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COMPETITIVE ENTERPRISE INSTITUTE

VOL. 30, NO. 2 | SUMMER 2017

FEATURED ARTICLES

The Institutions of Liberty:


What is Old Must Be New Again
4
BY RYAN RADIA
A Chance to Improve the FCC

5
BY WAYNE CREWS
The Only Way Washington
Can Be Smaller In Four Years

move through a wave of 21st century popu-


BY KENT LASSMAN lism, are the institutions of liberty.

12 This article is excerpted from Kent Lassmans


Populism elevates majoritarianism above
what we know to be the just goals of gov-
keynote speech delivered at the recent ernmentto secure the natural rights of all,
BY MICHELLE MINTON European Resource Bank meeting in among them life, liberty, property, and the
End the Madness by Letting Podgorica, Montenegro. pursuit of happiness.
States Legalize Sports Betting James Madison studied the democra-

ALSO IN THIS ISSUE


C lassical liberals of every stripe have
gathered to share information, build
human capital, and to learn how to create
cies of the pastnotably, failed democra-
ciesin Athens and Rome. But his greatest
insight came from the intellectual heritage of
and maintain the institutions of liberty. the Enlightenment. Among others, Madison
Africas Economy Needs to We are at the crossroads for classical learned from the Scottish philosopher David
Come out of the Shadows. . . . . . . . . . . . . 6 liberalism and liberal democracies. The clas- Hume that representation in our governing
Quit Paris Climate Treaty: sical liberal tradition calls for respecting the institutions can refine the popular will. A dose
Opposing View. . . . . . . . . . . . . . . . . . . . . . 7 liberty of individuals and of conscience, the of republicanism cools the tempers of the
freedom to trade goods and services, and most impassioned.
The Good, the Bad, and the Ugly. . . . . . 14
the mobility of people. Madison also knew, in perhaps his most
Media Mentions. . . . . . . . . . . . . . . . . . . . 15 I submit that what makes us alike are our famous turn of phrase, if men were angels we
End Notes . . . . . . . . . . . . . . . . . . . . . . . . . 16 natural rights. What holds us together, as we would need no government.
(continued on page 3)
A New Beginning with Old Friends
by Jim Harper

T he fight for freedom has many happy warriors, and


Im pleased to have joined Kent Lassman and the
Competitive Enterprise Institute team earlier this year in
His publication, Ten Thousand Commandments, has
become the annual catalog of growth in the regulatory
state along every dimension. Lately, with yet another
CEIs version of that fight. recent paper, Wayne has popularized the concept of
In a way, Im actually rejoining CEI. Sixteen years regulatory dark matter, those sub-regulatory guid-
ago, CEI was the first outlet beyond my own website to ances, letters, statements, and cock-eyed glances that
FROM THE VICE PRESIDENT

publish my arguments against Internet regulation in the regulators use to manipulate American companies,
name of privacy. Solveig Singleton and I co-wrote With landowners, and small businesspeople.
a Grain of Salt: What Consumer Privacy Surveys Dont Energy and environment is another area where CEI
Tell Us in 2001 to caution against Internet regulation work is paying off big time. Myron Ebell and colleagues
based on abstract consumer fears. have helped create the circumstances for policy change
History has shown that consumers prefer the big, in this area. Lets make it so that the United States can
rollicking, and challenging commercial Internet weve use all of its energy and material resources and to build
got to the small, tightly controlled Internet that federal our strong and productive, free society. Lets protect
bureaucrats were pushing for in the early 2000s. the environment through non-coercive means using the
CEI continues to give young analysts a chance. ideas of R.J. Smith, who recently celebrated his 80th
Former intern Daniel Press, whom we recently hired as birthday with us.
a research associate, has an excellent article out, co- Of course, litigation is a CEI specialty. Lately, CEI liti-
authored with Vice President for Strategy Iain Murray. gators have had to fight for the organizations ownand
Press and Murray point out how secure property rights, yourfree speech rights.
institutional reform, and affordable energy can unlock When Kent Lassman first joined CEI as president,
prosperity in Africa. he was greeted by a subpoena asking for information
But international bureaucrats are fighting to keep the about CEI advocacy and donor information going back
worlds people contained within their ideological and over 10 years. Because of a stiff challenge led by CEIs
bureaucratic systems. Thats why I think a recent paper general counsel, Sam Kazman, a group of state attor-
by Angela Logomasini is so important. Two recent World neys general calling themselves AGs United for Clean
Health Organization reports have made a hash of the Power has lost a lot of energy.
issues around pollution and development. By intermin- CEIs Center for Class Action Fairness is leading the
gling the challenges of less developed nations with fight against bogus class action settlements that reward
those of more developed ones, they argue against the attorneys far more than they should for the small benefits
pro-growth, free market policies that would let people they bring to plaintiffs.
in developing nations enjoy higher living standards and In the background of all this work, I see a better
longer lives. vision for organizing society.
It often takes years, but works like these and many The fight for freedom at CEI rests on the vision of a
others lay the groundwork for policy change that will free people deciding for themselves, through billions of
move our country and world further in the direction personal and marketplace decisions, what their society
of prosperity and liberty for all. There are no better is going to look like. When the restraint or corrective of
examples of those payoffs than what were seeing in the law is needed, its the common law of contract, prop-
policy areas that are particular CEI strengths. erty, and torts, anti-fraud and harm-based criminal law.
The regulatory reforms happening in Congress If I can help make this vision more explicit at CEI and
would be smaller, more timid efforts if it hadnt been for nurture the growth of freedom in the United States and
Wayne Crewss years of toil in the regulatory trenches. around the world, Ill be one happy CEI warrior.

