Rep. Paul Ryan and Sen. Patty Murray Tuesday evening announced a budget deal they say restores “regular order” to the federal budget and spending process. Overall spending in fiscal year 2014 would be $1.012 trillion, and overall spending in fiscal year 2015 would be $1.014 trillion. The agreement replaces $63 billion in sequester cuts with a combination of other savings and includes an additional $22.5 billion in deficit reduction.
The following statements from budget and tax experts at The Heartland Institute – a free-market think tank – may be used for attribution.
“Congress hasn’t passed an actual budget since 2009. For the sake of ‘regular order’ in budgeting, Ryan and Murray have agreed to gut the sequester cuts that have helped bring a semblance of fiscal responsibility to federal spending. They agree to send spending higher in the near term in exchange for a net deficit reduction of $22.5 billion over the long term. The federal government spends approximately $10 billion a day, so they’re trying to make a big deal out of saving two days of spending.
“And no Congress can force a future Congress to do anything, so all we know for sure is that we’ll soon see higher government spending. Considering the dismal history of promises of future fiscal restraint, it’s a safe bet the promised long-term deficit reductions will never happen.”
“This unremarkable budget compromise is all about November 2014: both Republicans and Democrats want to avoid being held responsible for ‘gridlock.’ But that means the one pressing issue on the table will be Obamacare, which is doing huge damage to only one party. Thus the budget deal, if it ultimately passes, could have big political implications by default.”
“President Barack Obama calls the budget deal ‘a good first step.’ Is this actually an admission that, after being president for five years, the country is only taking its first step? Or is this merely a political throwaway line? The country has actually already taken a series of steps toward resolving the unsustainable deficit that opened up in conjunction with the fiscal crisis of 2008. Following the Tea Party surge of 2010, the House of Representatives began to wrestle with its counterparts in the other chamber and with the president regarding spending and tax policies. The process has not been pretty.
“From $1.3 trillion or $1.4 trillion deficits during 2009–11, the deficit fell modestly to $1.1 trillion in 2012 (reflecting the beginning of the process we are now in), and to $700 billion in 2013. Together with an economy that is growing at a modest rate, the deficit as a percent of GDP has fallen by a bit more. The budget deal should bring us to a sustainable ratio of debt to GDP over the next two years. This progress is faster than was ‘promised’ by either major party candidate in 2012.”
“Congratulations to Congress. It has finally figured out how to ‘play nice’ in the sand box long enough to get elected again in 2014! Hopefully, members of Congress have learned a lesson and will continue to run the country in a responsible manner and leave partisan games out of the equation.”
Scott H. Richardson
Partner, Richardson and Ritchie Consulting
“This all amounts to band-aid work, nothing substantial.”
Tibor R. Machan
Professor Emeritus of Philosophy
R. C. Hoiles Endowed Chair in Business Ethics and Free Enterprise
Argyros School of Business & Economics
There are two fundamentally different concepts of “Equality.” One is equality under the law, that everyone should face the same rules. That was central to the American Revolution itself, which was the historic cutting edge to abolish the legal “aristocracy,” nobility, monarchy, and all of their vestiges in the law. There is no political dispute today over this form of equality. Republicans and conservatives support equality under the law just as much as Democrats, “liberals,” and Marxists ostensibly do.
The other concept of equality is equality of result, the idea that differences in wealth and income are inherently unfair and our goal should be to eliminate them. Obama explicitly said in his speech last week that he does not mean to promote equality of result. But throughout his remarks, he precisely complained about inequality of result. “The top 10 percent no longer takes in one-third of our income, it now takes in half,” Obama proclaimed. “Whereas in the past, the average CEO made about 20 to 30 times the income of the average worker, today’s CEO now makes 273 times more,” Obama further complained. “And meanwhile, a family in the top 1 percent has a net worth 288 times higher than the typical family, which is a record for this country.”
This concept of equality is fundamentally anti-American, and at the heart of Marxism and Communism. If public policies are to make all incomes equal, then there is literally no reason for anyone to work and earn more. The extra earnings anyone earns would just be confiscated, and given to those who work less, even those who don’t work at all, until their incomes are the same as everyone else’s. So why would anyone work at all?
And if public policies are to make everyone’s wealth equal, then there is no reason at all for anyone to save and invest anything. The extra savings, investment, and wealth anyone makes and accumulates would be confiscated, and given those with less, or none, until they had the same wealth as everyone else. So why save and invest at all?
With no savings, investment, entrepreneurship (why bother trying to start and run your own business when if it is successful it would have to be taken away from you), or even work, there would be no economic growth or prosperity at all. The notions of equal incomes and wealth for all are fundamentally incompatible not only with the entire concept of capitalism, but with any economic and social advance at all. Indeed, any society committed to equal incomes and wealth for all would logically only have to regress back towards the Stone Age. This is exactly what we saw in every Communist country in the 20th century committed to implementing these principles.
Moreover, with these as the ultimate results of such principles, any policy adopted to approach those principles would approach those same results, again as was demonstrated throughout the 20th century. Any such policies would retard economic growth, and lead to long term economic stagnation and decline, the greater the more such policies were implemented.
Yet, throughout academia, the media, and at the core of the Democrat party, the reigning assumption is that the goals of any fair society would be precisely equal incomes and wealth for all. This is the pall that is bringing down America over the long run. Especially as the rest of the world has learned precisely these lessons from the 20th century. But in America, such prep school Marxism means “hope and change.” Not just Obama, but our nation’s elites remain mired in these Marxist throwback fallacies of the last century.
Obama’s economic policies have been entirely consistent with this philosophy of equal incomes and wealth as the ultimate goal. He has thoroughly pursued increases in the tax rates of every tax, or maintaining them as high as politically possible, on “the rich” and corporations and businesses. The Obama regulatory jihad veers towards abolishing any concept of the private economy, with “private” business and industry to be run as the government and its bureaucrats decide, not as the entrepreneurs who build them decide. (“You didn’t build that” anyway, as Obama has proclaimed.) Government spending soared until the Republican House was elected in 2010 as a check and balance on this economic insanity.
And that is why there has been very little economic growth, throughout Obama’s entire presidency. Indeed, as the inevitable result of no growth, economic inequality has accelerated and soared under Obama. That is reflected in official government statistics measuring inequality, including the so-called “Gini” index. The incomes of the bottom 80 percent have been in persistent decline for all five years now, including for the middle class the deceiver in chief talks so much about, and for the poor, as poverty has soared under Obama as well. Yet, the stock market boom the Fed has been under such pains to induce with its loose, zero interest rate monetary policy, cheered on with the full support of Obama and his Treasury department, has meant that the incomes of the top 20 percent have continued to increase under the Obamanian reign of error.
The other key distinction to be made is between the goal of equal incomes and wealth, and safety net programs for the poor. Carefully constructed safety net programs for the poor can co-exist perfectly well with booming capitalism, which was the central argument of my 2011 book America’s Ticking Bankruptcy Bomb. Indeed, such programs can contribute to economic growth and prosperity for all. Constructed with pro-growth incentives for positive behavior (work, family, education, savings, investment, and entrepreneurship), such programs would not be much of a burden to the resulting booming economy. Indeed, the combination of such careful safety net programs and the booming economy can eliminate poverty entirely. And booming jobs and rising wages and incomes for the poor and middle class would more effectively promote actual economic equality.
Peter Ferrara is a Heartland senior fellow for entitlement and budget policy, a senior fellow at the Social Security Institute, and the general counsel of the American Civil Rights Union.[Article originally posted on spectator.org]
This week, on Fox News Sunday, Senator (and likely presidential hopeful) Rand Paul (R-KY) came out against further extension of unemployment benefits, saying that ongoing extensions do a “disservice” to workers. Yes, they do that, as well as offering a disservice to taxpayers.
But in an era where Republicans are so desperate not to seem “mean” that they too often act like “Democrats-lite,” this direct opposition to never-ending unemployment benefits is a breath of fresh air.
Sen. Paul pointed out that incenvitizing people to be unemployed for a longer time causes them to become less desirable as employees (as people who have been out of work for longer, and thus further out of touch with business, technology, or just a work ethic.)
There is another reason to oppose yet another extension: Removing unemployment benefits will wake more Americans up to the Obama economy and to the damage that this administration’s massive over-regulation, creation of uncertainty, and particularly Obamacare, are doing to the opportunities that all Americans have to live successful and fulfilling lives.
Finally, the administration and liberals everywhere argue that cutting back unemployment benefits will harm the economy. But if that’s the case, why don’t we just make a law banning work, then hand out money to everyone, and the economy will skyrocket, and we’ll all be able to live lives of leisure…for free?!?
The response to Sen. Paul, or rather whether the inevitable leftist frothing at the mouth can defeat Paul’s logic among independent and moderate voters, will say a lot about the future of the United States.
[First published at the American Spectator.]
In 2007 Dr. Nils-Axel Mörner was interviewed on the subject of sea levels. He is the head of the Paleogeophysics and Geodynamics department at Stockholm University in Sweden. He is past president (1999-2003) of the INQUA Commission on Sea Level Changes and Coastal Evolution, and leader of the Maldives Sea Level Project. Dr. Mörner has been studying the sea level and its effects on coastal areas for some 35 years.
“You have Vanuatu, and also in the Pacific, north of New Zealand and Fiji— there is the island Tegua. They said they had to evacuate it, because the sea level was rising. But again, you look at the tide-gauge record: There is absolutely no signal that the sea level is rising. If anything, you could say that maybe the tide is lowering a little bit, but absolutely no rising.”
The most recent edition of Bloomberg Businessweek features a cover that says “This entire country is about to be wiped out by climate change. It won’t last.” It is devoted to Kribati, a Pacific island chain, and it is a total lie.
The media has been a co-conspirator to the global warming hoax and I take this latest example as one that reveals its utter desperation to maintain the greatest hoax of the modern era. The facts mean nothing to them. Real science means nothing to them. But reality is intruding on theirs and the United Nations environmental program just wrapped up Conference of Parties-19 in Warsaw, where more nations are now in open revolt.
Writing from the conference was Craig Rucker, the Executive Director of the Committee for a Constructive Tomorrow (CFACT), a think tank that has helped organize the Poles to protest this travesty. “Poland has been bullied for decades and they are not about to cede their energy independence to Russia, the UN or anyone. Nor should they.”
