Archives for August, 2008
The Nutrition Nazis are Back
The consume’rs right to know. It’s hard to disagree with the nanny-state proposal now before the California legislature (I know, I know … what nanny-state procedure isn’t before the California legislature!?) to require full disclosure of calories on menus by restaurants. The target, of course, is supposedly unhealthy fast food outlets. Once people see the calorie count, it is assumed that they will desert en masse to the local veggie bar. But as Jacob Sullum of Reason points out, if people really wanted that information, companies would compete to provide it. It’s fair to assume that most people who show up at McDonald’s don’t expect a healthy meal!
They certainly aren’t likely to change their eating habits. Writes Sullum:
The only chain where a substantial share of customers said they noticed nutritional information was Subway, where 32 percent reported seeing it, compared to 4 percent at the other chains. Since Subway promotes a subset of its menu as lower in calories and fat than its competitors’ offerings, using a pitchman who lost hundreds of pounds while eating at the chain every day, this disparity is not surprising.
But even at Subway, calorie information seemed to make a difference for just one in eight customers. Of those who reported seeing the calorie information at Subway, 37 percent—12 percent of all Subway customers—said it affected their purchases. Subway customers who said they used calorie information bought about 100 fewer calories than those who said they didn’t see it and those who said they saw it but didn’t use it.
Notably, “there was no significant difference in mean calories purchased by patrons reporting seeing but not using calorie information and patrons who reported not seeing calorie information.” In other words, simply making people aware of calorie content is not enough to affect their food choices.
The information’s influence may be limited to people who are predisposed to count calories. If so, the impact of menu mandates will depend on the extent to which those people are not taking advantage of less obtrusive nutritional information already provided by restaurants.
The importance of pre-existing preferences also suggests that it’s risky to extrapolate from Subway customers (who, given the chain’s marketing, are probably especially weight-conscious) to fast food consumers in general. Another unresolved question is whether people compensate for fewer calories consumed at McDonald’s or KFC by eating more at home or elsewhere.
Even if menu regulations don’t make any difference on balance, Yale obesity researcher Kelly Brownell recently told the Los Angeles Times, “there’s still the issue of the consumer’s right to know.” What about the consumer’s right not to know? The same research that supporters of menu mandates like to cite indicates that most consumers prefer to avoid calorie counts, enjoying their food in blissful ignorance. There’s a difference between informing people and nagging them.
And that’s really what the rule is all about. Busy-bodies and nutrition nazis determined to badger the rest of us into eating they believe is best for us. Which, alas, almost certainly means the bill will pass the California legislature.
Happy Labor Day!
Today, in time for Labor Day weekend, I’ve got two new articles out on current goings-on in organized labor.
In The American Spectator, my op ed asks “What does Big Labor want?” — from the enormous amounts of time and effort it’s spending on this election.
Meanwhile, a longer article in Capital Research Center’s Labor Watch looks at the growing trend among labor unions to leverage their pension funds to pursue policy agendas at public company shareholder meetings — policy agendas that may not benefit the union members on whose behalf they’re supposed to be managing those pension funds.
The word ‘absurd’ does not do justice
Today in the WaPo we see that plans by the University of Chicago to establish a research institute named after the late Nobel prize-winning economist (and U. of Chicago alum) Milton Friedman has caused a bit of an outcry from the leftist professor crowd that typically congregates at exclusive and elite universities like U. of Chicago. That in itself is not a surprise, nor is it as absurd as statements made by some of the folks who helped draft and circulate a petition to block the establishment of said institute:
Critics say that they are concerned the institute will be a partisan, elitist organization and that it shouldn’t be under the auspices of a university. (irony not added!)
According to Bruce Lincoln, a professor of the history of religions:
People are concerned about the blurring of the line between Friedman’s technical work in economics and his fairly well-known persona as a political advocate of a very pure, free-market conservative or neoliberal position, where the market is the solution to everything.
And this is a bad thing because…?
