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January 2012
Facing a budget shortfall, officials of South Florida’s Tri-Rail commuter train are seeking help from the state — or rather, from drivers who rent cars in Florida. Tri-Rail, which runs between Dade, Broward, and Palm Beach counties, wants Tallahassee to impose a $2 surcharge on car rentals to keep the train going. Thankfully, the proposal is meeting opposition. Reports The Palm Beach Post:
But opponents, such as state Rep. Carl Domino, say the $2 fee would further depress tourism across the state.
“In an environment where tourism is weak, do you want to send the message to tourists that they’re going to have to pay even more money to come to Florida?” said Domino, R-Jupiter.
Ever since gas hit $4 a gallon, Tri-Rail ridership figures have smashed expectations, reaching levels not thought possible until 2020, Stevens said. About 4 million riders took the train last year, 23 percent more than in 2007. Ridership has more than doubled since 2005.
The numbers have dipped only slightly as gas prices have fallen – evidence, say officials, that those who try using the commuter rail tend to stick with it
That a slight fare increase spread across so many new riders would boost Tri-Rail’s finances should be obvious, but apparently not to the people who run Tri-Rail — which makes state Rep. Domino’s infusion of sanity especially welcome.
“Who uses this transit system?” asked Domino. “Shouldn’t the people who use it pay for it?”
For more on South Florida politics, see here and here. For more on public transport, see here. (Thanks to Margaret Griffis for the Palm Beach Post link.)
Contrary to claims by the Obama administration, there is no consensus among economists for a “stimulus” package, much less the trillion-dollar pork-filled “stimulus” package being crafted by Obama and liberal Congressional leaders. (Many economists oppose it). Even the liberal Washington Post, which has not endorsed a Republican for President since 1952, admitted this today: “Fiscal stimulus is far from a sure-fire remedy. Economists disagree about the efficacy of every pump-priming effort from the New Deal to last year’s tax rebates. In general, fiscal policy had fallen out of favor in economics. . .Many economists note Japan’s failed attempt to borrow and spend its way out of a recession during the 1990s” through “repeated stimulus packages. As it is, Japan piled up a massive debt and recovered only modestly, leaving it vulnerable to today’s downturn.” (See Editorial, “Priming the Pump,” Jan. 25, pg. B6).
The Obama Administration’s claim to economic expertise is odd, given that Obama’s nominee to head the Treasury Department and oversee economic policy is the “non-economist” Timothy Geithner, a man whose chief claim to fame is having worked on prior bailouts in which taxpayers were shafted, and he arguably “was had by crafty bankers.”
(Ironically, Geithner, whose responsibilities as Treasury Secretary will include overseeing the IRS, failed to pay income taxes (specifically, self-employment taxes) despite being specifically advised to do so by a past employer, even though he received an allowance from his employer to enable him to pay those very taxes).
Geithner has often been described by Obama staffers and liberal journalists (like David Broder of the Washington Post and Peter G. Gosselin of the Los Angeles Times) as an “economist.” But Geithner has neither a doctorate nor a bachelor’s degree in economics (although “international economics” was part of his Masters Degree studies). If Geithner qualifies as an economist, then so do I, given my economics background. And I consider Obama’s trillion-dollar stimulus proposal a disaster.
All the talk of a stimulus is resulting in a log-jam in state legislatures as legislators put off hard choices in the hope that Washington will bail them out, delaying passage of state budgets. In Virginia, for example, the Washington Post reports that “Legislators from both parties are guilty of assuming that President Obama will come to the aid of states with a stimulus package, and they aren’t taking the budget gap as seriously as they should.” Meanwhile, Maryland’s big-spending government, which pushed through record tax increases last year, is drawing up an extravagant wish list of new spending proposals it hopes will be funded by Obama’s budget-busting stimulus package. Obama’s plan has sent a “thrill” through irresponsible local officials, who even the Post has recently criticized for allowing public-employee pensions and benefits to skyrocket out of control.
The stimulus package is also contributing to the credit-freeze that left some businesses unable to borrow to meet payrolls. Banks are reluctant to lend money without knowing who will be the winners and losers from provisions buried in the 600-plus page stimulus package. And the money in the stimulus package will be spent mostly in future years — like 2010, an election year — not this year, when economic relief is most needed.
A consumer-product safety law recently passed by Congress will drive up the price of children’s clothes and toys and put thousands of small toymakers and children’s clothing makers out of business. (We wrote earlier about how it will enrich trial lawyers and “may actually harm safety“).
