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COMPETITIVE ENTERPRISE INSTITUTE

VOL. 31, NO. 4 | WINTER 2018

FEATURED ARTICLES

A Case for an Executive Order to


Rein in “Regulatory Dark Matter”
4 BY CLYDE WAYNE CREWS, JR.
comment for certain rules as “impracticable,
unnecessary, or contrary to the public
BY RYAN YOUNG AND IAIN MURRAY
interest.”

D
Trump’s Trade War eterioration of checks and balances To worsen this weakening of checks and
Hurts Americans via regulatory overreach and over- balances, the APA enables administrative
delegation by Congress to agencies are agencies to influence policy and exert
central to most modern critiques of the preferences and biases, without writing
administrative state. Less appreciated, notice-and-comment regulations at all.
though, is the extent to which administrative The catalog of allegedly sub-
agencies can influence policy without going regulatory decrees goes on, encompassing
7 through the established rulemaking process.
Agencies have issued reams of guidance
memoranda, notices, circulars, FAQs,
administrator’s interpretations, bulletins, and
BY ANGELA LOGOMASINI documents consisting of general statements other forms of “regulatory dark matter”—
Unfounded Accusations of policy and interpretive rules—as well as including even press releases and blog posts.
Regarding Bees and Glyphosate memoranda, interpretive bulletins, and other Such guidance can subvert the APA as a
issuances—over the years that can carry safeguard against overregulation. Worse,
regulatory weight. such widespread use of guidance displays
Congress should both streamline such disregard for constitutional norms.
decrees and reaffirm that such policy making Such agency edicts are not supposed
via guidance is not binding. However, given to be legally binding on the public, or even
that congressional action is both slow and on the agencies themselves. Yet, agencies
10 unlikely in the short term, the president should
issue a new executive order to highlight
sometimes invoke or refer to guidance in
correspondence or interaction with regulated
BY TREY KOVACS and strengthen the review and control entities. While businesses frequently request
A Labor Reform both Democrats of sub-regulatory guidance documents. clarifying guidance, even the Administrative
and Republicans Can Get Behind Over-delegation by Congress to agencies, Conference of the United States (ACUS)
overreach by those agencies, and court acknowledges that “members of the public
deference to that state of affairs have led to may feel bound by what they perceive as
ALSO IN THIS ISSUE this proliferation of regulation. coercive guidance” and “sometimes find they
The 1946 Administrative Procedure Act have no practical escape from the terms of a
(APA) established the public consultation policy statement.”
Congress Already Ruined Sports Betting
Once; Don’t Let Them Do it Again. . . . . . . . . . 5 rulemaking process, which consists of In addition, a significant amount of both
More Realistic Fuel Economy Rule Would advance notification of rulemaking to regulations and guidance is invalid, not
Cut Traffic Fatalities and Lower Gas Prices. . . 6 give the public the opportunity to provide having been submitted to Congress or to
A Decade after the Financial Crisis, the comment on a published proposed rule the Comptroller General of the Government
Government Fuels another Housing Bubble.8 before it is finalized in the Federal Register. Accountability Office as required by the
Supreme Court Hears Challenge to Unfair Despite its purported safeguards, the APA’s 1996 Congressional Review Act—which
Class Action Settlement . . . . . . . . . . . . . . . . . . 9 rulemaking process allows for wiggle gives Congress 60 legislative days to review
The Government Should Allow T-Mobile room via its “good cause” exemption, by a final major rule and pass “resolutions of
and Sprint to Merge. . . . . . . . . . . . . . . . . . . . 11 which an agency may deem notice and disapproval” to repeal certain agency rules.
The Good, the Bad, and the Ugly. . . . . . . . . 14
Media Mentions. . . . . . . . . . . . . . . . . . . . . . . 15 (continued on page 3)
End Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
A Winter Escape from the Regulatory Blahs
by Kent Lassman

M ore than 30 to one. That is the typical ratio of


new regulations issued by agencies to laws
passed by Congress and signed by the president
regulatory reform initiatives, the prospects for
autonomous vehicles, and insights into the future of
FinTech and consumer finance.
each year. It is a remarkable and damning In addition to CEI’s stars, several outstanding
statement about the lack of accountability of the guests are planning to join us in Savannah. Aaron
regulatory state. Brown, former chief risk manager at AQR Capital
However, before that number gets us down too and author of The Poker Face of Wall Street,
much, it is worth noting that the Trump administration will lead a dinner conversation on the coming
FROM THE PRESIDENT

has implemented a rudimentary regulatory budget, cryptocurrency revolution. As a launching point


a reform long proposed by CEI that can be an for the talk, Aaron will unravel the foresight and
important first step in reversing the unrestrained contemporary implications of Friedrich Hayek’s
growth of the administrative state. In this issue of CEI seminal 1976 volume, The Denationalization of
Planet you can read about the next step in CEI’s plan Money, and the current radical innovation of bitcoin.
to limit and right-size regulatory agencies. Wayne Will trustless value exchange on the Internet,
Crews explains how an executive order can further intermediated by cryptocurrencies, change the
restrict regulatory dark matter. concepts of ownership and identity? You may never
In addition, this issue features several articles own or use cryptocurrencies, but if you live until
to give you more background on critical issues 2030, Brown argues, they will change who you are,
like Trump’s trade war and a win for federalism on what you own, and what you can do.
sports betting. The former need not be a foregone Two respected longtime allies from the think
conclusion and the latter is an area where freedom is tank community will also participate to discuss
winning. There are updates on regulatory action that their recently published books. We’ll hear from
affect safety on America’s highways and how we American Enterprise Institute scholar Peter Wallison
grow our food. We bring you the latest on the most on his strategy to reverse executive agency
recent case CEI has brought to the Supreme Court, overreach, which makes up the core of his new
Frank v. Gaos. book, Judicial Fortitude: The Last Chance to Rein in
From topical news like a major the Administrative State. And Reason co-founder
telecommunications merger—and how federal and policy scholar Bob Poole will outline a radical,
regulators see it as an opportunity to micromanage economically sound solution for transforming
the business climate—to critical workplace trends our failing roads, as described in his new book,
like members-only unions, the Planet is your window Rethinking America’s Highways: A 21st Century
into how and where the team at CEI is building Vision for Better Infrastructure.
momentum steering regulatory policy in the direction To participate in this exciting conversation, make
of greater freedom. sure to reserve your space. Contact any member
You can hear from many of your favorite CEI of the CEI team for more information on how to
experts, who will be in Savannah, Georgia for get involved. We look forward to seeing you in
our next policy summit February 21-24. Join us for Savannah!
a mid-winter vacation from the regulatory blahs.
CEI’s Wayne Crews, Iain Murray, Daniel Press,
Marc Scribner, Sam Kazman, and other members
of our team will share with you details on promising