As we all are aware, the majority of US universities are replete with “institutes” and “centers” that are nothing if not “partisan” and “elitist.” Many of the universities themselves have been incestuous breeding grounds of leftist elites and their political dogmatism for years, to say the least. As a matter of fact its been documented (and here), analyzed, and fought against. But beyond all this, there is the inherent absurdity of rejecting the opportunity to have a privately-funded, high quality research institute named for a universally respected Nobel prize-winning alumnus simply because you disagree with his political beliefs. What ever happened to the alleged free exchange and debate of ideas on university campuses?
Maybe these folk are afraid of debating with ideas that refute their own for fear they may find themselves losing the debate. Or, maybe because these folks do not operate within a market-driven structure (the university tenure system) that requires tangible results, is why they reject that the market may actually be the answer to a great many things. The market does not magically make everyone a success, some people win and some lose, but at least they are free to choose how it happens.
-GH
Brookings Winds Up Doomsday Clock
The Brookings Institution is the most establishment of establishment think-tanks. Old-fashioned, genteel, liberal, they do a lot of good work while at the same time perpetuating a lot of ideas whose time passed long ago. I would never, however, have called them alarmist. Until today, that is, when its President put his name to an op/ed in the Washington Post that is laughable in its alarmism. Drawing from the language of the 1980s doomsayers and their Doomsday Clock, the op/ed is entitled “7 Years to Climate Midnight.”
Here’s a sample:
Reflecting a consensus of hundreds of scientists around the world, the Intergovernmental Panel on Climate Change (IPCC) has affirmed that greenhouse gas emissions are raising the Earth’s temperature. The Earth is on a trajectory to warm more than 4.5 degrees Fahrenheit by around mid-century. Exceeding that threshold could trigger a series of phenomena: Arable land will turn into desert, higher sea levels will flood coastal areas, and changes in the convection of the oceans will alter currents, such as the Gulf Stream, that determine regional weather patterns.
Manhattan and Florida would be under water, while Nevada would have no water at all. Some Russians quip that they would welcome a more temperate climate, but they would probably be sorry to lose St. Petersburg. Countries such as Bangladesh and Mali do not have the resources to mitigate or even to adapt to the impact of climate change; millions would flee coastal flooding and the desertification of farmlands, creating instant “climate refugees.”
Note the coulds and woulds. Yep, anything could happen. However, read the IPCC - which they have just recommended - Working Group II report on impacts and you won’t find anything about Manhattan and Florida being under water (except in the “centuries to millennia” scale). That’s because the IPCC sees the most likely accelerated sea-level rise scenario this century, assuming temperatures go the way they project they will, is only “up to” 0.6m, about 2 feet (see here).
The rest of the story is the same, as the Boys from Brookings accentuate the negative. The fact is that when it comes to human welfare, a richer-but-warmer world is better off than a poorer-but-cooler one. A rich, warm world will actually see a significantly reduced number of people at risk of hunger, down from 15% of the population toady to as low as 1%. Bangladesh and Mali do indeed not currently have the resources to adapt, that is for sure, but by the end of the century in a warmer world the average per capita income in developing countries will have shot up from $875 (in 1990 dollars) to at least $11,000 - about the same as the developed world now - and possibly far more. Sea defenses are surprisingly effective once built (look at the Netherlands) and avert massive humanitarian and environmental costs. The world should be investing in them now, but based on sober, local assessments of the risks at individual locations, not on the basis of global alarmism.
Anyway, what do they recommend?
Urgent and drastic action by the international community is required, and the United States must take the lead.
Americans produce more than four times as much carbon per capita as the Chinese; 12 times as much as Indians; and more than twice as much as citizens of Germany, France, Britain and Japan. Unless the United States acts first, it will have no credibility in persuading other countries to do their share.