Publisher The CEI Planet is produced by the Competitive Enterprise


Kent Lassman Institute, a pro-market public interest group dedicated to
Editor free enterprise and limited government.
Richard Morrison
CEI is a non-partisan, non-profit organization incorporated in the
Editorial Director District of Columbia and is classified by the IRS as a 501 (c)(3)
Ph (202) 331-1010
Ivan G. Osorio charity. CEI relies upon contributions from foundations, corporations
Fax (202) 331-0640
info@cei.org Contributing Editor and individuals for its support. Articles may be reprinted provided
Molly Dreisbach they are attributed to CEI.
ISSN#: 1086-3036

2 CEI.ORG COMPETIVE ENTERPRISE INSTITUTE


Liberty, continued
Ive seen many people in govern-
ment and have not seen many angels.
Therefore, governing institutions must
The question is
both be limited, and limit the authority
of any one faction.
whether our future
Id like to remind everyone governing elites will
of Madisons wry observation in
Federalist No. 55. respect and defend
If every Athenian citizen had been
a Socrates, every Athenian assembly our rights or sweep
would still have been a mob.
Large popular mandates are nice them aside.
as far as they go. They are oftentimes
necessary to effect big changesand regime and move toward the full R.M.
we have a lot of big changes in mind
but they are insufficient.
embrace of the precautionary principle?
Not on my watch. Not while CEI FREEDMAN
The question is not whether our gov-
ernment will be controlled by an elite
exists.
Our job now is to inject a healthy SOCI ET Y
group or by the democratic masses. dose of local knowledge and common
The people holding political authority sense into an ailing system poisoned
will always, by definition, constitute by politically fashionable expert opin-
an elite. The question is whether our
Help the Competitive
ion and unaccountable bureaucrats.
future governing elites will respect and We know that law is a tool of Enterprise Institute
defend our rights or sweep them aside. economic dynamism. It sets familiar carry on its work for
Ive asserted that many familiar boundaries for contract, fraud, prop-
20th century institutions are coming erty, and trespass, maximizing oppor-
generations by joining the
undone. They will be remade or they tunity within a common framework. R.M. Freedman society.
will be replaced. Ive warned explicitly Regulation is a tool for control. It
against too much faith in populism that permits behavior and creates monitor-
is divorced from our shared principles. ing systems for enforcement. It mini- In 2013, CEI established the R.M. Freedman
Society in honor of Robert M. Freedman,
But lest there be any confusion, mizes perceived risk and increases the
a business owner from West Bloomfield,
popular support, in and of itself, is not investment necessary to comply with
Michigan, who placed CEI in his estate
a bad thing. expert, technical codes.
and, in 2009, sadly passed on and gave
But while nearly always necessary, Like you, I want to see a society CEI its first legacy gift. We named the
popular support must not become an where people are in charge of deci- society in appreciation of his generosity.
end in itself. sions about their own lives. A tolerant
At the Competitive Enterprise society. A society based on laws rather Many of CEIs extended family choose to
Institute, our work is focused on regula- than on men. It means, simply, that include CEI in their estate plans through:
tory power, perhaps the area of law Im with you. I lead a think tank and Bequests,
most allergic to popular will. our role is to promote the institutions of Charitable Remainder Trusts,
America faces a fundamental liberty, now and always, the new and
question for economic regulation. Will Charitable Lead Trusts, or as a
emergent, as well as the old.
we adopt an increasingly technocratic Life insurance beneficiary.

If you make the decision to include CEI in


Kent Lassman (kent.lassman@cei.org) is President of CEI. 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.

