You are on page 1of 16
COMPETITIVE ENTERPRISE INSTITUTE FEATURED ARTICLES VOL. 28, NO. 4 | WINTER 2015 As Time Passes, CEI
COMPETITIVE ENTERPRISE INSTITUTE FEATURED ARTICLES VOL. 28, NO. 4 | WINTER 2015 As Time Passes, CEI

COMPETITIVE ENTERPRISE INSTITUTE

FEATURED ARTICLES

VOL. 28, NO. 4 | WINTER 2015

As Time Passes, CEI Carries On

6

IAIN MURRAY

Why Liberals Secretly Love Corporations

10

BILL FREZZA

New Zealand’s Free Market Triumph

  • I n the opening of Dylan Thomas’s verbally illustrative play “Under Milk Wood,” the First Voice repeats, “Time passes. Listen. Time passes.” Time has passed indeed. And I am out of time as leader of the Competitive Enterprise Institute. I was not the first and I will not be the last leader of this merry band of warriors. And to whom- ever is next, whether wearing pants or skirts (or both!) I say welcome and enjoy it. You inherit a genuinely unique group of thinkers and doers. To put ideas into action, CEI has always been more than “just a think tank.” We take a full-service approach to public policy— combining rigorous policy work with an activist’s ability to market, educate, and propagate our research findings and prin- ciples. We are always willing to explain,

to anyone who will listen why economic liberty make us all better off. But we do not stop there. We engage with policy makers, build coalitions, file Freedom of Information Act disclosure requests, broadcast our mes- sage near and far, and, when necessary, sue to ensure our economic future remains grounded in these timeless principles. The past decades have seen the unique and powerful institution that is CEI grow into the major policy player it is today. It has proved it can operate effectively, with limited resources, and punch above its weight. So keep on trucking, CEI. This too is just another season. Your next president will arrive already knowing what you are capable of.

—Lawson Bader

12

FRED L. SMITH, JR. AND MARC SCRIBNER

Lessons for Business Lead- ers from the Near-Death and Revival of America’s Railroads

ALSO IN THIS ISSUE

Obamacare vs. Beer, by Michelle Minton

5

Undermining Encryption, by Ryan Radia

8

Taxpayer-Funded Anti-BPA Activism Is the Real Danger, by Angela Logomasini

9

The Good, the Bad, and the Ugly

14

Media Mentions

15

End Notes

16

Wayne Crews’s Essay Recognized as Part of Atlas Network’s 2015 Sir Antony Fisher International Memorial Award

What America’s Decline in Economic Freedom Means for Entrepreneurship and Prosperity edited by Donald J. Boudreaux
What America’s Decline
in Economic Freedom Means for
Entrepreneurship and Prosperity
edited by Donald J. Boudreaux
Fraser Institute
Mercatus Center at George Mason University
2015

A collection of essays on the economic chal-

lenges facing the United

States, What America’s Decline in Economic

Freedom Means for

Entrepreneurship and

Prosperity, published by Canada’s Fraser Institute and edited by George Mason University economics professor Donald Boudreaux, has been named winner of the Atlas Network’s 2015 Sir Antony Fisher International Memorial Award, which “rec- ognizes the organization that published a book, magazine, report, monograph, or study that, in the opinion of a panel of external judges, has had demonstrable impact and made the greatest contribution to public understanding of the free society.”

CEI Vice President for Policy Wayne Crews contributed the essay, “One Nation, Ungovernable? Confronting the Modern Regulatory State” to the book. In his chapter, Crews provides a roadmap for

how to assess and rein in federal regulation

by highlighting the tools available to policy makers to bring about regulatory reform. He also explains the consequences of too much executive branch power. Capturing both data and analysis to provide a snap- shot of the ever-growing regulatory state, Crews offers practical steps to dial back America’s regulatory burden and restore constitutional constraints on government. Atlas awarded the winning organization a $10,000 prize and recognized it at the Liberty Forum and Freedom Dinner in New York City, November 11-12, 2015.

FROM THE ACTING PRESIDENT

FROM THE ACTING PRESIDENT CEI Looks Ahead to 2016 by Gregory Conko F our years ago,
FROM THE ACTING PRESIDENT CEI Looks Ahead to 2016 by Gregory Conko F our years ago,
FROM THE ACTING PRESIDENT CEI Looks Ahead to 2016 by Gregory Conko F our years ago,

CEI Looks Ahead to 2016

by Gregory Conko

F our years ago, I had the privilege—and the daunting task—of searching for a new president

to lead CEI, when founder Fred Smith decided it was time for him to step down. Our six-person search committee set out to find an intelligent and char- ismatic leader with a positive vision for defending individual liberty and free enterprise, and the focus to lead us toward achieving those goals. We pored over scores of resumes, held dozens of interviews with many highly qualified candidates, and eventu- ally selected Lawson Bader as our unanimous choice to be the next CEI president. Following an organization’s founder as president is a formidable job. But Lawson rose to the chal- lenge, and he proudly led CEI in some of its most important battles: fighting the Obama administra- tion’s energy rationing policies, the National Labor Relations Board’s onerous employment rules, the Treasury Department and Securities and Exchange Commission’s assault on America’s banking and finance industries, and many other expansions of federal power. Under Lawson’s leadership, CEI took our Obamacare legal challenge all the way to the Supreme Court. And Lawson laid out an ambitious vision for a bigger, more effective CEI as we negoti- ated, and recently completed, a successful merger with the Center for Class Action Fairness, a move that will make CEI’s litigation program even more effective. In November, we said a fond farewell to Lawson, as he rose to yet another challenge: replacing his dear friend Whitney Ball as the head of DonorsTrust. We, of course, will miss Lawson. But my colleagues and I are also eager to turn the page on a new chapter in CEI’s future, as our work continues. And we mean to be every bit as feisty and aggressive as CEI has been for the past three decades. We will continue to implement our strategic plan to derail implementation of the EPA’s destructive and

unconstitutional power plant emissions rules. We will continue to expose and push back against the Obama administration’s lawless Operation Choke Point, which uses threats of harassment by bank regulators to shut down legal but politically unpopu- lar businesses, such as small dollar lenders, pawn shops, and gun dealers. We will continue to battle the Transportation Security Administration’s intrusive and ineffective airline passenger screening practices. And in time, we expect our legal challenge to the constitutionality of the Consumer Financial Protection Bureau to land CEI back in the Supreme Court. We are working closely with House and Senate leaders from both political parties, and with state and local government officials, on a raft of reform measures to roll back aggressive regulatory poli- cies. In the current Congress alone, more than half a dozen pieces of legislation to rein in the regulatory state and make federal agencies more accountable to the American people incorporate ideas devel- oped and promoted by CEI scholars. Our devoted and capable staff will not rest until regulatory reform proposals like these are enacted into law and we succeed in our mission of removing government- created barriers to free enterprise, innovation, and prosperity. In short, we at CEI have an ambitious agenda, and we are eager to get on with the business of implementing it. In my 21 years at CEI, I have never before seen the organization more focused or more eager to bring about positive change. Sure, we may have to look for a new president. But we won’t let that slow us down. We are determined to find a can- didate who will challenge us to work even harder, and who will lead CEI in many more of the important battles to lift the heavy burden of government from the shoulders of America’s consumers and producers. Stay tuned.

