax Freedom Act (ITFA) Coalition, a group of communications and technology companies, business associations and consumer groups, applauds the House Judiciary Committee for taking the first step to avoid new Internet access taxes on millions of Americans across the country with today’s markup.

We greatly appreciate your continued leadership on this issue, and stand ready to work with you and your colleagues to ensure swift passage of a clean bill to make the moratorium on taxes on Internet access and multiple and discriminatory taxation of Internet commerce permanent before the current Internet tax moratorium expires on November 1, 2014. With strong bipartisan support in both chambers of Congress, these bills should be considered for passage without unnecessary delays to protect American consumers from new taxes on their Internet access.

Again, we thank you for your leadership on this issue, and the ITFA Coalition looks forward to working with you to achieve the goal of making the Internet tax moratorium permanent for all Americans.


The Internet Tax Freedom Act Coalition

Andrew Lundeen of the Tax Foundation noted in an article on PITFA that no real policy purpose exists for a tax on Internet access. “Additionally, there doesn’t seem to be a good reason to tax internet access in the first place. Governments tend to levy taxes on goods or services as a way of correcting for an externality or paying for the costs of a provided service.” “The internet does not create any evident externalities and may, in fact, have positive externalities associated with it. Additionally, state and local governments don’t seem to be providing any services associated with internet access.”

In a separate letter to the House of Representatives, Americans for Tax Reform takes the argument even further, pointing out that communication taxes are in many instances far worse than other sales taxes.

“Taxation of communications services is punitive and discriminatory. The average sales tax rate on voice services is 17 percent, and 12 percent on video services, while the average general sales tax rate is 7 percent. PITFA would at the very least prevent targeted taxes on Internet access, and disproportionate sales or other taxes on ecommerce.

Increased costs hinder continued growth in the digital space. As reported by the FCC’s National Broadband Plan, the largest barrier to consumer adoption and expanded use of Internet based services is cost. Allowing higher costs through Internet access taxes, which increase consumer cost and affect the rate of adoption, undermines America’s economic competiveness.”

While supporters of increased access taxes have argued that the taxes are needed to fund programs to help expand broadband to underserved areas, broadband coverage is already widely available and these programs may be unnecessary. Internet access taxes place an unnecessary burden on consumers in order to do something the market is already handling quite effectively. The current system is a hodgepodge of state and local access taxes competing against states without a tax. Making the Internet access tax moratorium permanent and ending the grandfather clause would help broadband access and development expand while reducing the need for government broadband spending.

Categories: On the Blog

Heartland Daily Podcast: Ilya Shapiro – Article V Amendment

Somewhat Reasonable - October 09, 2014, 1:30 PM

A new movement is spreading to state legislatures across the nation, attempting to do something which has never been done before: amend the United States Constitution from the grassroots up.

Using mechanisms embedded within the Constitution itself, activists are seeking to make reforms that have been successfully demanded of elected officials for decades. However, many people are unaware of how this process works — and many fewer aware that it’s even occurring.

Cato Institute Senior Fellow in constitutional studies Ilya Shapiro recently joined Heartland Institute Research Fellow Jesse Hathaway, explaining how the Article V amendment process works, and how it might be used to enact sound fiscal policy at the national level.


Categories: On the Blog

Obama Misleads Northwestern Students About Climate and Energy

Somewhat Reasonable - October 08, 2014, 6:17 PM

In his October 2 address on the economy at Northwestern University, President Barack Obama told students:

If we keep investing in clean energy technology, we won’t just put people to work assembling, raising and pounding into place the zero-carbon components of a clean energy age. We’ll reduce our carbon emissions and prevent the worst costs of climate change down the road.

But what does climate change have to do with energy supply? Almost nothing.

Climate change issues involve environmental hazards, whereas energy policy is concerned with supplying affordable, reliable electricity to industries and families. So where is the relationship to climate?

Until the 1980s, there was none. That one is now perceived testifies to the effectiveness of relentless lobbying by environmentalists and commercial special interests towards the idea that carbon dioxide (CO2) emissions from hydrocarbon-based power-generation will cause dangerous global warming.

So far, that has not happened. It has now been 18 years with no measurable planetary warming.

However, this warming disaster idea has become so entrenched that even prime ministers and presidents now misuse “carbon” as shorthand for “carbon dioxide,” and often call this plant-fertilizing gas a pollutant. For example, during his 13-minute address at the UN’s Climate Summit 2014 in New York City September 23, Mr. Obama referenced “carbon pollution” seven times and “carbon emissions” five times. That’s almost one misnomer per minute.

In reality, CO2 is environmentally beneficial. It is the elixir of life for most of our planetary ecosystems. Without it, life as we know it would end. No evidence exists that the amount humans have added to the atmosphere is producing dangerous warming or, indeed, any climate or weather events noticeably different in frequency, duration or intensity from human experience over the past couple of centuries.

Many negative consequences flow from wrongly connecting energy and global warming issues. Foremost among them has been a lemming-like rush by governments to generously subsidize what are otherwise uneconomic sources of energy, solar and wind power in particular.

The International Renewable Energy Agency reports that worldwide investment in renewables (not counting large hydropower) amounted to an incredible $214 billion in 2013 alone! IRENA insists that these expenditures need to more than double by 2030, to achieve the impossible goal of restricting average global temperature rise to 2 degrees Celsius by the end of the century.

However, results to date show that those investments have brought few benefits, and much harm. European studies have found that expensive, unreliable wind and solar power kills two to four jobs for each “renewable” energy job this heavily subsidized industry creates.

Mr. Obama paints alternative energy sources as environmentally virtuous, because they supposedly reduce CO2 emissions and provide renewable and clean sources of power. This too is highly misleading.

Wind and solar energy are certainly renewable – when the wind blows and the sun shines. But there is no power otherwise, so it’s tough luck if that’s when a hospital needs electricity for emergency surgery. Such intermittency also makes these sources entirely unsuitable as major contributors to national energy grids, to power factories, schools, businesses and families. The use of wind and solar power also increases the cost of electricity dramatically.

Moreover, these sources are assuredly not renewable when you consider the enormous amounts of land, mining, energy and raw materials required to build the wind and solar facilities, the extremely long transmission lines required to carry their electricity to urban centers, and the backup fossil-fuel generators needed the 80-90% of the time the renewable sources aren’t working.

Alternative energy sources are also far less environment-friendly than the President would have us believe. Wind turbines kill millions of birds and bats every year, and some rare species will undoubtedly be vulnerable to extinction if wind power continues to expand near important wildlife habitats. Massive solar installations have a disastrous effect on desert ecosystems and incinerate important bird species.

And yet the wind and solar generators are typically exempt from environmental laws that are used to block many other activities.

These problems are becoming apparent even to the European Union, once the world’s green energy leader. EU Energy Commissioner Gunther Oettinger recently said European energy policies must change, from being climate driven to being driven by the needs of industry, and job preservation. He could have included families, because millions of European households can no longer afford to heat their homes properly, due to soaring energy prices.

All nations need to return to the historic separation that previously existed between energy policy and climate policy. They must analyze and plan for both, in accord with their own distinct requirements and resources, and based on defensible environmental, technological, and economic analyses.

This means abandoning Mr. Obama’s naïve mantra that our energy choices affect global climate.

Categories: On the Blog

Heartland Daily Podcast: Kathleen Hartnett White – Fossil Fuels, the Moral Case

Somewhat Reasonable - October 08, 2014, 1:19 PM

Kathleen Hartnett White, is the Director of the Armstrong Center for Energy & the Environment Texas Public Policy Foundation. Kathleen was not always a think tank wonk, but rather served a six-year term as Chairman and Commissioner of the Texas Commission on Environmental Quality (TCEQ) the second largest environmental regulatory agency in the world after the U.S. Environmental Protection Agency.

Kathleen ran an agency with more than 3,000 employees, with annual budget of over $600 million, so she comes at her work with the insight of a regulatory insider.  More recently, Kathleen wrote a great study for the Texas Public Policy Foundation: Fossil Fuels: the Moral Case

In this edition of the Heartland Daily Podcast, Kathleen dispels the Malthusian myth, argues that we have abundant energy and are foolish if we don’t use it to make peoples lives better, and makes the case that it is immoral for people in the developed world to keep people in developing countries impoverished in terms of energy accessibility thus condemning millions of the world’s poor to poverty and premature death to in the cause of preventing future climate change.

Listen via the player above.

Subscribe to the Heartland Daily Podcast free at this link.

Categories: On the Blog

Parents, Teachers Increasingly Reject Common Core

Somewhat Reasonable - October 08, 2014, 1:10 PM

It’s been a rough year for the Common Core standards. As parents, teachers, officials, and politicians learn more about the standards, more and more states are considering ways to get out of Common Core. The standards in math and reading were allegedly designed to make students career- and college-ready. Now that the public is able to see them, the standards have proven not to be what was promised. People are fighting back.

Parents in states across the country have organized grassroots organizations to stop Common Core, including in Illinois. Teachers such as Marsha Griffin of Jonesboro Elementary in Illinois are speaking out against the standards. Griffin broke down crying when asked why she opposes Common Core.

“I have spent more time crying, coming into the classroom this year, than I have ever before,” said Griffin. “I have been given a great responsibility to teach these students. It’s my job to teach these students how to be well-rounded individuals. I don’t feel like I am doing that with this Common Core.”

Griffin said she felt a moral responsibility to speak up for her students and notes Common Core requires teachers to force specific strategies on how students find correct answers. She said she thinks employers are more interested in accuracy and efficiency than the specific way of getting there. The fourth-grade teacher predicts a mass exodus of students from traditional public schools as parents and students grow increasingly frustrated with Common Core.

“The pure joy of learning is disappearing from the educational landscape in the United States. I fear it will be a landscape where individuality is no longer valued,” Griffin said.

Oklahoma and Indiana have repealed the standards. Missouri, North Carolina, and South Carolina have adopted legislation to review Common Core. A few weeks ago, a school district in Lee County, Fla., voted to opt out of Common Core testing — but it rescinded the decision after officials warned the district its students would not receive standard diplomas and therefore might be unable to earn college credit.

That exemplifies one of the many problems with Common Core. Its proponents continue to swear the standards are voluntary, arguing states freely chose to sign up for Common Core in hopes of winning federal Race to the Top money. But the process wasn’t voluntary at all. States were bribed to adopt the standards in hopes of winning money through the federal Race to the Top program.