On November 21, Rucker reported that “COP-19 was shocked when China led a block of 132 nations in a walkout over ‘loss and damage.’ Loss and damage is a completely bogus concept that developed nations should be legally liable when natural disasters strike developing nations. There is of course no meaningful scientific or historical link that Typhoon Haiyan/Yolanda was abnormal and with no global warming link.”
We owe a debt of gratitude as well to The Heartland Institute, a Chicago-based free market think tank, that has sponsored eight international conferences on global warming since 2008 and recently released a report, Climate Change Reconsidered II. Like CFACT it has been on the forefront of those seeking to educate the public regarding the phony science claims put forth.
COP-19 was one more UN conference leading up to a new version of the Kyoto Protocol that required nations that signed onto it to reduce their so-called greenhouse gas emissions. The final push will come in 2015 in Paris.
Nations that did sign on—the U.S. Senate unanimously refused to ratify the treaty when the Protocol was initially introduced in 1997—are realizing the economic harm that it imposed on them. The same afternoon of the China-led walkout, Poland announced that it had fired its environmental minister who is also the president of the UN conference, two days before the conference was supposed to end!
The Protocol, as is the entire global warming aka climate change hoax, is based on the lie that carbon dioxide (CO2) in the Earth’s atmosphere is causing it to warm. In recent years CO2 has increased in the atmosphere and the Earth, some fifteen or more years ago, entered a cooling cycle. It is getting colder.
“Never underestimate what a gathering of bureaucrats and carbon profiteers might accomplish when after your money”, warned Rucker.
A November 20 article in The Daily Caller reported that “It’s worth noting that U.S. diplomats were specifically instructed by the Obama administration to oppose any attempts to create an independent fund for climate reparations from rich countries to poor countries.” Three days later the administration announced that it now supports all nations declaring their targets for reducing CO2 emissions before 2015. Rucker warns that this now clears “the path for the UN to adopt a full climate treaty and successor to the Kyoto Protocol in 2015.” If the Senate is not controlled by Republicans at that point, it would permit the administration to sign onto a treaty. The harm to the economy would be incalculable.
Australia’s Prime Minister Tony Abbott, elected recently to undo the damage of a carbon tax, told the Washington Post “Despite a carbon tax of $37 a ton by 2020, Australia’s domestic emissions were going up, not down. The carbon tax was basically socialism masquerading as environmentalism and that’s why it’s going to get abolished.” Australia did not send a representative to COP-19. Canada dropped out of the Protocol in recent years. Japan is abandoning the UN’s greenhouse gas emission reduction levels by allowing them to grow by three percent.
Nation by nation the UN global warming hoax is being abandoned for the obvious reason that it is a lie perpetrated to transfer wealth from the developed nations to those less developed. It was never about saving the Earth from a global warming; that was a lie from start to finish.
Some journalists are trying to tell the truth, but magazines like BusinessWeek and newspapers like the New York Times continue to keep the hoax alive. An informed population, not just in the United States, but increasingly worldwide, will ensure that it dies a long overdue death.
[First posted at Accuracy in Media.]
This article reveals that leading scientists know that the “prestige” academic journals are biased in favor of flashy and politically correct research findings, even when such findings are frequently contradicted by subsequent research. This is important in the context of the global warming debate because Nature and Science have published the most alarmist and incredible junk on global warming and refuse to publish skeptics. (Full disclosure: Nature ran a negative editorial about us a few years back, and a much better but still inaccurate feature story.) Claims of a “scientific consensus” rely heavily on the assumption that expertise can be measured by how often a scientist appears in one of these journals. Now we know that’s a lie.
Along these lines, I highly recommend a 2010 book titled Wrong: Why Experts Keep Failing Us – And How to Know When Not to Trust Them, by David H. Freedman, “a science and business journalist, contributing editor at Inc. magazine and has written for The Atlantic, Newsweek, NYT, Science, HBR, Fast Company, Wired, Self, and many other publications.”
He says experts can be wrong because:
1. Pandering to audience or client
2. Lack of oversight
3. Automaticity (assuming every problem has the same solution)
4. Flawed evidence (rely on other scientists for data)
5. Careerism (publish or perish, never admit mistakes)
6. Publication bias
7. Confounding variables
8. Conflicts of interest
He says we believe experts because we are predisposed to embrace people who espouse:
1. Certainty (absence of doubt)
2. Simple explanations (never more than three causes)
3. Universality (these factors/processes/principles apply to everything!)
4. Upbeat (good news)
5. Actionable (we can fix this)
6. Palatable solutions (we can afford to fix it)
7. Dramatic finding or insight (wow factor)
8. A compelling narrative (connects the dots)
9. Consensus (everyone believes this!)
Some excerpts from the book:
“In an anonymous survey conducted by Martinson and his colleagues and published in Nature in 2005, and responded to by some 3,200 researchers who had received funding from the National Institutes of Health, about one-third of participants admitted to at least one act of misconduct with regard to designing, conducting, interpreting, and reporting the results of studies within the previous three years.” (pp. 106-7)
“In a 2000 survey of biostaticians, half said they personally knew of research studies that involved fraud, and of that group, about half went on to say that the fraud involved the fabrication of falsification of data.” (p. 107)
“. . . researchers need to publish impressive findings to keep their careers alive, and some seem unable to come up with those findings via honest work. Bear in mind that researchers who don’t publish well-regarded work typically don’t get tenure and are forced out of their institutions.” (p. 108)
“Perhaps more important, tenured researchers still have to bring in research funding, and the pressure to do so often considerably increases with tenure, since senior researchers sometimes have to take most of the responsibility for getting entire labs funded.” (p. 109)
“Back in 1989 economists at Harvard and the National Bureau of Economic Research estimated that virtually all published economic papers are wrong, attributing this astoundingly dismal assessment to the effects of publication bias.” (p. 112)
“If a scientist wants to or expects to end up with certain results, he will likely achieve them, often through some form of fudging, whether conscious or not – bias exerts a sort of gravity over error, pulling the glitches in one direction, so that the errors tend to add up rather than cancel out.” (p. 114)
“Nature quoted the Princeton professor, Nobel laureate, and former Bell Labs researcher Philip Anderson as saying, ‘Nature’s editorial and refereeing policy seems to be influenced by the newsworthiness of the work, not necessarily its quality, and Science seems to be caught up in a similar syndrome.” (p. 119)
“Does the scientific community do anything effective to single out lousy research? Actually, yes – it makes sure that some of the worst research gets the most acclaim.” (pp. 122-23)
“Research by Dickersin and others suggests that on average positive studies are at least ten times more likely than negative studies to be submitted and accepted for publication.” (p. 123)
And my favorite:
“Many liberals, on the other hand, seem constitutionally incapable of giving fair consideration to, or in some cases even acknowledging, expert evidence and arguments (even if in the minority) that question whether we are really in the midst of a man-made global climate crisis.” (p. 78)
In recent years, over-the-air broadcasters, under the current retransmission consent regime, have been able to exact increasingly higher fees for permitting Multichannel Video Program Distributors (“MVPDs”), such as cable and satellite operators, to carry their TV programming. Both sides of the retransmission fee debate complain about the other parties’ relative market power, and policymakers, including some in Congress, complain about the consumer disruption that TV blackouts cause. Indeed, in the last three years, the number of blackouts has grown and the consumer inconvenience has been real.
These retransmission consent battles, such as the lengthy recent standoff between Time Warner Cable and CBS, have triggered a question in our minds concerning whether skyrocketing retransmission consent fees may hinder the success of the incentive auction. For the auction to have a chance of being successful, of course, broadcasters must decide to volunteer their spectrum to be auctioned.
The connection between retransmission consent and the incentive auction at first may appear somewhat speculative, but a new study released last week by the American Consumer Institute (“ACI”) finds that the way the retransmission consent regulations operate will adversely impact the chances of the incentive auction’s success. According to the ACI study, this is because the increasing retransmission fees will discourage broadcasters from relinquishing spectrum that they otherwise might put up for bid but for the impact of the retransmission consent regulations. Aside from the validity of the ACI study, the retransmission consent issue and the consumer disruption that attends blackouts resulting from retransmission consent standoffs are part of a larger market issue of which regulators and legislators ought to be aware, and which ought to be addressed.
Consumer welfare is promoted when consumers are allowed to choose what video programming they want to watch, regardless of the technology platform over which such programming is delivered. This consumer choice is best effectuated when consumers have access to various delivery mechanisms, such as over-the-air broadcasts, cable, satellite, telco MVPDs, or online distributors. Instead of focusing on consumer access, however, the current retransmission consent battles have focused more on a particular MVPD’s access to TV programming and the broadcaster’s provision of such programming. A broader focus would more likely enhance overall consumer welfare.
More spectrum for mobile broadband services holds the promise of adding enough capacity to permit consumers to more easily watch their favorite shows on a smartphone or tablet. This additional delivery mechanism already is becoming a boon to consumer video choice. The ability to obtain more mobile broadband capacity is in turn directly dependent on the success of the incentive auctions in making more spectrum available.
The incentive auction is expected to motivate broadcasters to voluntarily contribute a significant amount of over-the-air broadcast spectrum to a two-sided auction. The spectrum contributed by the broadcasters would then be auctioned off to the highest bidder, presumably service providers who wish to use the spectrum for mobile broadband use. If properly conducted, the two phases of this incentive auction could create up to 125 MHz of additional needed mobile broadband spectrum – at least that is the hope. This would accomplish a critical step in achieving the Administration’s goal of allocating to wireless broadband 500 MHz of spectrum. Both the FCC and Congress recognize that maximization of volunteered broadcaster spectrum is key to the overall success of the incentive auction.
As the new ACI study suggests, a broadcaster’s decision to contribute spectrum to the incentive auction will be driven by the economics of its business, including potential retransmission consent revenues, among others. The ability of a broadcaster to leverage control over its cost advantage by virtue of its grant of free local spectrum and certain regulatory protections may well contribute to a broadcaster’s power to exact increasing retransmission consent revenues. (MVPDs, of course, had to privately finance their own delivery systems, and with respect to the use of spectrum, largely had to pay for it.) The amount of the broadcasters’ retransmission consent revenues realized likely is not correlated directly with the amount of revenues that would be achievable in a truly free market environment. Fees in excess of those that otherwise would prevail in a free market could hinder either contribution of broadcast spectrum to the auction or increase the minimum price at which the broadcaster is willing to part with its spectrum.
