Archives for January, 2008
Company Flees Lawsuits, Regulation, Eliminating Jobs in New York City
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Altria, the parent company of cigarette-maker Philip Morris, is shutting down its headquarters in New York City and will no longer employ the “vast majority” of its employees there. At the same time, it is spinning off its profitable overseas business to an independent entity (Philip Morris International), to be headquartered in Lausanne, Switzerland, and shifting its U.S. headquarters to Richmond, Virginia.
It is spinning off its overseas operations in order to shield them from lawsuits in the U.S., like the ones that have forced it to pay billions of dollars to state governments, such as Minnesota, Texas, Mississippi, and Florida, and millions of dollars to individual smokers. Continental Europe in general, and Switzerland in particular, have court systems that are less indulgent towards lawsuits than American courts.
It may be moving its domestic operations to Richmond, Virginia for similar reasons. Virginia has a much lower tax burden than New York, has many fewer regulations, and its judges — both state and federal — are much less sympathetic towards lawsuits than are judges in New York City, like the notorious Jack Weinstein, the archetypal liberal activist judge, who ends up hearing almost all high profile class-action lawsuits in New York City through manipulation of the the judicial case selection process.
(The only area of law where Virginia judges seem to love using lawsuits to redistribute wealth is in the area of divorce and family law, but even in that area of law, Virginia has less of a redistributionist bent than New York State).
Straight Talk on Global Warming from…Bill Clinton?
Drudge today links to Jake Tapper’s “Political Punch” column at ABC News, where he reports on a speech given by Bill Clinton yesterday in Denver. In it, Bill refers to the question of global warming and economic growth in surprising new terms. Instead of talking about the hundreds of thousands of high-paying green collar jobs we’ll supposedly be generating by shunning the cheapest and most reliable energy sources on the planet, he issued a surprising recommendation.
In a long, and interesting speech, [Bill Clinton] characterized what the U.S. and other industrialized nations need to do to combat global warming this way: “We just have to slow down our economy and cut back our greenhouse gas emissions ’cause we have to save the planet for our grandchildren.”
At a time that the nation is worried about a recession is that really the characterization his wife would want him making? “Slow down our economy”?
We’ve come a long way from Democratic politicians who merely promised to raise taxes (which would have the effect of slowing growth) now to campaigners who are willing to cut out the middle man and go straight to sabotaging the economy outright. That’s what we in politics call progress. You can watch the whole thing here.
Cooler Heads Prevail at the Smithsonian
The multi-dimensional debate over political correctness at The Smithsonian (everything from exactly how many children Thomas Jefferson fathered to the proper display of the Enola Gay) has another entry: climate science at the Museum of Natural History. From today’s Inside the Beltway:
Suffice it to say, the Smithsonian Institution is not buying into the “global warming” hysteria being spread by Al Gore.
While in the District in recent days, professor Jeff Bennett of the Crawford School of Economics and Government at Australian National University toured the Smithsonian’s National Museum of Natural History, where he snapped photographs, since forwarded to Inside the Beltway, of two displays that caught his eye — both dealing with climate change and “the Future.”
“Initiation of glacial conditions may be triggered by surprisingly rapid climate changes,” reads one display. “Therefore, the minor global-cooling trend of recent decades … is being carefully watched and studied.”
Global-cooling trend?
Explains the next display: “the period 1890-1945 A.D. was abnormally warm, and there have been signs of cooling in the last few decades.”
Perhaps we should organize a field trip to celebrate this unexpected evenhandedness. While we’re on the Mall, we can even pick up a copy of The Dangerous Book for Boys and score a double victory against the PC enforcers.
The EU To Ban Patio Heaters: What’s Next, Light Bulbs?
Those hilarious Europeans. They are threatening to ban patio heaters. Too big a carbon imprint, it seems. So much for convenience, choice, and individual liberty. Reports the Times of London:
Britain’s growing café culture and taste for alfresco drinking and dining may be under threat from MEPs who want to ban the patio heater.
A vote in Brussels today is expected to call on the European Commission to abolish the heaters to help to tackle climate change. Such a move could cost the pub and catering trade dear.
Pubs spent about £85 million on patio heaters after the smoking ban was introduced last year. Besides forcing smokers into the cold there is concern that a ban on patio heaters could bring a significant cash loss to pubs, cafés and restaurants.