Louisiana Gov. Bobby Jindal is suing the federal government for this exact reason. The U.S. Department of Education and Education Secretary Arne Duncan are named in the suit for violating the 10th Amendment of the Constitution by essentially forcing states into Common Core through the Race to the Top program. The suit argues states had to “enter binding agreements to adopt and fully implement a single set of federally defined content standards and to utilize assessment products created by a federally-sponsored ‘consortia’.”

The feds will most certainly argue Race to the Top was voluntary, that states did not have to participate in Common Core or Race to the Top. That is true under the strictest interpretation, and a handful of states did opt not to participate.

The Obama administration did something very clever here. Tying billions of dollars in federal funding to the adoption of specific education policies — including Common Core — allowed the administration to get its way on the cheap while pretending it was all voluntary. It was like running a raffle with billions of dollars as the prize, and the entry ticket being a simple matter of selling your state’s soul to the feds.

Not many states managed to resist the temptation. Many state officials who signed up for Common Core did so without seeing a final version of the standards beforehand. Few eventually got any Race to the Top money. Now these standards are being shoved down the throats of parents, teachers and students. As the Lee County district in Florida discovered, getting away from the standards is not a decision you can easily make. The administration’s scheme was sneaky, underhanded and cunning.

Then there is the fact the ACT and SAT are being redesigned to align with Common Core. This means parents who put their children into private schools or homeschooling will not be able to avoid the standards unless their children do not go to college.

Under the law, education and curriculum are supposed to be state issues. According the State Supremacy Clause of the Constitution, education is to be handled on the state and local level. It is not enumerated as a federal power in the Constitution.

In addition to the legal restriction, there is a commonsense reason control of curriculum is left up to the states and not the federal government. What a parent would want their child to learn, what makes sense for the way a child is taught, is not going to be the same in urban Newark, N.J., as in the village of Sabina, Ohio. Local control of curriculum frees taxpayers and parents to ensure local schools meet their children’s needs.

Common Core supporters argue standards are not the same as curriculum, but that’s a flimsy claim and a trick of semantics. Standards very clearly and directly affect curriculum — defining what students need to know means defining what they will be taught.

The Common Core debate should be about what is best for students and taxpayers, not educrats and powerful multinational corporations. National standards like Common Core have been shown to have no ability to increase student achievement, and they inevitably take away local and state control of education policy. Experts from across the nation confirm the Common Core standards are academically mediocre at best.

Clearly, Common Core is not the best we can do for students or for taxpayers. Writing better standards at the state level is a far better solution to the problems plaguing the state’s education system.

Heather Kays (hkays@heartland.org) is a research fellow of The Heartland Institute and managing editor of School Reform News.

[Originally published at Illinois Business Journal]

Categories: On the Blog

Why Waxman’s FCC Internet Utility Regulation Plan Would Be Unlawful

Somewhat Reasonable - October 08, 2014, 12:01 PM

Rep. Henry Waxman, Ranking Member of the House Energy and Commerce Committee,wrote the FCC to propose that the FCC, in its pending Open Internet order remand, “reclassif[y] broadband providers as telecommunications services and then using the modern [Title I] authority of section 706 to set bright-line rules to prevent blocking, throttling, and paid prioritization.”

In response to an FCC request for comment on whether the FCC should continue to regulate broadband under its Title I Section 706 broadband authority (as the D.C. Appeals CourtVerizon v. FCC decision suggested), or should reclassify the Internet under Title II common carrier utility regulation, Rep. Waxman recommends the FCC try and use both Title I and Title II, and in such a way as to achieve more restrictive regulatory outcomes than either Title I or Title II would allow separately.

This is no “hybrid approach.” It’s a call for FCC double-regulation of the Internet using both Title I and Title II.

This is also no compromise. Effectively it would be the most extreme, maximal regulation yet proposed to the FCC because it would outlaw previously-legal, commercially-reasonable behavior under either Title I or Title II of the Communication Act, while creating maximal regulatory uncertainty and risk.

Why would Rep. Waxman’s FCC Internet utility regulation be found unlawful ultimately?

First, the fatally-flawed tent-pole assumption here, on which this entire contrivance depends, is that the FCC can somehow deem previously mutually-exclusive services under precedent and the law to now be inclusive, i.e. a service that can be both a largely unregulated Title I information service and also a heavily-regulated Title II telecommunications service — at exactly the same time.

Congress created mutually-exclusive definitions for information services and telecommunications services in the 1996 Telecom Act.

The Supreme Court’s Brand X opinion effectively affirmed those mutually-exclusive definitions in 2004.

And the FCC has nine precedents over the last 44 years that decided that basic and enhanced services, or telecommunications and information services, were mutually-exclusive service classifications: 1970198019861998199820022004,  2005,  2007.

Chevron Deference is no rescue here, because while the overall Telecom Act may be ambiguous granting the FCC wide interpretive latitude, there is no ambiguity that telecommunications and information services have always been ruled different mutually-exclusive services.

Second, Congress did not grant the FCC statutory authority to unilaterally combine heretofore mutually-exclusive, congressionally-defined, regulatory classifications, let alone for the purpose of imposing more restrictive regulation than Congress imposed in either Title I or Title II authority, or for the purposes of regulating competitive providers in the 21st century more restrictively than Congress and the FCC regulated the telephone monopoly in the 20thcentury.

This proposal contrives to impose and then forbear from Title II Section 202, which prohibits “unjust and unreasonable discrimination,” so that it can replace it with even more restrictive Title I regulation that would outlaw any discrimination at all, even if it was just and reasonable discrimination, or “commercially reasonable” discrimination, which have long been legal under Title II. Many court precedents have affirmed providers’ freedom to engage in just and reasonable discrimination.

Third, there is nothing in Section 706 that authorizes the FCC to essentially broadly-legislate regulatory restrictions in excess of common carriage obligations under Title II, that are designed in effect, to be economic regulations that create permanent implicit multi-billion dollar subsidies via a permanent zero-price for Silicon Valley sender or downstream traffic.

This is no trivial or technical matter, because the effect of this proposal would be to create a massive national economic subsidy scheme. The FCC would have to force consumers to subsidize Silicon Valley commercial interests and profitability by forcing consumers to pay the full cost of upgrading the Internet’s infrastructure with no fair share contribution from Silicon Valley.

Simply, the D.C. Circuit Court of Appeals ruled that the FCC does not have the authority to ban a two-sided market under its Title I Section 706 authority because that would be tantamount to illegal common carrier regulation of an information services provider, and under Title II the FCC does not have the authority to ban “just and reasonable discrimination” which is what the Waxman proposal is asking for.

More simply, how can combining mutually-exclusive regulations that both individually do not legally allow what the Waxman proposal seeks to achieve, somehow allow it when combined in an obviously contrived, and extremely restrictive, way never envisioned by Congress?


The D.C. Court of Appeals has twice overturned FCC overreach in broadband regulation inComcast v. FCC in 2010 and in Verizon v. FCC in 2014.

In Verizon v. FCC, Judge Tatel outlined a roadmap for the FCC to successfully assert general regulatory authority to cover most, but not all of the FCC’s regulatory needs and concerns. The FCC’s NPRM wisely proposes to follow the Court’s advice. It should follow through with that common sense approach.

However, if the FCC somehow were to adopt the Waxman double-regulation of the Internet approach, there is a high likelihood the courts would eventually overturn the FCC — yet again.

It isn’t a close call.

Implementing the Waxman proposal would be a unilateral de facto FCC Communications Act Update by the FCC – sans Congress.

Lastly, the Waxman proposal is also completely unnecessary, unwarranted, and unjustified double-regulation of competitive broadband providers of critical Internet infrastructure that well serve consumers, businesses, and the economy, and that need commercially-reasonable, regulatory certainty and flexibility to keep up with exploding demand for Internet capacity.


FCC Open Internet Order Series

Part 1: The Many Vulnerabilities of an Open Internet [9-24-09]

Part 2: Why FCC proposed net neutrality regs unconstitutional, NPR Online Op-ed [9-24-09]

Part 3: Takeaways from FCC’s Proposed Open Internet Regs [10-22-09]

Part 4: How FCC Regulation Would Change the Internet [10-30-09]

Part 5: Is FCC Declaring ‘Open Season’ on Internet Freedom? [11-17-09]

Part 6: Critical Gaps in FCC’s Proposed Open Internet Regulations [11-30-09]

Part 7: Takeaways from the FCC’s Open Internet Further Inquiry [9-2-10]

Part 8: An FCC “Data-Driven” Double Standard? [10-27-10]

Part 9: Election Takeaways for the FCC [11-3-10]

Part 10: Irony of Little Openness in FCC Open Internet Reg-making [11-19-10]

Part 11: FCC Regulating Internet to Prevent Companies from Regulating Internet [11-22-10]

Part 12: Where is the FCC’s Legitimacy? [11-22-10]

Part 13: Will FCC Preserve or Change the Internet? [12-17-10]

Part 14: FCC Internet Price Regulation & Micro-management? [12-20-10]

Part 15: FCC Open Internet Decision Take-aways [12-21-10]

Part 16: FCC Defines Broadband Service as “BIAS”-ed [12-22-10]

Part 17: Why FCC’s Net Regs Need Administration/Congressional Regulatory Review [1-3-11]

Part 18: Welcome to the FCC-Centric Internet [1-25-11]

Part 19: FCC’s Net Regs in Conflict with President’s Pledges [1-26-11]

Part 20: Will FCC Respect President’s Call for “Least Burdensome” Regulation? [2-3-11]

Part 21: FCC’s In Search of Relevance in 706 Report [5-23-11]

Part 22: The FCC’s public wireless network blocks lawful Internet traffic [6-13-11]

Part 23: Why FCC Net Neutrality Regs Are So Vulnerable [9-8-11]

Part 24: Why Verizon Wins Appeal of FCC’s Net Regs [9-30-11]

Part 25: Supreme Court likely to leash FCC to the law [10-10-12]

Part 26: What Court Data Roaming Decision Means for FCC Open Internet Order [12-4-12]

Part 27: Oops! Crawford’s Model Broadband Nation, Korea, Opposes Net Neutrality [2-26-13]