How did we get to our present situation?
Originally, the most technologically feasible method of enabling consumer access to video programming involved the FCC granting individual broadcast spectrum licenses to local TV stations throughout the country. Market forces linked up local broadcasting stations into nationwide networks, the primary source of over-the-air broadcasting market power. Regulations were adopted in part to protect local broadcasters, arguably for what may have been assumed to be good reasons back in their day. Other regulations were intended to regulate nationwide network market power. But, in any event, most of the significant legacy rules were created in a much different market environment.
These legacy regulations allow broadcasters to enjoy favored channel positioning, buy-through protection, syndicated exclusivity and network non-duplication protection, and carriage rights, all of which no other video programmer enjoys. Cable and satellite TV operators have some advantages too. For example, they enjoy a compulsory copyright license. They benefit from cross-ownership rules that limit the aggregation of TV broadcast stations in individual markets (and hence may limit the broadcasters’ market power), although to some extent these ownership limitations appear to have been eroded by the rise of “local marketing agreements” and other devices that, in recent years, have allowed broadcast stations effectively to combine local operations. Bruce Owen previously pointed out these advantages in an FSF Perspectives entitled, “The FCC and the Unfree Market for TV Program Rights.” These market distortions have been well documented in earlier FSF blog postings here, here, and here.
Since the successful launching of over-the-air TV, however, many other alternative programming delivery mechanisms have developed, from cable TV to satellite TV, to telco DSL, hybrid fiber, and fiber, and more lately, to Internet delivery, all of which the FCC repeatedly have recognized as market participants. With the growth of companies that offer these competing delivery mechanisms, much of the rationale for the older broadcast TV rules is gone, as well as other rules that, to some extent, may favor cable TV providers.
Rep. Scalise previously introduced the “Next Generation Television Marketplace Act of 2011,” that was designed to get rid of the outdated legacy regulations in the video marketplace. This bill proposed to eliminate many of the laws and regulations cited above that created artificial distinctions between video providers that no longer are relevant in a more competitive environment. The proposed bill would have returned to the realm of contract law much of the relationship among programmers and companies that operate delivery mechanisms. Adoption of legislation like the Scalise bill would be an important step in the right direction.
Admittedly, the connection between high retransmission consent fees and the success of the incentive auction is not one that can be precisely quantified, and precise quantification is not the point. But it is wrong to deny there is at least some connection, or that the broadcasters’ free access to spectrum is without any economic consequence whatever. If the policymakers’ stated concern – protection of consumer access to video programming – is to be achieved, the current focus on the retransmission consent battles needs to be seen in a much broader context of video marketplace policy reform.
Consumer choice can be most efficiently achieved by eliminating market-distorting regulations affecting video programming and facilitating repurposing of broadcast spectrum to mobile broadband use. These reforms would be an important move toward a free market-oriented video marketplace subject to vigorous competition. As now FCC Chairman Tom Wheeler said at his June 18 confirmation hearing: “Competitive markets produce better outcomes than regulated or uncompetitive markets.”
Refocusing efforts to improve consumer choice by eliminating legacy regulatory distortions in the video marketplace would be an important step in diminishing the likelihood of TV blackouts.
And could moving in this direction also improve the likelihood of success of the incentive auction? Just food for thought!
* Randolph J. May is President of the Free State Foundation, an independent, nonpartisan free market-oriented think tank located in Rockville, Maryland.
** Gregory J. Vogt is a Visiting Fellow of the Free State Foundation.
[Article originally published on the Free State Foundation.]
“Recognizing that these investments would include some risk, Congress established a loan loss reserve for the program, and the Energy Department built in strong safeguards to protect the taxpayer if companies could not meet their obligations,” Bill Gibbons, an agency spokesman, said in an e-mail to Bloomberg News. “Because of these actions…the Energy Department has protected nearly three-quarters of our original commitment to Fisker Automotive.”
Leave to the Obama administration hucksters to sell yet another green energy loser as a gain for the taxpayers. With this bankruptcy, it’s a $139 million loss that DOE gets to spin. The stellar defenders of the public purse originally thought Fisker was worth a $529 million risk, but quickly recognized that mistake and stopped paying at $193 million. Ever since it’s been a series of almost comedic errors that have included a partnership with battery-making dud A123 Systems, fire incidents, recalls, a bad Consumer Reports review, and other mishaps.
Like A123, a foreign investor will now buy Fisker’s cadaver. A group called Hybrid Technology LLC, led by Richard Li, the son of Hong Kong’s richest man, will buy the leftovers for $25 million. Bloomberg reported that Fisker listed assets of $500 million and debts of up to $1 billion in its Chapter 11 filing.
“(Hybrid Technology) is committed to building upon the Fisker legacy and presence in the United States as a foundation for the design and manufacture of advanced hybrid electric vehicles,” said a spokeswoman for the group, in another unfailingly positive statement put out by the DOE. “We will work to realize the full potential these fantastic cars offer in helping to remake the auto industry for the 21st Century.”
Fisker legacy? Fantastic cars? It’s too bad DOE’s breezy forecasts and eternal sunshine weren’t enough to power all the wind and solar projects they have forced taxpayers to subsidize. But the PR-ocracy has generated plenty to make even their worst “investment” disasters appear as if they were genius visionaries.
For example, in September DOE spokesman Bill Gibbons told the Washington Free Beacon that stimulus support for Ecotality was “meant to establish the seeds of infrastructure needed to support a growing market for advanced vehicles,” noting that “the company installed more than 12,500 charging stations in 18 US cities—or approximately 95 percent of their goal.” In other words, despite our loss of millions of dollars in public money, it was (almost) mission accomplished!
And when Colorado-based Abound Solar declared bankruptcy in June 2012, DOE deputy director of Public Affairs Damien LaVera wrote a lengthy article defending the agency’s “investments” in solar energy.
“Of the $400 million that Abound was originally approved for, the Department only lent the company less than $70 million,” LaVera wrote. “Because of the strong protections we put in place for taxpayers, the Department has already protected more than 80 percent of the original loan amount. Once the bankruptcy liquidation is complete, the Department expects the total loss to the taxpayer to be between 10 and 15 percent of the original loan amount.
“This effort has seen many successes as well as a few setbacks,” LaVera added, “but one thing is clear: America must continue playing to win in the clean energy race.”
Then there was the September testimony by former DOE Loan Programs Office director Jonathan Silver, in a hearing about secret email exchanges on private accounts held before the House Oversight and Government Reform Committee. When Rep. Jim Jordan of Ohio questioned him about millions of dollars in lost “investments” thanks to his agency’s poor judgments, Silver said the losses only represented three percent of the portfolio and one percent of the loan loss reserve set aside by Congress for the stimulus, which Silver said made the program a “success.”
For its part, the relentless cheerleaders at DOE have rah-rah-ed praises for Silver.
“Under Mr. Silver’s leadership,” DOE’s Web site says, “the Loan Programs Office has grown to become the largest project finance effort in the United States. Since Mr. Silver took office, the agency has committed over $40 billion in 42 clean energy projects with total project costs of over $63 billion. Cumulatively, these projects create or save over 66,288 jobs across 38 states and avoid over 38 million metric tons of carbon dioxide, equivalent to taking over 4.5 million vehicles off the road or about as many vehicles as in the state of Michigan. The program’s 23 generation projects produce over 32 million megawatt hours, enough to power nearly 3 million homes.”
So in the eyes of DOE you can mark down Fisker as another feather in their cap. When the Department announced in September it would auction the remainder of Fisker’s loan obligation – after coming to the conclusion that no one in their right mind would buy the company otherwise – current executive director of the Loan Program Peter Davidson saw the development as another opportunity to tout success.
“While our original loan commitment was for $528 million,” Davidson wrote, “only $192 million was actually disbursed. In addition, the Department has already recouped more than $28 million from the company’s accounts. These actions combined have already protected more than two-thirds of our original loan commitment….
“Despite Fisker Automotive’s bankruptcy setback, the DOE loan portfolio remains very strong – and is playing a crucial role in helping America’s auto industry thrive, innovate and compete.”
So the only people daring to rain on the bankruptcy positivity parade are those who are owed money by Fisker. News reports say a Delaware judge has the case on a fast track, with a hearing on the sale scheduled for January 3. According to Associated Press, unsecured creditors are owed $250 million, “but stand to receive a minimum total cash distribution of only $500,000.” Among those who have filed claims are former employees who say they are owed $4 million in back pay and benefits.
The Orange County Register reported the Fisker filings include a 669-page document of creditors. “Some of the names on the list indicate how well-connected the company was to Hollywood, Silicon Valley and Washington, D.C.,” the newspaper reported. Among them are actor Leonardo DiCaprio and Al Gore, as well as Joe Biden’s son, Hunter. The vice president appeared at an announcement in Wilmington, Del. in 2010 to promote Fisker’s plans to produce its second model at a former GM plant there, which never happened.
John Doerr, a senior partner with the Kleiner Perkins tech investment firm and big supporter of President Obama, was also listed as a creditor. After the scandal of Solyndra, and the bondholders who got screwed in the government’s GM bailout, it will be interesting to see who gets what’s owed them in the Fisker case
“Fisker’s collapse closes yet another sad chapter in DOE’s troubled portfolio,” said House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Oversight and Investigations Subcommittee Chairman Tim Murphy (R-PA) in a statement. “The jobs that were promised never materialized and, once again, taxpayers are on the hook for the administration’s reckless gamble.”
Remember when the taxpayers were supposed to be the ones protected first in cases where their money went to failed enterprises? Don’t be such a stick in the mud; just enjoy the breeze and the sunshine.
Paul Chesser is an associate fellow for the National Legal and Policy Center and publishes CarolinaPlottHound.com, an aggregator of North Carolina news.[Article originally posted on nlpc.org]
California Judge Michael Kenny has barred state bond funding for the California high speed rail system, finding that “the state’s High-Speed Rail Authority failed to follow voter-approved requirements designed to prevent reckless spending on the $68 billion project.” These protections had been an important in securing voter approval of a $10 billion bond issue in 2008. Sacramento Bee columnist Dan Walters suggested that without the protections in Proposition 1A, the measure “probably would have failed” to obtain voter approval.