Ph (202) 331-1010 Fax (202) 331-0640 info@cei.org ISSN#: 1086-3036
Ph
(202) 331-1010
Fax
(202) 331-0640
info@cei.org
ISSN#: 1086-3036
Publisher Lawson Bader Editor Marc Scribner Editorial Director Ivan G. Osorio Contributing Editor Keara Vickers
Publisher
Lawson Bader
Editor
Marc Scribner
Editorial Director
Ivan G. Osorio
Contributing Editor
Keara Vickers

The CEI Planet is produced by the Competitive Enterprise Institute, a pro-market public interest group dedicated to free enterprise and limited government.

CEI is a non-partisan, non-profit organization incorporated in the District of Columbia and is classified by the IRS as a 501 (c)(3) charity. CEI relies upon contributions from foundations, corporations and individuals for its support. Articles may be reprinted provided they are attributed to CEI.

CEI Merges with CCAF By Ted Frank O n October 1, the Competitive Enterprise Institute completed

CEI Merges with CCAF

By Ted Frank

O n October 1, the Competitive Enterprise Institute completed a merger with the Center for Class Action Fairness (CCAF), a public interest law

firm, which I founded in 2009 to challenge abusive class action litigation practices that harm consumers and shareholders. The merger combines CEI’s and CCAF’s proven track records in promot- ing free markets and challenging overregulation, creating a unique legal program dedicated to protecting the rule of law and supporting economic freedom, prosperity, and innovation. Founded in 1984, CEI has grown into an effective advocate for free - dom on a wide range of policy issues, including energy and environment, business and finance, technology, telecommunications, and food and drug regulation. CEI has long fought cronyism, rent-seeking, and other abuses of government power. Under the supervision of General Counsel Sam Kazman, CEI’s litiga- tion program has a long history of success, including establishing major new precedents for combating regulations that restrict consumer choice, stifle innovation, and limit competition. From its constitutional chal- lenges to Sarbanes-Oxley, the Big Tobacco Deal, and lethal federal fuel economy standards, CEI continues to develop new approaches to fight overregulation. CCAF has won tens of millions of dollars for consumers and sharehold- ers in fighting class action abuse. This work fits right in with CEI’s mission. By winning some precedent-setting cases, we seek to drastically reduce trial lawyers’ incentives for bringing abusive class action suits that yield no real benefit to the plaintiffs on whose behalf they’re supposedly filed and for structuring settlements in ways that benefit attorneys at the expense of their clients. For example, we won an important Sixth Circuit appeal in 2013 in the case In re Dry Max Pampers Litig. The proposed class action settlement, over alleged defects in a new line of diapers, would have paid attorneys $2.7 million, while the plaintiffs only got the opportunity for a refund—if they had not already received a refund and had retained the receipt and bar code from a years-old purchase of diapers. CCAF’s successful objec- tion led the trial lawyers to drop their meritless litigation and walk away with nothing. Moreover, the court established a precedent that attorneys should not be the “primary beneficiary” of class action settlements, a principle we have fought for since our founding and successfully applied to many other cases. Now the merger will give CCAF the freedom to take on many cases we couldn’t have litigated otherwise, and we look forward to our renewed focus. I will continue to lead the CCAF team and its pro bono advocacy against unfair class action procedures and settlements. When plaintiff classes receive tiny sums or worthless discount coupons while their attor- neys reap multi-million dollar windfalls, CCAF intervenes to fight for fair- ness and against such exploitation.

Ted Frank (ted.frank@cei.org ) is a Senior Attorney and Director of CEI’s Center for Class Action Fairness.

R.M.

FREEDMAN

SOCIETY

Help the Competitive Enterprise Institute carry on its work for generations by joining the R.M. Freedman society.

In 2013, CEI established the R.M. Freedman Society in honor of Robert M. Freedman, a business owner from West Bloomfield, Michigan, who placed CEI in his estate and, in 2009, sadly passed on and gave CEI its first legacy gift. We named the society in appreciation of his generosity.

Many of CEI’s extended family choose to include CEI in their estate plans through:

• Bequests, • Charitable Remainder Trusts, • Charitable Lead Trusts, or as a • Life insurance beneficiary.

If you make the decision to include CEI in your estate plans, please reach out and let us know.

While these sorts of decisions should be undertaken with the help of an estate planner, Lauren Avey and Al Canata of CEI can be a resource to you. You can reach them anytime at 202-331-1010.

CEI’s John Berlau Speaks on the Future of Finance Photo courtesy of Money 2020 CEI Senior
CEI’s John Berlau Speaks on the Future of Finance Photo courtesy of Money 2020 CEI Senior

CEI’s John Berlau Speaks on the Future of Finance

CEI’s John Berlau Speaks on the Future of Finance Photo courtesy of Money 2020 CEI Senior

Photo courtesy of Money 2020

CEI Senior Fellow John Berlau recently spoke at three events where he got to interact with flesh-and-blood innovators and entrepreneurs, learn about their revolutionary new products and services and the frustrating regulations that get in their way. Money20/20 is the world’s

premier payments technology exhibition. Held this year October 25-28 in Las Vegas, it featured technologies from mobile wallets to cryptocurrency to clothing embedded with “Internet of things” payment chips. Berlau spoke on the panel, “Dodd-Frank: Five Years Later.” He discussed the threat to innovation from Dodd- Frank and its spawn, the Consumer Financial Protection Bureau (though some audience members had some horror stories of their own). The AltFi Global Regulatory Forum 2015, held on November 4 in Washington, D.C., featured perspectives

from entrepreneurs and government officials from around the world on the growth of crowdfunding and peer-to-peer lending. Berlau appeared on panel on U.S. regulation. As he noted, the equity crowdfunding liberalization provisions of the Jumpstart our Startups (JOBS) Act of 2012 are a good first step, and are finally being implemented by the Securities and Exchange Commission. However, many rules remain too burdensome for entrepreneurs and investors, which calls for further deregulation in a JOBS Act 2.0. On November 18, the Financial Services Innovation Coalition held a forum on Capitol Hill on the new online options available to small business borrowers. As Berlau noted, new online lending platforms provide better options for entrepreneurs than high-cost alternatives like financing a new business through credit cards (which many entrepreneurs, including Google’s founders, have done). Berlau pointed out that these lenders are already regulated by numerous federal and state bodies, and cautioned about new regulations that would shackle financial innovation that has proven beneficial to small entrepreneurs.

CEI’s Marc Scribner on the Future of Transportation

On November 6, CEI Fellow Marc Scribner presented at the Preserving the American Dream Conference in Austin, Texas. The annual conference, organized by the American Dream Coalition, focuses on transportation and land-use policy from a free market perspective. Scribner discussed state legislative and regulatory activity with

respect to self-driving cars, and potential threats facing this emerging technology. Scholars from the Cato Institute, Reason Foundation, Heritage Foundation, and other free market think tanks also spoke at the conference. Rep. Blake Farenthold (R-Tex.) delivered the keynote address.