Part 28: Little Impact on FCC Open Internet Order from SCOTUS Chevron Decision [5-21-13]

Part 29: More Legal Trouble for FCC’s Open Internet Order & Net Neutrality [6-2-13]

Part 30: U.S. Competition Beats EU Regulation in Broadband Race [6-21-13]

Part 31: Defending Google Fiber’s Reasonable Network Management [7-30-13]

Part 32: Capricious Net Neutrality Charges [8-7-13]

Part 33: Why FCC won’t pass Appeals Court’s oral exam [9-2-13]

Part 34: 5 BIG Implications from Court Signals on Net Neutrality – A Special Report [9-13-13]

Part 35: Dial-up Rules for the Broadband Age? My Daily Caller Op-ed Rebutting Marvin Ammori’s [11-6-13]

Part 36: Nattering Net Neutrality Nonsense Over AT&T’s Sponsored Data Offering [1-6-14]

Part 37: Is Net Neutrality Trying to Mutate into an Economic Entitlement? [1-12-14]

Part 38: Why Professor Crawford Has Title II Reclassification All Wrong [1-16-14]

Part 39: Title II Reclassification Would Violate President’s Executive Order [1-22-14]

Part 40: The Narrowing Net Neutrality Dispute [2-24-14]

Part 41: FCC’s Open Internet Order Do-over – Key Going Forward Takeaways [3-5-14]

Part 42: Net Neutrality is about Consumer Benefit not Corporate Welfare for Netflix [3-21-14]

Part 43: The Multi-speed Internet is Getting More Faster Speeds [4-28-14]

Part 44: Reality Check on the Electoral Politics of Net Neutrality [5-2-14]

Part 45: The “Aristechracy” Demands Consumers Subsidize Their Net Neutrality Free Lunch [5-8-14]

Part 46: Read AT&T’s Filing that Totally Debunks Title II Reclassification [5-9-14]

Part 47: Statement on FCC Open Internet NPRM [5-15-14]

Part 48: Net Neutrality Rhetoric: “Believe it or not!” [5-16-14]

Part 49: Top Ten Reasons Broadband Internet is not a Public Utility [5-20-14]

Part 50: Top Ten Reasons to Oppose Broadband Utility Regulation [5-28-14]

Part 51: Google’s Title II Broadband Utility Regulation Risks [6-3-14]

Part 52:  Exposing Netflix’ Biggest Net Neutrality Deceptions [6-5-14]

Part 53: Silicon Valley Naïve on Broadband Regulation (3 min video) [6-15-14]

Part 54: FCC’s Netflix Internet Peering Inquiry – Top Ten Questions [6-17-14]

Part 55: Interconnection is Different for Internet than Railroads or Electricity [6-26-14]

Part 56: Top Ten Failures of FCC Title II Utility Regulation [7-7-14]

Part 57: NetCompetition Statement & Comments on FCC Open Internet Order Remand [7-11-14]

Part 58: MD Rules Uber is a Common Carrier – Will FCC Agree? [8-6-14]

Part 59: Internet Peering Doesn’t Need Fixing – NetComp CommActUpdate Submission [8-11-14]

Part 60: Why is Silicon Valley Rebranding/Redefining Net Neutrality?  [9-2-14]

Part 61: the FCC’s Redefinition of Broadband Competition [9-4-14]

Part 62: NetCompetition Comments to FCC Opposing Title II Utility Regulation of Broadband [9-9-14]

Part 63: De-competition De-competition De-competition [9-14-14]

Part 64: The Forgotten Consumer in the Fast Lane Net Neutrality Debate [9-18-14]

Part 65: FTC Implicitly Urges FCC to Not Reclassify Broadband as a Utility [9-23-14]

Part 66: Evaluating the Title II Rainbow of Proposals for the FCC to Go Nuclear [9-29-14]

[Originally published at Precursor Blog]

Categories: On the Blog

GAO Report Confirms: States Better Fracking Regulators than EPA

Somewhat Reasonable - October 08, 2014, 10:04 AM

A new report from the Government Accountability Office (GAO) confirms what many small-government environmentalists have been saying for years: States are more effective at regulating the disposal of wastewater from hydraulic fracturing operations than is the Environmental Protection Agency.

Hydraulic fracturing, also known as “fracking,” has led to a surge in oil and natural gas production in the United States. The process uses water, sand, and a few chemical additives to create fissures in oil- and gas-bearing rocks thousands of feet underground, allowing these resources to flow up to the surface.

Each hydraulically fractured well typically requires 2 to 4 million gallons of water, with 15 to 50 percent of this water flowing back to the surface after the process is complete. This water is typically briny, and it contains remnants of the sand and chemical compounds used to fracture the well.

This water must be disposed of or recycled. Disposal typically means injecting the wastewater into deep, underground wells regulated by EPA under the Underground Injection Control (UIC) program. GAO concluded EPA’s injection-well safeguards sufficiently protect drinking water: Few allegations of drinking water contamination, and fewer confirmed cases of groundwater contamination, have been reported.

However, GAO’s report stressed EPA has failed to be proactive regarding emerging challenges, such as induced seismicity (manmade earthquakes) and excessive pressurization of rock formations. GAO urged EPA to update its regulations to reflect state laws.

EPA cannot help enforce state regulations unless they are incorporated into federal rules, which is why GAO is urging EPA to update its rules to reflect the superior wastewater-injection protections adopted by states.

Amazingly, EPA responded by stating, “Incorporating changes into federal regulations, particularly through the rulemaking process, was burdensome and time-consuming.” This is the same EPA that is seeking to expand its authority (and therefore its control over your everyday life) by creating rules to regulate carbon dioxide emissions from power plants and micromanaging prairie potholes and the puddles that form in your driveway after a summer rain. Yet it considers its current duties “too burdensome.”

Claiming protection of the environment is “too burdensome” is not an option for state regulators, which is why they are more effective than federal regulators on these matters.

For example, Ohio passed regulations allowing the state’s chief of the Division of Oil and Gas to require a number of tests or evaluations to address potential induced seismic risks for companies seeking permits for brine injection wells in Ohio.

Other state regulations considered “too burdensome” for EPA adoption include on-site inspection for all injection wells to review the condition and operation of the wells. California, Colorado, and North Dakota require monthly reporting on injection pressure, injection volume, and the type of fluid being injected.

It makes little sense to entrust EPA to handle more responsibility when it has been incapable of fulfilling the responsibilities it already has. This is especially obvious when the responsibility involves essentially copying the example already implemented by state agencies.

EPA claims it does not have the resources to implement this program properly, but EPA’s budget request for 2014 was $8.153 billion, more than the entire annual budgets of 20 percent of states nationwide … yet these states, which have fewer resources at their disposal, manage to get the job done just fine.

It is time to seriously consider replacing EPA with a Committee of the Whole of the 50 state environmental protection agencies, an idea suggested by Jay Lehr, science director and senior fellow at The Heartland Institute, where I serve as research fellow. According to the GAO, we might as well do so, since the states seem to be doing all the heavy lifting already.

Isaac Orr (iorr@heartland.org) is a research fellow for energy and environmental policy at The Heartland Institute.

Categories: On the Blog

America’s Education Battlefield

Somewhat Reasonable - October 07, 2014, 2:32 PM

The 2010 introduction of Common Core, a set of requirements for what elementary and secondary school children should know in math and English language arts, has turned schools in one state after another into battlefields as its complexity and other factors led to protests against it. Even so, by mid-2014, a NBC/Wall Street Journal poll found that very nearly half of those asked about it hadn’t even heard of it. A number of states, such as Missouri, Indiana, Oklahoma, and South Carolina have withdrawn from it.

Schools today are often under fire for one reason or another. Ever since the 1960s when teachers unions began to secure more and more control, formerly the responsibility of individual and state school boards, Americans have been engaged in efforts to improve the elementary and secondary education systems. Many have elected to home school their children. Others have pushed for school choice to permit their children to attend a school that was clearly doing a better job than the one to which their children were assigned.

As youngsters settle into their classes, there are a number of trends worth noting.

Perhaps one of the most interesting trends is the expansion of online classes into K-12.  As Ashley Bateman noted in a recent issue ofSchool Reform News, “In 2013 ten million students of all ages participated in more than 1,200 massive, open, online courses offered by more than 200 universities.”  Of value to self-motivated students in particular, online classes are sure to find a larger audience of students who have grown up in the virtual world of game playing.

Another trend was noted by Marcy C. Tillotson, an education reporter for Watchdog.org. It is the increasing demand for more and more data about each student who worry that things done at a very young age like a schoolyard fight or emotional problems will follow them into college when they have long outgrown the problems or behaviors of childhood. Parents want to know what data is being collected and who has access to it. As often as not, they cannot find out.

Increasingly, school choice, a parent’s right to enroll their child in a selected public school, a private or a parochial choice, has become an issue that makes it into state legislature’s where some support and some forbid it. In Louisiana and Texas, for example, school choice programs and scholarship credits have gained support as a political issue. In Florida, the teachers union has initiated a lawsuit “to eliminate school choice for many low-income students and effectively kill a program to help students with autism and other special needs.” In North Carolina, its Supreme Court rendered a decision that permits more than 2,000 low-income parents to send their children to schools of their choice.

Attention to the quality of teachers, as opposed to letting tenure keep poorly performing ones in the classroom, is a growing trend. Last year in California, a first of its kind teacher quality lawsuit was decided in favor of the education reforms that brought it, striking down tenure and a similar lawsuit has been announced for New York.

As Ms. Tillitson reported, “Vergara v. California struck down state laws that required teacher layoffs based solely on seniority with no regard to teacher effectiveness, gave teachers permanent status after two years on the job, and made it difficult for school administrators to dismiss ineffective teachers.” As this trend expands to other states, a major complaint regarding poor performance will be addressed.

At the heart of the issue of teacher quality are the programs that prepare them to teach. As Ms. Tillotson noted, “A week after a California judge ruled on a case involving teacher tenure, dismissals and layoffs, the National Council for Teacher Quality released its annual report on another fundamental problem, the poor quality of teacher preparation programs. The report found that, as a whole, the programs need improvement. “Only a quarter of the programs expect aspiring teachers to be in the top half of their college’s academic pool. On a 125-point scale, the NCTQ ranked most programs as earning fewer than 50 points.