According to the court decision, the California High Speed Rail Authority (CHSRA) had failed to identify $25 billion of the funding that would be necessary to complete the first 300 mile segment. This was required by the terms of Proposition 1A as enacted by the legislature and approved by the voters. Yet, without a legally valid business plan, CHSRA was steaming ahead, at least until the court decision.
The principal longer-term significance of the ruling is that “rule of law” remains in effect in California. Elizabeth Alexis, co-founder of Californians for Responsible Rail Design (CARRD), a group opposed to the project, told the Los Angeles Times that CHSRA had been conducting itself as if it were “above the law” (Note 1).
Judge Kenny’s decision means that the state of California cannot ignore its laws, even when its leadership finds them politically inexpedient. Just like the businesses from the largest companies to the smallest used car lot, the law forbids the state from making legally binding promises and then casting them aside arbitrarily.
The Court Decision
The San Diego Union-Tribune summarized the court decision as follows:
Superior Court Judge Michael Kenny ruled that the California High-Speed Rail Authority could not proceed with using billions of dollars in bond funds to begin construction because it had not credibly identified funding sources for the entire $31 billion it will take to finish the 300-mile initial segment, nor had it completed necessary environmental reviews for the segment. These requirements were among the taxpayer protections written into law by California voters in November 2008, when they voted narrowly for Proposition 1A to allow the state to issue $9.95 billion in bonds as seed money for the project. Kenny said the state must develop a plan that comports with these requirements.
The Union Tribune further reported that Judge Kenny rejected arguments by the state Attorney General that state the legislature, rather than Proposition 1A (now state law which has not been repealed) was the final authority on how the bonds are used.
The Los Angeles Daily Newsindicated that the decision left the high speed rail project without either a funding plan or the ability to borrow money. The only remaining source of construction funding is a federal grant, which requires a match of state funding.
Proposition 1A and the high speed rail project have had a difficult history.
A $10 billion high speed rail bond issue to support the project (then called Proposition 1) was scheduled for 2008, after having been postponed twice. There was concern, however, in the state legislature that Proposition 1 had insufficient fiscal, environmental and management guarantees to attract a majority vote of the electorate. As a result, legislature enacted and Gov. Arnold Schwarzenegger signed Assembly Bill 3034, which added substantial protections and recast the ballot measure as Proposition 1A. Assemblywoman Catherine Gagliani, the author, said that the legislation “establishes additional fiscal controls on the expenditure of state bond funds to ensure that they are directed to construction activities in the most cost-effective and efficient way.”
Leading high speed rail proponent and then CHSRA Chairman Quentin Kopp (Note 2), applauded Assembly Bill 3034 indicating that “Californians will now be able to vote on a high-speed train system grounded in public-private financing and guided by fiscal accountability with the guarantee of no new taxes to fund the system,”
The Promised System
In the voter ballot pamphlet, proponents told voters that the proposed system would operate from San Francisco to Los Angeles and Anaheim, as well as through the Inland Empire (Riverside-San Bernardino) to San Diego and to Sacramento. This complete system was to cost $45 billion, according to the proponents (a figure that had already risen substantially).
Like many other large infrastructure projects, costs were soon to explode. By 2011, the cost had escalated to a range of almost $100 billion to more than $115 billion. Further, the promised extensions to Sacramento and the Inland Empire and San Diego were not included in that price (Note 3).
From High Speed Rail to “Blended” System
The political reaction to the cost escalation was negative, leading the CHSRA to radically revise the remaining San Francisco to Los Angeles and Anaheim line. CHSRA removed exclusive high-speed rail tracks in the San Francisco-San Jose and Los Angeles metropolitan areas. The cost of this “blended” system was estimated at $68 billion. CHSRA maintained its claim that the legislatively required travel time of 2:40 could be achieved without the genuine high speed rail configurations in the two metropolitan areas. Sacramento Beecolumnist Walters characterized this expectation as based on “assumptions that defy common sense.”
Former CHSRA Chair Quentin Kopp withdrew his support at this point, referring to the “blended system” as “the great train robbery.” Kopp also raised the possibility that the new plan could violate Proposition 1A, a judgment that Judge Kenny’s decision confirmed.
Kevin Drum, of Mother Jones may have provided the best summary of situation as it stands today:
Its numbers never added up, its projections were woefully rose-colored, and it was fanciful to think it would ever provide the performance necessary to compete against air and highway travel. Since then, things have only gotten worse as cost projections have gone up, ridership projections have gone down, and travel time estimates have struggled to stay under three hours.
Drum had previously characterized CHSRA claims as “jaw-droppingly shameless,”adding that “A high school sophomore who turned in work like this would get an F.”
Where From Here?
Proponents have not given up. As The Economistreported, proponents took comfort in the fact that “Judge Kenny did not cancel the project altogether.” The Economist continued “But if that is a victory, it is not clear how many more wins California high-speed rail can handle.”
The stalwart supporter San Francisco Chronicle editorialized that the court decision was a “bump” in the path for the project. Yet even the Chronicle conceded that: “The court results are a serious warning sign that the financial fundamentals need work.”
Too Big to Fail?
Columnist Columnist Dan Walters fears that to make the financial fundamentals work would require making the project “too big to fail:”
As near as I can tell, the HSR authority’s plan all along has been to simply ignore the law and spend the bond money on a few initial miles of track. Once that was done, no one would ever have the guts to halt the project because it would already have $9 billion sunk into it. So one way or another, the legislature would keep it on a funding drip.
Such a strategy would force California taxpayers to fill the gargantuan funding gap, which for the entire Los Angeles to San Francisco line now stands at approximately $65 billion. With the federal funding of approximately $3 billion, the state is 95 percent short of the $68 billion it needs.
California taxpayers may not be so accommodating. Even before Judge Kenny’s decision, LA Weekly reports that a USC/Los Angeles Times poll shows statewide opposition now to have risen to 53 percent of voters, while 70 percent would like to have a new vote on Proposition 1A (see “Californians Turn Against LA to SF Bullet Train”).
Even the federal funding is being questioned. California Congressman Jeff Denham, also a former supporter of the project, joined with Congressman Tom Latham to ask (link to letter) the United States Government Accountability Office if further federal disbursements could be illegal, given the uncertainty of the state funding needed to “match” the federal grant.
Congressman Kevin McCarthy, the majority whip in the US House of Representatives has indicated that he will work with others in Congress to deny further federal funding to the project.
The San Jose Mercury-News, which like the Chronicle had been a strong supporter of Proposition 1A in 2008 has long since climbed off the train. In an editorial following Judge Kenny’s decision, the Mercury-News decried the project’s “bait and switch,” tactics and called for “an end to this fraud.”
The Winners: California Citizens
At this point, the words of legendary New York Yankees catcher Yogi Berra seem appropriate: “It ain’t over till it’s over.” However, Judge Kenny has rewarded California citizens with something that never should have been taken away from them – a government that follows its laws.
Note 1: This is not the first time that the state has run afoul of the law on the high speed rail project. According to the Sacramento Bee:
The Howard Jarvis Taxpayers Association had challenged the ballot language for Proposition 1A, arguing the Legislature used its pen to “lavish praise on its measure in language that virtually mirrored the argument in favor of the proposition.” The appeals court sided with HJTA [stating], “the Legislature cannot dictate the ballot label, title and official summary for a statewide measure unless the Legislature obtains approval of the electorate to do so prior to placement of the measure on the ballot.”
Unlike the present decision, the state suffered no consequences for its violation and Proposition 1A was not invalidated.
Note 2: Chairman Kopp is a retired judge, former state Senator and former member of the San Francisco Board of Supervisors.
Note 3: Joseph Vranich and I have authored two reports questioning the ability of the California high speed rail system to meet its objectives (financial, environmental, ridership, and operations). The first, The California High Speed Rail Proposal: A Due Diligence Report, was published by the Reason Foundation, Citizens Against Government Waste and the Howard Jarvis Taxpayers Association in 2008. The second, California High Speed Rail: An Updated Due Diligence Report, was published by the Reason Foundation in 2012.[Article originally posted on newgeography.com]
Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris and the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.
Two courts already have ruled in different class actions that Google can be sued for illegal wiretapping for “interceptions” of personal information without meaningful consent — in circumstances analogous to how Google Glass operates.
First, the Ninth Circuit Court of Appeals recently ruled that wiretap law prohibits the type of transmission “interception” that Google StreetView cars’ did in secretly collecting personal information from unencrypted home WiFi networks.
- Specifically, this court denied Google’s claim that not encrypting one’s WiFi made the transmissions public. And this court also denied Google’s claim it was due the law’s exception designed to protect radio stations.
- Specifically, Judge Koh ruled that Google was not exempt from wiretap law because creating personal advertising profiles by reading people’s emails was not an “ordinary course of business.” Judge Koh also found that “accepting Google’s theory of implied consent… would eviscerate the [wiretap] rule against interception.”
Given these strongly-analogous court precedents, it follows that Google Glass’ surreptitious “interception” of personal conversations and information for Google’s commercial purposes without meaningful permission could be ruled illegal wiretapping as well.
If it is, Google and Google Glass users and app developers could face a lot more legal risk and liability than everyone currently thinks.
When it applies, wiretap law is tough. If someone has been wiretapped, they have been legally harmed. One does not have to prove specific harm. And the statute has significant fines for each infraction.
The sheer number of potentially illegal Google commercial wiretaps is staggering and unprecedented. Google StreetView may have illegally eavesdropped on tens of millions of Americans homes. Gmail may have eavesdropped on every one of Google’s 425 million users email exchanges for several years.
If Glass is as big as Google hypes it to be, add many more millions of people’s actual conversations on which Google could illegally eavesdrop.
These court precedents suggest that Google has a lot more explaining and qualifying to do before it moves from its testing phase to full-scale commercial rollout of Google Glass. That’s because as a cloud service all the recordings of Glass users will not reside on the Google Glass device that users buy and own, but in Google’s data centers that Google controls. Thus the Glass user and Google are inextricably linked, so what one does, potentially could create wiretapping liability for the other.
First, Google likely will have to get much more explicit permission from Google Glass users for Google to “intercept” their conversations with others for its commercial purposes, and establish a protocol for somehow securing the permission of the others for the “interception” as well.
Judge Koh’s precedent could put Google’s “implied consent” theory at risk if applied to Glass. What if Glass adds a blinking light to Glass to indicate to others that it is recording? Will Google claim that the blinking light is enough for “implied consent” for the wiretapping?