COMPETIVE ENTERPRISE INSTITUTE C E I . O R G 3


A Chance to Improve the FCC
administration, the agencyproposed
BY RYAN RADIA
The Open Internet bringingmany online streaming plat-
forms into the regulatory framework
Order, inspired by
T he new Chairman of the Federal
Communications Commission
(FCC), Ajit Pai, has his work cut out the net neutrality
governing cable and satellite provid-
ersdespite the fact that Netflix is
hardly an old-school cable company.
for him. He must move the FCCs More recently, the FCCsought to
approach to technology and telecom movement, has issueextensive rules dictating how TV
policies from the heavy-handedness set-top boxes are designed. Chairman
that characterized the Obama era, thwarted broadband Pai has already announced the FCC
as with the public utility regulation will abandon the set-top box pro-
of broadband providers, to a lighter providers efforts posal. He could go further by sunset-
ting existing regulations that apply to
touch focused on advancing Internet
freedom, fostering innovation, and pro- to give consumers these boxes.
Making these changes will take
moting access to new technologies.
This transformation is critical for better Internet plans some time, especially if the FCCs
new leadership is to stay on the right
consumers, given that the FCC regu-
lates Americans ability to access and
at lower prices. side of theAdministrative Procedure
use many technologies that younger Act, the federal law governing how
generations now take for granted. Undoing these rules, therefore, is now agencies issue and revise regulations.
From our mobile devices and GPS to the responsibility of the FCC. As the FCC works to achieve broader
cable television, government regula- The agencys top priority should reforms, it should follow the precedent
tors at the FCC dictate what com- be undoing net neutrality by reversing set by the Obama administration in
munications-related innovations and the so-called Open Internet Order. 2009, which declined to defend in
infrastructure are available to you and, This 2015 ruleclassified broadband court controversial regulations such as
indirectly, at what cost. providersas common carriers under the net neutrality rule. (The legality of
Chairman Pai has already signaled Title II of the Communications Act of that rule remains a live issue, currently
his willingness to revise and improve 1934. The upshot of this decision was at theen bancstage in the U.S. Court
FCC regulations, which grew increas- to place broadband companies under of Appeals for the D.C. Circuit.)
ingly harmful and obsolete during the same regulatory structure origi- Ultimately, Congress, not the FCC,
the Obama era. One such rule is nally crafted over 80 years ago to needs to rein in the agencys years of
already off the books due to a recent oversee the long-defunct Ma Bell tele- regulatory excesses. Otherwise, every
vote in Congress, which used the phone monopoly. The Open Internet four years, three unelected individuals
Congressional Review Actto elimi- Order, inspired by the net neutrality will acquire immense power to shape
natethe FCCs broadband privacy movement, has thwarted broadband the future of the Internet and the
rule in early April. That rule distorted providers efforts to give consumers telecommunications market in gen-
the Internet marketplace, treating better Internet plans at lower prices. eralchecked only by the willingness
telecom companies such as Comcast Chairman Pai is reportedly finalizing of federal judges to reverse agency
and Verizon differently than Internet his plans to roll back the 2015 order, actions. Therefore, imposing clear limits
content providers such as Amazon and while defenders of Internet regulation on the FCCs roleor even abolishing
Netflix.Instead of fostering competi- are gearing up for a fierce battle. large chunks of the agencys author-
tion for individualized advertising, the Lifting rigid regulations on Internet ityis necessary if the Internet is to
privacy ruleundermined it, depriv- providers would help create a freer, remain open and free. In the meantime,
ing consumers of discounted Internet more consumer-friendly, telecom sector. with Chairman Pai at the helm, the
access thanks to advertisers subsidiz- But that will not be enough. Decades of FCC has an opportunity to change its
ing their broadband provider. legacy regulationsfrommedia owner- course on significant regulations.
But the most harmful FCC regula- ship restrictionsthat originated in the
tions issued during the Obama adminis- 1940s to telephone fees that are really
tration have been in place long enough just corporate welfareshould be on Ryan Radia (ryan.radia@cei.org) is
that they cannot be undone through the chopping block as well. research fellow and regulatory counsel
the Congressional Review Act, which The FCC should also revisit the tele- at CEI. A version of this article was
allows Congress to vote to repeal a vision marketplace. During the Obama originally published in RealClearPolicy.
rule up to 60 days after it is finalized.

4 CEI.ORG COMPETIVE ENTERPRISE INSTITUTE


The Only Way Washington Can Be Smaller In Four Years
1. Theestablishment of Regulatory
BY WAYNE CREWS Reform Offices and Task
Forcesat each agency to cut
Real expertise
means ensuring that
T here are now several moving and
overlapping parts to President
Donald Trumps streamlining, swamp-
out red tape (E.O. 13777,
Enforcing the Regulatory
Reform Agenda) the once-public
draining agenda. 2. Trumps initial Executive Order
April brought Office of ona Comprehensive Plan for and centralized
Management and Budget (OMB) Reorganizing the Executive
Director Mick Mulvaneys memo- Branch, now fleshed out by endeavors of
randum for agency heads on a
Comprehensive Plan for Reforming
Mulvaneys guidance and
queries to agencies; mankind are moved
the Federal Government and Reducing
the Federal Civilian Workforce. Theyll 3. New detailedguidance from into the voluntary,
OMB to agencieson carrying
have to report back in 180 days on
streamlining, with public input. out Trumps Executive Order competitive
12771, Reducing Regulation
Mulvaney calls much agency
activity, costly solutions in search pf a and Controlling Regulatory marketplace.
problem: Costs on implementing a
cost freeze, and eliminating
The result has been too many over- two rules for each new one means ensuring that the once-public
lapping and outdated programs, implemented; and centralized endeavors of mankind
rules, and processes, and too many are moved into the institutions of the
Federal employees stuck in a system 4. Establishment of theOffice of voluntary, competitive marketplace.
that is not working for the American American Innovationtasked This, arejection of administrative state
people. with bringing private sector premises, should guide Trump and
business and management Mulvaney streamlining initiatives.
Overlap isnt the real issue. Its expertise. Blueprints for thede-escalation of
the existence of most programs and
The Trump administrations actions central power is the essence of what
agencies, period. What is it exactly that
here are the most aggressive aimed at should count as agency expertisein
agencies are doing? What are they
reduction of bureaucracy sincePresident todays world. If Trump and Mulvaney
there for? The premises of the supervi-
Ronald Reagans original regulatory can make agencies back off their
sory state are the issue.
oversight executive order cut both rules brazenness, especially as applied to
If we were starting with a blank
and number of pages in the Federal growing new sectors, the downsiz-
sheet of paper, we may not keep most
Register by more than a third. ing can take care of itself. That is, if
federal agencies .
But executive actions arent perma- Congress does its part and prevents
Of course we did start with a
nent. Congress created this bureau- agency interference in new areas
blank sheet of paper at the Founding.
cracy and only Congresscan reduce it. where it hasnt explicitly legislated
Somehow, we had houses before HUD
The administrative states century- authority.
and we learned before the Education
long premise is that expertise consists The fiscal side gets most of the
Department appeared on the scene.
in a priestly, guiding hand from above, attention, and will again soon with the
The Founders didnt seek to control
for efficiency and safeguarding the budget proposal. But stop giving agen-
us back then, yet our complex society
public. cies new work to do, stop appointing
is even harder, not easier, to supervise
My favorite recent takedown of commissioners and directors in the
centrally.
the administrative states premises is first place, and budgets take care of
But back to Trumps Bureaus
Steve Haywards article, The Threat themselves.
against Bureaucracy. Alongside
Mulvaneys Comprehensive Plan to Liberty, and I highly recommend
for Reforming Government, weve it, especially to those carrying out the
new Trump/Mulvaney directives. Wayne Crews (wayne.crews@cei.org)
recently seen: is Vice President for Policy at CEI. This
Real expertise means something
else entirely in free economies; it article is excerpted from a column origi-
nally published onForbes.com.