Increasingly, the quality and content of various educational programs are being questioned and challenged.  One example is the College Board’s Advanced Placement U.S. History Framework (APUSH) and the questions about who wrote the curriculum that is taught to 500,000 students in more than 8,000 high schools every year.

When Larry Krieger, a retired College Board-praised teacher and Jane Robbins, a senior fellow at The American Principles Project asked the College Board who was the author or authors of the program, all they got as a reference to a web page listing 19 college professors and teachers who served on two College Board committees but where not listed as authors, but as “Acknowledgements.”  Kreiger and Robbins call the history program “biased, poorly written, and ineptly organized”; one that “has raised alarms from state and national leaders.” We keep hearing about the importance of “transparency” but apparently the College Board does not think it applies to them.

It has long been known that U.S. schools tend to perform more poorly than those in other nations. Joy Pullman, a research fellow of The Heartland Institute and managing editor of School Reform Newsreported that “According to two recently released studies, the schools middle-income families send their kids to are not as good as parents think.”

“A national study,” wrote Ms. Pullman, “found U.S. students whose parents have college degrees perform worse than peers from comparable families in other countries. In the United States, 43 percent of such children tested ‘proficient’ in math on an international test, compared to 71 percent of comparable students from Poland, 68 percent in Japan, and 64 percent in Germany.” Overall, U.S. students performed better than those in only six countries.

Not surprisingly, Ms. Bateman has reported that “Accepting federal mandates in exchange for funding is the crux of the problem” of ever-growing educational bureaucracies at the state level. “States report that 40 percent of the paperwork burden they deal with is to comply with federal regulations,” said Lindsey Burke, the Will Skillman Fellow in Education at The Heritage Foundation.

When one considers how much in tax revenue is collected for the purpose of educating our youth, one would hope for better results, but fortunately there are many individuals, parents, and organizations seeking to improve the quality of education and our schools are going to remain battlefields for many years to come.

© Alan Caruba, 2014

[Originally published at Warning Signs]

Categories: On the Blog

RFK, Jr. Wants Me Jailed … as a War Criminal!

Somewhat Reasonable - October 07, 2014, 2:24 PM

The “people’s climate march” was notable for the amazing energy, economic and climate illiteracy displayed by the mostly young people parading along New York City streets September 21.

Their chants, rants and placards demanded that we stop climate change (that’s been ongoing throughout Earth and human history), eliminate fossil fuels (that supply 80% of the energy that makes their modern living standards possible), ban fracking (which is largely responsible for reducing the carbon dioxide emissions they blame for global warming that ended at least 18 years ago), and abolish capitalism!

Some of the absurdities can be enjoyed here, here, here and here. Among my personal favorites:

* Al Gore grinning for a photo op with NYC Mayor Bill DiBlasio and UN Secretary General Ban-Ki Moon. This is same Al Gore who got a C and D in his two college science courses, told “Tonight Show” audiences that the Earth’s interior is “several million degrees” (the core is actually nine thousand deg F), and refuses to debate anyone on climate change or even take audience questions he has not preapproved.

* Actor Leonardo DiCaprio basking in the NYC limelight, releasing a series of movies claiming that climate change is immediate and dangerous, and marching with other people’s anti-tar sands and “100% for the planet” signs – after arriving in the Big Apple not via commercial jetliner and subway.

* Actor Mark Ruffalo denouncing Climate Depot director Marc Morano for daring to ask whether celebrities like Messrs. Gore and DiCaprio are appropriate spokesmen for “stop global warming” campaigns – considering how much they enjoy multiple mansions, global vacations, and private jets, yachts, SUVs, helicopters and limos. Questions like that are “off-limits,” Ruffalo declared. “That is a question you shouldn’t be asking here today, because that defies the spirit of what this is about,” he said. “Anyone who attacks Leonardo DiCaprio is either a coward or an ideologue.”

Wow! I wasn’t aware that asking inconvenient questions or pointing out inconvenient truths was improper – especially when posed to people who put themselves forward as paragons of virtue for leading campaigns that inevitably restrict access to energy, lower developed country living standards, and keep the Third World impoverished – while the leaders enjoy lifestyles that are many times more profligate, carbon-intensive and carbon dioxide-spewing than the average American or African citizen’s.

But surely the most surreal episode of the march was Robert F. Kennedy, Jr. saying Morano and I and thousands like us should be jailed for expressing doubts about “dangerous manmade climate change.”

“I think they should be in jail … with all the other war criminals.” Republican politicians too – “those guys are doing the Koch brothers bidding and are against all the evidence, saying global warming does not exist. They are contemptible human beings,” he fumed, for our “war on science,” I presume.

So RFK the younger wants to punish us for the “crimes” of exercising our First Amendment rights, demanding actual evidence to support alarmist assertions, saying people’s needs for reliable, affordable energy must be part of the conversation – and insisting that those needs take precedence over absurd claims that climate change is “the world’s most fearsome weapon of mass destruction,” posing “greater long-term consequences” than ISIL, terrorism or Ebola, as Secretary of State John Kerry insists.

Mr. Kennedy needs to read the Constitution, reflect on the once proud history of free speech and civil rights in the United States, and acknowledge the harm his policies are causing. He also needs to get his facts straight.

None of us says global warming or climate change “does not exist.” Global warming, global cooling, “climate disruption” and “wild weather” have been “real” since Earth began. What we challenge is alarmist assertions that human carbon dioxide emissions have replaced the powerful, complex natural forces that caused repeated ice ages, little ice ages, warm periods, droughts, storms and other fluctuations throughout history. We dispute claims that any climate changes will be dangerous, and are our fault.

We vigorously refute claims that CO2 is “pollution.”  This is what we exhale. It’s the trace gas (0.04% of our atmosphere) that enables plants to grow, and makes all life on Earth possible.

We debunk talk of countless “disasters” that Climate Armageddonites – from President Obama on down – blame on fossil fuels and insist “are happening right now.” The planet hasn’t warmed for 18 years. The nearly nine years since Wilma in October 2005 is the longest period since 1900 (and maybe the US Civil War) without a category 3-5 hurricane hitting the United States. Floods, droughts and other events are all within historic patterns, as readers can see in my new report, Climate Hype Exposed – how pseudo-science is used to justify policies that hurt jobs, liberties and people.

Just as crazy, RFK Jr. made it clear that he and his wife will not give up their $5,000,000 Malibu home or “reduce the, uh, our quality of life in order to have a, uh, rational free market, in order to, um, stop the use of carbon and to divorce ourselves from a fuel that is destroying our planet.” But they, many of the NYC marchers and climate alarm leaders are surely doing all they can to reduce your quality of life.

The policies RFK & Comrades demand would raise the price of fossil fuel energy that powers our modern world, creates and preserves jobs, and improves, enhances and safeguards lives. In Europe, they’ve made energy so expensive that millions of pensioners and other poor families cannot afford to heat their homes properly – and thousands die needlessly from hypothermia every winter. We’re heading there, too.

They cause millions of deaths every year in developing countries – by preventing construction of state-of-the-art coal and gas-fired power plants, and depriving people of reliable, affordable energy. More than 2.5 billion people worldwide must still use wood, charcoal, coal and dung in open fires to heat and cook; well over a billion still do not have electricity, still do not enjoy its wondrous blessings.

As a result, millions die every year from lung diseases due to constantly breathing polluted smoke from cooking and heating fires, from intestinal diseases caused by spoiled food and tainted water, and from countless other diseases of energy deprivation and poverty. The vast majority are women and children.

My colleagues and I would gladly go on trial and even serve time for “treasonous” speech against the climate alarm establishment … and for “polluting” the atmosphere with plant-fertilizing, life-giving CO2.

But then we would insist that Mr. Kennedy and his comrades also be tried and sentenced: for eco-manslaughter and crimes against humanity, for the disease and death their policies cause and perpetuate.

The International Criminal Court might be the proper venue, just as RFK suggested for us. But perhaps the climate demagogues and anti-fossil fuel zealots should be tried – and serve their sentences – in countries that have suffered the most at their hands, for their war on women, children and the poor. Conditions in those Third World prisons are notoriously worse than in the zealots’ mansions, and in the comparatively posh modern jails and prisons found in most of the USA and Europe.

Alternatively, these true climate criminals could be sentenced to do community service, while living like the natives: in mud huts, breathing their air, drinking their water, being bitten by disease-infested insects, and having to walk miles to basic medical services when they inevitably contract malaria, pneumonia or dysentery. That could make alternative community service a death sentence – akin to what Mr. Kennedy and his self-righteous friends are imposing on so many unfortunate people.

It’s time to refocus. The world needs abundant, reliable, affordable energy, to create opportunity and prosperity, improve and save lives, and enable us to adapt to whatever climate changes might come.  Misguided noise about climate change “deniers” and humans replacing natural forces in controlling Earth’s climate serve only to distract us from the critical job at hand.

Paul Driessen is senior policy analyst for the Committee For A Constructive Tomorrow (CFACT) and Congress of Racial Equality (CORE), and author of Eco-Imperialism: Green power – Black death.  

Categories: On the Blog

President Ebola

Somewhat Reasonable - October 07, 2014, 2:14 PM

What does it tell you when Britain and France have stopped flights to and from the nations in Africa where Ebola has become a threat and the United States has not taken a similar measure?

What does it tell you when the President sends 3,000 U.S. troops on a “humanitarian” mission to West Africa? It tells me he has put the U.S. at risk if any or a portion of these troops return after having been infected.

As always history has lessons that cannot be ignored. In 1918 and 1919, there was a pandemic of the Spanish influenza that caught nations by surprise, infecting an estimated 500 million people and killing between 50 and a 100 million of them in three waves. It began in the U.S. in March 1918 at a crowded army camp, Fort Riley, Kansas.

As these troops, living in close proximity to one another, were transported between camps, the disease spread quickly even before they were assembled on East Coast ports on route to France. They in turn brought it to the trenches of war in Europe.

The second wave struck in 1918 at a naval facility in Boston and at the Camp Devens military base in Massachusetts. October 1918 was the most deadly month in which 195,000 Americans died. The Harvard University Open Library notes that the supply of health care workers, morticians, and grave diggers dwindled and mass graves were often dug to bury the dead. There were subsequent outbreaks in 1957 and 1968.