Second, Google likely will have to explicitly state in its terms of service what additional actions Google will do to the recorded Glass conversations in Google’s data centers, if anything, other than store them.
Will Google data mine/”intercept” the Glass users’ recordings and actions for:
- The purposes of targeted advertising?
- “Improving other Google services?
- Predicting user behavior or needs for Google Now?
- Integrating with other Google advertising services?
- Augmenting Google’s artificial intelligence data base of knowledge?
Simply, what if anything will Google do with the private information gleaned from Glass recordings of private conversations?
Third, given Google’s large potential wiretapping liability, will Google change its no curation policy and curate and approve all Glass apps that could wiretap before they can be used on Glass? Will Google have in place internal controls to prevent Glass App developers from violating the wiretap act on their service to limit their liability? Will Google give apps developers access to any of the Glass users’ recordings of conversations to operate their apps, or for any other purposes?
If Google’s StreetView and Gmail both have potential illegal wiretapping liability for intercepting private information without the meaningful consent of the intercepted, it follows that Google Glass has a similar potential illegal wiretapping liability as well.
But Google’s potential illegal wiretapping liability may not stop there.
If Google has applied its theory of “implied consent” – i.e. if one uses Google’s products and services Google can use any “intercepted” personal information for any purpose it alone deems appropriate – some other Google services could attract closer attention for potential illegal wiretapping.
- Since Google Voice is closely integrated with Gmail, does Google “intercept” Google voice conversations in any way like it “intercepts” Gmails to target advertising on any Google service?
- Since Android is a free operating system that enables $9 billion in annual mobile advertising revenues per eMarketer, does Android “intercept” any mobile conversations or personal information without meaningful consent of the intercepted for the purposes of targeting advertising?
- And since Google’s Chrome browser is free, and Google Fiber’s free broadband service offering is implicitly ad-supported, does Chrome or Google Fiber intercept any mobile conversations or personal information without meaningful consent of the intercepted for the purposes of targeted advertising?
Simply, if it is illegal for Google to “intercept” Gmails and WiFi signals for advertising purposes under wiretaps laws, it follows that Google could be liable for intercepting Google Glass, Voice, Android, Chrome, and Fiber personal communications without meaningful consent for advertising and other purposes.
Big picture, why Google is potentially so vulnerable on wiretapping is that it has taken a general legal position that it is most always the responsibility of others to protect themselves from Google’s spying. Consequently, it is not Google’s legal responsibility to refrain from spying on people without their permission.
At bottom, the conflict here is potentially immense. Wiretap law protects people from being spied upon, while Google’s business model is based on “implied consent” for Google’s commercial spying.
[Originally published on Precursor Blog]
Friday’s announcement by the Obama administration that it will allow wind energy companies to kill certain bird species for 30 years without legal ramifications shows that its $1 million paltry fine of Duke Energy for avian slayings a week earlier was just for show.
Slamming the president for the application of double standards, not enforcing laws it doesn’t like, and acting unilaterally without Congressional authority is nothing new. It’s not often, though, you see such an obvious policy contradiction appear within such a short period of time. And now, without need to worry about re-election, he can pit his environmental constituencies against each other (wildlife protection vs. green energy promotion).
The latest decision, by the U.S. Fish and Wildlife Service, extends the maximum possible term for permits to “take” (“molest or disturb”… “take, possess, sell, purchase, barter, offer to sell, purchase or barter, transport, export or import…”) from five years to 30 years. According to the rule the agency placed in the Federal Register, the change “will facilitate the responsible development of renewable energy and other projects designed to operate for decades….” So, all of a sudden – when it comes to wind, but not fossil fuels – “regulatory certainty” is a big concern for the Obama administration. Makes sense considering the billions of dollars he’s poured into subsidizing renewables.
Of course the wind energy industry asked for (more) special treatment, like it has with loan guarantees, grants, research funding, tax credits, and mandates for the use of its intermittent power by electric utilities. The American Wind Energy Association says the permit change is no big deal.
“Eagle fatalities only occur at a very small number of facilities across the country,” AWEA says on its Web site. “In fact, collision with turbines at modern wind farms is responsible for less than 2 percent of all reported human-caused golden eagle fatalities, and only a handful of bald eagle fatalities ever….”
Of course, eagles aren’t the only species sliced and diced by turbine blades. An independent study published by the Wildlife Society Bulletin, cited by the Daily Caller, found that 573,000 birds and 888,000 bats are killed by wind projects in the U.S. every year. And according to the Fish and Wildlife Service’s own analysis, the number of birds killed is 440,000 per year, National Review reported.
Realizing the bad optics but at the same time desperate for the special protection – since wind turbines aren’t going to stop spinning and birds aren’t going to stop flying into them – the industry sought measures for its own preservation. The White House even hosted a powwow in August with AWEA and several environmental groups to discuss eagle permits.
“This is not a program to kill eagles,” said John Anderson, the director of siting policy at AWEA, to the Associated Press. “This permit program is about conservation.”
Many environmental and wildlife protection groups disagreed.
“Instead of balancing the need for conservation and renewable energy, (the Department of) Interior wrote the wind industry a blank check,” said David Yarnold, president of Audubon.
“The federal government didn’t study the impacts of this rule change even though the [law] requires it,” said Kelly Fuller, who formerly headed up the wind campaign at the American Bird Conservancy. “Instead, the feds have decided to break the law and use eagles as lab rats.”
Republican Sen. David Vitter, the ranking member on the Environment and Public Works Committee, has sought accountability from the Obama Justice Department and the Fish and Wildlife Service for accountability over the inequitable application of species protection laws against energy companies – namely, the fossil fuel industry gets prosecutions and fines while the regulators pass wind. But amazingly, the leniency granted for wind was so extreme it put the conservative Vitter on the same side as most environmental groups, as Politico noted.
“Thirty years is a long time for some of these projects to accrue a high death rate,” Vitter said in a statement. “The Administration has repeatedly prosecuted oil, gas, and other businesses for taking birds, but looks the other way when wind farms or other renewable energy companies do the exact same thing. There needs to be a balanced approach in protecting migratory birds, while also supporting domestic energy, and with this newest decision, the Administration has failed to achieve that.”
So who benefits? Companies like Duke Energy, which only two weeks ago was trotted out as a poster child by the Justice Department to prove that they prosecute wind projects for bird killings too. It wouldn’t surprise if we found out that Duke agreed to pay the $1 million fine for killing 160 or so birds under the Migratory Bird Treaty Act, knowing that the Obama administration – a close ally of recently departed Duke CEO Jim Rogers – was going to grant this huge regulatory break for them and AWEA. The settlement came after Vitter and Sen. Lamar Alexander had waited nearly a year for an answer to their inquiry about unequal appliance of the bird protection laws.
Besides the Congressional pressure (House Committee on Natural Resources Chairman Doc Hastings (R-Wash.) made his own inquiry in May), the administration was also feeling the heat from the mainstream media this year as well. In May the Associated Press published a lengthyexpose of how the wind industry has been given a pass on eagle deaths, and even showed how the administration was complicit in its protection.
“Killing these iconic birds is…a federal crime, a charge that the Obama administration has used to prosecute oil companies when birds drown in their waste pits, and power companies when birds are electrocuted by their power lines,” AP reported. “But the administration has never fined or prosecuted a wind-energy company, even those that flout the law repeatedly. Instead, the government is shielding the industry from liability and helping keep the scope of the deaths secret.”
Among the ways the Obama administration concealed the bird kills, according to AP, was to not disclose companies’ reports of “takes,” claiming the information belongs to the energy companies and are trade secrets or would interfere with enforcement investigations.
Noticeably absent among conservation groups from the August meeting on permits was the American Bird Conservancy, which has been consistently vocal against the leniency granted to the wind industry.
“There are no seats at the exclusive decision-making table for groups that want the wind industry to be held accountable for the birds it kills,” said Kelly Fuller, who works on wind issues for the group.
The development at the end of last week shows how powerful the wind industry has become in the eyes of the Obama administration. Two AWEA representatives sat in that August meeting with at least 7 others from environmental groups, including Defenders of Wildlife and the National Wildlife Federation, and came away with a 30-year grace period.
This is what the Obama administration looks like in pursuit of its agenda without concern for re-election.
[Originally published on the National Legal and Policy Center]
The Web site of the National Libertarian Party has an online opinion poll that asks: “Which option most closely matches your feeling about the closing of the WWII Memorial during the so-called government shutdown?” I love it that they refer to the “so-called” government shutdown, so true in light of all the reports that government continued to spend our money at an alarming rate.
The first three proposed answers are what you might expect: “The government should not have closed the WWII Memorial” (58% ), “It was OK for the government to close the WWII Memorial” (3%), and “I don’t care much whether or not the memorial was closed during the shutdown” (5%).
But the next possible answer was a surprise: “The WWII Memorial should have been built on private property to avoid political meddling.” The thinking man’s answer! As Ayn Rand would have said, “check your premise.” If you rely on politicians to erect monuments, don’t complain if they choose to shut them down. An impressive 20% chose that answer.
The final possible answer, though, is even better: “A non-interventionist policy at the time of WWI might have prevented WWII.” I don’t think it’s possible to read that without laughing out loud. There shouldn’t even be a monument (to close down or keep open) because there never should have been a war. That’s really thinking it through! And 10% of the 5,516 folks who answered the poll chose that answer.
This is why I love libertarians. They think things through and for themselves, never accept the choices as they are presented by the political or chattering classes, and always check the premise. The result may not always be an effective tactic or strategy for advancing freedom, but that’s not always the point, is it? Finding the truth and speaking it out loud are their own reward, and they are toxic to totalitarianism of all stripes, eventually if not right away. No intellectual movement speaks truth to power better than libertarianism.
Diane and I just sent a gift to the LP to help them buy a building in Washington DC. You can learn more about that effort by going here.
The Affordable Care Act (ACA), they point out, incorporates some ideas from a Heritage Foundation proposal and a law promoted by Mitt Romney. Those are not, however, conservative ideas, much less good ideas, and are not a “sound chassis” for anything.
There is nothing conservative about the forcible redistribution of wealth. And even Wall Street Occupiers should be against redistributing people’s earnings to Big Insurance, Big Pharma, Big Hospitals, Big Data Mining, and nameless unaccountable bureaucrats in the vast, ever-expanding realm of Kathleen Sebelius.