CEI’s Ryan Radia Discusses the Future of Music

On December 8, CEI Associate Director of Technology Studies Ryan Radia participated in a panel discussion on Capitol Hill of U.S. copyright law as it applies to the music industry, along with other policy experts and industry representatives. The panelists discussed options for updating laws in ways that will benefit consumers and artists alike. In a keynote speech to kick off the event, Rep. Blake Farenthold (R-TX) explained why Congress should pay attention to this issue. With the music industry changing rapidly as it seeks to adapt to

CEI’s John Berlau Speaks on the Future of Finance Photo courtesy of Money 2020 CEI Senior

emerging technologies and new broadcasting platforms, outdated policies need to be reexamined. Several panelists agreed that Congress should revisit the existing disparity in how recording artists are paid based on the type of medium. For instance, when a song is played by either a radio station or through an online streaming service, both the songwriter and the recording artist are paid a royalty, but different broadcasting media—terrestrial radio, satellite radio, and online streaming—pay different fees for the same content. As the panelists noted, Congress can promote innovation and creation in the music industry by enacting laws that ensure musicians can charge market- based rates for their work.

Obamacare vs. Beer BY MICHELLE MINTON P resident Obama likes beer. He drinks it, he brews

Obamacare vs. Beer

BY MICHELLE MINTON

P resident Obama likes beer. He drinks it, he brews it, and he’s been

named the presidential candidate people would most like to have a drink with. However, his signature health care law might change how we can enjoy a cold one when ordering at a restaurant. A little-known provision within the Affordable Care Act (“Obamacare”) requires chain restaurants with 20 or more locations to list calorie infor- mation for “standard menu items,” including each available beer, by December 2016. Testing the nutritional content of a single beer could cost as much as $1,000, according to the Beer Institute, a trade association represent- ing brewers. Very large brewers producing millions of barrels of the same few brands each year can easily absorb that cost. But smaller brewers with large selections could see costs quickly add up. And it isn’t just calories. Other nutritional information, including total carbohydrates, sugars, and proteins, must be made available in writing upon a customer’s request. That means many craft brewers will miss out on an important opportunity to grow their business. For a craft brewer, getting a beer onto the menu of a major chain restaurant like TGI Fridays is a huge boost. However, it doesn’t make sense for them to test every variety of beer they make, spending many thousands of dollars before they even make it onto a chain restaurant’s menu. Restaurants interested in carry - ing a craft beer may not want to wait for testing to be done and will move on to beers that already have nutritional information. In addition to the cost and lost opportunity for smaller brewers,

the ACA labeling

requirement threatens

to exacerbate regu- latory overlap and sow confusion, Paul Gatza, director of the Brewers Association, which represents smaller brewers, told me. The Alcohol and Tobacco Tax and Trade Bureau (TTB) is the agency that normally handles regulation of beer, including labeling, but the ACA menu- labeling rules bring brewers under the authority of the U.S. Food and Drug Administration (FDA). “We would like to see a harmoniza- tion of the differences between FDA and TTB in how they handle calories,” Gatza said. The Brewers Association, along with a coalition of other alcohol trade orga- nizations, is asking the FDA for clearer guidance on the new rules. “The FDA allows an exact number of calories for menus and menu boards when the calorie number is on the label, but only allows rounding to the nearest 10-calo- rie increment if not,” said Gatza. This is different from the TTB’s requirement, which allows for rounding to the near- est calorie increment. For example, if a restaurant has a beer with 167 calories, they have to list it as having 170 under FDA’s menu-labeling law. However, some brewers already have calories listed elsewhere, using the TTB’s method of rounding to the nearest calorie. While Gatza admits that the risk is minimal, there is “an opening for these multiple calorie counts for a specific beer and serving size to cause confusion and, theoretically, exposure to a nuisance suit,” he said. The Brewers Association is hoping to work with the FDA to allow for

Obamacare vs. Beer BY MICHELLE MINTON P resident Obama likes beer. He drinks it, he brews

“reasonable tolerances,” which func- tionally means allowing the numbers to fall within a certain range so that brewers can calculate the approximate calories, carbs, sugars, etc., based on the alcohol content of any particular beer. This would allow the Brewers Association to create a database of ranges for brewers to use for each beer style, without the need to go through costly nutritional testing for every beer they make. According to Gatza, “that would be a solution that wouldn’t expose the smallest brewers to large expense, tough decisions about whether to stay in chains, or providing inaccurate information.” Unless the FDA provides greater flexibility within the new rules, all of this may add up to increased risks and costs to small brewers. While consum- ers at chain restaurants will certainly see more information on their menu as a result of the new rule, but they might also notice fewer options when it comes to the selection of beer.

Michelle Minton (michelle.minton@cei.org) is a Fellow at CEI. A version of this article originally appeared at RealClearPolicy.

Why Liberals Secretly Love Corporations BY IAIN MURRAY I f there is one bugbear that stands
Why Liberals Secretly Love Corporations BY IAIN MURRAY I f there is one bugbear that stands

Why Liberals Secretly Love Corporations

BY IAIN MURRAY

I f there is one bugbear that stands as paramount for American pro- gressives, it is the corporation. Corporations are viewed as amoral at best, immoral at worst, exploitative of their workers, dismissive of environ- mental or social concerns, and existing purely in the name of profit. They are routinely blamed for the great reces- sion, global warming, and income inequality. So why are progressives and President Obama’s Department of Labor pursuing policies that will lead to the creation of more and bigger cor- porations? Because the political Left’s paymaster, organized labor, needs corporations to exist and thrive. Corporations grew up because entrepreneurs need to find investors to help finance their businesses. That in turn, requires them to keep transac- tion costs low, which requires them to hire employees rather than contract for each individual routine transaction.

That’s the foundation of the corporate

structure of owners, management, and

workers. For the past century, this structure has been under attack by progressive activists, who have long viewed corpo- rations as ideological battlegrounds, with management arrayed against workers. In fact, much of the Naderite attack on corporations was based on the idea that management did not act in the owners’ interest. Ironically, the National Labor Relations Act and similar Depression- era laws supported by progressives set this structure in stone, in the name of “protecting” workers against manage - ment. Certain aspects of the employ - ment relationship were guaranteed by government enforcement—including overtime, unemployment insurance, paid time off, opportunity for union representation, and other requirements on employers. Before the modern corporation, economies were characterized by what Adam Smith called “the system of

natural liberty,” where businesses were small in scale and owners invested their personal assets into the venture and freely contracted with other busi- nesses and individuals for services. This model lost out to the corporation because of the transaction costs related to identifying and contracting with other businesses to perform a service for you. It was far easier, and more reliable, to directly employ someone to do the job, even when required to offer the protections imposed by law. That’s why the corporation survived for most of the last century despite the increased costs of hiring. Corporations also reduced transac- tion costs within their own organiza- tions—and the prospect of internal strife among workers—by devising innovative new business arrangements. The franchising business model turned many workers into potential owners. New management models turned other workers into junior managers. The “us versus them” model that created labor strife broke down, and union

The dues paid by employees for union representation— which they may not even want—makes large corporations
The dues paid by employees for union representation— which they may not even want—makes large corporations

The dues paid by employees for union representation— which they may not even want—makes large corporations a huge source of funds for political campaigns.