And, at some point, 3,000 U.S. troops will be returning from West Africa to military facilities here at home.

Thus far we have been fortunate to have identified the case of the Ebola victim who had entered the nation from Liberia, but there are few guarantees that more will not be found or deterred. The Oct 4Washington Post reports that “Since July, hospitals around the country have reported more than 100 cases involving Ebola-like symptoms to the federal Centers for Disease Control and Prevention.”

Largely unknown is that 90,000 Americans die annually from preventable infections they acquire while in hospitals!

The concern about illnesses entering the U.S. is particularly true of our southern border which remains porous. Thank goodness Texas has taken measures to tighten its border security, but I am reminded that the Obama administration sued Arizona when it attempted to increase its security against the influx of illegal aliens.

Obama is the President who engineered an invasion of thousands of children and others from Latin America and then distributed them to various states without informing their governors or other authorities of who and where they were. Not surprisingly, in recent months cases of an enterovirus respiratory disease affecting school-age children have been reported around the nation.

Obama has no regard for the sovereignty of the nation or its immigration laws.

This is the same President who has made it clear that he intends to extend amnesty by executive order to an estimated eleven million illegal aliens, but not until after the midterm elections in November. I doubt that he has the constitutional power to do this. I hope the U.S. Congress has the means and the will to negate this.

The U.S. has a healthcare system that is the envy of the world, but the introduction of ObamaCare is already having negative effects on its administration and the former system of privately purchased healthcare insurance. Hundreds of thousands of Americans who had such insurance have lost it and those who signed up for ObamaCare are discovering it is far more expensive.

Perhaps the most under-reported story thus far regarding Ebola is the fact that in 2010, according to The Daily Caller, “the administration of President Barack Obama moved with virtually no fanfare to abandon a comprehensive set of regulations which the Centers for Disease Control and Prevention (CDC) had called essential to preventing international travelers from spreading deadly diseases inside the United States.” Among the viral diseases of concern was Ebola.

I want to have confidence in the Centers for Disease Control, but after witnessing the failures of one government agency after another including the Secret Service, I wish I felt better about them.

I have no doubt its staff are seriously concerned and doing what they can to respond to the threat, but I also think they and the rest of us are at risk from a regime led by a man whose incompetence has written a new chapter in the history of the presidency.

I wish that I felt confident that the Obama administration will take such steps as are necessary to keep the Ebola threat from harming the health of the nation such as not issuing visas to those from the affected nations in Africa, but the record to date limits that confidence.

© Alan Caruba, 2014

[Originally published at Warning Signs]

Categories: On the Blog

The Lizard of Oz: Texas Beats Environmentalists

Somewhat Reasonable - October 07, 2014, 2:03 PM

“When the Dunes Sagebrush Lizard (DSL) was being considered for listing under the Endangered Species Act (ESA),” Chris Bryan, agency spokesman for the Texas Comptroller, told me, “significant parts of the Texas economy were placed at risk.”

On September 30, District of Columbia District Court Judge Rudolph Contreras ruled against the Center for Biological Diversity (CBD) and the Defenders of Wildlife. The groups brought litigation in the hopes of requiring the Fish and Wildlife Service (FWS) to reverse its 2012 decision not to list the lizard as endangered.

The 2012 decision was the first time that community engagement beat back a proposed ESA listing—a stinging defeat to a movement that has historically used lawsuits as an effective weapon.

In August 2013, Texas Comptroller Susan Combs was granted intervenor status in the case. In October, several regional and national oil and gas associations joined Combs.

The DSL story represents a new chapter in ESA compliance that allows conservation and productive activity to coexist. Previously, presence of an ESA-listed species would shut down activity with harsh consequences for landowners and communities.

The spotted owl stands as the posterbird for bad ESA policy. More than 20 years ago, the spotted owl was listed under the ESA. As a result, much of the logging industry in the Pacific Northwest is gone—leaving thousands unemployed and hundreds of communities decimated. Fifty percent of the nation’s forestry jobs lost from 1990 to 2009 were in just two states: Oregon and Washington. Yet, the listing did not stop the decline of the spotted owl. And, as a result of the listing, forest management in the West changed—leaving thousands of acres overgrown and unhealthy, resulting in the devastating wildfires we see today.

Texas decided to do it differently.

Aware that the Dunes Sagebrush Lizard was an ESA target, conservation efforts started in 2008. Private land in the Permian Basin of West Texas and Southeastern New Mexico—an area that produces 15 percent of U.S. oil and 5 percent of natural gas, as well as a prime ranching and farming region—makes up about half of the DSL habitat. The locals were very worried that if the lizard were listed, the regulations would seriously impact their operations and impose substantial costs.

Stories of individual losses, like the spotted owl’s, prompted the Texas State Legislature to pass a bill creating the Interagency Task Force on Economic Growth and Endangered Species to help municipalities and regional governmental bodies cope with the ESA.

Additionally, the Comptroller’s Office provided funds to survey the lizard’s habitat—which revealed 28 more Texas DSL populations, in addition to the three known populations.

The 2011 surveys were possible because of a special provision the legislature passed in 2011 that allowed DSL population locations to remain confidential. Without the force of state law, landowners resist cooperating in conservation efforts out of fear their property would be rendered unusable.

By being proactive, Texas was able to enact voluntary conservation programs that brought about the 2012 FWS decision not to list the lizard. Addressing the Texas approach, Brian Seasholes, director of the Endangered Species Project at the Reason Foundation, says: “The Texas approach protects landowners from the ESA and the federal government, while finding a balance between economic activity and species conservation.”

Comptroller Combs is elated with the court’s decision, especially considering thepushback she received when she took a risky stand and embarked on the experimental plan to forge an innovative, flexible, and successful conservation plan for the DSL. Responding to the court ruling, Combs said: “It supports our basic belief that the TCP provides appropriate conservation for the lizard and reaffirms that the research conducted by Texas A&M University about the DSL helped to provide Fish and Wildlife the best scientific data available to make the decision not to list the species as endangered.”

New Mexico Congressman Steve Pearce, who spearheaded much of the public education on the potential impacts the DSL listing would have on communities in his district, likewise, welcomes the court’s decision:

It is about time the courts stood up for private landowners over radical environmental groups that continually use sue-and-settle tactics to exploit taxpayer money to pay lawyers and fund themselves instead of recovering species. This decision ensures that sound conservation efforts are carried out in Eastern New Mexico without sacrificing the economic activity that the area depends on. The plan itself is a great example of how cooperative conservation efforts between private industry, state officials, landowners, and the federal government are more than adequate to protect species. This decision differs from the Fish and Wildlife’s listing of the lesser prairie chicken in March that severely hindered a successful cooperative conservation effort. I hope the Fish and Wildlife Service along with the courts continue to allow future efforts like this to succeed.”

Now that Texas’s proactive efforts—such as those engaged to protect the Dunes Sagebrush Lizard—have withstood legal challenge, other states may take similar legislative and conservation actions preventing environmental groups (under the guise of conservation) from using lawsuits to block growth in the United States.

The author of Energy Freedom, Marita Noon serves as the executive director forEnergy Makes America Great Inc. and the companion educational organization, theCitizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program:America’s Voice for Energy—which expands on the content of her weekly column.

Photo credit: U.S. Fish & Wildlife Service

[Originally published at Breitbart]

Categories: On the Blog

All States, and the Feds, Should Emulate Minnesota’s Civil Forfeiture Reform

Somewhat Reasonable - October 07, 2014, 1:43 PM

Imagine police seize your money, your car, even your house. Imagine this happens without you being convicted of a crime or even charged with one. Imagine being told you must sue the government to get back your property and prove you did nothing wrong, and the government can do nothing – nothing – and still keep the property.

This happens thousands of times a year across the country. But it will soon happen less often in Minnesota, which has taken a small but important step toward ending one of the most abusive law enforcement practices in the nation. It’s a step the federal and other state governments should take to protect citizens from abusive police and prosecutors and restore a fundamental principle of life in these United States: that we are presumed innocent until proven guilty.

States and local governments have stolen billions of dollars of property from people who have never been convicted of a crime or charged with one. They’ve done it under a practice called “civil forfeiture.” It’s an outgrowth of the nation’s “war on drugs,” which has been raging and failing since President Richard Nixon launched it more than 40 years ago.

Civil forfeiture defenders say it’s another way to get at criminals—usually drug users or sellers—while helping to fund law enforcement. Under civil forfeiture, police and prosecutors may seize property, sell it, and use the proceeds to pad their budgets. To get back their property, forfeiture victims must spend thousands of dollars in legal fees to sue. In many instances, the legal costs would exceed the value of the property.

Politicians eager to look tough on crime decided to structure civil forfeiture so police and prosecutors may take property on the mere suspicion it could be linked to a drug crime or certain other nefarious activities. Police and prosecutors don’t have to prove anything. All they have to do is claim they “suspect” the person losing the property might have been planning to use it in an illegal way or might have used or obtained it illegally. Their “suspicions” often are so flimsy no arrest or criminal charge is made. They just take the property.

The final straw for Minnesota legislators came after the Minneapolis Star-Tribune broke a scandal in the state’s Metro Gang Strike Force by reporting on the brutality of its raids and the apparent police thefts of cash and other property, including at least 13 seized cars that went “missing.” A state court later ordered $840,000 in seized property returned to forfeiture victims, and the strike force was disbanded.

Effective August 1, a bill signed into law by Gov. Mark Dayton will require people in Minnesota to be convicted of a drug crime before their property can be seized through forfeiture.

Civil forfeiture for other reasons is still possible, but reining in property seizures under the pretext of drug activity is a good start.

Through civil forfeiture our local, state, and federal governments effectively declare we are presumed guilty until proven innocent. In other words, it is a system of tyranny by police and prosecutors. Americans should never accept tyranny, no matter what excuses people in government give for imposing it.

North Carolina is the only state with no civil forfeiture. Let us hope Minnesota and the rest of the states and the federal government get to where North Carolina is and ban all civil forfeitures.

[Originally published at Inside Sources]

Below is a video from HBO’s John Oliver’s show “Last Week Tonight” discussing Civil Forfeiture laws


Categories: On the Blog

‘If You Like Your Internet, You Can Keep Your Internet’ and Other Government Lies

Somewhat Reasonable - October 07, 2014, 11:49 AM

Conservatives and Libertarians inherently have little faith or trust in government. We know the institution is inherently flawed – and self-serving.