Redistributing wealth is a prescription for social unrest. There is nothing more divisive than dividing up loot. The “contributors” don’t like having their earnings taken, and the recipients are chronically unhappy too because their share is always too small. People resent having to pay for other people’s medical care—a resentment that was exploited in the disingenuous “free rider” argument for the law.
Young, healthy people don’t want to pay higher premiums so that older, sicker people can pay less than their actuarial costs. And without a mandate, they won’t.
ACA tries to conceal the fact that “insuring” everybody and everything means that everybody is always paying for everybody else’s medical care, with a big chunk siphoned off by managers and money shufflers.
Obama didn’t create the third-party payment system, which caused the spending crisis. But ACA expands it still more, rigidifies it, and attempts to crush true free-market competition.
Insurance is a voluntary risk-sharing contract. Real insurance companies are not third parties. They reimburse subscribers who suffer a loss. They do not provide or manage services or write checks to those who do. Nor do they tell subscribers how to spend their check. To the extent that some casualty insurers are beginning to imitate “health insurers,” they are damaging their industry and inviting a cost spiral, as well as corruption and deterioration of quality in the auto repair and other industries.
ObamaCare is compulsory. Most of the provisions of coverage are government-dictated, and pricing by risk is mostly forbidden. Hence, “health plans” are not insurance.
ACA is also the antithesis of affordability. Those who have a prepaid plan have every incentive to use it to the maximum. Plus there are enormous built-in transaction costs. These factors are reflected in the premiums—which HealthCare.gov attempted to conceal from people eligible for subsidies. Not that beneficiaries of taxpayer largesse necessarily care about how much invisible, presumably richer other people are having to pay on their behalf.
Those who seem to be getting something for nothing are still likely to be hurt. If the subsidy is miscalculated, they may have to “repay” that which they never received (it went to the insurer). Those who have coverage may still be unable to get care. They may be trading coverage for loss of a full-time paycheck. They may face a greater-than-100% marginal tax rate if they do earn more money, owing to the income thresholds.
In every case, forcible redistribution of wealth decreases the total amount of wealth. There is no prosperity without a reward for working.
ACA is not an opportunity for bipartisan coalition-building. There is no “tweak” that can help a rotted-out chassis, no advantage in trying to steer the vehicle built on it in a slightly different direction.
There is nothing conservative about theft, deceitfulness, forcing people to act contrary to interest or conscience, undermining the work ethic, or politicizing the practice of medicine.
There is also nothing compassionate, moral, ethical, or prudent about these things.
ObamaCare cannot be fixed. It must be repealed before it destroys the medical system, the economy, and the American system of constitutionally limited government.
We must learn from this debacle that compulsion is not the answer. Pasting a conservative, Republican, or bipartisan label on forcible redistribution of wealth, or hiding it behind a show of good intentions with well-chosen tragic stories, does not change its evil, destructive nature.
In this podcast, Mike LaFaive of the Mackinac Center for Public Policy discusses in greater detail his article on the Heartlander titled “A Tax Hike Al Capone Could Have Loved”. In his article, he compares Al Capone’s liquor smuggling incentives to the new increases in cigarette taxes proposed by Chicago Mayor Rahm Emanuel.
LaFaive describes the excessive taxes on cigarettes as “prohibition by price”, where the taxes are so high it creates an “implicit prohibition” of cigarettes. Recently, Mayor Rahm Emanuel proposed a new, $.75 tax increase on cigarettes, which would put Chicago the most expensive city for cigarettes in the entire country. LaFaive believes this would cause Chicago to become the number one cigarette smuggling state, and bump down New York, where 60% of all cigarettes in the state are smuggled.
Before the most recent tax increases, the University of Illinois did a study of cigarette smuggling in the city of Chicago, and found that 75% of the cigarettes were not from Chicago; in fact, 29% were from Indiana. The fact is that increases taxes on cigarettes only drives smokers to buy elsewhere and the city (or state) actually ends up losing tax revenue, when the goal was to increase it. It creates incentives for smugglers to buy cheap and sell high; profits are as good as smuggling drugs and the punishments are less severe.
It’s time to fight back against these detrimental tax policies. You can read more at the Mackinac Center website.
Listen to the podcast in the player above
Dan Pilla, author of the Heartland-published Ten Principles of Federal Tax Policy, discusses the current tax system in the United States and how it does not follow any of the ten principles laid out in his book. Pilla is a taxpayer’s rights advocate and has defended countless tax payers against the IRS. He helps individuals and businesses who struggle with our tax problems, which are plentiful.
The first principle is simplicity, which our tax system is most certainly not. The tax code now consists of about four million words, which is three times the amount in the 1970′s, and twice the amount of the 1990′s. That doesn’t scream “simple” to me! Also, there have been more than 3,200 tax code changes between 2001 and 2008, with 500 of them being just in 2008. Nobody understands the tax code, not even the IRS.
Our current tax system creates criminals out of law-abiding citizens. Pilla says most people are trying to abide by the law and follow the tax rules, but they get tripped up by the complicated mess of the system. When you’ve got two different tax analysts telling you two different things, plus two IRS agents who tell you two different things, how are you to know what is correct and incorrect? Last year alone there were 37 million penalties issued by the IRS- and there’s only 130 million tax returns filed! That means 28% of people who filed tax returns were penalized… Scary stuff.
Another principle that Pilla discusses is stability. He says Americans have a right to know that their tax system will remain stable and consistent this year, and for years to come. This is important because every American is affected by the tax code in every part of their lives. Every decision made has tax consequences- to marry or not to marry, to have children or not, to take a raise at work, planning a business, and planning retirement.
The bottom line is the income tax and liberty cannot coexist. Which one are you willing to live without?
Listen to the podcast in the player above.
One hundred years ago this month, on December 23, 1913, the Congress passed the Federal Reserve Act, establishing a national central-banking system in the United States. The governing board of the Federal Reserve was organized on August 12, 1914, and the Federal Reserve banks opened for operation on November 16, 1914.
On the surface, the preamble to the Act, which summarized the purpose of the new government-created institution, seemed fairly innocuous:
“An Act to provide for the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes.”The Powers of the Federal Reserve
But what this meant was the start of the monopolization of monetary matters in the hands of a single politically appointed authority within the boundaries of the United States.
Those innocuously sounding functions listed in the Act’s preamble, however, gave the Federal Reserve the power to:
(a) Control the quantity of money and credit supplied in the United States.
(b) Influence the value, or purchasing power, of the monetary unit that is used by the citizenry of the country in all their transactions.
(c) Indirectly manipulate the rates of interest at which borrowers and lenders transfer savings for investment and other purposes, including the funding of government budget deficits.A Century of Central Bank Mismanagement
The 100-year record of the Federal Reserve has been a roller coaster of inflations and recessions, including the disaster of the Great Depression of the 1930s, the “excessive exuberance” of the late 1990s that resulted in the “Dot.Com” bubble that burst in the early 2000s, and the recent boom-bust cycle of the last decade from which the U.S. economy is still slowly recovering.The crucial and fundamental problem with the power and authority of the Federal Reserve is that it represents monetary central planning. In a world that has, for the most part, turned its back on the theoretical error and practical disaster of believing that governments have the wisdom and ability to centrally plan the economic affairs of a society, central banking remains one of the major remaining forms of socialism practiced around the globe.
Government control and planning of the monetary system has resulted in extensive political power over virtually every aspect of our economic life. In 1942 Gustav Stolper, a German free-market economist then in exile in America from war-torn Europe, published a book titled “This Age of Fables.” He pointed out:“Hardly ever do the advocates of free capitalism realize how utterly their ideal was frustrated at the moment the state assumed control of the monetary system . . . A ‘free’ capitalism with government responsibility for money and credit has lost its innocence. From that point on it is no longer a matter of principle but one of expediency how far one wishes or permits government interference to go. Money control is the supreme and most comprehensive of all governmental controls short of expropriation.” The Power to Manipulate the Lives of Millions
Through monetary central planning governments have the capacity to manipulate and destroy the real value of the accumulated savings and wealth of hard-working people. Rising prices eats away at the real buying power of every dollar a person has set aside and saved for his needs of the future.
Governments can use money creation to redistribute income among individuals and groups in the society to serve various political purposes. When the money supply is increased it does not impact every market demand, price, or income at the same time. It is injected in the economy and, like a pebble dropped into a pond of water, sends out ripples of effects that differentially and disproportionally benefit some and harm others.
In addition, monetary injections through the banking system distort and twist the patterns of capital investment and resource use throughout the society, which inescapably generate the booms and busts that have punctuated the economic history of America during the last 100 years.
The rationale behind such control has been the notion that governments and their appointed central-banking authorities have the knowledge and capability of maintaining economy-wide stability and growth.Central Banking as the Failed Socialist Mentality
But what has never been explained is how a handful of central bankers can know, better than the free competitive market, what should be used as money, what the quantity and value of that money should be, and what interest rates can assure a proper and continuous balance between savings and investment for long-term sustainable economic growthIn other words, central banking represents one of those instances of the hubris of the social engineer, who claims to know more about how to better manage some aspect of society rather than to leave these decisions and their outcomes to the individual market participants themselves.
The fact is, the Federal Reserve can no more correctly plan for an “optimal” quantity of money or a fictitious “good” rate of price inflation than any other branch of government can properly plan for the optimal supply and pricing of shoes, cigars, soap, or scissors.
And the history of central bank monetary policy in the United States and around the world has demonstrated the same inevitable failures as all other forms of socialist planning over the last century.The Market Knows Better than a Central Bank
What should be used as money and what quantity of it would serve the uses and demands of people in society can only be discovered through the interactions of people in a free market.
What should be the value, or buying power, of a unit of money can only emerge out of people offering money they have to spend for the goods and services that others are offering in exchange for that money. The resulting money prices for purchasable goods would establish what the general value of that money should be in the market place.
And a truly free and competitive banking system would generate the stable and sustainable financial intermediation that would enable the formation of market-based rates of interest to bring people’s savings into coordinated balance with the borrowing demands of others desiring to undertake profitable investments.An Agenda for Monetary Freedom
What, then should be the done, and put in place of government central banking? The consistent advocate of the free market should call for the abolition of the Federal Reserve and the operation of a market-based system of private and competitive free banking in its place.