COMPETIVE ENTERPRISE INSTITUTE C E I . O R G 5


Africas Economy Needs to Come out of the Shadows
This is a massive problem. As Daniel are still backlogged), allow businesses
BY IAIN MURRAY Press and I write in a new Competitive more freedom, and provide an expe-
Enterprise Institutestudy: Studies dited process for entrepreneurs to set

W esterners used to call sub-Saha-


ran Africa the Dark Continent.
That epithet reflected a willful igno-
conducted across Sub-Saharan Africa
estimate that the informal economy
accounts for some 50 to 80 percent of
up businesses. As a result, it is one of
the most prosperous countries in Africa
per capita, withone of the worlds fast-
rance of the continents civilizations, the regions GDP, 60 to 80 per cent of est growth rates.
cultures, and history, and helped justify employment, and as much as 90 per However, allowing entrepreneurs to
a shameful period of colonization, cent of new jobs. Having that many run their businesses free from govern-
exploitation, and oppression. Yet in people dependent essentially on luck ment interference will not be enough to
two respects the characterization is for their livelihood grossly exacerbates propel the continent to the next level of
accuratemuch of the regions econ- Africas longstanding problems of busi- development. That will require access
omy exists in the shadows, and energy ness climate uncertainty and lack of to affordable energy, which is the
infrastructure to light the continent is investment. lifeblood of large-scale business and a
supbar. Correcting these two problems Most development agencies tend sure provider of real wealth.
will go a long way to improving the lot to blame lack of infrastructure, educa- Unfortunately, too many Western
of every African. tion and skills training, and limited development officials see Africa as a
In the international development access to technology for the problem testing ground for unproven renewable
community, there is much talk of of the informal economy. But what energy technologies. Their goal? To
an informal sector in developing Africa really suffers from is oppressive see if African nations can industrial-
economies. That means that businesses government. Taxes are high, regula- ize without fossil fuels. That is a fools
and individuals operating in it do so tions are either strict or nonsensical errand. As the World Bank hasnoted,
without the protection of law, and are (sometimes both), and property rights theres never been a country that has
probably doing so illegally. They may lack protection. So people take the developed with intermittent power.
well thrive through some combination rational approach and work around Climate concerns are also over-
of corruption, benevolent neglect by the problemwhich means operating blown. Africa is currently responsible
the government, or the public holding in the informal economy. for just 4 percent of global emissions of
the laws in question in general disre- Responsible African governments greenhouse gases. Even if Africa were
pute. Yet if a problem arises, informal can follow the example ofBotswana, to develop entirely on fossil fuels, the
entrepreneurs have no leg to stand on which has worked to establish a reli- International Association for Energy
in front of a court of law. able rule of law (although its courts Economicsfindsthat will increase total
global emissions by as little as2 per-
centover current levels.
Western governments owe Africa
a huge debt for the way they have
treated it in the past. One of the best
ways of repaying this debt is to encour-
age their African counterparts to solve
these two problems, and empower
figuratively and literallythe African
entrepreneur to light the way forward.

Iain Murray (iain.murray@cei.org) is Vice


President for Strategy at CEI. A version
of this article was originally published
onThe Huffington Post.

Growing central business district and railroad in Gaborone, Botswana, 2017

6 CEI.ORG COMPETIVE ENTERPRISE INSTITUTE


Quit Paris Climate Treaty: Opposing View
Accepting this precedent guarantees favors, while also risking that activist
BY CHRISTOPHER C. HORNER that future pen and phone presidents courts will reimpose restrictions such as
will also avoid constitutional review of the EPA war on coal rules that Trump

P resident Trumps advisers are debat-


ing recommendations on the Paris
climate treaty. Reported arguments
unpopular commitments by just declar-
ing them not a treaty.
Climate catastrophe?No computer
says hell undo.
We hear climate policy leadership
will be ceded to China. Did you hear
for staying in it appear to be no more modelcited by the United Nations about the mule who refused to shed his
than rationalizations to break Trumps projects a detectable temperature reins because he didnt want to give
campaign promise to leave. reduction from the Paris Agreement. The up his leadership position? Me neither.
Consider the line that it is not a ultimate aim of the agreement is instead Withdrawing means take one lump,
treaty because its not binding. This to make the most abundant energy now, and avoid sticking us all with the
is, respectively, untrue and irrelevant. increasingly costly, artificially rationing bill once Trump leaves office. Trump
State Department guidelines (Circular its availability. promised as candidate to withdraw.
175) establish treaty criteria, and the Seeking subsidies or competitive Breaking that vow amounts to a costly
Paris Climate Agreement requires advantage for the renewable energy betrayal.
Senate ratification to be valid under our industry under these schemes have
Constitution. Do it legally, or get out. motivated climate treaties since Enron
President Obama claimed that the pioneered the move in the mid 1990s. Christopher C. Horner is a senior fellow
Senates treaty-power role existed at They seek to use government to profit at at CEI. A version of this article was
his discretion in order to confer treaty- your expense. originally published in USA Today.
like status on his domestic climate Remaining in the agreement endan-
agenda without making the apparently gers energy prices underpinning the
futile case to gain political support. U.S. manufacturing renaissance Trump