Government violates the Wallet Rule. Which is:

You go out on a Friday night with your wallet.  You go out the following Friday night with my wallet. On which night are you going to have more fun?

Government is always working with our wallet – theirs is empty until they first fleece ours. They will thus never spend our money as prudently, wisely or well as do we.

Government is just another organism.  Like any other, its first priority is self-preservation – its second self-expansion. And worse than just about any other – it will do whatever it takes to accomplish these priorities.

Including lie its collective face off.

The Barack Obama Administration is the most government-expansive administration in our nation’s history. To that end, they have used any means necessary – including lying its collective face off. For instance:

If you like your health care plan/doctor – you can keep your health care plan/doctor.

This Administration’s obsessive government expansion occurs in the face of it being just like any other administration and government entity – incessantly, serially incompetent at doing just about anything.

All of which has led people – well beyond conservative and libertarian circles – here:

CNN Poll: Trust in Government at All-Time Low

Gallup Poll: Trust In Government Problem-Solving Reaches New Low

Which brings us to the current debate over the government power grabbing huge now authority over the Internet.

President Obama’s Federal Communications Commission (FCC) – and its Obama-appointee Chairman Tom Wheeler – are contemplating fundamentally transforming how the government regulates the Web.  It’s called Title II Reclassification.

Title II is the uber-regulatory superstructure with which we have strangled landline phones – you know, that bastion of technological and economic innovation. Which do you find more impressive – your desktop dialer or your iPhone?

Title II regulations date back to the 1930s – so you know they’ll be a perfect fit for the ultra-modern, incredibly dynamic, expanding-like-the-universe World Wide Web.

This would be the most detrimental of all Information Superhighway road blocks. Rather than the omni-directional, on-the-fly innovation that now constantly occurs, Title II is a Mother-May-I-Innovate, top-down traffic congest-er. Imagine taking a 16-lane Autobahn down to just a grass shoulder.

But fret not, the regulators tell us.  They will wield just some – and not all – of their massive new powers.  They will practice “forbearance.”

“(F)orbearance” refers to  a special magic power that Congress gave the FCC…which gives the FCC the power to say “you know that specific provision of law that Congress passed? We decide it really doesn’t make sense for us to enforce it in some particular case, so we will “forbear” (hence the term ‘forbearance’) from enforcing it.”

Can we trust government to – forever and for always – leave regulatory powers on the table unused?

Can we trust this Administration – the most government-expansive ever – to do so?

Can we trust this particular FCC?

Coalition Warns FCC Chairman about FCC’s Increasing Politicization

In a letter sent today to Federal Communications Commission Chairman Tom Wheeler, a coalition of groups expressed concerns over the agency’s  loss of objectivity and impartiality in recent proceedings, especially the FCC’s ongoing Open Internet rulemaking.

The letter urges the Commission to keep partisan politics out of its decision-making process, to avoid spinning media coverage, and to focus on substance, not the total number of comments filed in controversial proceedings.

This FCC?

‘Most Transparent Ever?’ Behold the FCC’s Secret, Crony Socialist Meetings

This FCC?

FCC Chairman Won’t Allow His IG To Hire Any Criminal Investigators

We certainly can not.  In what can we trust?

Aesop Knew: Regulators Regulate – It’s Their Nature

When Bureaucrats Determine Their Own Limits – There Are No Limits

You bet.

So when the government tells us – as it ramps up new, massive government power grabs – “If you like your Internet – you can keep your Internet?”

Don’t you believe it.

[Originally published at Human Events]


Categories: On the Blog

Carbon Footprints: Good, Bad and Ugly

Somewhat Reasonable - October 06, 2014, 9:52 PM

Australians are supposed to feel guilty because some bureaucrat in the climate industry has calculated that we have a very high per capita “carbon footprint.” By “carbon footprint.” they mean the amount of carbon dioxide gas produced by whatever we do.  Every human activity contributes to our carbon footprint – even just lying on the beach breathing gently produces carbon dioxide.

Producing carbon dioxide is not bad – it an essential gas in the cycle of life, and beneficial for all life. There is no proof whatsoever that human emissions cause dangerous global warming.  Moreover, it is not per capita emissions that could affect the climate – it is total emissions, and on that measure Australia’s small contribution is largely irrelevant. This is just another PR weapon in the extreme green alarmist arsenal.

Even if carbon footprints were important, not all footprints are environmentally equal – some are good, some are bad and some are just plain ugly.

“Good” carbon footprints are the result of producing unsubsidised things for the benefit of others. An example is a grazier in outback Australia whose family lives frugally and works hard but has a high carbon footprint producing wool, mutton and beef from sustainable native grasslands and may use quad bikes, diesel pumps, electricity, tractors, trucks, trains, planes and ships to supply distant consumers. Many productive Australians with good carbon footprints produce food and fibres, seafood and timber, minerals and energy for grateful consumers all over the world. Activities like this create a large “per capita carbon footprint” for Australia. That so few people can produce so much is an achievement to be proud of.

A “bad” carbon footprint is produced when government subsidies, grants, hand-outs, tax breaks or mandates keep unproductive or unsustainable activities alive, leaving their footprint, but producing little useful in return. The prime examples are subsidised green energy and the government climate industry, but there are examples in all nationalised or subsidised industries and activities. (Russia and East Germany easily met their initial Kyoto targets by closing decrepit Soviet-era nationalised industries.)

An “ugly” carbon footprint is produced by green hypocrites who preach barefoot frugalism to us peasants while they live the opulent life style. Examples are the mansions, yachts and jet-setting of prominent green extremists such as Al Gore and Leonardo DiCaprio.

The ultimate ugly carbon hypocrites are those who organise and attend the regular meetings, conferences and street protests, drawing thousands of globe-trotting alarmists and “environmentalists” from all over the world by plane, yacht, car, bus, train and taxi to eat, drink, chant and dance while they protest about over-population, excessive consumption and heavy carbon footprints of “all those other people”.

Maybe they should lead by example and stop travelling, eating, drinking and breathing.

Categories: On the Blog

Celebrating The Work Of Nobel Prize Winning Economist, F.A. Hayek – A Man Who Has Made the 21st Century a Freer and More Prosperous Time

Somewhat Reasonable - October 06, 2014, 1:29 PM

Forty years ago, on October 9, 1974, the Nobel Prize committee announced that the co-recipient of that year’s award for economics was the Austrian economist, Friedrich A. Hayek. Never was there a more deserving recognition for one of the truly great free market thinkers of modern times.

The Nobel committee recognized his contributions, including “pioneering work in the theory of money and economic fluctuations and for [his] penetrating analysis of the interdependence of economic, social and institutional phenomena.”

Over a scholarly and academic career that spanned seven decades, Hayek was one of the leading challengers against Keynesian economics, a profound critic of socialist central planning, and a defender of the open, competitive free society.

The awarding of the Nobel Prize for Economics in 1974 represented capstone recognition to an intellectual life devoted to understanding the workings and superiority of social systems grounded in the idea and ideals of human freedom and voluntary association.


“Austrian” Influences on Hayek

Friedrich August von Hayek was born on May 8, 1899 in Vienna, Austria. He briefly served in the Austrian Army on the Italian front during World War I. Shortly after returning from the battlefield in 1918 he entered the University of Vienna and earned two doctorates, one in jurisprudence in 1921 and the other in political science in 1923. While at the university, he studied with one of the founders of the Austrian school of economics, Friedrich von Wieser.

But perhaps the most important intellectual influence on his life began in 1921, when he met Ludwig von Mises while working for the Austrian Reparations Commission. It is not meant to detract from Hayek’s own contributions to suggest that many areas in which he later made his profoundly important mark were initially stimulated by the writings of Mises. This is most certainly true of Hayek’s work in monetary and business-cycle theory, his criticisms of socialism and the interventionist state, and in some of his writings on the methodology of the social sciences.

In 1923 and 1924, Hayek visited New York to learn about the state of economics in the United States. After he returned to Austria, Mises helped arrange the founding of the Austrian Institute for Business Cycle Research, with Hayek as the first director.

Though Hayek initially operated the institute with almost no staff and only a modest budget primarily funded by the Rockefeller Foundation, it was soon recognized as a leading center for the study of economic trends and forecasting in central Europe. Hayek and the Institute were frequently asked to prepare studies on economic conditions in Austria and central Europe for the League of Nations.


Hayek as Opponent of Keynesian Economics

In early 1931, Hayek traveled to Great Britain to deliver a series of lectures at the London School of Economics. The lectures created such a sensation that he was invited to permanently join the faculty of the LSE. In the early fall of 1931 these lectures appeared in book form under the title Prices and Production. So widely influential did this book and his other writings become at the time that through a good part of the 1930s, Hayek was the third-most frequently cited economist in the English-language economics journals. (John Maynard Keynes and his Cambridge University colleague Dennis Robertson came in first and second.)

This began his decade-long challenge to Keynes’ emerging “new economics” of macroeconomics and its rationale for activist government manipulation through monetary and fiscal policy.

In 1931–1932, Hayek wrote a lengthy two-part review of Keynes’s Treatise on Money for the British journal Economica. It was considered a devastating critique of Keynes’ work, one that forced Keynes to rethink his ideas and go back to the drawing board.

At the same time, the Great Depression of the early 1930s served as the backdrop against which Hayek explained his own theory and criticized Keynes.


Monetary Mismanagement and the Great Depression

In Prices and Production (1931) and Monetary Theory and the Trade Cycle (1933) Hayek argued that in the 1920s the American Federal Reserve System had followed a monetary policy geared toward stabilizing the general price level. But that decade had been one of major technological innovations and increases in productivity. If the Federal Reserve had not increased the money supply, the prices for goods and services would have gently fallen to reflect the increased ability of the American economy to produce greater quantities of output at lower costs of production.

Instead, the Federal Reserve increased the money supply just sufficiently to prevent prices from falling and to create the illusion of economic stability under an apparently stable price level. But the only way the Fed could succeed in this task was to increase reserves to the banking system, which then served as additional funds lent primarily for investment purposes to the business community.