Hold on there, bucko. Per capita ranking is all very well, but the fact is that there are a billion Chinese and a billion Indians. China actually emits more in total than us. Third and fourth on the list are Indonesia and India. The developing world is where the emissions are increasingly coming from. Why? because it helps make them rich. America putting on a hair shirt is going to do nothing to stop that process. Now, there is something called the Environmental Kuznets Curve, which suggests that the environment becomes more important in political decision-making as societies become richer, but that doesn’t appear to be affected by example. The best we can do is not to hope that the developing world will stop going up the curve, but that we can help them over the top and down the other side faster. That involves technology sharing and transfer, which is a whole different kind of leadership than what Talbott and Pascual are suggesting.
Let’s go on. Here’s their preferred solution:
To their credit, McCain and Obama support the creation of a cap-and-trade system that would limit national emissions. Trading among firms would put a price on carbon. That is an essential step toward changing industry behavior, encouraging energy conservation and providing an incentive for new technologies. As the most powerful national economy, the United States can set an example for the world in harnessing wind and solar power; “sequestering” (or capturing) carbon from coal plants; and developing cellulosic ethanol and safe civilian nuclear power as alternatives to fossil fuels.
But the domestic obstacles to these and other measures are daunting. While some industries will prosper, other sectors of the economy, especially those that produce or rely on coal, steel and cement, will contract. Electricity prices will increase in the near and middle terms. Many workers and households will need help with the costs of transition.
Cap and Trade, eh? Beloved by Wall Street, politicians and Enron, hated by economists, free-marketers and environmentalists alike. The reason the financiers love it is because they can make a killing selling permits, and the perverse incentives it produces should give anyone pause. Politicians, however, love it precisely because of those “daunting obstacles” - it will increase energy prices to the average consumer (ie “voter”), but does so without an obvious tax voters will blame politicians for, while keeping large-donating energy companies happy. That’s precisely what happened in Europe. Oh, and no real emissions reduction either. Interestingly, CEI predicted all this back in 2001. If cap and trade is the answer, you’re not asking the right question.
At least they admit that their policy will induce hardship, but this should be their clue that they need to think laterally. The fact is that Brookings are stuck in the old rut of arguing for emissions reduction by inflicting restriction and hardship, instead of asking how you can get emissions reductions while increasing welfare. That’s where “no regrets” policies focused on increasing innovation and removing governmental barriers and limits are the way forward. My paper on ten such policies is almost ready. You’ll be the first to see it here when it comes out.
Anyway, Brookings has resorted to what science communications expert Matthew Nisbet (not someone likely to agree with me on the details) terms as framing global warming as a ‘Pandora’s Box,’ with all sorts of calamities ready to emerge. Yet evidence suggests it doesn’t work. Brookings’ entry into the debate merely advances harmful policies in an ineffective way. They really should know better.
Cross-posted from The Really Inconvenient Blog.
“Pre-crime social dangerousness”
In a move reminiscent of Minority Report, the Cuban government has arrested punk rock singer Gorki Aquila Carrasco, for charge of “pre-crime social dangerousness.” His real crime, of course, is criticizing the Castro government in not-very-polite terms. (Video contains very strong language. Thanks to Tom Walls for the Miami Herald link.)
A note from Fred Smith on the battle for free trade
Some thoughts on why our side is losing in its efforts to promote and defend free trade:
- From the time of the GATT onward, the primary approach to trade liberalization has been based on mercantilistic arguments. What will another nation sacrifice to gain the right to benefit our consumers? That approach — always based on real-politics - not intellectual considerations arguably worked in a world where rent-seeking was limited, where the trade negotiation entity (the GATT) was weak, when the focus was on global arrangements rather than regionals or bilaterals, and when trade had not become the tool to advance “social justice” in the world. None of those conditions any longer exist. Isn’t it time to rethink whether it might not be politically possible to advance free trade as unilaterally beneficial to the citizens of each country? That is, is it not conceivable that efforts to strengthen the consumerist forces around the world might not prove an offset to the producer and utopian pressures to see trade as a means of advancing special interest agendas?