COMPETIVE ENTERPRISE INSTITUTE C E I . O R G 7


C E I E V E NT S UP DAT E

CEI Experts Reach out to Global Allies


In April and May, CEI experts spoke at two major
international conferences that brought together allies
from around the world. On April 22, CEI President
Kent Lassman delivered the keynote address at the
European Resource Bank meeting, held April 21-23 in
Podgorica, Montenegro. On the same day, CEI Vice
President for Strategy Iain Murray spoke on a panel
on regulation in the sharing economy. Then on May
26-27, CEI cosponsored the Conservatives International
conference in Miami, along with the Alliance of
Conservatives and Reformists in Europe and others.
On May 26, Iain Murray participated on the panel,
Capitalism for the Little Guy. Later that evening, Kent
Lassman and Daniel Hannan MEP gave remarks at the
Freedom Reception, which CEI hosted. On May 27, CEI
Founder Fred Smith participated on a panel discussion
on how business leaders canand shouldengage
Left to right: CEI President Kent Lassman, former Spanish Prime Minister with the public to promote pro-market policies.
Jose Maria Aznar, and UK Member of the European Parliament Daniel
Hannan at the Conservatives International Conference

CEI Vice President for Strategy Iain Murray speaks at the


Conservatives International Conference.
CEI Founder Fred Smith speaks at the Conservatives
International Conference.

8 CEI.ORG COMPETIVE ENTERPRISE INSTITUTE


Jim Harper Calls for Stronger Fourth Amendment
Protections at National Constitution Center
On May 11, CEI Vice President Jim Harper joined a panel of experts at
the National Constitution Center (NCC) in Philadelphia to discuss how
to apply the Fourth Amendment in the digital age. Harper discussed
his proposal for applying the Amendments protections to data and
telecommunications so modern Americans may enjoy the privacy
protections the Framers of the Constitution sought, a goal the Supreme
Court has stated in recent Fourth Amendment cases. The NCC recently
published Harpers paper, Administering the Fourth Amendment in the
Digital Age, in which he argues that courts should eschew doctrine,
such as the reasonable expectation of privacy test. Instead, they
should assess whether there was a search or seizure, whether it was of
the items listed in the Fourth Amendment, and whether such searching
or seizing was reasonable.

CEI Hosts FCC Chairman and Former FCC Chief Economist


On May 16, CEI hosted Federal Communications
Commission (FCC) Chairman Ajit Pai at a Capitol
Hill forum. CEI President Kent Lassman interviewed
Chairman Pai regarding the FCCs plans to repeal
burdensome Internet regulations issued in recent
years (pictured). Following this discussion, Lassman
moderated a panel of telecom policy experts, including
CEI Research Fellow and Regulatory Counsel Ryan
Radia, who explained how Congress can ensure that a
future FCC does not impose heavy-headed regulation
on the Internet. Then on May 17, CEI hosted a book
party featuring Professor Thomas Hazlett, a former
FCC chief economist and author of the new book on
spectrum policy, ThePolitical Spectrum: The Tumultuous
Liberation of Wireless Technology, from Herbert
Hoover to the Smartphone. Radia interviewed Hazlett
about his new book, which chronicles how free market
forces have improved the allocation of spectrum
and the ways in which the government is still far too
involved in how spectrum is used by market participants.

COMPETIVE ENTERPRISE INSTITUTE C E I . O R G 9


Myron Ebell on the Energy and
Environment Policy in the
Trump Administration
On March 16, Myron Ebell, director of CEIs Center for
Energy and Environment, participated in a luncheon
discussion at the Independence Institute in Denver, on his
recent role leading the incoming Trump administrations
EPA transition team (pictured). The event attracted around
120 attendees.He also recorded a 30-minute interview
for Independence Institute President Jon Caldaras
weekly show, Devils Advocate, on Colorado Public
Television.Then on March 23 and 24, Ebell spoke at
the Heartland Institutes 12th International Conference
on Climate Change in Washington, D.C., where he
was presented the Speaking Truth to Power Award
by Heartland President Joseph Bast.On April 5, Ebell
debated Jeremy Symons of Environmental Defense at an
event hosted by Georgetown University.Then on April 24,
Ebell spoke on the prospects of energy sector deregulation
in the Trump administration, climate policy, and other
topics at the Bloomberg New Energy Finance (NEF) 10th
annual Future of Energy Summit in New York City, an
invitation-only event with over 1,000 attendees, which was
livestreamed to Bloomberg NEF clients. Finally, on May
15 and 16, Ebell spoke at the Washington Policy Centers
annual Solutions Summit policy conference, in Spokane
and Bellevue, Washington, on environmental policy in the
Trump administration.

Marlo Lewis Discusses U.S.-Canada Energy


Cooperation and Auto Fuel Efficiency
On April 5, CEI Senior Fellow Marlo Lewis participated in a Heritage
Foundation panel discussion of U.S.-Canadian economic and security
issues (pictured). Saskatchewan Premier Brad Wall keynoted the
event. Then on April 14, Lewis participated in a panel discussion,
sponsored by the R Street Institute, on fuel economy and vehicle
emission regulation. Lewis argued that auto markets are a discovery
process for finding outconsumer preferences. He was joined on the
panel by Chris Nevers of the Alliance of Automobile Manufacturers,
Steven Nadel of the American Council for an Energy Efficient
Economy, Ian Adams of R Street, and Rod Richardson of the Grace
Richardson Foundation.