The following would be the steps to bring this about:
1.The repeal of the Federal Reserve Act of 1913 and all complementary and related legislation giving the federal government authority and control over the monetary and banking system.
Repeal of legal-tender laws, which give government the power to specify the medium through which all debts and other financial obligations, public and private, may be settled.
- Repeal of all restrictions and regulations on free entry into the banking business, including interstate banking.
- Repeal of all restrictions on the right of private banks to issue their own bank notes and to open accounts denominated in foreign currencies or gold and silver.
- Repeal of all federal and state rules, laws, and regulations concerning bank-reserve requirements, interest rates, and capital requirements.
- Abolition of the Federal Deposit Insurance Corporation. Any deposit-insurance arrangements and agreements between banks and their customers, or among associations of banks, would be private, voluntary, and market-based.
In the absence of government regulation and monopoly control, a free monetary and banking system would come into existence; it would not have to be created, designed, or supported.
A market-based monetary and banking system would naturally emerge, take form, and develop out of the prior system of monetary central planning. Monetary freedom would be established in place of the current Federal Reserve System.
The 100 years of central banking mismanagement and central banker hubris of presuming to plan the monetary and banking affairs of hundreds of millions of people would, then, would be brought to it’s end.
[Originally published on EPIC TiMES]
We are weeks away from being fully immersed in the 2014 election cycle. Predictions abound, likening the 2014 cycle to 2010—when the House flipped from Democratic to Republican. Only this time, it is the Senate that has the potential to change. Twenty of the 33 seats up in 2014 are currently held by Democrats—more than half of whom are in trouble.
In 2010, Senate Majority Leader Harry Reid was up for reelection—for his fifth term—and he was facing “a ferocious challenge.” He was “in trouble.” Remember, 2010 was the year of Tea Party victory. In light of the mounting government debt, pork barrel spending was no longer vogue. But Senator Harry Reid, apparently, didn’t get the memo. “The 71-year-old one-time boxer touted his ability to bring federal money to his home state—no one could do more,” said the HuffPost coverage of his “surprise” win.
A May 2010 internal email addressing the need to expedite Department of Energy (DOE) green-energy loan approvals for projects in Reid’s district says: “Reid is constantly hit at home for not bringing in the federal dollars.” In the email, reported Obama bundler and former Clinton Administration staffer, Jonathan Silver, who was, at the time, the executive director of the Loan Programs Office, was to assure Reid that he anticipated “a good number of projects to be approved in the coming months.”
Reid saw the potential in green-energy dollars before anyone else. He laid the foundation to allow him to bring home the “federal dollars.”
The White House and DOE insiders helped Reid secure green-energy stimulus funds for his home state of Nevada—which he touted in his 2010 campaign. He is tied to more than $3 billion of taxpayer money—currency that created just over 200 permanent jobs.
The Washington Times reported: “Mr. Reid, a Nevada Democrat, who led passage of the $814 billion stimulus bill and worked to include the loan guarantee program to help finance clean-energy projects…” The 2009 stimulus package—the American Recovery and Reinvestment Act (ARRA)—was jammed-packed full of clean-energy provisions, about 10 percent (nearly $100 billion) of the monies were earmarked for renewable energy.
Having “worked to include the loan guarantee program,” Reid was frustrated when the federal dollars weren’t flowing into Nevada fast enough.
Seven months after the stimulus was signed into law, Reid, sent a letter, dated September 23, 2009, to President Obama, complaining about the “slow pace of implementation of the Department of Energy’s loan guarantee programs.” In it, Reid patted himself on the back for his role (via the stimulus bill) in helping to “appropriate an additional $6 billion for an expanded loan guarantee program.” Despite Reid’s acknowledgement of the “risks” involved, he proceeded to request that “obstacles be cleared away,” and basically demanded that the ARRA monies for the loan program be “rapidly” dispensed.
Reid had campaign donors anxiously waiting for the federal dollars. The Washington Free Beacon revealed that executives from three companies that received millions through the “fast-track” approvals all donated to Reid and other Democrats—Nevada Geothermal, Ormat Nevada, and SolarReserve—have contributed more than $58,000 since 2008. Additionally, the then-CEO of BrightSource energy—which ultimately received $1.6 billion in stimulus funds—hosted a fundraiser for Reid.
Each of these projects did receive the federal dollars—but not because they were such great projects. President Obama has declared that DOE decisions had “nothing to do with politics.” But, all four of the above, plus a transmission project originally known as Southwest Intertie Project (SWIP), were speculative—at best. Their ratings, along with the majority (22 out of 26 projects) of the stimulus-created 1705 Loan Guarantee Program, were rated as “junk” grade investments (“with a high likelihood of failure”), yet the taxpayer-backed loans were approved, with many of these projects also being awarded huge amounts of free taxpayer cash in the form of stimulus grants. Why? Politics.
Loan Program Office emails indicate that Reid’s projects were prioritized because they were “high profile,” “tied to larger events,” or because they had Reid’s support. Here’s a sampling from the hundreds of leaked emails relating to the various Reid projects:
- December 5, 2009: “Reid may be desperate. WH might want to help. Short term considerations may be more important than longer term considerations and what’s a billion anyhow?”
These five projects gave Reid bragging rights at a time when he most needed it.
Reid’s 2010 campaign included this slogan: “FIGHTING FOR CLEAN ENERGY JOBS IN NEVADA.” In a campaign document, he brags about his “efforts in passing the American Recovery and Reinvestment Act” and about pursuing “consistent federal incentives to develop clean renewable energy resources.”
The projects were used as campaign photo ops and talking points that helped the connected companies seeking the loans. Ormat Nevada, Inc.’s director of policy and business development, Paul Thomsen, was featured in a 2010 campaign ad where he states: “Harry Reid saw the potential for geothermal before just about anyone else.” It is important to note that Thomsen served as an aide to Reid from 2002-2005 and he also contributed to Reid’s campaign. Regarding SWIP, the Las Vegas Sun reported: Reid gets “an election-year trophy.”
Reid’s role in the green-energy, crony-corruption story is illustrative of the election scam that so often takes place in America. Once again, Obama lied. These loanswere given for political reasons. They gave Harry Reid an election-year platform and victory.
The whole green-energy, crony-corruption story is convoluted and difficult to grasp—which, I believe, is part of the goal. It is so twisted and interconnected that the average person is unlikely to have the time to dig through the whole story. Only hard-core politicos care enough to follow the trail—which is why, for the past 18 months Christine Lakatos and I have covered the saga. Christine has done the in-depth research; I’ve presented the capsulized version. I hope this taste has tempted you to dig deeper.
Senate Majority Leader Harry Reid knows how to work the system. He’s not up for reelection in 2014, but 20 of his friends are. Like Reid, they voted for the 2009 stimulus bill that launched the entire green-energy, crony-corruption scandal that took nearly $100 billion taxpayer dollars to pay off donors to Harry Reid, President Obama and other high-ranking Democrats. More than fifty of those stimulus-funded projects, coupled with additional clean-energy funds, have gone bankrupt—or are circling the drain—and have taken our money with them.
These five “junk-rated” stimulus loans were rushed so they could offer Reid election year trophies. Of the five, two are facing trouble. The other three, after years of receiving taxpayer money, are still incomplete. Plus, BrightSource Energy’s Ivanpah solar power project has been “executing birds.”
More than $3 billion went to Reid’s friends with the promise that the federal dollars would create “tens of thousands of green jobs.” A little more than 200 permanent jobs have actually been created.
Harry Reid saw the potential before anyone else all right. Green energy was a gold mine for him and his cronies.
[Originally published on Town Hall]
Neil Stenhouse, lead author of a paper accepted for publication by the Bulletin of the American Meteorological Society, trashed the ability of American Meteorological Society meteorologists to understand global warming after they failed to validate Stenhouse’s mythical global warming consensus. Stenhouse’s criticism of AMS meteorologists in the UKGuardian puts dues-paying AMS members in the odd position of supporting and publishing the work of a non-scientist who is bashing their credentials.
Stenhouse, a psychologist and doctoral student in communications at George Mason University, emailed all full members of the American Meteorological Society for whom he could find an email address and asked them to fill out an online survey on global warming. More than 1,800 AMS meteorologists filled out the survey.
Only 52 percent said global warming is occurring and is caused mostly by humans – which is itself a far cry from having 52 percent say humans are causing a global warming crisis. The results were a huge blow to the mythical notion that all or nearly all scientists agree that humans are causing a global warming crisis. This is especially the case considering the AMS survey reflected the views of scientists with atmospheric science expertise. This wasn’t a survey of engineers or other non-atmospheric scientists with little if any atmospheric science expertise.
After I reported the results of this survey last month at Forbes.com, global warming activists went into damage-control overdrive, doing everything possible to downplay the results.
The Guardian, in an article published by Scott Abraham and Dana Nuccitelli (one an engineer, the other a solar scientist), was especially critical of most AMS members’ ability to understand and hold informed opinions on global warming issues. “Most AMS members are not climate researchers, nor is scientific research of any kind their primary occupation,” Abraham and Nuccitelli asserted.
Stenhouse piled on with additional criticism, downplaying in the Guardian article most AMS meteorologists’ ability to hold informed views on global warming. “You only see low levels of consensus in the sample if you also look at the views of people who are not climate experts,” Stenhouse told the Guardian.
Considering only 52 percent of AMS scientists believe humans are the main cause for some global warming, and considering the Guardian protested that only 13 percent of AMS meteorologists listed climate science as their primary area of expertise (as if having expertise in one area of atmospheric science precludes expertise in others), this leaves Stenhouse asserting that the term “not climate experts” applies to a majority of AMS members.
This might lead you to wonder why Stenhouse conducted the survey in the first place. Most likely, the psychologist lives in an echo chamber of like-minded global warming alarmists and expected the survey to reveal a broad alarmist consensus. Now that Stenhouse doesn’t like the survey results, he trashes AMS meteorologists’ ability to hold informed opinions on global warming, even as Stenhouse publishes the results of his study in an AMS-administered journal.
Stenhouse and the Guardian also attempted to isolate and give unique credibility to the small percentage of AMS meteorologists who self-identified their primary job focus as research. This, by definition, excludes almost all meteorologists who don’t work for government. Therefore, the survey results show that the majority of meteorologists whose jobs, salary and publishing activities are dependent on government funding and the perpetuation of the mythical global warming crisis say global warming is occurring and humans are the primary cause.