The CEI Planet is produced by the Competitive Enterprise


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

2 CEI.ORG COMPETITIVE ENTERPRISE INSTITUTE


Dark Matter, continued
Pruning back agency rules, by executive order or regulatory
or pausing their issuance, is only reform legislation—would tend to shift
a first step toward reining in the toward sub-regulatory guidance as a
administrative state, given agencies’ workaround.
inclination to resort to regulatory dark If Congress sees a flurry of new
matter to influence policy. Bringing reports on guidance documents in
regulation and guidance under part triggered by a new executive
control and strengthening democratic order, that may be the impetus for Help the Competitive
accountability will require reining in the it to finally take steps to scale down Enterprise Institute carry
bureaucracies that enable and sustain the administrative state more broadly
rule by unelected professed experts. by addressing the issue of over- on its work for generations
Guidance creates a loophole for delegated power. If Congress wants by joining the Legacy
regulation. It merits the same high-level, a new rule or guidance, it can vote to
formal executive branch treatment rules enact it. It is long past time to rein in of Liberty Society
receive. When government increasingly agency overreach via regulatory dark
dominates vast sectors of human matter. We must, one way or another,
enterprise and seeks to expand into learn whether guidance is governable.
Thanks to the generous support of our friends,
new ones, it need not trouble itself with the Competitive Enterprise Institute has
such formalities as issuing regulations remained a successful advocate for liberty for
at all. Over time, agencies discouraged Wayne Crews (wayne.crews@cei.org) is nearly 35 years. The Legacy of Liberty Society
from issuing traditional rules—whether Vice President for Policy at CEI. recognizes the faithful support of any donor
who desires to advance the principles of free
enterprise and limited government through
his or her will, trust, life income gift, retirement

CEI Summit 2019


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planned giving instrument.
Contributions to CEI are tax deductible. We
accept gifts via check, credit card, cash, or

Savannah, Georgia, Bitcoin—as well as stock or other securities


and assets. CEI also accepts contributions in a

February 21-24, 2019


will or trust. Including CEI in your estate plans
is easy, and can be altered as needed.
Consult your tax professional about the limits
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tions and your tax situation. For contributions
in a will or trust, consult a tax or estate profes-
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Join CEI in the charming “Business Belle of the South”


If you would like to join the Legacy
for its third annual summit. Stay with us at the new Perry of Liberty Society or learn more
Lane Hotel, in the heart of Savannah’s historic district, and about the impact you can make
engage with CEI policy experts, special guest speakers, through one of CEI’s giving societies,
please contact CEI’s Philanthropy
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COMPETITIVE ENTERPRISE INSTITUTE C E I . O R G 3


Trump’s Trade War Hurts Americans
of goods from the United States, both
BY RYAN YOUNG AND IAIN MURRAY sides are better off. Americans have
gotten $592 billion worth of value
When governments
T he Trump administration recently
announced a trade agreement that
from trade with the EU, while sending
only $500 billion of goods across
impose retaliatory
will replace the 24-year-old North
American Free Trade Agreement
the Atlantic. The “deficit” is actually a
surplus of value. Both sides win.
tariffs, they are
(NAFTA) with the United States-
Mexico-Canada Agreement. The new
Governments can prevent that
win-win from happening by imposing
essentially saying:
agreement is not that different from
NAFTA. Given the president’s affinity
tariffs or regulatory standards that
raise the cost so much that their citizens
“We are going to
for government-managed trade, that’s
a good thing. Although the negotiations
are no longer willing to pay. In doing
so, governments deny their citizens
hold our consumers
missed some significant reform
opportunities, the new agreement
the opportunity to improve their lives.
When governments impose retaliatory
hostage until you
leaves intact the mostly tariff-free
relationship between the United States,
tariffs, they are essentially saying:
“We are going to hold our consumers
stop holding your
Canada, and Mexico.
The most obvious missed
hostage until you stop holding your
consumers hostage!”
consumers hostage!”
opportunity is that recent U.S. tariffs Yet, the full effects of tariffs are
worse than that. They amount to In fact, the Tax Foundation calculates
against Canadian and Mexican steel
government intervention in the market that the effect of tariffs imposed so far
and aluminum will remain in place,
to favor some economic activities over already outweighs the benefits of the
allegedly for national security reasons.
others. Thus, a new steel plant has to tax cuts.
These tariffs are unjust and harmful to
be viewed alongside the increased There are other ways to achieve
American consumers. Some American
costs to industries that use steel as an the administration’s goals that do not
businesses are going under because
input. Some of those businesses may require imposing pain on American
of them. Jobs are being lost. Prices of
close. Some people gain jobs, others citizens. America and the European
consumer goods like dishwashers are
lose them, but the jobs that are created Union can join together to use the
going up. Meanwhile, ever-increasing
are jobs that exist only because of World Trade Organization to put
tariffs on imports from other countries
the government’s industrial policy pressure on China, for instance, by
like China will further exacerbate
masquerading as trade policy. revoking its status as a developing
these problems. To fully understand
The president’s stated goal of country, which it uses to justify
why these tariffs are not the “win” the
reducing all trade barriers to zero is many of its worst practices. The U.S.
president and his supporters make
a worthy one. He also has a point steel industry can be promoted via
them out to be, we have to think clearly
when he says that China’s predatory deregulation, especially in relation to
about what international trade actually
practices should be held to account. its energy needs, not trade protection.
entails.
Forced technology transfer and What the administration should
We often talk about trade between
requiring companies doing trade not do is impose significant pain on
nations as if it were done between
in China to include the Chinese American citizens. That’s exactly what
governments. But “Mexico” does
Communist Party in their charters are is happening with Trump’s tariffs. This is
not trade with “America.” The actual
examples of bad trade practices that why the president’s trade policy is not
trade is between individuals, to the
need to stop. Yet, trying to achieve working.
tune of billions of transactions a year.
That trade is win-win by definition. these objectives by imposing pain on
Individuals only give something up if Americans is simply bad policy.
This administration has provided Ryan Young (ryan.young@cei.org)
they expect something better in return.
significant relief to American businesses is a Fellow at CEI. Iain Murray (iain.
That means the term “trade deficit”
and consumers by removing some murray@cei.org) is Vice President for
is incredibly misleading. When
burdensome regulations and reducing Strategy at CEI. A version of this article
Americans buy $592 billion worth of
taxes. A prolonged trade war will was originally published at Morning
goods from the European Union (EU),
negate the gains from these policies. Consult.
and the EU buys $500 billion worth

4 CEI.ORG COMPETITIVE ENTERPRISE INSTITUTE


Congress Already Ruined Sports Betting
Once; Don’t Let Them Do it Again
near for the federal sports gambling Giving the leagues a data monop-
BY MICHELLE MINTON ban. In January 2017, the major U.S. oly also allows them to decide what
sports leagues began lobbying state types of bets gambling companies can