10 CEI.ORG COMPETIVE ENTERPRISE INSTITUTE


Marc Scribner on Transportation and
Infrastructure
On February 22, CEI Senior Fellow Marc Scribner
spoke on a panel before House staffers on how to
reform airport financing in a free market direction. Then
on March 6, he appeared on a Cato Institute panel on
the prospects for transportation regulatory reform in the
forthcoming infrastructure package being developed by
the administration. On March 29, Scribner spoke at an
event sponsored by The Hill newspaper at the Newseum
(pictured) on infrastructure modernization and what the
United States could learn from Canada.

CEI Unveils New Agenda


for Congress
On March 23, 2017, CEI hosted
an evening reception on Capitol
Hill to launch Free to Prosper:
A Pro-Growth Agenda for the
115th Congress. Free to Prosper
is designed to be the go-to
resource for policy makers and
their staff for market-oriented
policy solutions. All of CEIs policy
experts attended the reception
to meet and speak with over 70
congressional staff who joined
us. CEI President Kent Lassman
provided welcoming remarks.

COMPETIVE ENTERPRISE INSTITUTE C E I . O R G 11


End the Madness by Letting States
Legalize Sports Betting
Gambling regulation has histori- a national interest in protecting the
BY MICHELLE MINTON cally been a state matter. As a form of integrity of sports.
commerce conducted entirely within Over the past three decades,

D uring the recent National


Collegiate Athletics Association
(NCAA) Mens Basketball
state borders, Congress generally
leaves it up to the states to decide how
it ought to be regulated. However, in
PASPA has proven to be a failure. The
sports gambling market in the U.S.
swelled from around $40 billion per
Championship, sports fans around the the 1990s more than a dozen states year in 1991 to an estimated $140
nation eagerly followed the action contemplated legalizing sports wager- and $400 billion per year today, with
not just to see how their teams per- ing, which provoked concern, largely Americans filling out around70 mil-
formed, but how well they did in their among the major national sports lion bracketsduring March Madness
March Madness betting pools, with leagues, that more gambling would alone. Clearly, preventing states from
the chance of winning a small sum of lead to corruption and an erosion of legalizing the activity has done little
money by predicting the winner. Few public trust in sports. to stop the spread of sports bet-
realize, however, that their friendly Acting on that fear, Congress ting, as explained in my recent CEI
wagers on the games are illegal due to passed the Professional and Amateur study,Time to End the Madness
an archaic federal statute. For the sake Sports Protection Act (PASPA), which around March Madness. What the
of the millions of fans who enjoy betting blocked states that had not already ban has done is prevent states from
on the game and the constitutionally legalized sports betting (namely, just legalizing sports betting, generating
guaranteed sovereignty of the states, Nevada) from doing so in the future. revenue, and instituting real, legally
this law must be changed. Congress justified this unprecedented enforceable consumer protections.
intrusion into state matters by claiming Worst of all, the law treats adults like

12 CEI.ORG COMPETIVE ENTERPRISE INSTITUTE


In October 2014, the New Jersey In fact, it has actually increased the
What the ban has legislature repealed the states laws
that explicitly prohibited sports gam-
likelihood of match-fixing. In Europe
and much of the rest of the world where
done is prevent bling at casinos and race tracks,
attempting to decriminalize but not
sports betting is legal, sports leagues
rely on the gambling industry as an
states from legalizing expressly legalize the activity. Again,
the sports leaguesled by the NCAA
early warning system. Bookmakers
can alert the leagues when they spot
sports betting, sued. Disturbingly, federal courts have
sided with the leagues twice, agreeing
signs of match-fixing and work with the
authorities to bolster game integrity,
generating revenue, that PASPA not only barred states from
legalizing sports betting but even pre-
to mutual benefit. In the U.S., bookies
who want to alert authorities to signs of
and instituting real, cluded them from modifying their own corruption cant do so without fear of
laws in a way that appeared to conflict being prosecuted.
legally enforceable with spirit of federal law. It is not the role of the federal
Though courts have rejected the government to protect the reputation
consumer protections. argument that PASPA unconstitution- of our sporting events or dictate the
ally prohibits state-based commerce, types of wagering individuals may
the U.S. Supreme Court has indicated engage in or states may authorize. It is
children and makes criminals out of
interest in hearing New Jerseys time for Congress to place its bets on
otherwise law-abiding citizens.
appeal, asking for the opinion of the the American people and American
The law is also unconstitutional.
acting Solicitor General on the case. federalism by repealing PASPA and let-
As the State of New Jersey has
Hopefully the Court will hear the case. ting states decide for themselves on the
argued many times in court, the 10th
Otherwise, we are left with a big prob- question of sports betting.
Amendment to the Constitution reserves
lemnot just for sports betting but for
powers not delegated to Congress
any issue on which the states deviate
to the states and to individuals. The
from Washington and attempt to repeal Michelle Minton (michelle.minton@
Constitution makes no reference to
their own laws. cei.org) is a fellow at CEI. A version
giving Congress the power to prevent
The citizens of each state deserve of this article was originally published
states from legalizing certain types of
to have their interests well represented by theAmerican Legislative Exchange
commercial activities, such as gam-
by their own state lawmakers. And the Council.
bling. The courts, however, have sided
states should be protected from federal
with the sports leagues, who have sued
legislators commandeering the will of
the Garden State each time it tried to
state lawmakers and citizens.
legalize sports betting, arguing that this
Meanwhile, PASPA has also done
violated PASPA.
nothing to protect the integrity of sports.