- I note that when an attempt was made to appeal directly to the European consumers (”Do you know how much more you’re paying for food?”) by US negotiators some time ago, the EU politicians went berserk, suggesting that they (at least) viewed this strategy as politically possible.
- The willingness of governments around the world to allow trade policy to become the instrument for all social agendas leaves little hope for advancing economic liberalization. If we must wait for agreement by environmentalists, human rights activists, labor groups,. women and religious groups, pro-democracy advocates and so forth, there is little scope for agreement on what is already a very complex process.
- Moreover, the mercantilist bias of trade negotiations has allowed protectionists to seize the moral high ground. We care about economics; they care about justice. “Fair” trade coffee ‘Yes!’ - Free trade coffee, ‘No!’
- That failure reflects, of course, in part the dominance of the NGO movement by coercive utopians but there are also a growing array of economic liberal NGOs around the world and these have not yet been effectively organized or mobilized both to challenge the domestic producer groups, nor to retake the moral high ground in the global debate. Even some of the traditional NGOs are becoming aware of the risks attendant on their fellow NGOs antipathy to trade.
- This suggests the possibility that a group promoting greater trade freedom might play a critical role in seeking to organize a ‘Grand Alliance’ of economic liberal NGOs (especially from the developing world) and pro-trade economic interests from the developing world. The counter-alliance - anti-trade NGOs (the Lori Wallachs of the world) and anti-trade economic interests ( Lou Dobbs and the sugar sector) already exist and provide the model for creating our own Holy Alliance. -Fred
Does Government Need to Fund Energy R&D?
The Breakthrough Institute, whose willingness to think outside the box I greatly admire, issues a challenge of sorts to my friend Jim Manzi, who has been particpating in a debate with them over at Cato Unbound. They say:
“If Manzi thinks it is not the government’s role to make large investments to enable the emergence of new industries then he should explain how America could have become such a rich nation without having invested in the railroads, the highways, the electrical grid, the Internet, microchips, the computer sciences, and the biosciences.“
Let’s go through them one by one:
Railroads: were actually built by private enterprise, very much following the similar model in the United Kingdom. Government’s role was not as investor but as facilitator, issuing state charters with limited eminent domain powers that eased the way for quick build. There was very much competition to build the best routes. Eminent domain has significant problems, but it is difficult to think of alternatives with linear developments like railroads - or electric transmission lines. That’s a subject for a future post, but at base, this is an example of private, not government investment.
Highways: There has certainly been massive central government funding of highways since Eisenhower (see here), but government got involved in them for defense-related reasons. Would it have happened without them? Well, construction and upkeep of the King’s Highways in the UK was for two hundred years handled by Turnpike Trusts. When the new private railways came along, the toll income halved overnight (intermodal competition in transport is as important as, probably more important than, intramodal). Today, new roads around the world are being built on public-private partnership basis, with government handling the political risk and private companies the construction risk. It is perfectly plausible that future highways will be built largely through private investment.
[Aside on highways: before the vast government investment in highways, privately-owned mass transportation was profitable and efficient. Without the massive government investment in highways, and assuming light regulation on its development, we probably would have much better developed “public” transportation in the US. I suspect this is the sort of thing Breakthrough would like to have seen happen.]
The electrical grid: Well, this is a clear case where government screwed up the development of the infrastructure. America’s fragmented and inefficient grid is a direct result of the Depression Era PUHCA law and other restrictions (see here). Private development would almost certainly have given us a much more efficient and responsive electric grid. And, absent “fairness” regulation, we probably would have had smart pricing all over the country for some time, something that again I suspect Breakthrough would have applauded.
The Internet/computer sciences (we’ll take these as one): Granted, DARPA came up with the idea of linking remote computers together - again for defence purposes - to create a whole that was more than the sum of its parts. But to what extent was it that act that made the Internet the tool it is? Hyperlinks were invented by United Technologies (despite the then nationalized British Telecom claim otherwise) and bulletin boards were developed by AOL, Compuserve etc. CERN certainly had a role in introducing the World Wide Web, but the investment that has made it a massive success has been overwhelmingly private. In a sense, government funding of the Internet was nothing more than seed money.