A fter a prohibition lasting more than


two decades, Americans outside
Nevada can finally bet on sports
lawmakers to ensure that, were sports
betting to be legalized, the subse-
quent regulations would guarantee
make, because they can withhold data
if they don’t want certain bets made.
This would give the leagues an extraor-
without breaking the law. The newfound the leagues a cut of the gambling dinary advantage over the gambling
freedom is thanks to a May ruling by profits. industry when negotiating contracts.
the Supreme Court that overturned the A key component of the leagues’ Schumer’s proposal would be a
federal law blocking states from legal- plan was an “integrity fee.” Under this windfall for the leagues—all of which
izing sports betting. Since then, four plan, sports books would be required are headquartered in Schumer’s
states have joined Nevada in offering to pay the leagues 1 percent of all home state—but would do nothing to
legal gambling on sports. Those states bets wagered. That might sound like safeguard consumers or the integrity of
are already reaping the benefits, collect- a pittance, but the fee would actually sporting events. The opposite, actually.
ing millions in tax revenue and licensing amount to about 20 percent of gam- Match-fixing is more likely to
fees. More importantly, legalization bling operators’ profits, since they only occur when betting markets are illegal
undermines the vast illegal sports keep a portion of the money wagered, because it is easier for criminals to hide
gambling industry—a win for consumers while paying out the rest to winners. their behavior. And the more criminals
and sports integrity. So why is Congress State legislators have almost unani- profit by illegal gambling, the more
discussing a proposal that could bring mously rejected the leagues’ demand money and incentive they have to
this progress to an abrupt end? for integrity fees; they likely under- attempt to corrupt players and officials.
The federal ban aided the rise of stand that imposing them would limit Congress set the stage for this
illegal sports betting, an estimated the nascent legal gambling industry’s exact scenario in the U.S. when it
$150 billion a year industry in the U.S., ability to attract customers and gen- barred states from regulating sports
that for 25 years Congress did nothing erate tax revenue for states. But the betting, giving consumers no other
to stop. Yet some in Congress now insist leagues seem to have had better luck option but the black market. Now
that the federal government is better with Congress. Though Schumer’s plan they are considering proposals that
equipped to regulate the burgeoning doesn’t mention integrity fees, it would will make it harder, if not impossible,
legal industry. grant leagues a price monopoly. for legal gambling operators to offer
A September 27 House Judiciary Schumer’s proposal gifts the the same types of games, odds, and
Committee hearing focused on the leagues a data monopoly, allowing payouts as the illegal market, ensuring
Supreme Court ruling’s implications for the leagues to charge as much as they that customers continue to spend their
federal sports betting regulation. So want for their data. It would require money illegally.
far, the only proposed framework for gambling operators to rely exclusively If we allow Congress to set the rules
federal sports betting regulations comes on “league data” to determine the that govern sports gambling again, we
from Sen. Chuck Schumer (D-N.Y.). outcome of bets. This means gambling will be stuck with those rules and their
Like those who originally endorsed the operators would be prevented from unintended consequences for decades.
sports betting ban, Schumer argues that using third-party sources of information One can debate the merits of the specific
federal interference in sports betting about games (even public sources) and laws that govern sports gambling, but
is necessary to protect sporting events forced to buy the data needed to make after a 25-year failure to address illegal
from criminals who might try to corrupt bets from the leagues. sports betting, it is difficult to argue
the games and profit by wagering on In Europe, third-party data com- Congress would be more effective than
fixed outcomes. However, the plan panies compete to sell data to sports- the states at regulating the industry.
details make it clear the motivation for books on the basis of price, speed, and
regulating sports betting is less about accuracy. Schumer’s proposed frame-
safeguarding consumers or markets than work would eliminate that competi- Michelle Minton (michelle.minton@
about protectionism and rent-seeking. tion, essentially giving the leagues the cei.org) is a Senior Fellow at CEI. A
Even before the Supreme Court power to force sportsbooks to pay as version of this article was originally
ruling, it was clear that the end was much as the leagues want for the data. published at the Washington Examiner.

COMPETITIVE ENTERPRISE INSTITUTE C E I . O R G 5


More Realistic Fuel Economy Rule Would
Cut Traffic Fatalities and Lower Gas Prices
The average mileage requirements
BY MYRON EBELL were set to increase rapidly from the
existing standard of 35 mpg by 2020

T he Trump administration has


proposed to halt the steady
increases in corporate auto fuel
for passenger cars, pickup trucks, and
SUVs to 54.5 mpg by 2025.
After review, the Department of
economy (CAFE) standards that were Transportation and the Environmental
concluded as part of backroom deals Protection Agency decided to scale
made by the Obama administration back the rate of annual increases, and
with the State of California and then flatline CAFE at 37 mpg from
automakers between 2009 and 2012. 2020 to 2026.
In doing so, the administration has Meeting ever more stringent fuel
struck a blow for consumer choice that economy standards is driving up new-
will be good news for drivers planning vehicle prices. Sticker shock is causing
to buy a new car in the next decade. a lot of people to hang on to their
That’s because the mileage mandate current cars. The average age of all
is one of the main causes of rapidly cars on the road is now at an all-time
rising vehicle prices. Freezing CAFE high of nearly 12 years.
standards will make new cars more The Transportation Department’s
affordable for millions of Americans analysis shows that having so many
and allow many of them to buy bigger 15- to 25-year old cars on the road
and safer new models. poses a major safety concern. Not only Federal CAFE standards have limited
CAFE standards were first enacted are newer cars safer, but systems such consumer choice and forced consumers
in 1975 as a response to the 1973 as braking and airbags become less either to buy models they would not
OPEC oil embargo. The idea behind reliable as cars get older. otherwise buy or to put off buying new
CAFE was that reducing American How much safer the administration’s cars altogether.
dependence on foreign oil was a proposal make new cars will be For many people, fuel economy
national interest more important than hotly debated. The Transportation will still be the most important factor in
other factors that people consider Department concludes that the choosing a new car. The good news for
when buying a new car, such as safety, proposed changes will prevent about them is that the Trump administration’s
size, performance, and cost. 1,000 traffic fatalities a year. If that action will in no way prevent them from
Even with CAFE, American number is anywhere close to reality, buying a model that gets great gas
dependence on foreign oil increased it will be hard for anyone to argue mileage. The good news for everybody
as more people drove more miles against making those changes. else is that the choice of models will be
and domestic oil production declined. Supporters of CAFE respond by much wider than if the CAFE standard
However, by 2012 it was clear that pointing to polls showing strong public had remained at 54.5 mpg.
the shale oil and gas revolution was support for higher fuel economy
rapidly increasing domestic production standards. The polls are no doubt
and would solve the very problem accurate on that one question, but they Myron Ebell (myron.ebell@cei.org)
CAFE was designed to address. fail to ask respondents whether they is Director of the Center for Energy
Although Congress has refused to would support higher fuel economy and Environment at CEI. A version of
enact global warming legislation, a standards if it meant that the vehicles this article was syndicated by Tribune
2007 Supreme Court decision allowed they could buy were smaller, less safe, News Service, and appeared in 30
Obama’s Environmental Protection and more expensive. newspapers, including the Los Angeles
Agency (EPA) to repurpose CAFE as There are tradeoffs between Times, Chicago Tribune, Newsday,
a program to reduce greenhouse gas price, safety, fuel economy, size, and Sacramento Bee, Wisconsin State
emissions. performance. That is the key point. Journal, and Arizona Daily Star.