I, Whiskey: The Movie

COMPETIVE ENTERPRISE INSTITUTE C E I . O R G 13


THE THE THE
GOOD BAD UGLY

The Good: Court Criticizes The Bad: Glass-Steagall The Ugly: House GOP
Schneidermans Evasion of May Return Abandons Repeal of
Open Records Law Payment Card Price Controls

A new court ruling criticizes New York On May 1, President Trump told In May, House Republicans gave up
Attorney General Eric Schneidermans Bloomberg News that he was consid- efforts to repeal a provision of the 2010
illegal stonewalling of public records ering breaking up Americas biggest Dodd-Frank financial law that imposes
requests. At issue in the case is the banks. Im looking at that right now, caps on the fees that banks and credit
key document related to a coalition he said. Theres some people that want unions place on debit card purchases.
orchestrated by Schneiderman last to go back to the old system, right? So The provision, known as the Durbin
year that was aimed at shutting down were going to look at that. It was the Amendment, for its sponsor, Sen. Richard
the climate science debate. The State latest rumbling from this administration Durbin (D-Ill.), enjoys the support of
of New York Supreme Court handed about government action against banks. large retailersincluding Walgreens,
down a ruling on April 19, which Trumps chief economic adviser, Gary which is based in Sen. Durbins home
awarded attorneys fees to CEI in our D. Cohn, has previously talked about state of Illinois.
successful legal challenge to obtain bringing back the Glass-Steagall Act, All the evidence suggests the cap on
an official copy of Schneidermans a Depression-era law that separated debit card interchange fees resulted in a
Common Interest Agreement, the investment and commercial banks but windfall for retailers who failed to pass
document behind his multi-state, anti- was partially repealed in 1999 by the on savings to consumers, said CEI Vice
free speech campaign. Even after the Gramm-Leach-Bliley Act. President for Strategy Iain Murray. The
agreement became available on the Whatever one thinks about break- result has been a net loss of around $25
Internet, Schneidermans office refused ing up the big banks, thats not what billion a year for American consumers,
to release an official copy of it. bringing back Glass-Steagall would most of it born by low-income house-
In the ruling, the court character- do, warns CEI financial policy expert holds. The House had a chance to right
ized Schneiderman as having stone- John Berlau. Re-imposing Glass- this wrong, and they blew it.
walled and as having completely Steagall restrictions would just prevent A Home Depot executive bragged
failed to explain his conclusory banks of any size from dealing in on a stock analysts conference call that
reasoning for withholding the docu- securities through an affiliate, hurting price controls could add up to $35 mil-
ment. It noted that the fee award was their bottom line and denying consumer lion per year to the chains bottom line,
particularly appropriate to promote choice. Regional and community banks said CEI Senior Fellow John Berlau. If
the purpose of the states Freedom couldnt supplement their income with the Durbin amendment explicitly bars
of Information Law. CEI sought the other financial services, which is espe- banks and credit unions from recouping
agreement after having successfully cially important during hard times, and the full cost of a debit card transaction
fought off a wide-ranging subpoena consumers couldnt receive brokerage from a retailers, who pays these costs?
from U.S. Virgin Islands Attorney and insurance services from their com- Consumers. The costs have been shifted
General Claude Walker, a member of munity banks. Bringing back Glass- to them in the form of reduced benefits,
Schneidermans anti-speech coalition. Steagall would be destructive but for like free checking, and higher fees at
small banks more so than big ones. their banks and credit unions.