The hospitality industry has estimated that if only 10 per cent of Britain’s pubs offered outdoor facilities a ban could cost £250 million a year, or as much as £45,000 a year for a single business.
It’s so good that America isn’t like that. It would be as if Congress banned, oh, light bulbs. … Oops!
(By the way, whatever does it mean, a British “café culture.” I love Great Britain, but a British café culture??)
U.S. officials should oppose, not endorse, EU bully tactics
C. Boyden Gray, the U.S. Envoy to the European Union, said Tuesday (Jan. 28) that U.S. and EU adoption of carbon “offset” taxes (aka carbon tariffs) is “inevitable” if China, India, and other developing countries refuse to limit their greenhouse gas emissions.
Gray spoke to European-based reporters in a telephone news conference. As reported by Joe Kirwin of BNA (Bureau of National Affairs, Inc.), Gray said the United States and the EU would eventually “have no choice” but to impose carbon tariffs on products from developing countries to remain competitive in the global economy. To illustrate, he cited the import penalty provisions of S. 2191, the climate bill introduced by Sens. Joseph Lieberman (D-Conn.) and John Warner (R-Va.).
Such talk can only encourage European countries, which are considering a carbon tariff proposal put forward by the European Commission, to restrict trade and impede development in poor countries. Continue reading this post »
I love Kyoto, but…
At EconLog, Bryan Caplan sums up succinctly the method whereby President Bush this week was able to sound more predisposed toward a global treaty to limit greenhouse gas emissions — that is, ration carbon-based energy — without really being so:
If you don’t like telling people No, a convenient alternative is setting conditions you know other people won’t accept. Then the impasse is their fault, you see.
He cites many liberal Democrats’ opposition to trade agreements, which they claim is “qualified,” not because they’re opposed to liberalized trade per se, but because they think it should be made “fair” through a morass of side agreements and provisions dealing with potential adverse effects from the increased trade.
But turnabout is fair play. In the same State of the Union speech in which Bush advocated approval of trade treaties with Colombia, Panama, and South Korea — which union-friendly Democrats have stalled claiming the need for such provisions — Bush offered on climate change policy to “let us complete an international agreement that has the potential to slow, stop, and eventually reverse the growth of greenhouse gases.” But…“This agreement will be effective only if it includes commitments by every major economy and gives none a free ride.”
Of course, the chance of this is nil, as India and China unapologetically beckon to the world, “Send us your over-regulated, energy-starved manufacturing.” A good name for this is “the ‘yeah, but’ way of saying No.”
Subprime Crybabies
Last night, ABC News lavished sympathy on a North Carolina couple whose mortgage payments had risen to just over $2,000 a month, owing to the fact that they had an adjustable rate mortgage whose interest had recently risen from an introductory 9 percent rate to a hefty 14 percent rate.
Math is obviously not something that ABC News journalists understand. The ABC evening news program hosted by Charles Gibson credulously accepted the couple’s claim that they were being forced to devote the lion’s share of their income to their mortgage payments, even though ABC reported that the couple’s annual income was $80,000 — or about $7,000 per month.
How do you go broke paying $2,000 in mortgage payments on wages of $7,000 per month? I suspect the real reason they had difficulty paying their mortgage was the same reason they presumably had a high interest rate on their mortgage in the first place — high credit card and other debt resulting from personal irresponsibility. (My mortgage interest rate is 5 percent, because I have excellent credit. Only a rotten credit history, or a complete failure to shop around for the best interest rate, could have led to me paying a 9 percent interest rate).
Yet ABC News depicted them as victims of predatory lending.
House Passes “Stimulus” Bill That Discourages Work
The House has overwhelmingly voted to pass the “stimulus” bill I discussed earlier, which would increase the deficit, provide “rebates” that did nothing in past recessions to revise the economy, and give Fannie Mae, which engaged in Enron-style accounting and helped create the housing bubble, broad new lending powers.
Michelle Malkin points out the the Senate version of the “stimulus” bill is even worse than the version passed by the House, containing a lot of welfare, and that even its less controversial components, like extension of jobless benefits, will discourage work and thus result in lower, rather than higher, economic output — the opposite of a true economic stimulus — as even a liberal economist conceded.
Schwarzenegger Health Care Plan Bites the Dust
California Governor Arnold Schwarzenegger’s multibillion dollar health care plan was rejected as too expensive by the California State Senate’s Health Committee, putting him to the left of even that predominantly Democratic body.