6 CEI.ORG COMPETITIVE ENTERPRISE INSTITUTE


Unfounded Accusations Regarding
Bees and Glyphosate
The researchers mixed the chemical
BY ANGELA LOGOMASINI with sugar water and fed it to the bees.
“Whoa. Here is an assumption that

R ecent accusations that a popular


weed killer harms honeybees have
become headline news in a wide range
puzzles me,” observes Bloom. “What
does a dose of 5-10 mg have to do
with the amount of glyphosate that
of sources including CBS News, The would be found in, or consumed by, a
Guardian, and Popular Science. Yet the bee foraging in weeds that contain a
solitary study they all cite doesn’t hold similar concentration?” not find serious impacts. Some studies
much water. Glyphosate is a weed killer, which even involved spraying glyphosate
Glyphosate, the active ingredient in means the flowers on these weeds likely directly on bees without finding ill
Monsanto’s Roundup herbicide, is valu- will die quickly, if the plants even flower effects. Regarding this latest study, she
able to farmers who have genetically at all, leaving little or nothing for bees notes that the levels administered are
modified plants resistant to Roundup, to visit. Indeed, farmers have an incen- “rather high” and don’t reflect the fact
such as Roundup-Ready Corn, which tive to prevent weeds from flowering, to that glyphosate rapidly breaks down in
enables Roundup application to control keep them from producing seeds. This the environment.
weeds with low risk of damage to is reason to doubt that feeding bees As she points out, feeding bees
nearby crops. the amount of glyphosate that a farmer sucrose solutions affects the amino acids
Not surprisingly, the genetic modi- might apply to a plant is not the same in their guts, which may be a reason
fication and Monsanto connections as field exposure. why the unrealistically high levels of
have prompted environmental activist Bloom also notes that the study did glyphosate might have some impact on
campaigns to seek to ban Roundup. not find adverse effects among the bees gut bacteria. Many of the study findings
These activist groups have a long with the highest glyphosate exposures. are “noisy and inconsistent,” indicat-
record of making questionable claims Rather, reduced gut bacteria was found ing that the fluctuation of gut bacteria
about Roundup’s risks to both humans among bees with lower exposures. is affected by factors not necessarily
and the environment. They have even In fact, the author could just as easily related to the glyphosate, such as natu-
managed to infiltrate the World Health have assumed that bees do better when ral variations of gut bacteria in bees.
Organization’s International Agency exposed to higher levels of glyphosate. “If you care about bees, look else-
for Research on Cancer, which recently Bloom also notes serious confounding where,” says Ruishalme. “We do know
misclassified glyphosate as probably factors in the study, and the fact that that habitat loss, disease, invasive spe-
carcinogenic. any effects measured were not par- cies, climate, and many other factors
The recent study on glyphosate and ticularly compelling. He concludes that have detrimental effects.” As she points,
bees latches on to questionable claims the study is so flawed that it “should be glyphosate is an important tool for
about other chemicals harming hon- returned to the hive.” reducing environmental impacts associ-
eybees. Published in the Proceedings Bloom isn’t the only one to question ated with farming. It allows for no-till
of the National Academy of Sciences, the study. Science blogger and biolo- farming, which reduces runoff that
it suggests that glyphosate exposure gist Iida Ruishalme penned a lengthy would eventually pollute waterways.
can upset the development of healthy post on the topic (originally drafted in Ruishalme is right. If we really care
bacteria in bees and thereby make June and updated in September 2018), about bees and wildlife, we need to
them more susceptible to diseases. in which she notes: “Glyphosate is a focus on facts and not simply accept
The authors allege that they exposed herbicide, in other words, it is toxic to accusations that wrongly demonize
bees to glyphosate at levels bees might plants. Its target enzyme is not found in valuable chemical products like herbi-
experience in the field. However, a insects or other animals, so it is gener- cides and pesticides.
close look at the study shows it has ally not very harmful to them—and as
more holes than a honeybee hive. confirmed by a recent study, even direct
The American Council on Science sprays are not lethal to bees.” Angela Logomasini (angela.
and Health’s Josh Bloom questions the Ruishalme’s post provides an over- logomasini@cei.org) is a Senior Fellow
claim that exposure levels administered view of numerous studies related to at CEI. A version of this article was
in the study are akin to field exposures. glyphosate and bees, which overall do originally published on Open Market.

COMPETITIVE ENTERPRISE INSTITUTE C E I . O R G 7


A Decade after the Financial Crisis, the
Government Fuels another Housing Bubble
standards across the mortgage market. As a result, the same policies that
BY DANIEL PRESS The result was that by the middle of caused the last housing bubble are
2008, 57 percent of the 55 million even further entrenched than before.