representation in the private sector plummeted. However, in recent years the costs of contracting with another party have been coming down. Corporations are being replaced by networks or platforms that enable two-sided mar- kets, where the purchaser of a service can buy it from a small-scale supplier rather than a large corporation. The most famous example is Uber, which provides a network matching riders to drivers, without having to go through a taxicab firm. That’s why Uber, despite having some corporate features, is a very different animal from a taxicab company. One might think that given the Left’s hatred of corporations, progres- sives would cheer this development. Not so. Instead, many view Uber

as exploitative, perhaps even more so than a 1930s-era corporation, because it deprives workers of New Deal-era legal protections. The Obama administration agrees. In response, it is quietly working to replace the long-established legal defi- nition of what makes an independent contractor with a new one, announced by blog post over the summer. Previously, workers who set their own hours and had significant con- trol over the way they worked were regarded as independent contractors, free from the requirements of much employment law. Now, however, the Department of Labor (DOL) has lowered the bar for a test of employ - ment to simply getting a majority of your income from one source. So the woman who drives passengers through a ride-sharing app to earn some extra income while caring for a sick relative is arguably no longer a contractor, but an employee of the app firm. Meanwhile, the administration is also bent on reinforcing the old management-worker divide. New DOL overtime rules are likely to eliminate huge swathes of junior-management positions, harming aspirational young workers, as employers cut back on or even eliminate overtime opportunities. The National Labor Relations Board likely will rule soon that franchisor companies are “joint employers” of their franchisees’ workers, making them responsible for day-to-day matters like individual workplace conditions and working hours, a burden that would

make franchising a much less attractive business model for companies seeking to expand. In the end, this suite of regulatory actions actually reinforces the old cor- porate structure that was set in place in the 1930s. The result is more large corporations based on an “us versus them” paradigm that pits manage - ment against workers—in other words, exactly the corporate structure the Left claims to hate. There are two reasons why the Left wants to see this structure continue. First, it gives government agencies immense power over employment conditions. Second, large corporations are easier to unionize than smaller companies. And the dues paid by employees for union representation— which they may not even want—makes large corporations a huge source of funds for political campaigns. It is the small company and the aspiring entrepreneur that will be most hurt the most by the administration’s actions. If the administration persists, it will end some magnificent opportuni- ties for innovation, cost reduction, and consumer protection in the American economy (such as network apps’ feed- back mechanisms). And it will do so by propping up its supposed biggest enemy, the 1930s-style corporation.

Iain Murray (iain.murray@cei.org) is Vice President for Strategy at CEI. A version of this article originally appeared in National Review.

The dues paid by employees for union representation— which they may not even want—makes large corporations
The dues paid by employees for union representation— which they may not even want—makes large corporations

Support I, Whiskey on Indiegogo

Campaign launching Monday, July 13th www.indiegogo.com

Undermining Encryption BY RYAN RADIA F or most Americans, communicat- ing over the Internet has become
Undermining Encryption BY RYAN RADIA F or most Americans, communicat- ing over the Internet has become

Undermining Encryption

BY RYAN RADIA

F or most Americans, communicat- ing over the Internet has become

routine. We now correspond elec- tronically with colleagues, loved ones, friends, and even doctors on platforms ranging from email to Snapchat. But criminals have followed us online, and cyber attacks are reported almost daily. Efforts to safeguard our digital data from bad actors can seem futile. Fortunately, technology can dramatically reduce the risks we face from hackers, identity thieves, and even foreign spies. But some top government officials want to under- mine a crucial security technology:

encryption. Encryption translates valuable information into seemingly meaning- less gibberish that can be decrypted only with a private key. E-commerce websites have long used encryption to prevent criminals from swiping their customers’ credit-card informa- tion as it travels between computers. More recently, an encryption protocol called HTTPS has taken off, making it much harder to snoop on our brows- ing habits. Encryption does more than protect information as it traverses the Internet; it protects it on the devices we use every day. A typical smartphone now contains powerful processors that can quickly encrypt and decrypt data. Losing a phone or laptop no longer means worrying about who might misuse the private information stored on it — assuming the device was prop- erly encrypted, meaning users must enter a passcode before each use. However, some government officials claim that encryption helps criminals break the law with impunity. In a world of ubiquitous encryption, the argument goes, police will no longer be able to quickly search a suspected drug dealer’s smartphone

to find the identity of his sup-

plier. Instead, police may need

a passcode before they can access information on the device. A similar challenge exists on the Internet, where a growing number of “zero-knowledge” services host encrypted data that cannot be decrypted without the user’s key. Federal Bureau of Investigation Director James Comey is per- haps the nation’s leading critic of encryption. In numerous speeches and hearings, he has argued that when the police encounter encrypted data on a suspect’s smartphone or online account, they often can’t get the information they need to prevent crimes or catch criminals. Therefore, Comey has implored companies such as Apple and Google to design their platforms to ensure law enforcement can access a user’s data even if she won’t divulge her passcode. So far, major tech companies have resisted these demands—for good reason. Today, an encrypted iPhone or Android device is typically accessible only with the user’s pass- code; neither the company behind the platform nor the wireless carrier holds the key. Introduce a mechanism for law enforcement to get around encryption, however, and it’s all but certain that hackers, criminals, and spies will soon figure out how to exploit the same mechanism. Instead of pressuring companies to “voluntarily” redesign their devices and platforms, the administration should welcome the adoption of strong encryption—especially within govern- ment agencies, many of which have yet to encrypt sensitive files. Even a modest flaw can render a form of encryp- tion practically useless, as the Allies proved during World War II when they cracked Nazi Germany’s Enigma machine codes. Given the mounting cybersecurity threats we face, is this really a tradeoff worth making?

Undermining Encryption BY RYAN RADIA F or most Americans, communicat- ing over the Internet has become

Aside from a handful of anecdotes, law-enforcement officials have shown scant empirical evidence that encryp- tion is meaningfully frustrating criminal investigations. Even if encryption were to become a serious roadblock, there are alternatives to weakening encryption. For example, Congress could consider criminalizing a per- son’s “willful refusal to comply with a decryption order,” as law professor Orin Kerr has suggested. Thankfully, encryption sup- porters have pushed back on this issue with some degree of success. As The Washington Post recently reported, the Obama administra- tion has declined to push for a law to force companies to decrypt user data—for now. Yet the administration will continue its “conversations with industry,” according to Comey—so the prospect that officials will continue to strong-arm companies to weaken their encryption behind closed doors remains likely. Instead of imagining a worst-case scenario where criminals can wreak havoc with impunity, law enforcement should use the myriad tools it already possesses to investigate and prosecute criminals. Meanwhile, the government should leave encryption alone.

Ryan Radia (ryan.radia@cei.org) is Associate Director for Technology Studies at CEI. A version of this article originally appeared at RealClearPolicy.

Taxpayer-Funded Anti-BPA Activism Is the Real Danger BY ANGELA LOGOMASINI A larmist claims about the chemical

Taxpayer-Funded Anti-BPA Activism Is the Real Danger

BY ANGELA LOGOMASINI

A larmist claims about the chemical Bisphenol A (BPA) have reached

an absurd level. According to the website Treehugger.com, a new study shows that exposure to BPA can make humans lazy and eventually obese from lack of exercise. Such claims con- tinue to populate the Internet thanks to taxpayer funded junk-science studies about this chemical. BPA has been used safely for more than five decades to make hard clear plastics (polycarbonate plastics) and epoxy resins that line the inside of steel and aluminum cans. There are no veri- fied cases of anyone suffering ill effects from BPA exposure from consumer products, and numerous comprehen- sive scientific reviews have found BPA safe at current typical exposure levels. For example, the U.S. Food and Drug Administration concluded earlier this year that “BPA is safe at the current levels occurring in foods,” and the European Food Safety Authority “con- cluded that BPA poses no health risk to consumers of any age group (including unborn children, infants, and adoles- cents) at current exposure levels.” Yet activists keep an alarmist anti- BPA drumbeat alive by trumping up small and often poorly designed stud- ies that allege potential health effects based on questionable data. Many of these studies simply report weak and largely meaningless associa- tions—which do not demonstrate cause and effect—between BPA and various health ailments. Other studies are based on dosing rodents with massive amounts of BPA— levels that are not relevant to human exposures—to trigger health effects. Moreover, unlike rodents, humans quickly metabolize BPA and pass it out of the body before it can have any effects. The recent study highlighted by

Treehugger is another example of one of these irrelevant rodent studies.