The Schwarzenegger plan would dramatically increase the role of the state in the health care system, relying on tax increases and manipulation of the federal Medicaid system to increase federal subsidies.
Like many proposals to expand states’ role in health care, the Schwarzenegger plan probably violated the federal ERISA law through its employer mandates. That doesn’t seem to have been a big factor in the State Senate’s decision, though.
Nor does the fact that the Schwarzenegger plan would have covered illegal immigrants. That infuriated people on talk radio, but seems to have had little effect on the legislature.
Film: Shootdown
President Bush didn’t mention Blanca Gonzalez, the mother of jailed Cuban dissident Normando Hernandez Gonzalez, after all. But the film Shootdown, which I also mentioned in the same post yesterday, is Michael Moynihan at Reason today. The film profiles the blowing out of the sky by Cuban air force MiGs of two planes from the Brothers to the Rescue operation.
An event soon overshadowed by the saga of Elian Gonzales, the attack on the unarmed Brothers to the Rescue planes is now largely forgotten outside Miami. And despite the smokescreen of misinformation presented by Castro and his foreign enablers, the facts of the story are rather straightforward and grimly characteristic of a totalitarian regime.
As three Brothers to the Rescue planes approached Cuban territory, the lead plane, piloted by the group’s founder Jose Basulto, briefly breached Cuban airspace. While the planes were searching for refugees in the water, officials in Havana, tipped off by a mole in the Brothers leadership, scrambled Soviet-made MiG fighter planes to knock the planes out of the sky. Basulto’s plane managed to escape. When the other two were vaporized by Cuban missiles, both were flying over international waters.
The mole, former Cuban Air Force MiG pilot Juan Pablo Roque, is a chilling reminder of the Stasi-like tactics of the Cuban secret police. Roque infiltrated Brothers to the Rescue by insinuating himself into the exile community—going so far as to write a book for the Cuban American National Foundation detailing his escape from the island—and marrying a local woman as cover. The day before the deadly flight, Roque declined an invitation to participate in the mission and informed his wife that he would be away on business. A day later, he reappeared on Cuban state television to denounce the Brothers as “terrorists” of the empire.
The Fidel Castro death watch may have begun, but for a country brutalized under such a regime, transition to democracy is bound to be difficult — and messy. Here’s hoping it involves no more loss of life.
Need a Dentist? Don’t Go to Great Britain!
A toothache is never fun. It is likely to be particularly painful in Great Britain. Reports Investor’s Business Daily:
Since April 2006, one in every 10 dentists have stopped offering treatment under Great Britain’s national health care system. Who can blame them? The government changed its contract with 21,000 dentists almost two years ago, and the result was more work for the dentists and limits on their earnings.
Because of the shortage, 2.7 million Britons have gone nearly two years without dental work. Alice Thomson drolly summed up the situation thusly in Friday’s London Telegraph:
“In Britain today, you can stuff yourself on deep-fried Mars bars, drink 20 pints a night, inject yourself with heroin, smoke 60 cigarettes a day or decide to change your sex — and the NHS has an obligation to treat you. . . . But if you have bad teeth, forget it.”
Ah, the wonders of socialized medicine!
Deficit-Expanding “Stimulus” Package Grows
The “stimulus” plan devised by House leaders and the White House at a price tag of nearly $150 billion is now being rejected as too small by Senate Finance Committee head Max Baucus. His plan would give out much more welfare benefits, and provide tax “rebates” to millions more people who don’t even pay taxes, than the House plan proposed. (I described yesterday how other Senators are busy proposing all sorts of welfare for inclusion in the stimulus plan, and how millions of dollars from the plan may end up financing left-wing special-interest groups).
Baucus’s stimulus plan would also give out rebates even to individuals making over $75,000 per year and married couples making $150,000 per year, who would be barred from receiving rebates under the House plan, which gives rebates only to people making less than that.
To try and pay for his new welfare proposals (and additional rebates), Baucus’s plan eliminates some of the business tax cuts contained in the House plan, eliminating a few billion dollars worth of tax “incentives for business investment” that might create jobs.
Baucus also engages in funny bookkeeping to make it seem like his much more costly plan costs only $156 billion, just a little more than the House plan. “House leaders and tax writers were skeptical yesterday that the Baucus plan could offer all those measures for the $156 billion price tag he put on his bill,” since the business tax cuts he removed from the House bill can’t begin to pay for all the welfare he added to it.