Microchips: Texas Instruments and Fairchild separately invented the integrated circuit and, although TI was first, Fairchild’s was better - a great example of competition at work. Now certainly defense purchases of large numbers of chips for Minutemen missiles lowered the price considerably, making them affordable enough for all sorts of new technologies, but it would be a mistake to say that that could not have happened in the absence of the Minutemen project. DVDs, for example, replaced VHS pretty quickly after initially being far more expensive. Integrated circuits were bound to replace transistors whatever happened.
Biosciences: Private pharmaceutical companies spend massive amounts worldwide on bioscience. There is indeed some small amount of government funding rpoducing breakthroughs at the basic science level, but once again these amount to seed money and certainly aren’t arguments that suggest massive government funding in development and deployment of bioscience products either happens or is necessary. Indeed, government tends to get in the way of such deployment, often with tragic results. And there’s also the case of Craig Venter, whose private approach to human genome sequencing almost embarrassed the international government-funded approach, so much so that they strong-armed him into giving up his company’s property rights.
All in all, these examples actually show that government functions best by facilitation - creating the right legal and political environment for innovation and delployment of new technologies. Sometimes it tries to make us safer through defense expenditure and ends up making us richer. Sometimes it interferes and delays or perverts the most efficient development of the technological asset. None of these cases suggest that massive government funding of energy R&D is essential. They do, however, show that government can very much help by getting out of the way. And that’s an argument I am currently developing at much greater length.
SEIU’s California Scheming III (and Michigan, too)
The scandal that broke at the largest union local in California earlier this month, an affiliate of the Service Employees International Union, has spread to Michigan, where the head of that state’s largest local has been forced to resign, less than a week after Tyrone Freeman, the head of the California local was forced to resign and the SEIU national organization removed all of the California local’s officers.
One interesting aspect of this story, in today’s Los Angeles Times, is the continuation of the power struggle between SEIU President Andy Stern and Sal Rosselli, the head of an Oakland, California, local which Stern has been trying to merge into the local at the center of the scandal.
In its statement, the SEIU said it has enlisted former California Atty. Gen. John K. Van de Kamp to assist in the Los Angeles investigation, and that former California Supreme Court Justice Joseph Grodin has agreed to preside over an internal hearing on the inquiry next month.
The statement also announced that Stern’s administration would seek trusteeship of an Oakland local that has resisted the union’s efforts to shift 65,000 of its 150,000 workers to the chapter that Freeman headed. The Los Angeles local was placed in trusteeship last week and all of its officers were removed.
In the statement, Stern’s office accused the Oakland local of improperly setting up a nonprofit and a legal defense fund with members’ dues, misappropriating an internal database and retaliating against workers who criticized its leadership. The statement said that the union found significant evidence that the Oakland chapter’s leadership “engaged in a pattern of financial malpractice and fraud.”
Ringuette said she knows of no allegations that officers of the Oakland local or their relatives personally profited from any of the purported actions. The Times reported some of Stern’s charges against the local in June.
The president of the Oakland organization, Sal Rosselli, denied the allegations Monday. He said the trusteeship move was an attempt to deflect attention from the spending inquiry in Los Angeles and now Michigan, and to punish him for fighting the 2-year-old proposal to transfer his members to Freeman’s local.
“It’s an act of desperation by Stern,” Rosselli said. “They’re just recycling stuff he’s already talked about.”
A merger with the Los Angeles local would have given the now-disgraced Freeman more dues money to play with, at rank-and-file members’ expense. Rosselli would be right to feel vindicated in his opposition to the merger with the LA local, so it is curious that SEIU’s national officers would be going after direct control of his local now.
For more on SEIU, see here, here, here, and here.