These studies continue to pour

into the news cycle, thanks in part to funding by the National Environmental Institute Health Sciences, a division of the National Institutes of Health. Between 2010 and 2012, NIEHS doled out at least $172 million on BPA research, according to a Citizens Against Government Waste tally. “The impetus” for this funding, according to NIEHS director Linda

Birnbaum, was a “workshop” involv -

ing 38 “experts” in BPA science, sponsored by NIEHS, several other federal agencies, and the left-of-center group Commonweal. These research- ers met in Chapel Hill, North Carolina, in 2007, where they developed what has become known as the “Chapel Hill Consensus Statement,” which calls for more funding of BPA research. Birnbaum attended as an employee of the Environmental Protection Agency

before she was appointed to NIEHS in

who stood to gain financially by exag- gerating BPA risks in order to build momentum for government support. In addition to wasting tax dollars, this activist-driven research affects markets and regulation. For example, Target, Walmart and other retailers have introduced programs to pressure suppliers to phase out BPA and other chemicals from consumer products. Similarly, in 2104, Sen. Edward Markey (D-Mass.) and Rep. Lois Capps (D-Calif.) introduced the Ban Poisonous Additives Act (S. 2572, H.R. 5033), which would ban BPA resins for good packaging. Calls to ban or phase out BPA ignore these products’ benefits. For example, steel cans were once lined with tin. But tin lining can corrode, compromising the packaging and eventually letting in air and poten- tially dangerous pathogens such as Clostridium botulinum, which produces deadly toxins. BPA resins solved this problem in

  • 2009. the 1960s, when it was used to coat cans to prevent food contamination from bacteria and rust. This also helped reduce food spoilage, while main- taining food flavor and quality and extending shelf life. Today, unless seri- ous dents perforate a seam and let in air, the risk of contamination in canned foods is very low. In fact, during the past 30 years, there have been no cases of foodborne illness outbreaks related to the failure of can packaging. It’s time to differentiate between science and activist-funded agendas. We can learn from science, but will become victims of bad public policy if we continue to allow government- funded activism.

The meeting didn’t offer an objec- tive review of the issue, but instead brought together like-minded research- ers seeking to advance a political agenda. One of those researchers, Frederick vom Saal, has built his career making a host of health claims about BPA using questionable techniques and exaggerating the results. In fact, vom Saal, who was on the workshop’s organizing committee, has advocated for a BPA ban, and is on “a quest to get endocrine disrupters, such as BPA, out of daily use,” according to a profile of him in a University of Missouri-affiliated newspaper. Perhaps not coincidentally, at least 21 of the Chapel Hill Consensus contributors have worked on NIEHS- funded studies addressing BPA risk, including vom Saal, who has coau- thored at least 14 such studies. There is an apparent conflict of interest among the Chapel Hill Consensus scientists

Angela Logomasini, Ph.D. (angela. logomasini@cei.org) is a Senior Fellow at CEI. A version of this article originally ap- peared in The Washington Examiner.

New Zealand’s Free Market Triumph BY BILL FREZZA A mong stories of economic suc- cess, New
New Zealand’s Free Market Triumph BY BILL FREZZA A mong stories of economic suc- cess, New

New Zealand’s Free Market Triumph

BY BILL FREZZA

A mong stories of economic suc- cess, New Zealand stands out.

Two decades ago, it dramatically transformed itself from a welfare state saddled with crushing public debt, rampant inflation, and a closed and moribund economy, to become one of the freest, most prosperous, and open countries in the world today. How did they do it? Our journey begins in 1981, when economic crisis opened up a window for dramatic change. Two individuals stand out in the struggle for reform: Sir Roger Douglas and Ruth Richardson. Though members of Parliament from opposing parties, the two made common cause, often against their own party leaders, and dominated New Zealand politics for years. Today, Roger and Ruth are widely respected elder statesmen, but I was able to track them down and pick their brains for a few hours. Historically, the majority of New Zealand’s trade had been with the United Kingdom, but that ended after 1973, when the UK joined the European Economic Community, the European Union’s predecessor. That required the UK to abandon its favored trade relations, which dealt New Zealand a terrible economic shock. The political response was disastrous:

increased protectionism, expanded entitlement benefits, wage and price

controls, out-of-control deficit spend- ing, and lots of money printing by the central bank. New Zealand was headed toward bankruptcy. In 1975, Ruth Richardson’s National Party came to power, with Robert Muldoon elected Prime Minister in a landslide. Critics described his campaign platform as a “denial of economic reality accompanied by bribery of the voters.” His actions once in office confirmed that assessment.

New Zealand’s Free Market Triumph BY BILL FREZZA A mong stories of economic suc- cess, New

Under Muldoon’s leadership per- capita income dropped to the lowest among all developed nations. In the 1981 election, the National Party clung to its parliamentary majority by one seat—won by Ruth Richardson, then a political rookie. Not long after she arrived, all hell broke loose. “I was the majority. And I went in with the reputation of being a fiery free market advocate, so I was regarded as a nuisance from day one,” she said. “So I sat in the front row of the caucus and I looked Muldoon in the eye, and he said to me, ‘What have you come to Parliament to do, girlie?’ … I said, ‘I’ve come to defeat inflation.’” New Zealand’s government finances were completely opaque and held under lock and key. Ruth demanded to see the country’s books, giving Muldoon an ultimatum: “You show me the books or I don’t vote for you.” With his majority at stake, Muldoon caved. Still, despite Ruth’s best efforts, the situation kept spiraling down, with inflation peaking at 18 percent. Treasury and Reserve Bank officials, fearing financial collapse, consulted with senior Labour Party opposition

leaders, most notably Roger Douglas, who was then finance minister-in-wait- ing, to frame an economic recovery platform. The 1984 elections were a disas- ter for the National Party. The Labour Party, under leader David Lange, swept into power, publicly pledged to Roger Douglas’s reform platform. The government immediately deval- ued the propped-up currency, floated the New Zealand dollar, and removed all capital controls. The currency, priced at its real value, helped boost agricultural exports. Farm subsidies were slashed, boosting productivity and efficiency in agriculture. Roger launched an all-out assault on the bloated state sector, and eventually privatized most state-owned enterprises. Top income tax rates, which had peaked at 66 percent, were slashed down to 30 percent, roughly where they remain today. Ruth handily won reelection in her district, despite her party’s defeat. She then used her position to egg on Roger’s reforms, and set to work reforming her own party. “So, in the first three years of Rogernomics, Roger pretty had a free run,” said Ruth. “I was virtually the only one in the caucus

H.L Mencken once said: “Every election is a sort of advance auction sale of stolen goods.”
H.L Mencken once said: “Every election is a sort of advance auction sale of stolen goods.”