T his past September marked the


10-year anniversary of one of the
most dramatic events of the 2008
mortgages in the financial system were
either subprime or otherwise of low
quality, with the government backing
And housing prices are again rising
rapidly. Since 2012, the housing
market has been on a six-year boom,
financial crisis—the collapse of Lehman 76 percent of them. When the housing with prices higher today than before
Brothers, the fourth-largest investment market turned sour, Fannie and Freddie, the crisis, and rising faster than any
bank in the United States. While the riddled with toxic mortgages, were time since 2005. AEI’s National
spectacular failures of Wall Street taken over by the government to prevent Mortgage Risk Index shows growing
firms grab most of our attention, it was their collapse. risk in recent years as the government
the meltdown of the U.S. residential One would think such a stunning housing agencies loosen their
mortgage market that was prelude to failure would force the government to underwriting standards.
the failure of the investment banks. wind down the GSEs. Yet, 10 years But housing booms cannot go
That enormous housing bubble after the crisis, not only has Congress on forever. And when house prices
was fueled not by an unregulated free failed to reform Fannie and Freddie, the begin to fall, mortgages must be able
market, but by the federal government’s two are actually backing even more to withstand deteriorating market
audacious housing policies. What may of the mortgage market than before. conditions. If they cannot, there is a
surprise many Americans is that even a Taxpayers continue to back up to 90 greater chance of mass defaults and a
decade after the financial crisis, these percent of newly written mortgages and broader housing collapse, which would
same policies remain in place—and as much mortgage debt today as they put taxpayers on the hook for trillions of
they appear to be contributing to did during the crisis. dollars of the GSEs’ liabilities.
another house price boom. The slight reforms the government Clearly, neither Congress nor
Beginning in the early 1990s, imposed on the mortgage market have federal regulators learned the lessons
both Congress and the Clinton been a disappointment. The Bureau of the last housing bust. To prevent
administration sought to dramatically of Consumer Financial Protection, a similar collapse, Congress must
expand home ownership. To achieve an astonishingly powerful agency wind down the current government-
this, the government compelled two established after the financial crisis, was dominated mortgage system and
government-sponsored entities (GSEs), meant to define minimum standards replace it with one backed by private
Fannie Mae and Freddie Mac, to in mortgages, such as debt-to-income capital, through legislation such as the
meet risky affordable housing goals. ratios, in order to ensure mortgage Protecting American Taxpayers and
Fannie and Freddie were required to quality, but it has failed to do so. Homeowners Act.
purchase a certain percentage of loans The bureau’s Qualified Mortgage While winding down the GSEs,
each year that had been made to rule, finalized in 2013, includes an Congress should respect the property
low-income or otherwise underserved exemption, known as “the patch,” for rights of GSE shareholders by offering
borrowers. Fannie and Freddie initially loans the GSEs could purchase. That them some form of compensation. If
had a modest 30 percent quota of means that the government housing the government housing agencies are
low-to-moderate income loans to agencies can continue promoting to continue to exist, regulators such
purchase, but that was continually excessive borrower leverage, with as the Bureau of Consumer Financial
raised over the years, eventually dangerously low down payments Protection should at minimum require
topping 56 percent by 2008. and creditworthiness and high debt- them to adopt sound underwriting
To meet these ambitious goals, to-income ratios. As Edward Pinto of standards by revising the Qualified
the GSEs had to dive deep into the the American Enterprise Institute (AEI) Mortgage rule.
subprime mortgage market. They put it, “a loan that would have been
began to lend to borrowers with little considered a subprime loan before the
or no documentation, poor credit, financial crisis … will now be marketed Daniel Press (daniel.press@cei.org) is a
dangerously low down payments, as prime if it is declared eligible for Policy Analyst at CEI. A version of this
and high levels of debt compared purchase by Fannie or Freddie” under article was originally published at the
to income—lowering underwriting the Qualified Mortgage rule. Washington Examiner.

8 CEI.ORG COMPETITIVE ENTERPRISE INSTITUTE


Supreme Court Hears Challenge to Unfair
Class Action Settlement that Gives Millions
to Attorneys, Zero Dollars to Class Members
O n October 31, the U.S. Supreme
Court heard arguments in Frank
v. Gaos, a landmark case brought by
CEI’s Center for Class Action Fairness
(CCAF) challenging an unfair class
action settlement in which lawyers and
their handpicked pet causes got mil-
lions while class members got nothing.
“The Supreme Court has an oppor-
tunity to stop a clear abuse of the class
action system that shortchanges con-
sumers,” said Theodore H. Frank, CEI’s
director of litigation. Frank is a named
petitioner in the case, and made history
as the first petitioner to argue his own
case before the Supreme Court this
century. “We hope the Supreme Court
will rule against this unfair settlement
and adopt a standard that will protect Attorney Melissa Holyoak. “Now objected to the settlement negotiated
consumers from being preyed upon by that the Supreme Court has heard the by the plaintiffs’ lawyers and Google
their own attorneys in future cases.” concerns of consumers, it is up to the when it provided $0 to class members
“As a class member in this case, Justices to set a standard that ensures but divided millions between the plain-
I would have preferred to receive class members are not taken advan- tiffs’ lawyers and third party organiza-
my portion of the settlement instead tage of by their attorneys.” tions unrelated to the case, under a
of giving it away to the attorneys’ The original class action lawsuit doctrine known as cy pres. A decision
alma maters and other pet causes,” centered on alleged privacy violations from the Supreme Court is expected in
said fellow petitioner and CEI Senior by search engine giant Google. CCAF 2019.

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COMPETITIVE ENTERPRISE INSTITUTE C E I . O R G 9


A Labor Reform Both Democrats and
Republicans Can Get Behind
BY TREY KOVACS

L abor Day was established in the


late 19th century as a way to honor
all the workers who contribute to the
wealth and prosperity of America.
Since then, there’s been a seismic shift
in what jobs and industries dominate
American life. More than ever before,
workers today seek greater freedom
and flexibility at the workplace.
So why has Congress been unable
to significantly change federal statutes
governing private sector employment
since the late 1940s? Both sides of
the political aisle agree that workers
deserve a greater voice in the work-
place, but Democrats and Republicans Second, workers who choose not to progressive magazine In These Times,
don’t often agree on how to achieve join a union are not allowed to negoti- entitled “It’s Time for Unions To Let Go
this goal. ate directly with their employer. This of Exclusive Representation,” they set
Here’s one major reform both sides means that many employees are subject forth a long-held concern regarding
should be able to agree upon. Neither to the pay and work conditions negoti- exclusive representation: It “allows lazy
side is particularly fond of “exclu- ated by a union they did not vote to union officials to sit back and collect
sive representation,” which grants have represent them or decide to join. their salaries without doing much for
unions monopoly status to represent In addition, employers are forbidden to workers.”
and negotiate on behalf of all the negotiate with any individual employee All sides may have different reasons
employees at a workplace. This long- or organization other than the exclusive for wanting to repeal “exclusive rep-
entrenched labor law mandate directly representative. resentation” agreements, but together,
conflicts with every individual’s right to Third, labor unions also find fault repeal of this unfair, antiquated labor
freedom of association. It’s also prob- with exclusive representation. Unions law is a great place to start negotiating
lematic on a number of other counts. complain that non-union workers are substantial reform of labor policy.
First, too many people are denied able to “free ride” on union services in Congress can fix the injustice of
choice over union representation. states with right-to-work laws, which forcing union representation on workers,
To win an election and become an free workers from having to pay com- and that of forcing unions to represent
exclusive representative, a union must pulsory union dues to keep their job. workers who do not pay for the service.
only receive a majority of votes cast. In Unions believe all workers should pay All sides of the political spectrum should
most union elections, not all employ- for representation they receive, even if embrace the idea of getting rid of exclu-
ees vote, so this process allows for a they are not members and voted against sive representation.
minority of workers to impose a union union representation.
on the rest of their colleagues. And Fourth, the power of exclusive repre-
unlike elected officials, unions never sentation deprives unions of an incen- Trey Kovacs (trey.kovacs@cei.org) is a
stand for reelection. That means future tive to do the best job they can for their Policy Analyst at CEI. A version of this
generations of workers simply inherit members. A trio of labor union activists article was originally published in USA
union representation. said it best. In a recent article in the Today.