Russia Bears Down on European Energy
Incisive article in the Wall Street Journal today on how Russia is using energy supply as part of its strategic renaissance. An excerpt:
Despite Russia’s repeated use of energy as a political weapon in Eastern Europe, Western Europeans keep repeating the mantra that Russia has been a reliable supplier to “Europe.” They also choose to ignore that natural-gas giant Gazprom serves as the Kremlin’s leading foreign-policy arm. The company is primarily state-owned, and many members of Gazprom’s leadership are current or former government officials. The Kremlin’s present occupant, Dmitry Medvedev, until recently was the chairman of Gazprom. His replacement there is former Prime Minister Viktor Zubkov.
The Russian plan is rather simple: Punish countries that refuse to come under its influence by building new gas pipelines that bypass them, while rewarding countries and political leaders that cooperate with Russia with lucrative energy deals. Maintaining a monopoly over the transport of Caspian gas to Europe is essential for Moscow to ensure that all those countries that have submitted to a Russian “partnership” will acquiesce to the return of the former Soviet space to the Kremlin’s control.
It is vital to understand that Russia has designs on Eastern Europe and is using its energy supply to buy off Western Europe. The future looks bad if this is the case.
Yet there is a question here that needs answering first. Natural gas, while cheap to burn and an efficient form of energy, is not the only source of electricity Western Europe has. Germany and Britain both possess abundant coal. France has based its energy profile on nuclear. Both could provide Russia-free energy across Western Europe, yet both are reviled by environmentalists. Wind power and renewables, beloved by environmentalists, are simply not up to the job.
It therefore seems that when faced with a choice between empowering Russia and annoying environmentalists, Western Europeans are less afraid of the former.
Let’s also remember that the Kyoto Protocol is designed to see large amounts of Western European money transferred to Russia as European nations purchase credits for emissions reductions banked by Russia following the collapse of communism. European nations can’t reduce emissions on their own, for the aforementioned reasons, so they need to buy credit from elsewhere. This was the central reason behind Russia’s ratification of the Kyoto Protocol. To put it bluntly, the Kyoto Protocol is subsidizing Putin’s military retrenchment. If supposed oil wealth funding madrassas is a problem, then this certainly is as well.
This is, needless to say, a terrible situation to be in. When environmentalism gets its way, Putin gets his. If Putin’s energy weapon is to be neutralized, Western European governments need to face down the environmental lobbies in their countries, and allow digging for coal and new nuclear build. Political calculus, however, suggests otherwise. And Putin knows this.
Cross-posted from The Really Inconvenient Blog.
Anna Tomalis, R.I.P.
Last Friday, I attended the funeral of a remarkable 13-year-old girl named Anna Tomalis. For the past three years, Anna had been battling terminal cancer and, more recently, trying to get the Food and Drug Administration to grant a “compassionate use” exemption so she could try an experimental cancer drug now being jointly developed by the pharmaceutical companies ARIAD and Merck. Unfortunately, FDA rarely grants exemptions. If too many exemptions are granted, it would become harder to enroll patients in clinical trials, where they have as much as a 50-50 chance of getting a placebo. Anna was too young and too sick to be admitted to any of the clinical trials, so that wasn’t at issue here. But, of course, the whole point of FDA is to keep individuals from making their own decisions about which drugs to take. So, eventually, after months of delay, FDA finally approved Anna’s exemption, but it came too late. She died just three weeks after beginning treatment — too little time for the drug to have worked.
I got to meet Anna and her mother Liz a few months ago, through a patient advocacy organization called the Abigail Alliance For Better Access To Developmental Drugs, with which CEI works occasionally. And, I continued to correspond with them both by e-mail ever since. Though I certainly did not know Anna very well, the service was quite moving. Her father, Ron, for example, explained that Anna realized all along that her chances of survival weren’t good. But, keeping a good attitude about the whole thing, Anna insisted that she be buried in a hot pink casket. Since no one actually makes a hot pink casket, her parents had to buy a non-descript one and take it to an auto body shop to have it painted pink.