H.L Mencken once said: “Every election is a sort of advance auction sale of stolen goods.”

who was saying, ‘this is the right thing to do.’” The economy began to show signs of life, but still had a long way to go. With the 1987 elections coming up, the National Party fatally miscalculated voter sentiment, believing most people would rebel against Rogernomics. “Labour were reelected with an even greater majority than they had in 1984,” said Ruth. “That for us was the moment of truth.” Ruth moved up to become opposition finance minister- in-waiting. Old guard National Party stalwarts who remained opponents of reform were sacked. But just as the National Party came around to supporting more aggres- sive market reforms, Labour began to backslide. Yet, Roger still managed to pass three major bills that cemented his legacy: the State Sector Act of 1988 and the Public Finance and Reserve Bank Acts of 1989. The State Sector Act completely reformed the civil service. All civil service employees were moved from job-for-life union contracts with senior- ity-based advancement to individual employment contracts and merit-based compensation and promotion. The Public Finance Act of 1989 transitioned all government accounting from an ad hoc cash accrual basis to the same generally accepted account- ing principles (GAAP) required by businesses. Finally, the Reserve Bank Act of 1989 ended the practice of goos- ing monetary policy before an elec- tion to create a temporary illusion of

prosperity. The Act directs the New Zealand central bank to serve only one mandate: price stability—unlike the U.S. Federal Reserve, which serves the con¬flicting mandates of price stability and full employment. Despite these accomplishments,

Roger Douglas and Prime Minister David Lange set to fighting, and Roger resigned his cabinet position. The Labour Party’s poll ratings plummeted. Roger, worn out by the infighting, chose not to stand for reelection in

Ruth then introduced the first national budget in full compliance with GAAP standards, a practice that remains sacrosanct in New Zealand to this day. No more lying with numbers, no more obfuscation of long-term liabilities, no more kicking the can down the road. The National Party won the 1993 elections by one seat, putting Ruth right back where she began her political journey. She helped pass the Fiscal Responsibility Act of 1994, which

  • 1990. codified a set of transparent budgeting protocols. A few days after it passed Parliament, Ruth resigned and left political office forever, tired but proud of what she and Roger had accom- plished. “The idea was: As I was leav - ing the kitchen, to bang up the rules for fiscal cooking on the kitchen wall, so that anyone who would replace me would be subject to those disciplines.” In 1994, New Zealand had the highest rate of job growth in the OECD. Twenty years have passed since this political drama played itself out, and the results speak for themselves. The 2014 Index of Economic Freedom ranks New Zealand fifth in the world, with ratings of 90 percent or higher for rule of law, freedom from corruption, business freedom, and labor freedom. H.L Mencken once said: “Every election is a sort of advance auction sale of stolen goods.” It’s a trap nearly every democracy has fallen into. New Zealand could have easily ended up like Greece. Thanks to Roger Douglas, Ruth Richardson, and the wise people of people of New Zealand they avoided that fate. The question now is:

This handed the National Party an opening to push for more market-ori- ented reforms, including deregulation of the labor market, public spending cuts, and welfare reform. An electoral landslide that put the National Party in power gave it a clear mandate to continue. Within six weeks of assuming her new position as finance minister, Ruth began slashing government spending. But economic turnarounds take time, so the government still had to borrow money in order to operate, even as the financial climate had darkened. Facing a downgrade, she and her colleagues traveled to New York for a meeting with Standard & Poor’s. “I was basically facing them down and saying, ‘How dare you downgrade a country that’s done a lot of reform already, a new government that’s taken the really tough calls?’” said Ruth. “We got on the plane; we didn’t know what the result was … When we landed, we were advised we had a single downgrade.” Emboldened by her success, Ruth pushed on to reform the private labor market. Her Employment Contracts Act of 1991 ended government support for compulsory union membership and multi-employer labor agreements. Every worker and every employer was given the right to negotiate individual employment contracts. Union member- ship plummeted, with a concurrent rise in productivity, flexibility, and competitiveness.

Which path will we choose?

Bill Frezza (bill.frezza@cei.org) is host of the RealClear Radio Hour (RCRH) and the author of “New Zealand’s Far-Reaching Reforms: A Case Study on How to Save Democracy from Itself,” published by the Antigua Forum. This article is based on RCRH’s 100th show.

Lessons for Business Leaders from the Near- Death and Revival of America’s Railroads BY FRED L.
Lessons for Business Leaders from the Near- Death and Revival of America’s Railroads BY FRED L.

Lessons for Business Leaders from the Near- Death and Revival of America’s Railroads

BY FRED L. SMITH, JR. AND MARC SCRIBNER

B usiness executives deal with the spiraling cost of complying with

government regulations every day. This burden has become so large and pervasive that many have come to accept it as inevitable. Business leaders can’t imagine—and certainly don’t make plans for—a future when that burden is lifted. The history of the U.S. railroad industry, however, suggests that fighting to lift the weight of govern- ment restrictions is possible—and can be profitable. The heavy regulation that besets America’s economy is a legacy of the Progressive era, when the view that civic-minded bureaucrats could effectively regulate our economy became dominant. Congress increas- ingly approached legislation as a way to set aspirational goals, while delegat- ing the detailed edicts of policy to the executive branch. Independent agen- cies—supposedly immune to political influence—accrued massive powers to design and implement regulations, which have become the most important source of lawmaking in modern times. Progressives rode the populist wave that arose in response to the emergence of the nation’s first large, nationwide firms, in order to push through an array of regulatory initiatives—railroad regulation, then antitrust regulation. Railroads were the first major sector of the economy to experience this new federal intervention. In 1887, Congress enacted the Interstate Commerce Act, which created the Interstate Commerce Commission (ICC), with broad support from politicians from both major parties, as well as from a number of railroad industry executives. However, few understood the com- plex pricing and operational policies

of the emerging industries of the time. And, as Nobel

Laureate economist Ronald

Lessons for Business Leaders from the Near- Death and Revival of America’s Railroads BY FRED L.

As Nobel Laureate economist Ronald Coase noted, that which policy makers do not understand will often be attributed to anti-consumer, anti- competitive practices.

railroad industry. In addition, during

the early decades of the 20th century, Congress significantly expanded the ICC’s regulatory jurisdiction to encom- pass pipelines, telecommunications, motor carriers, and domestic water- borne carriers. Rail pricing strategies became rigid over the following decades. The ICC became more interested in setting prices to minimize competition between firms—and between transportation modes—than in policing alleged anti- competitive behavior. As a result, the railroads went on to experience what became known in the industry as a century-long going out of business sale.

By the 1970s, the railroads faced imminent collapse. Much of the Northeast’s rail network had been nationalized following the bankrupt- cies of the Penn Central and six other railroads—a fate that then seemed likely for the rest of the nation’s private rail system. Policy makers saw no other alternative than liberalization, driven by an unusual confluence of economic and intellectual forces, including liber-

alization in other industries. Deregulation efforts were already under way for airlines and truck- ing, and there were even some early steps in communications and banking. Future Treasury Secretary John Snow,

Coase noted, that which policy makers do not understand will often be attributed to anti- consumer, anti-competitive practices. Pro-regulation railroad executives, having grown weary of “rate war” competition and their inabil- ity to sustain private cartels, welcomed and harnessed this ignorance to push for inter- ventions they believed would benefit their firms. But as Henry Varnum Poor, founder of the company that became Standard & Poor’s, warned at an 1886 Senate hearing:

Our governments, state and national, have very little genius or faculty for the supervision of railroads. They can provide that reports be made which shall give an adequate idea of the condition of railroad companies and of the manner in which they are con- ducted; that done, public opinion must do the rest.