To attract borrowers to take these funds off the market, interest rates had to be lowered. Beneath the calm surface of a stable price level, interest rates had been artificially pushed below real market-clearing levels. That generated a misdirection of labor and investment resources into long-term capital projects that eventually would be revealed as unsustainable because there was not enough real savings available to complete and maintain them.

The break finally came in 1928 and 1929, when the Fed became concerned that prices in general were finally beginning to rise. The Fed stopped increasing the money supply, investment profitability became uncertain, and the stock market crashed in October 1929.

Hayek argued that the economic downturn that then began was the inevitable consequence of the investment distortions caused by the earlier monetary inflation. A return to economic balance required the writing down of unprofitable capital investments, a downward adjustment of wages and prices, and a reallocation of labor and other resources to uses reflecting actual supply and demand in the market.

But the political and ideological climate of the 1930s was one increasingly dominated by collectivist and interventionist ideas. Governments in Europe as well as the United States did everything in their power to resist these required market adjustments. Business interests as well as trade unions called for protection from foreign competition, as well as government support of various types to keep prices and wages at their artificial inflationary levels. International trade collapsed, industrial output fell dramatically, and unemployment increased and became permanent for many of those now out of work.

Throughout the 1930s Keynes presented arguments to justify activist monetary and fiscal policies to try to overcome the imbalances the earlier monetary manipulation and interventions had created. This culminated in Keynes’ 1936 book, The General Theory of Employment, Interest and Money, which soon became the bible of a new macroeconomics that claimed that capitalism was inherently unstable and could only be saved through government “aggregate demand management.”

Hayek and other critics of Keynesian economics were rapidly swept away in the euphoric belief that government had the ability to demand-manage a return to full employment.


Hayek as Critic of Socialist Central Planning

But while seemingly “defeated” in the area of macroeconomics, Hayek realized that what was at stake was the wider question of whether in fact government had the wisdom and ability to successfully plan and guide an economy. This also led him to ask profoundly important questions about how markets successfully function and what institutions are essential for economic coordination to be possible in a complex system of division of labor.

In 1935, Hayek edited a collection of essays titled Collectivist Economic Planning, which included a translation of Ludwig von Mises’ famous 1920 article, “Economic Calculation in the Socialist Commonwealth” on why a socialist planned economy was functionally unworkable. For the volume, Hayek wrote an introduction summarizing the history of the question of whether socialist central planning could work and a concluding chapter on “the present state of the debate” in which he challenged many of the newer arguments in support of planning.

This was followed by a series of articles over the next several years on the same theme: “Economics and Knowledge” (1937), “Socialist Calculation: The Competitive ‘Solution’” (1940), “The Use of Knowledge in Society” (1945), and “The Meaning of Competition” (1946). Along with other writings, they were published in a volume entitled, Individualism and Economic Order (1948).


Divided Knowledge and Market Prices

In this work Hayek emphasized that the division of labor has a counterpart: the division of knowledge. Each individual comes to possess specialized and local knowledge in his corner of the division of labor that he alone may fully understand and appreciate how to use. Yet if all of these bits of specialized knowledge are to serve everyone in society, some method must exist to coordinate the activities of all these interdependent participants in the market.

The market’s solution to this problem, Hayek argued, was the competitive price system. Prices not only served as an incentive to stimulate work and effort, they also informed individuals about opportunities worth pursuing. Hayek clearly and concisely explained this in “The Use of Knowledge in Society”:

“We must look at the price system as such a mechanism for communicating information if we want to understand its real function . . . The most significant fact about this system is the economy of knowledge with which it operates, or how little the individual participants need to know in order to be able to take the right action.”

In elaborating his point, Hayek wrote that “The marvel is that in a case like that of a scarcity of one raw material, without an order being issued, without more than perhaps a handful of people knowing the cause, tens of thousands of people whose identity could not be ascertained by months of investigation, are made to use the material or its products more sparingly.”

Hayek added: “I am convinced that if it [the price system] were the result of deliberate human design, and if the people guided by the price changes understood that their decisions have significance far beyond their immediate aim, this mechanism would have been acclaimed as one of the greatest triumphs of the human mind”

It was in this period, as well, that Hayek applied his thinking about central planning to current politics. In 1944 he published what became his most famous book, The Road to Serfdom, in which he warned of the danger of tyranny that inevitably results from government control of economic decision-making through central planning. His message was clear: Nazism and fascism were not the only threats to liberty. The little book was condensed in Reader’s Digest and read by millions, and resulted in Hayek going on a nationwide lecture tour in the United States that was a resounding success.

In 1949 Hayek moved to the United States and took a position at the University of Chicago in 1950 as professor of social and moral science. He remained there until 1962, when he returned to Europe, where he held positions at various times at the University of Freiburg in West Germany and the University of Salzburg in Austria.


The Spontaneous Order of Human Society

The realization that something so significant—the price system—was undesigned and not intended to serve the purpose it serves so well became the centerpiece of Hayek’s writings for the rest of his life. He developed the idea in several directions in another series of works, including, The Counter-Revolution of Science (1952); The Constitution of Liberty (1960); Law, Legislation and Liberty in three volumes (1973–1979); in various essays collected in Studies in Philosophy, Politics and Economics (1967) and New Studies in Philosophy, Politics, Economics and the History of Ideas (1978); and in his final work, The Fatal Conceit: The Errors of Socialism (1988).

His underlying theme was that most institutions in society and the rules of interpersonal conduct are, as the eighteenth-century Scottish philosopher Adam Ferguson expressed it, “the result of human action, but not the execution of any human design.” In developing this idea, Hayek consciously took up the task of extending and improving the notion of the “invisible hand” as first formulated by Adam Smith in The Wealth of Nations and refined in the nineteenth century by Carl Menger, the founder of the Austrian school of economics.

Hayek argued that many forms of social interaction are coordinated through institutions that at one level are unplanned and are part of a wider “spontaneous order.” To a large extent, he explained, language, customs, traditions, rules of conduct, and exchange relationships have all evolved and developed without any conscious design guiding them. Yet without such unplanned rules and institutions, society would have found it impossible to progress beyond a rather primitive level.

Another way of expressing this is that, in Hayek’s view, the unique characteristic of an advanced civilization is that no one mind (or group of minds) controls or directs it. In a small tribal society all members often share basically one scale of values and preferences; the chief or leader can know the potentialities of each member and can assign roles and duties so that the tribe’s physical and mental means can be applied more or less successfully to the common hierarchy of ends.

However, once the group passes beyond a simple level of development, any further social progress will require radical revision of the social rules and order: the complexity of social and economic activity will make it impossible for any individual to master the information necessary to coordinating the members of the group. Nor will the members continue to agree on preferences and values; their actions and interests will become more diverse.

An advanced society, therefore, must always be a “planless” society, that is, a society in which no one overall “plan” is superimposed over the actions and plans of the individuals making up the society. Instead, civilization is by necessity a “spontaneous order,” in which the participants use their own special knowledge and pursue their own individually chosen plans without a higher will or mind guiding them.


The Fallacy of Social Justice

The very complexity that makes it impossible to know all the information required to guide society, Hayek reasoned, makes it equally impossible to judge the “justice” or “worthiness” of an individual’s total actions. As a result, the popular call for “social,” or “distributive,” justice is inapplicable in a free society. Social justice requires not merely that individuals receive what is rightly theirs in general terms, but that individuals and groups also receive some stipulated distributional share of the society’s total output or wealth.

However, Hayek showed that in the market economy, distributions of income are not based on some standard of “deservedness,” but rather on the degree to which the individual has directly or indirectly satisfied consumer demand within the general rules of individual rights and property.

To attempt to distribute income shares by “deservedness” would require the government to establish some overarching standard for disbursing “social justice,” and would necessitate an economic system in which that government had the authority and the power to investigate, measure, and judge each person’s “right” to a share of the society’s wealth.

Hayek suggested that such a system would involve a return to the mentality and the rules of a tribal society: government would have to impose a single hierarchy of ends and would decide what each member should have and what should be expected from him in return. It would mean the end of the free and open society.


Hayek’s Appeal to Intellectual Humility

At the Nobel Prize ceremonies held in December 1974, at which the recipients received their awards, Hayek delivered a brief banquet dinner address in which he said that he wondered if there should be a Nobel Prize in a field like economics because the media often expects the award winner to deliver omniscient-like remarks on all the social and economic problems of the world.

The usefulness of Hayek receiving that Nobel Prize was that it enabled him to present a more formal lecture at the Nobel ceremonies on what he called “The Pretense of Knowledge,” a reminder that economists and policy-makers should remember that we all know far to little to presume to know enough to successfully plan and regulate the world through any political authority.

Thanks to his ideas, the 21st century can be a freer and more prosperous place in which to live, if we only we take to heart his appeal to intellectual humility, and allow each of us the liberty and latitude to plan our own lives with our individual limited knowledge, and rely upon the open market to coordinate all that we do through the competitive price system.

[Originally published at EpicTimes]

Categories: On the Blog

John Fund Criticizes AG Eric Holder on New Book Tour

Somewhat Reasonable - October 06, 2014, 11:47 AM

Part 1 published yesterday at Illinois Review, Thursday, October 1, recounted the stellar and above-board behavior of Attorney General Edwin Meese when serving President Reagan, as remembered by Joseph Morris, an honored member of the Chicago Federalist Society, who held the position of Reagan’s Assistant Attorney General during part of Meese’s tenure as Attorney general. Introductory comments by John Fund were included as a teaser to whet the appetite for further Fund reflections and trust-worthy opinions in what is now Part 2.

John Fund reflected on how It was only six years ago that Obama was “a citizen of the world.” His candidacy was like the third coming. However, now the tide seems to be turning. Fund’s observation was linked to NBC’s “60 Minutes” TV program that he had viewed the night before, Sunday, 9/28.  Fund drew a blank when he inquired whether any in attendance had viewed the program.

On the broadcast, Obama was asked by Steve Kroft why the U.S. had not anticipated the Islamic State’s threat. Although Obama acknowledged there had been an underestimation of what had been taking place in Syria, he proceeded to place blame on his Director of National Intelligence, James Clapper, and others in the intel community.