Anna also tried to use her impending death in order to promote a change in the law that would make it easier for critically ill patients to get compassionate use exemptions. Even though she realized she wouldn’t last long enough to benefit personally from such a change, she visited Washington several times in order to advocate for such a policy. My op-ed on the subject appeared in this past weekend edition of The Wall Street Journal, and can be read here.
EU Governments Fund Environmental Activism
It’s no surprise to many readers of this page, but governments in North America and Europe often funnel millions of dollars to activist groups that turn around and use those funds for lobbying purposes. Over at www.gmobelus.com, long-time biotechnology reporter Andrew Apel uncovers the latest developments.
Do you live in Europe? If you don’t, do you want to be governed by European policies? It turns out, Europe’s governments pay hundreds of millions of Euros annually to groups which export Europe’s attitudes to governments overseas. …
Such simple accusations completely fail to address what is actually a very complex issue. The FOE is merely one component of a system in which the European Commission, the Member States of the European Union, European foundations, and other organzations, disburse, receive, and redirect hundreds of millions of Euros annually through a widespread network of activist organizations.
The whole piece is worth a read.
“Cruising in Loving Memory of Cheap Gas”
Will gas prices keep dropping? A recent drive I took ended with a very strange coincidence. If I were superstitious, I’d regard it as a sign that we’re in for cheaper gas.
Two weekends ago we drove our daughter to college in central Virginia. As we started heading out, I noticed that regular at the neighborhood gas station had dropped to $3.65. That was nice, since the price had been above $3.80 only days before.
We got off I-66 at Gainesville, which two years ago had been the scene of a locally famous price war that for a while led to gas below $2.00!. Filling up at that price back then had been a memorable event for me, since gas had nearly hit $3 only months before.
Further down the road we found prices below $3.50. We filled up—not quite as good a feeling as $1.98, but not bad. And then, at the very end of our trip, one station was selling regular at $3.39. I liked this trend.
Of course, the trend didn’t continue on the way back—duh. But then something strange happened. We pulled into a Gainesville station just before the last stretch home on I-66, and lo and behold—there was a van parked right in front of us with this message stenciled on its rear windshield:
“CRUISING IN LOVING MEMORY OF CHEAP GAS”
Googling this phrase turns up nothing, so it’s not like this is a ready-made window stencil purchased by scores of people. The van we saw may well be the only one in the country carrying this message, and we just happened to pull up behind it after driving all day idly noting gas prices.
I’m a fan of cheap gas. It’s good for my wallet, and it’s good for people universally. If this was an omen of lower prices to come, it was a good omen.
Related links:
Why fans of cheap gas are more honest than warriors against “oil addiction”
Stop kvetching about Exxon (1-minute video)
Free Enterprise Fund v. PCAOB, An Illogical Ruling on Sarbox
On Friday, a divided appeals court rejected a constitutional challenge to a powerful board set up by the Sarbanes-Oxley Act to regulate the accounting industry. The court’s decision was internally-inconsistent and illogical. It also provoked a strong dissent from Judge Kavanaugh. The challenge argued that the Public Company Accounting Oversight Board (PCAOB) violated the Constitution’s Appointments Clause, as well as separation-of-powers safeguards. Eminent legal scholars have questioned the PCAOB’s constitutionality, such as Law Professor Donna Nagy, an expert on securities regulation, and Professor Stephen Bainbridge, a leading authority on corporate law. The PCAOB has “massive power,” “unchecked power by design,” according to a Senator who voted to create it. But it was nevertheless upheld in a 2-to-1 vote by the D.C. Circuit.