The nascent ICC was forced to rely on rail industry leaders, as few at the newly created agency had any exper- tise in rail transport. This led to what left- ist historian Gabriel Kolko and others called “regulatory capture”—the notion that regulations actually benefited the regulated firms, rather than consum- ers. Legislation in 1910 established the United States Commerce Court to adjudicate ICC disputes. However, the Commerce Court was abolished only three years later, after one of its judges was impeached for accepting bribes from representatives from the railroads and the coal industry. Following the Commerce Court’s dissolution, the ICC took a more aggressive approach to regulating the

Civil Aeronautics Board Chairman Alfred Kahn, and others within the bureaucracy sought to liberalize these industries.

Civil Aeronautics Board Chairman Alfred Kahn, and others within the bureaucracy sought to liberalize these industries. Yet, it was not until railroad executives lent their support to these efforts that deregulation become a reality. Those efforts led to Congress’ enactment of the Staggers Rail Act of 1980, which largely freed the railroads from ICC oversight and gave them the freedom to introduce flexible rates. The Act helped return America’s railroads to profitability by allowing them to gain traffic back from other modes of transportation, such as trucking. Those profits allowed private rail firms to renovate their deteriorated infrastruc- ture. That private network investment has totaled more than half a trillion dollars since 1980. The railroads’ experience provides valuable lessons for those seeking to address the excesses of regulation.

• Regulations create costs by deny - ing firms the flexibility to operate in a highly competitive world that demands swift, creative responses to emerging, unforeseen challenges.

• Alleged “market failures” tend to be less costly than government failures. Regulations, usually intended to address perceived market failures, all too often fail to live up to their expected gains. Instead, they often increase costs while the benefits rarely materialize.

• Businesses, like railroads a cen- tury ago, too often take a fatalistic

approach to regulation and seek accommodation. For example, they may endorse one national regulator as less burdensome than mul- tiple state regulators, even though competition among the states could result in the less burdensome regula- tors emerging as dominant.

Fatalism does little to encourage businesses from resisting overregula- tion. It also doesn’t help in making the moral, intellectual, and economic case for competitive free markets. If the pervasive Progressive Zeitgeist is to be resisted, it will take much more than rolling back a few regulations or making them somewhat more favorable to certain firms and sectors. Current policies have resulted in a century of ever more restrictive regulations and an ever-increasing burden on the entrepre - neurial sector of the economy. Business surveys routinely recog- nize regulations as one of the most serious impediments to innovation and growth. Yet, to date, business leaders have mounted little serious resistance. Instead, they often choose appeasement of their critics, much like the railroads did in the late 19th century and the decades following. While some might gain some short-term benefits from such tweaking, businesses in general find their wealth-creating capabilities limited. In part, these failures illustrate the tendency of business to go it alone, rarely reaching out to truly pro-market activist and academic allies. Groups

favoring an expanded role for govern- ment have been more entrepreneurial, creating effective alliances between moral-intellectual and economic forces. For example, trial lawyers and environ- mentalists work closely to advance their common policy goals, as do unions and consumerist groups. Such “Baptist and Bootlegger” alliances address the reality that policy change in market democracies requires moral and intel- lectual, as well as political and eco- nomic support. Railroads sought economic lib- eralization after almost a century of struggling under an ever more restrictive regulatory regime that left them facing ruin. They succeeded in impressive manner—a once-moribund industry recovered rapidly and is now again a vibrant part of the American economy. The rail industry’s 11th-hour investment in promoting economic freedom may be one of the most profitable investments of the last few decades. Shouldn’t more American businesses explore similar investments in liberalization?

Fred Smith (fred.smith@cei.org) is founder of CEI and Director of CEI’s Center for Advancing Capitalism. Marc Scribner (marc.scribner@cei.org) is a Fellow at CEI. They are authors of the new CEI study, Reviving Capitalism:

Lessons from the Near-Death and Rebirth of American Railroads.

Civil Aeronautics Board Chairman Alfred Kahn, and others within the bureaucracy sought to liberalize these industries.

Learn more at RealClearRadio.org.

Realclear Radio offers listeners a fresh perspective on political and social issues of the day through informative interviews and dis- cussions. Brought to you by the

Competitive Enterprise Institute and RealClearPolitics, and hosted by CEI Fellow Bill Frezza.

THE THE BAD GOOD THE UGLY CEI Prevails in Court against Illegal TSA Body Scanner Policy

THE

THE THE BAD GOOD THE UGLY CEI Prevails in Court against Illegal TSA Body Scanner Policy
THE BAD
THE
BAD
THE THE BAD GOOD THE UGLY CEI Prevails in Court against Illegal TSA Body Scanner Policy

GOOD

THE THE BAD GOOD THE UGLY CEI Prevails in Court against Illegal TSA Body Scanner Policy
THE THE BAD GOOD THE UGLY CEI Prevails in Court against Illegal TSA Body Scanner Policy
THE UGLY
THE
UGLY

CEI Prevails in Court against Illegal TSA Body Scanner Policy

Missouri Right-to-Work Bill Vetoed

President Obama Rejects Keystone XL Pipeline

For several years, CEI has been attempting to force the Transportation Security Administration (TSA) to comply with federal law and a court order related to the agency’s unlawful deployment of airport body scanners. In July, CEI filed suit in the U.S. Court of Appeals for the D.C. Circuit asking the court to compel the agency to produce a final rule governing the use of the scanners. In October, the court sided with CEI. “We are pleased the court agreed with our petition that the TSA has taken far too long to comply with the basic rulemaking process that all agencies must follow,” said CEI Fellow Marc Scribner. “We look forward to exam- ining the final rule to see how the TSA considered the thousands of public comments on how, why, and where the TSA can use body scanners.” Members of Congress were outraged after a leaked inspector general report in June found that the agency’s airport screening failed to detect fake bombs and weapons brought through by undercover auditors 96 percent of the time.

In September, legislators in Missouri had an opportunity to bring worker freedom to their state. They passed an historic right-to-work law, which would have reduced unions’ privilege and blunted their intimidation tac - tics against workers. Unfortunately, Governor Jay Nixon (D) vetoed the bill and an attempt to override Nixon’s veto fell short. “In failing to override the governor’s veto, Missouri lawmak - ers lost a chance to make history and dealt a devastating blow to worker freedom in favor of special interests and Big Labor,” said CEI Policy Analyst Trey Kovacs. Kovacs previ- ously authored a study for CEI on right-to-work in Missouri highlighting that not having a right-to-work law from 1977 to 2012 led to an estimated $3,040 in lost per capita income, for a total loss of $18.3 billion.

In November, President Obama rejected the proposed Keystone XL pipeline, dealing a blow to economic growth and commonsense environ - mental policy. Myron Ebell, direc - tor of CEI’s Center for Energy and Environment, blasted the president for pandering to far-left environmental activists. “President Obama’s deci- sion to deny the necessary permit for the Keystone XL Pipeline adds to his shameful record of policies to constrict domestic energy production and raise energy prices for American consum - ers,” said Ebell. “It comes after six years of foot dragging by his adminis- tration designed to delay the pipeline to death and just before the U.N. climate conference in Paris, where the President hopes to cap his anti- affordable energy record by signing a new climate treaty. While his timing is politically clever, the decision is con - trary to America’s economic interests and harms our relations with Canada, our closest ally and largest trading partner.””