10 CEI.ORG COMPETITIVE ENTERPRISE INSTITUTE


The Government Should Allow T-Mobile
and Sprint to Merge
When Sprint and T-Mobile spying on or disrupting rival countries’
BY JESSICA MELUGIN AND RYAN executives testified before the Senate networks.”
RADIA Judiciary Committee’s antitrust panel in 5G will be up to 100 times faster
June 2018, Sprint Executive Chairman than today’s 4G networks, powering

O n September 11, 2018, the


Federal Communications
Commission (FCC) announced it
Marcelo Claure pointed out that his
company didn’t have the resources to
compete with Verizon and AT&T on its
driverless cars, remote surgeries, smart
appliances, virtual reality applications,
and things we haven’t even imagined
needed more time to review the pend- own. He’s right. Sprint is the most highly yet. Can we really expect federal regu-
ing merger of T-Mobile and Sprint. leveraged company traded on the S&P lators to correctly comprehend, diag-
Meanwhile, the Department of Justice 500, saddled with debts of nearly $40 nose, and correct for the infinite factors
is examining the deal’s antitrust implica- billion and rising. that go into something as complex as
tions. In the interest of consumers and By combining Sprint with T-Mobile, the 5G communications revolution?
competitiveness, the agencies should the new company could offer triple Even with the best of intentions,
wrap up their inquiries quickly and the 5G capacity the companies could regulators could inadvertently derail
let the nation’s third and fourth largest provide separately. Building a top-notch any progress made toward securing
mobile carriers merge. nationwide 5G network will take a the future of 5G, doing more harm than
Sprint and T-Mobile need to com- combination of spectrum licenses, cell good for consumers in the process.
bine their resources to build a more towers, and cash. Examples of regulatory failure abound.
efficient company to stay competitive A merged Sprint and T-Mobile The FCC itself has a long history of
with the two leading U.S. carriers, would check these three critical boxes. them—it took “just” 40 years to get cell
Verizon and AT&T. In fact, the whole But if regulators stymie the firms’ rational phones to market!
industry needs to innovate and grow as business decision to merge, benefits that Progressive-era thinking may be
quickly as possible to win the race to would otherwise flow to consumers will back in vogue these days, but ideas’
5G—the fifth generation of mobile con- go unrealized. It’s impossible to know cultural popularity doesn’t erase their
nectivity—as companies in countries like just what innovations never come to be perils. The invisible hand of the mar-
China speed ahead of their American when the government stops the market- ketplace, with all its price signals and
competitors. place from evolving as it would without nuances, innovates, coordinates, and
The bosses at T-Mobile and Sprint interference. corrects better than teams of lawyers in
have skin in the game, specialized The implications of the merger clunky Washington bureaucracies.
expertise, and every incentive to keep between T-Mobile and Sprint transcend Allowing Sprint and T-Mobile
consumers happy. That’s more than you the domestic U.S. economy. If American to merge is a good first step toward
can say for those who seek to block the companies aren’t allowed to scale up to recognizing the wisdom of the market-
merger. meet the challenges of the coming roll- place and the folly of antitrust regula-
Antitrust interventionists who oppose out of 5G networks, Chinese companies tion. For the sake of consumers and our
the deal claim that consumers are auto- are more than happy to take the lead. competitiveness, Washington should
matically better off with four national The deal’s geopolitical implica- keep its hands off the future of 5G
carriers, rather than the three that would tions alone make this dynamic sector communications.
exist if T-Mobile and Sprint joined too important to leave to meddling
forces. But the merger’s foes ignore bureaucrats. The Wall Street Journal
the dynamic nature of the wireless recently reported: “Companies with Jessica Melugin (jessica.melugin@
marketplace. the largest and most reliable networks cei.org) is Associate Director of the
If Sprint and T-Mobile are stopped will have a head start in developing Center for Technology and Innovation
from merging, will each company carry the technologies enabled by faster at CEI. Ryan Radia (ryan.radia@cei.
on the same as in the past? Probably speeds.” The Journal added that, “the org) is Research Fellow and Regulatory
not. The more likely outcome is that dominant equipment suppliers could Counsel at CEI. A version of this article
one, or perhaps both, of the companies give national intelligence agen- was originally published at The Daily
won’t survive. cies and militaries an advantage in Caller.

COMPETITIVE ENTERPRISE INSTITUTE C E I . O R G 11


CEI EVENTS AND PUBLIC APPEARANCES

Myron Ebell and Sam Kazman Discuss Energy


and Environment Reform
On July 27, Myron Ebell, Director of CEI’s Center for Energy
and Environment, spoke before the annual meeting of the
Independent Petroleum Association of New Mexico, held
in Albuquerque, on the current state of energy policy in
Washington. Then on August 7, he spoke at the America
First Energy Conference 2018, sponsored by the Heartland
Institute, on two panels, “Reining in the Regulators,” and
“Reforming EPA: Lots of Progress, More to Do.” Also at the
conference, CEI General Counsel Sam Kazman spoke on the panel, “CAFE Standards: Why They Need to Go.” Also in August,
Ebell spoke twice at the American Legislative Exchange Council’s annual meeting, in New Orleans, on a panel on the social cost
of carbon and on a panel discussing the progress being made on the Trump administration’s energy agenda.

CEI and Ocean Outcomes Cosponsor Luncheon Panel


on Fisheries Management Innovation
On August 21, CEI co-hosted the panel discussion, “Fishing for Better
Solutions: Achieving Environmental, Business, and Social Goals in
Seafood,” with Ocean Outcomes (O2), an international nonprofit
organization that advocates for sustainable fisheries worldwide. The
panel featured Ocean Outcomes President and CEO Dick Jones and O2
Chief Operating Officer Hoyt Peckham, PhD. The discussion focused on
innovative private sector approaches to the management of the seafood
supply chain that have demonstrated success over the past 20 years, and
the challenges that remain for producers of all types and sizes.

CEI Hosts Luncheon Discussion on the Value of Tipping with Professor


Tony Gill
On September 20, CEI hosted the luncheon discussion, “Tipping Points: An Economic and
Pedagogical Defense of Gratuities,” with University of Washington Political Science Professor
Tony Gill. In his talk, Gill discussed how the time-honored tradition of tipping wait staff at
restaurants has come under fire recently, both in the private marketplace and the voting
booth—including in a recent ballot measure in Washington, D.C., which the city council has
since overturned because of its potential for economic damage. Gill argued that tipping,
while unpopular at the moment, benefits restaurant owners, employees, and customers,
building trust in society in a way that lubricates the wheels of commerce.