Shortly after the interview Ron Fournier, a supporter of President Obama, tweeted John Fund:

“I, me, my. It’s their fault.  “I, me, my.  It’s their fault.”   “I, me, my.  It’s their fault.”   “I, me, my. It’s their fault.”  “I, me, my. It’s their fault”

To further note:  Americans did turn away from watching Obama talk about the nation’s new war on ISIS on CBS’ “60 Minutes.”  The sympathetic news media mentioned the massive collapse in ratings for the program, but placed blame on the absence of a preceding football game.  It was not surprising that not one individual present to hear John Fund speak had watched Obama on “60 Minutes.”

Fund related an anecdote about James O’ Keefe, an American conservativeactivist who gained national attention for his release of video recordings of workers at ACORN offices in 2009. Entering a polling place in Washington, D.C, dressed as a scruffy-looking individual, James ‘O Keefe, seeing people in line, walked up and asked if Eric Holder was on the voter role.

A quick check showed Holder as a registered voter. Without further communication, O’Keefe was handed Holder’s ballot. Deciding to play along, O’Keefe asked if he had to show his ID and even offered to go out to his car to fetch it, only to be told that they weren’t permitted to ask for ID’s.  O’Keefe didn’t vote in Holder’s name, but, Holder, upon hearing about O’Keefe’s stunt responded later on that “You don’t need an ID to come to the Justice Department.”  He further explained that no one had to show an ID to go up to see him in his office whenever they wished to.

The Obama legacy of Al Sharpton

Another disappointing aspect of the Obama legacy was Holder, Obama, and Jarrett building up Al Sharpton as the most important civil rights leader in America today.  As the new black leader and one whom Obama leans on for advice, Al Sharpton sits in on meetings at the White House; Sharpton’s telephone number is on Eric Holder’s speed dial; Sharpton vacations near where Valerie Jarrett spends her time at Martha’s Vineyard; and Sharpton, now that Holder has tendered his resignation, is engaged in conversation as to Holder’s replacement.  All this, and Sharpton claims to have no income, claims to borrow all his suits from friends, and has never apologized for anything he has ever done of a shady and dishonest nature, i.e., the Tawana Brawley case of 1987 and the ‘Jena 6′ protest held in Jena, Louisiana in 2007.

Al Sharpton’s behavior has left this nation divided, politically disconnected, and cynical. Nearly 50 years after the March on Washington by Martin Luther King, race relations remain poor due to hucksters like Al Sharpton and Jesse Jackson.  Some liberals are finally getting it, included Margaret Carlson, who said when appearing in August of last year on PS’s Inside Washington:  “We’re gone from Martin Luther King to the Reverend A Sharpton, and as a leader . . . it’s very dispiriting.”  Rather than having the welcome mat rolled out for Al Sharpton at the White House, John Fund suggested that Sharpton should be run out of town.  According to Fund, only a small segment of blacks support Sharpton.

Questions entertained by John Fund

  • In referring jokingly to Valerie Jarrett as President Jarrett, John Fund revealed that Jarrett has a 24-hour secret service detail, something Obama’s Chief of Staff doesn’t even receive.  “But after all the President does play a lot of golf and is often delayed.”  Fund left it at that.
  • Regarding the possibility of finding out about the scandal involving Lois Lerner?  The Justice Department, having starting an investigation in May of 2013, seems to have no intention of following through. The same holds true for the host of other scandals associated with the Obama administration.
  • In response to a question about Holder’s replacement, Fund thought the individual would be made out of the same cloth as Holder.  After all, President Obama plans to issue a slew of executive orders after the November election. He will need someone to defend Obama’s elastic view of executive power divorced from the Constitution.

Related as fact by John Fund was how Tom Perez, as Secretary of Labor, makes use of a separate private computer in his agency which operates as a shadow government. Other officials have been caught using private aliases email accounts to correspond to hide sent messages. Two top EPA officials used email aliases accounts when corresponding with environmental groups: EPA Region 8 Administration James Martin, as well as EPA Administrator Lisa Jackton, who has since resigned.

The vast majority of inspector generals conferred by the House have been appointed by Democratic governors.  It is telling that forty-seven out of seventy-two signed a letter in August of this year that they can no longer do their jobs effectively because of their inability to get the documents they need to conduct their individual investigations.

The Inspector General Act of 1978, as amended, establishes the responsibilities and duties of an IG. The IG Act has been amended to increase the number of agencies with statutory IGs. In 1988 came the establishment of IGs in smaller, independent agencies and there are now 72 statutory IGs.

The primary job of an inspector general is to detect and prevent fraud, waste, abuse, and violations of laws and to promote economy, efficiency and effectiveness in the operations of the Federal Government.  Given the dissatisfaction of two-thirds of this nation’s inspector generals, it does not bode well for this nation, nor does it create the environment necessary to build back trust in government so lacking among the American people.

What happened to the promise candidate Obama made to the American people that his government would be the most open and transparent ever, if he were elected? This promise has fallen by the wayside. Perhaps it was never meant to be.

[Originally published at Illinois Review]


Categories: On the Blog

Municipalities GON Wild!

Somewhat Reasonable - October 06, 2014, 11:36 AM

Recently two towns, Chattanooga, Tennessee, and the City of Wilson, North Carolina, have petitioned the federal government, via the FCC, complaining that state laws are constraining them from the municipal provision of broadband services, that is, from building a government owned network (GON). That is, these municipalities want to expend resources to build and operate broadband systems, without following any of regulations that govern private sector providers. To overcome the state’s rightful authority the city governments have proposed that the FCC preempt state law and empower municipalities in ways that upset the political structure of the U.S.

While models of municipality creation vary widely around the world, in the United States how they are created is fairly clear. The U.S. Constitution empowers states as the primary political entity. The federal government itself is also creation of the states, and of the people, with the Constitution placing restraints on government broadly, at the agreement of the states. States are also empowered to arbitrarily create subdivisions, generically referred to as municipalities. Ultimately then, responsibility for the municipalities generally falls to the states.

FCC intervention into this relationship between states and municipalities would have profound negative effects as was explained in the FCC filing by Madery Bridge. Municipalities, untethered from responsibility to the state, could partake in risky schemes of tax funded adventurism placing the entire state and all its citizens at risk. And government owned networks have proven risky indeed.

For years, municipalities around the country have tried, and ultimately failed, to either set up their own communications networks or to partner with private companies to get into the business of broadband. The list of failures is long and keeps growing but includes Utah’s UTOPIA, Burlington, Vermont , Chicago, Seattle, Tacoma, , Minnesota’s FiberNet, the Northern Florida Broadband Authority, Philadelphia and Orlando. To be clear this is a minimal partial list and does not include the many systems that will not disclose whether they are already being bailed out with taxpayer’s money. The reasons for the failures are numerous, typically resulting in taxpayer funds being wasted. Some would nit-pick the details of the failures, but the fact remains that taxpayer money was put at risk, often without approval of taxpayers, and most often squandered.

Even still, some municipalities want to plow forward, heedless of the lessons, believing that they are somehow different. As mentioned, some have been frustrated by state laws in at least twenty states that were designed to prevent fiscal folly on behalf of the localities, laws that shield all citizens of the state from financial risk. Adopting the failed model of municipal provision of communications services is the wrong idea, as many municipalities across the country can attest.

Municipalities face many risks in building and operating broadband networks. As has been seen in the routine failures, governments chronically underestimate the cost of building out and maintaining networks, and chronically overestimate adoption rates.

Technology infrastructure investment, like most infrastructure investment, is not for the faint of heart or the partially committed. Municipalities and states across the country are constantly challenged by maintaining the relatively static infrastructure that they have already taken on, such as streets, sidewalks, bridges and buildings.

Technology is vastly more challenging. One must jump in with both feet, constantly updating the technology and business models. As online services grow more sophisticated, customers have become accustomed to regular upgrades, challenging the ability of governments to keep up with demand. Those challenges are multiplied a hundred fold when the complications of delivering video and voice are added. Video services alone are in a constant state of upgrade, either in providing more channels, more programming, or providing services to customers to allow them to customize their own video experience, such as video on demand.

Of course as a greater variety of more complicated technology and services is offered, the more expensive the building of the system and overall operations becomes. In turn even more taxpayer money is placed at risk, because when these systems fail it is not private investors who lose money but taxpayers across the state often without any say in the matter, and the vast majority of whom received absolutely no benefit. When local and state coffers are depleted because of these sorts of risky government bets, the cry is for more tax revenue or for an outright bailout.

In general, technological innovation continues to far outpace the speed of government, which simply cannot compete with the market. So, in the case where a municipal system is competing against a private system, about the time the municipal system is up and running, private networks will offer something better, cheaper, and faster. Even in cases where there is no private sector competition, government operated networks will never keep pace with public expectations. Broadband systems are not like a water public utility where the same pipes are used for one hundred years to deliver the same product in the same way.

The challenges of government owned networks and the preservation of free speech is also daunting. The theoretical became real in San Francisco, a city that often brags of its rich tradition of civil liberties. There, a municipal communications system was purposely shut down to prevent people from engaging in specific, legal communications. In a chilling statement, city officials pointedly said, “Cellphone users may not have liked being incommunicado, but BART officials told the SF Appeal, an online paper, that it was well within its rights. After all, since it pays for the cell service underground, it can cut it off.”

Whether San Francisco should be paying for municipal communications systems at all is a question for the city and state. The more pressing concern is the freedom of speech problems that arise when a municipality owns a communications system.

Importantly, rarely is it the case that government is trying to serve someone with no Internet access option. Rather the most common motivation for beginning the government owned network fantasy is economic development groups being swayed by traveling consultants. Their siren song is too hard for some communities to resist, and repeated past failures tend not to be mentioned.

Such localities could better use their time and resources by moving to provide clear and more rapid approval decision making for wireless facilities as wireless rapidly has and continues to be the favored method of accessing broadband. Policymakers should sponsor initiatives to encourage broadband deployment into unserved areas using incentives for private sector companies that risk their own capital.

Where state officials of any sort are calling for FCC action, their arguments are merely an attempt to end run the state’s political process and the will of the people. They seek to create public policy where they were not able to do so within their own state through proper channels. This is policy
making by the ruling class rather than by will of the people. State policies should be determined through state legislation or at least through state rule making.

Allowing the states to continue to experiment with how to broadband will be delivered to the greatest number of their residents is absolutely the right policy to pursue. The FCC should stand on the side of greater creativity and innovation, and the law, and not intervene in state law.

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