Media MENTIONS USA Today reports on the FAA’s new drone regulations and quotes CEI fellow Marc

MediaMENTIONS

USA Today reports on the FAA’s new drone regulations and quotes CEI fellow Marc Scribner on the final rule.

Marc Scribner, a transportation expert at the Competitive Enterprise Institute, an advocacy group for limited government, said the FAA should have

allowed public notice and comment about the final rule for the registry, which will be published Tuesday in the Federal Register. Ignoring those requirements means government officials “are practically demanding litigation,” Scribner said.

–DECEMBER 14,

USA Today

Fox Business reports on Vice President for Policy Wayne Crews’s latest study on the “regulatory dark matter” cre - ated by federal agencies and its economic costs.

The rules hit all levels of American life, health care, retirement, the work- place, education, and the Internet, says Clyde Crews, Jr., a top researcher and respected author with the liber- tarian-leaning Competitive Enterprise Institute, in his new report, “Mapping Washington’s Lawlessness 2016.” According to Crews’s estimation of the “regulatory dark matter,” the federal government has published 524,251 “public notices” describing

The Huffington Post quotes the response by Myron Ebell, Director of CEI’s Center for Energy and Environment, to the “Wanted” posters targeting him, CEI senior fellow Chris Horner, and other climate skeptics at the Paris Climate Conference.

“The vilification of me and several other climate realists during a meeting of tens of thousands of alarmists sug- gests these alarmists are worried that

a handful of people speaking the truth threatens the so-called consensus that global warming is a crisis,” Ebell said in a statement.

—DECEMBER 7,

Huffington Post

Pittsburgh’s Tribune-Review interviews Senior Fellow John Berlau on the dangers of the Department of Labor’s proposed “fiduciary rule.”

Q: What damage do you believe the rule could cause? A: The rule would severely restrict investment choices in savings plans such as 401(k)s and IRAs, especially for poor and middle-class investors, by forcing investment professionals to adhere to a one-size-fits all defini- tion of “best interest” for assets and investment strategies. [If the rule goes into effect,] predictions are that many brokers will stop serving households

Media MENTIONS USA Today reports on the FAA’s new drone regulations and quotes CEI fellow Marc

The Wall Street Journal cites Center for Class Action Fairness Senior Attorney Ted Frank on recent class action settlements.

Litigator and class-action activist Ted Frank raised similar concerns last year when he objected to a settlement of allegations that Gillette Co.’s Duracell unit misled consumers about the battery life of a premium battery line. While approving the settlement, the federal trial court judge in Florida questioned the plaintiffs’ assertion that their request for a $5-plus million fee was more than reasonable. The law- yers said it was only 10 percent of the estimated value of the settlement. “[T] he $50 million calculation is somewhat illusory, because the parties never expected that Gillette would actually pay anything close to that amount,” wrote Judge Gregory A. Presnell. Mr. Frank told Law Blog that inflated estimates of settlement value are common in class actions and help plaintiffs’ lawyers make their fee requests “seem more reasonable.” He said he’s hoping the U.S. Supreme Court will take up the issue, saying he plans to ask the justices to review the

federal rules that affect the economy in the Federal Register since 1994. Federal agencies issued 3,554 rules and regulations in 2014, versus the 224 bills Congress passed and the

with less than $50,000 in assets.

—OCTOBER 30,

Tribune-Review

battery settlement, which was affirmed by a federal appeals court.

—OCTOBER 22,

The Wall Street Journal

president signed into law last year. “The average has been 26 rules for every law over the past decade,” Crews says.

—DECEMBER 10,

Fox Business

Nonprofit Org. U.S. Postage PAID Permit 425 Southern MD ... END NOTES Police Bust Nonagenarians over
Nonprofit Org. U.S. Postage PAID Permit 425 Southern MD ... END NOTES Police Bust Nonagenarians over
Nonprofit Org. U.S. Postage PAID Permit 425 Southern MD
Nonprofit Org.
U.S. Postage
PAID
Permit 425
Southern MD

...

END

NOTES

Nonprofit Org. U.S. Postage PAID Permit 425 Southern MD ... END NOTES Police Bust Nonagenarians over

Police Bust Nonagenarians over Mahjong Game

In tiny Altamonte Springs, Florida, four women aged 87 to 95 were recently enjoying their weekly mahjong game in the Escondido Condominium clubhouse when police arrived to shut down the game, telling the women they were engaged in illegal gambling. It is believed a “troublemaker” resident tipped off the police. “This is ridiculous,” Zelda King told the Heritage Florida Jewish News. “We haven’t played in the clubhouse for weeks! We have to go to each other’s homes to play and not everyone lives in Escondido. It is an international game and we are being crucified!” But apparently there was no ordinance in Altamonte Springs prohibiting mahjong for money in the first place. “Penny-ante games” of up to $10 are not considered crimes. The ladies have a $4 limit.

Robert Mugabe Awarded China’s Peace Prize

Dictator Robert Mugabe, who has ruled Zimbabwe with an iron fist for more than three decades, is notorious for widespread human rights violations against his political opponents, hyperinflation that led to Zimbabwean dollar bank note denominations of up to a $100 trillion, and widespread poverty. In October, it was announced—to widespread confusion—that Mugabe would be awarded the Confucius Peace Prize, China’s answer to the Nobel Peace Prize. The Confucius Prize was established in 2010 after the Nobel Peace Prize was awarded to Liu Xiaobo, an imprisoned Chinese dissident and literary critic. Mugabe ulti- mately declined the prize, which included a cash award of 500,000 renminbi (nearly $80,000), or 28 million revalued

Zimbabwean dollars at the current exchange rate ..

Falling Weather Balloon Device Prompts Bomb Squad Response

In November, measurement equipment attached to a weather balloon fell to the ground in Philadelphia, prompt- ing the city’s bomb squad to spring into action after the box struck a vehicle. According to Mitchell Gaines of the National Weather Service, a balloon carrying a radio- sonde was launched in Virginia, but high winds caused it to drift over Philadelphia. Radiosondes measure a variety of weather variables when they are carried high into the atmosphere by balloons. When they reach a certain altitude, the weather balloon pops, sending the radiosonde drifting to the ground below by an attached parachute. The devices are labeled with a mailing address and instruct the finders to return them to the weather service. Usually, this occurs in rural areas where falling radiosondes are unlikely to immedi- ately alert anyone, let alone strike a car, home, or person

Providence’s Criminal Mayor Honored by Portrait in City Hall

Buddy Cianci is nationally known as one of America’s most criminally inclined local politicians, rivaling the noto- riety of Marion Barry, the late mayor of Washington, D.C. In November, a large portrait of Cianci was unveiled in Providence City Hall. “It’s not the first time I’ve been framed,” Cianci told a crowd of supporters at an event held in his honor. Despite his criminal convictions and many more allegations of corruption, Cianci enjoyed strong support among some segments of the public and officials in Rhode Island. He served 21 years as mayor, which came to an end in 2002 when he began serving more than four years in federal prison following a racketeering conviction. His first term as mayor ended in 1984 after he pleaded no contest to a felony assault charge after attacking a man with a fire - place log, an ashtray, and a lit cigarette. He currently hosts a popular daily radio show.