Future generations will have to pay off the federal debt incurred to pay for either the House or Senate versions of the “stimulus” plan. As The Washington Post notes, “The cost of either plan would be tacked onto this year’s federal budget deficit.”
Earlier, how I discussed how the stimulus plan will increase the financial power of Fannie Mae, an agency that engaged in Enron-style accounting fraud and helped create the housing bubble; how the rebates in the stimulus plan won’t revive the economy; and how the income limits on rebates in an earlier version of the stimulus plan would deny rebates to middle class people in high-living-cost areas, even as they would allow rebates to go to some rich people who receive unearned income and avoid taxes through tax loopholes.
SOTU: Economic Rationality 1, Alarmism 0
Well, President Bush has given his final State of the Union address and the news stories analyzing it are soon to be legion. Among the most anticipated topics was what he would say about global warming and what the U.S. government should do about it. A couple of weeks ago, the flagship of UK leftism, The Guardian, confidently predicted that Bush would reverse himself and “make a historic shift in his position on global warming.” Sorry, Guardian readers. I’m sure staff writers Gaby Hinsliff, Juliette Jowit and Paul Harris didn’t mean to get your hopes up.
For a late-night recap of what Bush actually did say, let’s turn to CEI’s very own global warming guru, Myron Ebell:
President Bush made it clear in his State of the Union speech that he has not changed his mind that the best policies to address global warming are based on developing new technologies rather than enacting mandatory targets and timetables to reduce emissions. He also said that any new international agreement to succeed the Kyoto Protocol must include commitments from the major developing nations. Since China, India, and other major developing countries have adamantly opposed agreeing to mandatory emissions cuts for themselves, this means that no new treaty will be agreed that includes Kyoto-style mandatory targets and timetables–that is, as long as the next administration continues President Bush’s policies. In my view, President Bush is correct to prefer new technologies to mandatory emissions cuts and the governments of China, india, and other developing countries are right to oppose any new international agreement that would consign their people to perpetual energy poverty because the blessings of abundant energy far outweigh any potential negative impacts of potential global warming.
I would also note that President Bush did not comment on cap-and-trade bills in Congress, on whether the EPA would make an endangerment finding for CO2, or on whether the polar bear would be listed. I hope that these are signals that the president does not support cap-and-trade and is having second thoughts about endangerment and the polar bear listing. Even if one thinks, as I do not, that a Kyoto second round is desirable, it would be utterly foolish to enter into mandatory domestic programs to reduce emissions before an international treaty is agreed.
So there you have it, OpenMarket readers. The dark, cold night of energy rationing is held at bay yet again. The same bargain still applies: you keep using the energy that keeps you warm, and we’ll keep defending it.
Video: Smith, Bailey, and Kiesling on climate change
Over at reason.tv, Fred Smith tackles climate change, from Reason’s recent conference in Washington, DC, as part of a panel also featuring Reason science correspondent Ron Bailey (CEI’s inaugurual Warren Brookes Fellow) and Northwestern University economist Lynne Kiesling.
Bloated “Stimulus” Plan to Fund Left-Wing Causes
Earlier today, I wrote about how Senators are busy “larding up the bloated ’stimulus’ plan with more welfare” by proposing added government spending on frills such as taxpayer-financed “mortgage counseling.”
Commenting on that post, Michelle Malkin noted that left-wing groups like ACORN and La Raza would likely receive much of the money for such “counseling,” and that their counseling is likely to duplicate existing mortgage programs.
It’s not the first time these groups have received subsidies at the public’s expense. Consumer class actions lawsuits are often brought in the California courts. The lawyers choose to bring them in California in part because California state courts permit them to divert settlement proceeds to left-wing groups allied with the lawyers themselves.
A big recipient of those proceeds has been La Raza, which gets money from consumer class actions even though most of its legal activities have nothing to do with consumers. (For example, it sued Avis Rent-A-Car System on behalf of its illegal alien employees in Aguilar v. Avis Rent-A-Car System (1999)).
Chances are, a consumer class action lawsuit has been brought in your name in the California courts. Almost all of us have received one of those routine class-action notices in the mail at one time or another, resembling a piece of junk mail. The notice tells you that a settlement has been reached in a class action lawsuit against some company you bought a product from in the past, and that you and thousands of other people may be entitled to some coupon or small dollar amount if you take the time to fill out some claim form (while the lawyers who brought the lawsuit receive millions). So you may already have helped fund La Raza.
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