As Walter Olson notes in Forbes Magazine, the Consumer Product Safety Improvement Act (CPSIA) is
“now shaping up as a calamity for businesses and an epic failure of regulation, threatening to wipe out tens of thousands of small makers of children’s items from coast to coast, and taking a particular toll on the handcrafted and creative, the small-production-run and sideline at-home business, not to mention struggling retailers. How could this have happened? Congress passed CPSIA in a frenzy of self-congratulation following last year’s overblown panic over Chinese toys with lead paint. . .Barbed with penalties that include felony prison time and fines of $100,000, the law goes into effect in stages; one key deadline is Feb. 10, when it becomes unlawful to ship goods for sale that have not been tested. Eventually, new kids’ goods will all have to be subjected to more stringent “third-party” testing, and it will be unlawful to give away untested inventory even for free. The first thing to note is that we’re not just talking about toys here. With few exceptions, the law covers all products intended primarily for children under 12. That includes clothing, fabric and textile goods of all kinds: hats, shoes, diapers, hair bands, sports pennants, Scouting patches, local school-logo gear and so on. And paper goods: books, flash cards, board games, baseball cards, kits for home schoolers, party supplies and the like. . .makers of these goods can’t rely only on materials known to be unproblematic (natural dyed yarn, local wood) or that come from reputable local suppliers.”
“Instead they must put a sample item from each lot of goods through testing after complete assembly, and the testing must be applied to each component. For a given hand-knitted sweater, for example, one might have to pay not just, say, $150 for the first test, but added-on charges for each component beyond the first: a button or snap, yarn of a second color, a care label, maybe a ribbon or stitching–with each color of stitching thread having to be tested separately.”
“Suddenly the bill is more like $1,000–and that’s just to test the one style and size. The same sweater in a larger size, or with a different button or clasp, would need a new round of tests–not just on the button or clasp, but on the whole garment. The maker of a kids’ telescope (with no suspected problems) was quoted a $24,000 testing estimate, on a product with only $32,000 in annual sales. Could it get worse? Yes, it could. Contrary to some reports, thrift and secondhand stores are not exempt from the law.”
We were virtually alone in opposing the law back in 2007. The bill passed the House by a vote of 424-to-1 and the Senate by a vote of 89-to-3.
The law’s sponsors are now trying to avoid responsibility for the regulatory train-wreck their law is causing by proposing cosmetic fixes to the law, which will not be enough to prevent thousands of jobs from being lost. Their cosmetic changes are just a political ploy, to avoid responsibility for the catastrophic consequences of the law, which they do not want to change because it enriches their trial lawyer allies.
Any changes to this wasteful law will come too late for many retailers and poor families searching for cheap clothing for their kids. ”Regulations set to take effect next month could force thousands of clothing retailers and thrift stores to throw away trunkloads of children’s clothing.”
Eric Holder, Obama’s choice for attorney general, is hostile to civil liberties. He has previously expressed veiled support for using the misnamed “Fairness Doctrine” to squelch “conservative critiques” and “conservative media,” such as Fox News (which Holder believes is anything but “Fair and Balanced,” contrary to its slogan). The “Fairness Doctrine” is designed to shut down conservative Talk Radio.
Advocates of a broad federal hate-crimes law have pointed to the Duke Lacrosse case as an example of where federal prosecutors should have stepped in and prosecuted the accused players — even though the state prosecution in that case was dropped because the defendants were actually innocent, as North Carolina’s attorney general conceded, and were falsely accused of rape by a woman with a history of violence (including trying to run over someone with her car) and making false accusations. Supporters of federal hate-crimes legislation like Janet Reno view it as a way of getting around constitutional protections against double jeopardy, by allowing reprosecution in federal court of people who have already been found innocent in state court.
Civil libertarians like Wendy Kaminer have criticized the federal hate-crimes bill for taking advantage of a loophole in constitutional double-jeopardy protections. So has Gail Heriot, a law professor and member of the U.S. Civil Rights Commission.
Holder has also been criticized by civil libertarians for seeking to undermine the Sixth Amendment right to counsel, and by gun-rights advocates for seeking to eviscerate Second Amendment rights recognized by the Supreme Court.
Holder was also involved in the disgraceful pardon of fugitive millionaire Marc Rich,, whose ex-wife was a major Clinton donor, and the pardons of unrepentant Puerto Rican terrorists.
I wrote earlier about how the federal hate-crimes bill backed by Obama and Congressional leaders would violate constitutional federalism safeguards, and how it would allow people found innocent in state court to be retried in federal court. Supporters of the hate-crimes bill have all sorts of rationalizations for disregarding not-guilty verdicts. Hate-crimes activist Brian Levin, who testified before Congress, claims reprosecutions are needed because local jury pools are biased. NOW Legal Defense Fund told Congress that reprosecutions are appropriate if local prosecutors had “inadequate resources” or were of “questionable effectiveness.”
Given the politically-charged nature of many hate-crimes trials, Kimberly Potter of New York University was probably right when she told Congress back in 1998 that if the federal hate crimes bill is enacted, “the acquittal of [hate-crimes] defendants in state court will frequently trigger demands for federal prosecution.”