14 CEI.ORG COMPETIVE ENTERPRISE INSTITUTE


MediaMENTIONS
The Wall Street Journals editorial with all its shortcomings, will preclude The Wall Street
board highlights the findings of the experimentation and bargaining Journal reports
the 2017 edition of Ten Thousand among companies that causes markets on the release of
Commandments. to progress. Wayne Crews
As if taxes havent been high April 25, Fortune latest study on
enough, the U.S. Government also Regulatory Dark
forced Americans to spend an eye- The Washington Post highlights Matter.
watering $1.9 trillion in 2016 just to CEIs campaign urging President According toa
comply with federal regulations. Thats Trump to withdraw from the Paris report out todayfrom
according to the latest annual 10,000 Climate Treaty. the indispensable Wayne Crews of the
Commandments report released today On Tuesday, the Competitive Competitive Enterprise Institute, on top of
by Wayne Crews of the Competitive Enterprise Institute, a conservative the thousands of rules the federal govern-
Enterprise Institute. If it were a country, advocacy group, released an ad urging ment churns out, the feds have also been
U.S. regulation would be the worlds Trump to jettison the Paris climate deal. issuing nearly 25,000 notices every
seventh-largest economy, ranking The ad includes footage of Trump on the year telling Americans what to do in the
behind India and ahead of Italy, notes campaign trail, promising to cancel absence of any new law or regulation.
Mr. Crews. He adds that our regulatory the Paris deal. Mr. Crews also finds that not even federal
tab is nearly as large as the total pretax Mr. President, dont listen to the agencies can agree on how many fed-
profits of corporations. swamp, it goes on to say. Keep your eral agencies there are. Estimates range
May 31, The Wall Street Journal promise. Withdraw from the Paris cli- from 61 to 443.
mate treaty. March 14, The Wall Street Journal
Senior Fellow John Berlau dis- In a statement accompanying the
cusses the changing finance and ads release, CEIs Myron Ebellwho Senior Fellow Marc Scribner
banking regulatory landscape headed up Trumps EPA transition discusses how increasing airline
under the Trump administration. teamsaid exiting the Paris agreement competition may be the solution to
Consumers, investors and entre- is an integral part of the new adminis- incidents of poor service:
preneurs have been winners under trations push to unravel Obama-era As Marc Scribner of the Competitive
Trump, said John Berlau, senior fellow environmental regulations. Enterprise Institute put it this week: If
at the Competitive Enterprise Institute, a April 19, The Washington Post American consumers wish to enjoy
free-market think tank. The banks that improved service quality in air travel,
want more freedom, that are innovative, Center for Class Action Fairness they should demand that Congress
will be winners. The banks that want founder Ted Frank discusses how repeal 90 years of anti-competitive
government support for things like the plaintiff lawyers use class action federal law. Less regulation of air travel,
SIFI designation and use regulation to settlements to enrich themselves not more, is the solution.
block their competition are going to be at the expense of class members. January 14, Los Angeles Times
some of the losers. In general, this is a systemic issue
April 26, CNBC with class actions, where lawyers
structure settlements to benefit them-
Research Fellow and Regulatory selves rather than the class, said Ted
Counsel Ryan Radia discusses Frank, a lawyer and director of the
the Federal Communication Center for Class Action Fairness at the
Commissions Chairman Ajit Pais Competitive Enterprise Institute think tank
plan to eliminate net neutrality in Washington D.C. Its a consistent
rules. problem.
The rigid rules that now govern Frank said judges who must approve
Internet providers forbid an array of settlements in such cases sometimes
business models that could benefit approve seemingly lopsided agree-
consumers, Ryan Radia, a research ments, despite laws designed to prevent
fellow at the pro-business Competitive attorneys from structuring settlements to
Enterprise Institute, said in a statement. benefit themselves more than the class.
Freezing todays Internet in place, April 5, The Boston Globe

COMPETIVE ENTERPRISE INSTITUTE C E I . O R G 15


Nonprofit Org.
U.S. Postage
PAID
Permit 425
Southern MD

...END NOTES
If You Build It, Taxpayers Will Pay for It Part I D.C. Transit Agency Making Delays More Aromatic
The National Football League hates gambling so much The Washington, D.C.-area Metro subway system
that it recently approved the Oakland Raiders move to Las which The Washington Post called a national embarrass-
Vegas. But its a winning bet for Raiders owner Mark Davis, ment last yearhas its share of well-known troubles. From
who is essentially gambling with house moneyexcept service interruptions to fires so frequent they led a local
this time the house is the taxpayer. At $750 million, its the resident to create the website ismetroonfire.com, transit
largest direct public subsidy for a stadium ever granted, agency officials have their work cut out for them. So in an
and Clark County will soon be floating a bond to raise effort to improve riders experience, Metro is installing
all that money and raising hotel room taxes on the Strip air fresheners. The fresheners, installed on Metros green
by 0.88 percent in order to pay back their debt hold- line, come in two scents: cucumber melon and mango. The
ers over the next 30 years, notes Deadspin writer T. M. results? Metro spokeswoman Sherri Ly said that customer
Brown. Worse, this isnt an isolated case. Mercatus Center surveys found an increase in rider satisfaction with the level
researcher Michael Farren finds that by 1992, 77 percent of railcars cleanliness. On social media, rider reaction has
of all professional sports stadiums in the U.S. had been been mixed. While some have said they like the new train
financed by taxpayers. Within a decade, nearly half of all smell, one rider wrote to the Post, asking, Why not just
professional sports franchises were once again request- clean the trains really well with nontoxic cleaning agents
ing public funds for new facilities or were already in the and get rid of the moldy, mildewed, smelly carpeting on
construction or renovation process. many trains?

If You Build It, Taxpayers Will Pay for It Part II Excuses, Excuses
Local politicians often tout municipal broadband as key On May 24, Vermont Governor Phil Scott became the
to their regions economic development. Yet, the results to first state executive to veto a bill to decriminalize marijuana.
date are less than stellar. In a new study, Christopher Yoo His reason? The supposed lack of a reliable roadside test to
and Timothy Pfenninger of the University of Pennsylvania find determine driver impairment from THC, the intoxicant found
that few city- and county-owned broadband networks in the in marijuana. But the absence of a reliable roadside sobriety
U.S. are earning back predicted revenue, and many threaten test for THC is a poor excuse for striking down the legisla-
to jeopardize other local spending priorities because of tion. Reason magazine columnist Jacob Sullum recently
cost overruns. Examples include the Minnesota city of reviewed several Automobile Association of America (AAA)
Monticello, which established a municipal fiber network in reports that looked at THC-related traffic incidents. One
2009, expecting it to eventually turn a profit. Instead, the report was based on THC-related traffic incident data in
network, known as FiberNet, has lost millions of dollars, Washington State between 2005 and 2014 (Washington
suspending payments to bondholders in 2012. The service is and Colorado legalized recreational marijuana in 2012).
still operating it at a loss, running a $100,000 operational While AAA reported a 30-percent increase in THC-related
deficit in the last half of 2016 alone. Today the network costs traffic incidents events over that period, 66 percent of drivers
$5,549 per household, or $16,875 per subscriber. who tested positive for THC in fatal accidents also tested
positive for other substances. Irresponsible behavior, it
seems, doesnt depend on access to any one substance.

16 CEI.ORG COMPETIVE ENTERPRISE INSTITUTE