Wow, that’s quite a news flash. Meanwhile, for the vast majority of meteorologists who don’t fall within that group – those who aren’t beholden to government funding and who don’t have a funding dog in the global warming debate – only a minority say global warming is occurring and humans are the primary cause.
Stenhouse’s undermining of the credibility of AMS meteorologists should come as no surprise given that his job is to spread global warming alarm. The website for the George Mason Center for Climate Change Communication, under whose auspices he conducted the survey, states at the very top, “Climate change is the result of human actions and choices.”
Boy, that’s an objective point of view, especially for a psychologist who criticizes the informed opinion of atmospheric scientists.
Stenhouse’s website even goes a step farther, arguing that social activism is necessary to address human-caused climate change. “Limiting climate change – and protecting people and ecosystems to the degree possible from unavoidable changes in the climate – will require significant public engagement in the issue so that difficult decisions can be made by members of the public and policy makers,” Stenhouse’s website argues.
Is it any wonder that a psychologist/global warming activist would throw atmospheric scientists under the bus after he discovers they don’t share his global warming alarmism? Probably not. But what is really interesting is how the very AMS meteorologists whom Stenhouse is trashing are the ones whose professional dues support the journal that publishes Stenhouse’s paper. Granted, the survey results reported in the paper destroy the mythical global warming consensus, for which there is value in spreading the word.
Still, I suspect the AMS bureaucracy is going to get an earful from its member meteorologists on this one.
The Obamacare “disaster” is everywhere. Recently, a poll in Transom showed that 42% of Indpendents trust democrats in regards to healthcare, whereas 58% trust Republicans. Ben Domenech, senior fellow from The Heartland Institute, says the poll shows a major shift in attitudes; historically, democrats have been viewed in favor regarding health care.
In this podcast, Domenech warns of the coming “dominoes” of Obamacare implementation. In the coming year, we will likely see a spill-over of disruption into the employer-based insurance market. In fact, the American Enterprise Institute estimates we could see up to 50 million cancellations in the next year.
The first major domino of Obamacare was the website launch, healthcare.gov. Domenech says we’ve had two unexpected dominoes as well;
1. Epic policy cancellations
2. The non-functioning back end of heatlhcare.gov. In fact, the back end isn’t even fully built yet…
To illustrate the disastrous quality of Obamacare, we can turn to a poll by CBS who found that 84% of democrats said they wanted Obamacare changed or repealed. How astonishing!
Domenech predicts another domino, which he calls “doc shock”. He predicts that the large, quality-care hospitals like the Mayo Clinic, Cedars-Sinai, and M.D. Anderson will see an enormous amount of disruption (As well as the patients who need them). Most of the Obamacare exchange plans cut the top hospitals out of the networks because they’re too expensive to support. This means that families who need quality care for cancer or other such serious illnesses won’t be able to purchase health insurance via the exchange that covers what they need.
All-in-all, Obamacare will cause some major disruptions in the health care world; for doctors, hospitals, and patients alike.
Listen to the podcast in the player above.
Americans know the Internet, wireless, and broadband have revolutionized communications. In six years, nearly three quarters of Americans have become smart-phone or tablet users!
House Energy and Commerce Committee Chairman Fred Upton and Subcommittee Chairman Greg Walden understand America’s biggest communications disconnect.
They know the core of America’s communications law was written in 1934 based on 19th century technology and regulatory assumptions and is in serious need of overhaul. They know America has 1G communications law in a 4G world.
Chairmen Upton and Walden are showing much needed leadership in thoughtfully and diligently beginning the important multi-year task of modernizing and simplifying communications law for the 21st century.
They appreciate the risks of relying on 1934 technology law that has no living authors and technology assumptions that predate the TV, computers, and cellular, let alone today’s world of the Internet, broadband, smart-phones and apps.
They rightfully have concerns that outdated law that incorrectly presumes monopolies and that is inherently hostile to competition and innovation could snag 21st century growth and innovation in the legal blight, rubble and underbrush of the distant past.
Why force companies of today to run an obstacle course of obsolete technology law in order to grow and innovate? Much of this law has outlived its usefulness and is a drag, distortion, and discouragement of further communications growth and innovation.
So what’s the need for change? What isn’t working for a 21st century marketplace?
Technologically, legacy law assumes inefficient, analog, electrical, continuous-voltage function technology, the opposite of today’s hyper-efficient, digital, and discontinuous-voltage technology of computers.
This profoundly wrong technology predicate means the core law presumes all communications technologies have monopoly economic characteristics requiring preemptive, technology-specific, or “silo-ed” regulation.
A converged Internet world burdened with myopic silo-regulation inherently suffers from huge and unnecessary inefficiencies and impediments to competition and innovation.
Another fundamentally incorrect technology assumption of legacy law is that “place” matters.
In the monopoly wire line-centric world of the distant past, “place” was literally how and where the government regulated most everything.
Today, both mobile-wireless and the Internet make “place” largely irrelevant. People are no longer tied to a wired place and companies can access the Internet virtually anywhere.
Simply, people expect to be able to communicate and access the Internet from anywhere, when legacy law still assumes they somehow should be tethered to a specific “place.”
Economically and competitively, much of legacy 1934 law still incorrectly presumes monopolies still exist.
Today there is no telephone monopoly when 75% of Americans have chosen a competitive alternative. And there’s no cable monopoly when 46 million American households subscribe to a cable competitor.
Incorrectly assuming monopolies exist, means legacy law also incorrectly presumes monopoly economics exist. That’s despite the important change in policy toward competition in the 1996 law update and the advent of digital competitive economics.
That profound inherent economic conflict essentially means American communications law is at war with itself.
While legacy law assumes Government network unbundling needs to be done via regulation, digital technology naturally unbundles itself into infinitely-interchangeable building-block technologies.
Tellingly, IP technology enables engineers, and often users, to easily and quickly configure, devices, transmission technologies, and networks before a regulator can even collect their thoughts.
Simply, obsolete law assumes competition is not possible without Government, whereas modern law would recognize that digital and Internet technologies, with their ever-increasing cost efficiencies, naturally enable robust facilities-based broadband competition.
Legally, the FCC increasingly is finding obsolete law dysfunctional in the 21st century. It loss of authority in Comcast v. FCC, and its upcoming likely partial loss of authority in Verizon v. FCC, increasingly leaves the FCC with square pegs to put in round holes.
To stay relevant long term, expect the FCC to work cooperatively with Congress in updating the Communications Act.
As for spectrum, since there is no legal requirement for modern management, accountability or accounting of Government spectrum use, it hoards over two-thirds of this critical natural resource.
This wasteful Government spectrum hoarding denies the private sector the spectrum it needs to keep pace with exploding demand for mobile bandwidth. This benign neglect is becoming a growth cap on the mobile revolution.
In sum, the need for modernizing America’s communications law is urgent and undeniable.
Legacy law is not working for the 21st century marketplace; increasingly it is working against it.
[Originally published on The Daily Caller]
On the same day that the Los Angeles City Council moved to regulate e-cigarettes, the National Center for Public Policy Research’s Jeff Stier testified at a New York City Council Health Committee hearing on a similar measure being rushed through the New York City Council.
In his testimony, Stier encouraged council members to think twice about whether it is in fact “prudent” to extend New York City’s ban on smoking in public places to include e-cigarettes:
I would caution you that this is not the prudent thing to do. The prudent thing to do here is to help cigarette smokers quit. Rushing to judgment here could have serious, unintended consequences that you need to be aware of. It will stop people from quitting smoking. E-cigarettes are not a gateway to smoking. The data does not show that. E-cigarettes are a gateway to quitting smoking.
E-cigarettes, which do not produce smoke, have been a boon to those who have tried to quit smoking but have failed.
“Nicotine,” Stier explains, “is addictive, but not particularly harmful, especially at the levels consumed by smokers or users of e-cigarettes, who are called ‘vapers’ for the vapor, rather than smoke, emitted by e-cigarettes.”
“Nicotine’s bad reputation should be attributed to its most common delivery device, cigarettes,” says Stier. “Nicotine itself is about as dangerous as the caffeine in soda. Along the same lines, while too much soda can cause weight gain, nobody seriously suggests that caffeine causes obesity. Similarly, e-cigarettes provide the nicotine and the habitual activity of smoking, without the danger of burning tobacco.”
“Mayor Bloomberg and his nanny state allies in New York City and Los Angeles have steam coming out of their ears about e-cigarettes. Here is a product created by private-sector innovation that is doing what many hundreds of millions of dollars of government spending, costly litigation, addictive excise taxes, warning labels and punitive regulation have been unable to do: help cigarette smokers quit happily.”
“Regulators understand that in order to maintain not only their huge budgets, but their basis for authority to control both private-sector businesses as well as personal decisions, they must demonize, delegitimize, and defeat e-cigarettes every step of the way,” Stier says.
“Some, without any basis in science, allege that e-cigarettes are a ‘gateway’ to smoking. But initial studies, as well as empirical evidence, show that e-cigarettes are a major gateway away from, not toward, smoking. For all the heated rhetoric, there’s little dispute in the scientific community: those who quit smoking cigarettes and switch to e-cigarettes reap immediate as well as long-term health benefits. And those improvements are dramatic.”
Stier concludes: “Regulations that treat e-cigarettes the same as their deadly predecessor will have the unintended consequence of keeping smokers smoking. Quitting nicotine use altogether is the best choice. But for those who chose not to, or find it too difficult, e-cigarettes are a potentially life-saving alternative.”
Outgoing New York Mayor Michael Bloomberg, nicknamed “Nanny Bloomberg” by many for his use of government tools to influence what private citizens eat and drink, supports the New York proposal. Bloomberg’s administration imposed New York City’s ban on public smoking in 2003.
Like Los Angeles and New York, Chicago is considering banning the use of smokeless e-cigarettes anywhere in the city tobacco smoking is banned. The proposed ban is supported by Mayor Rahm Emanuel. The sale of e-cigarettes to minors is already appropriately illegal under Illinois state law.
The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from individuals, less than four percent from foundations, and less than two percent from corporations. It receives over 350,000 individual contributions a year from over 96,000 active recent contributors.
Contributions are tax-deductible and greatly appreciated.
[Originally published on Pundicity]