John Berlau Hosts Luncheon Discussion on


Regulation’s Impact on Credit Union Members
On October 4, CEI hosted the luncheon panel discussion, “How the
Regulatory State Victimizes Credit Unions and their Members,” featuring
Credit Union National Association (CUNA) President and CEO Jim
Nussle and CUNA Deputy Chief Advocacy Officer for Policy Analysis
and Chief Economist Mike Schenk. Nussle and Schenk discussed the
unique burdens credit unions face because of the red tape of Dodd-
Frank legislation and the Bureau of Consumer Financial Protection, and
how their organization is rallying its members to push back against
overregulation. CEI Senior Fellow John Berlau moderated the discussion.

12 CEI.ORG COMPETITIVE ENTERPRISE INSTITUTE


Daniel Press Discusses the Promise of FinTech at Financial Services
Conference
On October 5, CEI Policy Analyst Daniel Press spoke at a conference held by the Financial Service
Centers of America, held in Las Vegas. He discussed the Office of the Comptroller of the Currency’s
recently announced special purpose bank charter, which promises to allow new entrants into
the financial services field by considering bank charter applications from FinTech firms, not just
traditional banks.

Marc Scribner Offers Free-Market Transportation


Solutions at Cato Institute Book Forum
On October 10, CEI Senior Fellow Marc Scribner participated in a
panel discussion on the new book, Romance of the Rails: Why the
Passenger Trains We Love Are Not the Transportation We Need by
Cato Institute Senior Fellow Randal O’Toole. The panel, hosted by the
Cato Institute, also featured American Public Transportation Association
Vice President of Policy Art Guzzetti and Rail Passengers Association
President Jim Mathews. Panelists discussed the future of passenger
rail in light of transportation alternatives—such as cars, buses, and
airplanes—that promise much like cell phones have replaced land
lines. Cato Institute Editor Jason Kuznicki moderated the discussion.

Ted Frank and Melissa Holyoak Discuss Case Challenging


Abusive Class Action Settlements before the Supreme Court
On October 17, CEI hosted an invitation-only dinner discussion on the
Supreme Court case Frank v. Gaos, which presents an opportunity to set class
action precedent and put an end to cy pres abuse. Named petitioners Ted
Frank, CEI’s Director of Litigation and Director of the Center for Class Action
Fairness, and CEI Senior Attorney Melissa Holyoak discussed strategy for the
October 31 oral argument. Frank v. Gaos challenges the settlement reached
in the Gaos v. Google privacy lawsuit. In that settlement, the class members
received nothing while $8.5 million was divided entirely between the class
action attorneys and cy pres recipients, in this case class counsel’s alma maters
and nonprofits previously supported by Google.

CEI Offers a Toast to Reason


On November 1, Kent Lassman and CEI raised a glass to Reason’s
legacy and future advancing free minds and free markets. The
Toast to Reason kicked off Reason Magazine’s and the Reason
Foundation’s 50th Anniversary weekend at The Edison, downtown
Los Angeles’ first private power plant turned speakeasy.

Left to right: Dana Fares of Birdy Fox Films, DonorsTrust


President and CEO Lawson R. Bader, and CEI Director of
Philanthropy and Partnerships Heather Browning

COMPETITIVE ENTERPRISE INSTITUTE C E I . O R G 13


THE THE THE
GOOD BAD UGLY

The Good (but some Bad):


CAFE Rollback Can Save The Bad: IPCC Reaches
Lives, but a Bigger Rollback Dire Conclusions Based on The Ugly: EU Seeks to
Could Save Even More Dubious Models Ban Plastics

The recently announced Safe The latest report of the United Nations On October 21, the European
Affordable Fuel Efficient (SAFE) Intergovernmental Panel on Climate Parliament endorsed a proposal to
Vehicles proposal—issued last August Change (IPCC), published on October ban a wide array of popular plastic
by the Department of Transportation 8, promoted headlines regarding the products, such as straws, plates, and
and the Environmental Protection supposed urgency for drastic climate cutlery. EU officials claim the proposal,
Agency—would partially roll back policy action, thanks to its alarmist which still needs to be approved in
the stringent schedule for corporate tone. “The IPCC’s report is the latest negotiations with member states, is
average fuel economy standards set in a series of dire warnings of tipping needed to fight ocean pollution. In
by the Obama administration. Stringent points and last chances dating back to reality, it fails at its stated objective,
CAFE standards lead automakers to the 1980s. The good news is that the while burdening consumers. “The
produce smaller, lighter cars. They also rate of global warming since 1980 is proposed EU ban is simply an attack
make newer cars more expensive. Both much lower than that predicted by the on consumer freedom that won’t help
of these effects undercut traffic safety. computer models used by the IPCC,” the environment,” noted CEI Senior
The proposed rollback, by reducing said Myron Ebell, Director of CEI’s Fellow Angela Logomasini.” While
these effects, would save more than Center for Energy and Environment. bans on plastic consumer items like
12,000 lives over the next several “Unless the rate of warming increases bags, cups, straws, and whatever
decades, according to the agencies’ dramatically, the drastic and immediate else may be great material for
estimates. However, as CEI argues reductions in greenhouse gas emissions grandstanding by politicians, they
in comments filed with the agencies, the IPCC claims are necessary to only divert attention from developing
if this partial rollback will save that avoid catastrophe will not be needed. real solutions that actually tackle
many lives, then a bigger rollback That’s good because the IPCC’s policy the problem of plastic waste in our
would save even more. Using the recommendations would be colossally oceans. They also ignore the benefits
agencies’ own models, CEI estimates expensive—taxes on carbon dioxide of products in ensuring sanitary food
that lowering the standards even further emissions equivalent to adding $29 to service, convenience, and energy
would save an additional 4,000 lives. a gallon of gasoline by 2030.” savings.”