The red tape generated by the PCAOB has been very costly to investors and our economy. $35 billion is the estimated annual cost of complying with just the PCAOB’s rules governing “internal controls.” A University of Rochester study estimated overall costs of the law to shareholders at $1.4 trillion. The 2002 law did nothing to protect shareholders: many of the mismanaged companies now engulfed by the mortgage crisis, like Countrywide Financial, were paragons of Sarbanes-Oxley compliance, using compliance with its red tape to mask underlying problems. The law has driven businesses and jobs overseas, virtually drying up I.P.O.s. And the PCAOB’s unaccountable, unconstitutional structure gives it an incentive both to overregulate small business, and to shy away from taking meaningful steps that would actually protect the investing public.
The constitutional challenge is a case called Free Enterprise Fund v. Public Company Accounting Oversight Board.
You can always trust socialists…
…to promise much and deliver little, if anything — all the while making themselves feel just great. The Israeli news site Ynetnews.com reports:
A Gaza activist told Ynet Saturday that local residents were disappointed by the small quantities of food brought in by two boats carrying international leftist activists.
“Many people thought these boats will make a significant contribution to break the siege, not only politically but also in terms of brining in goods, equipment, food, and medicine,” he said. “However, once it turned out these boats contain too little food and mostly activists…some people left the beach disappointed.”
I bet they were really into being “green,” too. Wonder how much litter they left behind? (Thanks to Margaret Griffis for the Ynet link.)
Yet more on SEIU — it’s going after private equity, again
An editorial in today’s Wall Street Journal gives “Service Employees International Union President Andy Stern credit for tenacity” in pressuring private equity firms. SEIU, reports the Journal, recently filed a citizens’ initiative to the Washington state legislature to limit state pension fund investments in private equity firms, requiring state pension fund administrators to consider “social criteria” when making investment decisions.
On the SEIU political checklist are a private equity firm’s “lack of transparency, poor employment practices, environmental impacts and other indicators of irresponsible corporate behavior.” The Investment Board would also have to encourage private equity to comply with the SEIU’s vision of “corporate responsibility.” That means firms would have to release data on revenues, taxes, and executive compensation, provide “living wages and benefits,” recognize a “collective bargaining representative” at each portfolio company, and mitigate “climate risk,” which is to say be politically correct on global warming. The Investment Board itself would also have to “support changes to tax laws that eliminate unfair advantages” to private equity, and more.
In other words, Washington state pension funds would for all practical purposes be barred from investing in private equity. State Investment Board Executive Director Joe Dear concluded as much when he told a local newspaper that “No private equity firm that we want to do business with will do business with us under these terms.” He predicted this would “cost taxpayers and beneficiaries millions in higher taxes and contributions.”
And he has the data to prove it. Nearly $14 billion of Washington’s investments are in private equity, which has provided returns of 12.6% over the past decade, compared to 7.9% for pension holdings as a whole. Barring private equity would “destroy our ability to invest in our highest-returning asset class,” said Mr. Dear. The losers would be union pensioners who depend on those returns for retirement income.
Mr. Stern’s real agenda here is to coerce private equity firms into giving his union a free hand in organizing workers at their portfolio companies. Having failed to organize those workers in elections, or to negotiate unionization deals with private equity management, Mr. Stern is now seeking political retribution. His strategy is to demonize the industry in public and promote damaging legislation until the companies give in.
It would be grossly irresponsible for state pension fund managers to take the approach SEIU is pushing. Union pension funds, which have in recent years become a tool for political activism at public company shareholder meetings, are today considerably underfunded, especially when compared to comparable private pensions, as a recent study by Diana Furchtgott-Roth of the Hudson Institute shows.
For more on organized labor’s response to the rise of private equity see here.
For more on SEIU, see here, here, and here.
-
Search
-
Categories
Agriculture
Bureaucrash
CEI in the City
Culture
Economic Liberty
Energy
Environment
Global Warming
Healthcare Reform
Insurance
Intellectual Property
International
Legal
Mobility
Nanny State
Nano & Biotech
Odds & Ends
Personal Liberty
Politics as Usual
Precaution & Risk
Privacy
Sanctimony
Tech & Telecom
Trade
-
RSS Center