14 CEI.ORG COMPETITIVE ENTERPRISE INSTITUTE


MediaMENTIONS
Fellow Ryan Young explains why Ted Frank discusses his role Vice President
the only way protectionist trade as both a named plaintiff and of Policy Wayne
policies help keep some jobs is at counsel of record in CEI’s case Crews estimates
the expense of many other jobs. before the United States Supreme the cost of the
Despite the deal with Canada and Court, Frank v. Gaos. total federal
Mexico, the trade war with China Theodore H. Frank is familiar with the regulatory
shows no sign of letting up. Meanwhile, adage that a lawyer who represents burden.
imported steel now costs 25 percent himself has a fool for a client. But later As the Competitive
more, in turn raising domestic this month, he will stand before the Enterprise Institute
steel prices, passing costs on to Supreme Court to argue his own case. noted earlier this year
manufacturers. “It was a very tough decision to decide in its Ten Thousand Commandments
Saving 33,000 steel-industry jobs to do it myself,” he said. annual report, federal regulations
costs the economy 179,000 jobs, a net The usual play would have been to cost a lot more than their stated dollar
loss of 146,000, Ryan Young, a fellow hand the case off to an expert lawyer amount. As of last year, regulation and
in regulatory studies at the Competitive who specializes in Supreme Court federal intervention in the economy cost
Enterprise Institute, told ABC News. arguments. But Mr. Frank, who has spent Americans an estimated $1.9 trillion.
“Basically,” Young added, “the few the last decade filing objections to class And that’s one of the lowball estimates
are benefiting at the expense of the action settlements he considers abusive, out there.
many.” said he was the right man for the job in How much is that? It’s the equivalent
–October 18 the case that bears his name. He will of a $15,000-per-household tax
ABC News join a small group of lawyers who have levied each year in perpetuity. That’s
handled the Supreme Court arguments more than the average family spends
Senior Fellow Marc Scribner in their own cases. On the whole, they on food, clothing or transportation.
sounds the alarm on an have done rather well. Only housing takes more of the family
overlooked subsidy inserted –October 15, budget.
into the Trump administration’s The New York Times –August 14,
proposed reform of fuel economy Investor’s Business Daily
standards. Labor policy expert Trey
Tucked into the EPA’s proposed Kovacs led opposition to the Senior Fellow Angela
Safer Affordable Fuel-Efficient, or SAFE, re-nomination of a National Logomasini’s criticism of plastic
Vehicles rule released in August is Labor Relations Board member straw bans was lauded in a
language that would give companies who had demonstrated his lack of widely published column by
credit toward emissions standards for impartiality. renowned TV investigative
producing cars that include vehicle-to- Conservative groups are urging journalist John Stossel.
vehicle communication capabilities— President Donald Trump not to Want to sip a refreshing beverage this
technology that allows autonomous re-nominate Democratic National Labor summer? If environmental zealots and
cars to exchange speed and position Relations Board Member Mark Pearce, sycophants get their way, you won’t be
information with each other to prevent whose term ends on Monday, pointing allowed to sip it through a plastic straw.
accidents. to what they say were a series of radical Banning straws “might make
“If they were to go forward with pro-union decisions he was involved in some politicians feel good,” says the
this, this would violate the [agency’s] during the Obama administration. Competitive Enterprise Institute’s Angela
pledge to technology neutrality,’ On Thursday, the Competitive Logomasini in this week’s Stossel TV
Marc Scribner, senior fellow at the Enterprise Institute and five other free- video, “but it won’t actually accomplish
Competitive Enterprise Institute, told the market groups sent a letter to Trump anything good.”
Washington Examiner. “What they are saying that in his eight years at the –July 18
doing is picking technology winners NLRB, including more than five years FoxNews.com
and losers.” as its chairman, Pearce has “failed to
–October 18, represent the public interest” by routinely
The Washington Examiner ruling in favor of unions.
–August 24,
Reuters

COMPETITIVE ENTERPRISE INSTITUTE C E I . O R G 15


Nonprofit Org.
U.S. Postage
PAID
1310 L Street NW, 7th Floor Permit 425
Washington, DC 20005 Southern MD

...END NOTES
Do You Have a Permit for that Jack O’Lantern? Do You Have a Permit for that Ramp?
Want to bring some Halloween cheer to your neighborhood? The Texas Ramp Project is a nonprofit that has built tens
You may need to check with local officials first—and killjoy of thousands of ramps across the Lone Star State, free of
neighbors. Canton, Ohio resident Michael Fillon was recently charge, to help people in wheelchairs to go in and out of
forced to shut down the haunted house he had set up outside their homes. “It felt freeing to be able to go down the ramp
his house after getting a call from the local fire marshal. “I and out of the house,” said Nancy Miner, of Duncanville,
didn’t realize I needed to have a license for a home haunt,” Texas. “Otherwise, I’m kind of a prisoner in there.” This is
Fillion said. Most of Fillon’s neighbors were fans of his DIY a worthy endeavor to which no one could object—except,
haunted house, “Skullman’s Ghastly Garage,” except for one, perhaps, code enforcement bureaucrats. Miner said she was
who reported him to the township. Now he has to scale back told by a city worker that the ramp did not meet city require-
or face fines. “I was really upset,” said one neighbor. “ It’s a ments, so she would have to have it torn down or face a
shame because this has been a great community outreach fine. Yet, the ramps, which are all built by volunteers, have
and also helping out people who need food.” Fillion did not a stellar safety record. “In Dallas County alone, we’ve built
charge money for entry, and instead asked visitors to bring almost 5,000 ramps,” said Gary Stopani, who built Miner’s
canned goods for a local food bank. ramp. “We’ve built over 15,000 statewide since 2006 and
we have yet to have a ramp fail due to safety.”
Do You Have a Permit for that Driveway—What, We
Gave You One? Do You Have a License for that Rocket?
Michael Zydeck has been facing off against the City of East A driver in Belgium was fined $78,000 for speeding—at
Lansing, Michigan, over … a driveway. Zydeck, a radiologist 432 miles per hour, half the speed of sound—in an Opel
who lives in Plymouth, Michigan, bought a house in Lansing Astra, last May. An engineering breakthrough accidentally
for his daughter to live in while attending Michigan State uncovered by vigilant Belgian traffic cops? Not quite. The
University. The Zydeck family, wanting more room to park, astonishing recorded speed was due to a speed camera
decided to expand the driveway. After Zydeck’s first contrac- coding error. Traffic authorities acknowledged the error and
tor got a permit and began work, a neighbor asked the city voided the fine. Unfortunately for the driver, police deter-
to stop the project, claiming the permit had been wrongly mined that he did actually speed, going 60 kph (37 mph) in
approved. After months of bureaucratic wrangling and false a 50 kph (31 mph), and issued him a ticket for around €50,
starts, the city offered Zydeck $1,500 to shrink the driveway, or around $57. The driver posted an image of the bank-
which may not be enough to cover the costs. Zydeck’s attor- breaking ticket on Facebook, where it got 1,700 likes and
ney, Mark Grebner, said: “By my calculations, the city’s errors 1,200 comments. According to The Telegraph, one com-
have induced my client to spent approximately $18,650 for menter noted: “What’s the point of having a Lamborghini
a driveway which would have cost $8,000 if he had not had when you can go 696kph in an Astra?”
the misfortune to build it in East Lansing.”

16 CEI.ORG COMPETITIVE ENTERPRISE INSTITUTE