The defendants in the Duke lacrosse case, charged with an interracial rape, were vindicated by DNA evidence. But their detractors, such as former John Edwards staffer Amanda Marcotte (who has repeatedly smeared critics of the federal hate crimes bill as being bigots) and radical activist Alton Maddox (who was involved in the Tawana Brawley hate-crime hoax), continue to insist that they were guilty of hate crimes, and that more hate-crimes laws are needed.
For some people, it seems, hate crimes are so terrible that not even innocence should be a defense. Such people eagerly await passage of the federal hate-crimes bill.
I’d be impressed if a policy issue in Washington actually ever WENT AWAY. But it seems like we have to dust off the same arguments over and over again, beat back and refute the same tired interventionist ideas endlessly. Two stories in today’s news point at the problem. One, $3 billion in “stimulus” spending is being proposed for the Internet and telecommunciations industry–with regulatory strings attached (take the government money, your network has to be “open access”; so a backdoor–strike that, explicit–imposition of net neutrality on technologies and networks that don’t even exist yet). The second notable story is that–surprise–most of those who’d get broadband subsidies apparently don’t even want broadband.
Several years ago at the Cato Institute, Adam Thierer, Thomas Pearson and I wrote on high-tech pork barrel spending of the very kind being pursued today. These projects aren’t new, they’ve been around for a while, and the economic downturn is a perfect excuse to dust them off. We could and probably will write new papers on why the broadband “stimulus” will harm both industry and consumers; but the reality is we’ve said it all before. Here’s the executive summary from our 2002 report “Birth of the Digital New Deal: An Inventory of High-Tech Pork-Barrel Spending”
Congressional spending sprees are nothing new in Washington. But now, new spending initiatives are cropping up that cover telecommunications services, the Internet, and the high technology sector in general. Although federal legislative activity on this front is not a formally unified effort, the combined effect is tantamount to the creation of what might be called a “Digital New Deal.” Just as policymakers proposed a litany of New Deal programs and spending initiatives during the Great Depression era, lawmakers today are devising many new federal programs aimed at solving the supposed emergencies or disasters that will befall the telecommunications industry without government assistance. The recent troubles of the dot-com and telecommunications sectors have only added fuel to the fire of interventionism.
The new communications, cyberspace, and Internet-related spending initiatives that policy-makers are considering or have already implemented can be grouped into four general categories: (1) broadband deployment; (2) digital education, civic participation, and cultural initiatives; (3) cybersecurity; and (4) research and development. Dozens of new federal programs have been proposed in these areas during the 107th Congress. And dozens of other assistance programs already exist.
The dangers of the cyber-pork barrel should be obvious. Washington subsidy and entitlement programs typically have a never-ending lifespan and often open the door to increased federal regulatory intervention. That kind of political meddling could also displace private-sector investment efforts or result in technological favoritism by promoting one set of technologies or providers over another. Moreover, subsidy programs are unnecessary in an environment of technological competition, characterized by both proliferating consumer choices and uncertain market demand for new services. Finally, perhaps the leading argument against the creation of a Digital New Deal is that by inviting the feds to act as a market facilitator, the industry runs the risk of becoming more politicized over time.
Before high-tech sector leaders become too comfortable in Washington circles, they should ask themselves if they want their future to be so closely tied to the whims of federal legislators and regulators.
Right behind the broadband stimulus goldmine within the Obama administrations stimulus plan sits Sec. 3102 (E). Sec. 3102 (E) is a fairly simple bit of reading that deals with requirements that must be met in order to receive grants for funding broadband deployment in rural areas. If we break this section down, which truthfully is only necessary if you are a rock, it goes over a few items. For instance, making sure no one gets “unjust[ly] rich”, which begs the question what is “justly rich”. The grant holder would have to meet buildout requirements, which have yet to be determined. And it calls for the vaguely worded, “maximize use of the supported infrastructure by the public,” which probably infers that a network would need to capitalize on the number of users that could connect rather than providing the best speed possible for less users. We do know that the administration does in fact want broadband. We know that because they called it that. And we know that the FCC determined that broadband is at least 768Kbps last March, so we can safely assume this would be the bare minimum.
After this, it gets a little more interesting. The requirements call the grant recipient to operate the wired/wireless broadband network on a open access basis, and additionally “adhere to the principles contained in the Federal Communications Commission’s broadband policy statement.”
Those who are a little more familiar with communications policy are probably already aware that “open access” is just the softer, more gentle way of saying network neutrality. Additionally, the FCC Policy Statement on Broadband is most certainly a position statement and a point by point of net neutrality rules that it believes it can regulate based on Title I of the 1996 Telecommunications Act. In reality the FCC has no authority to regulate net neutrality, and evidence of this is the legislation submitted in committee year after year to create neutrality enforcement.
The issue here is that it doesn’t matter if the FCC or the Fed can regulate net neutrality on the grand scale right now, the recipient of these grant funds will be legally bound to adhere to the FCC policy statement implementing net neutrality and establishing open networks. After that, the fix is in. One or more publicly funded networks would exist running under regulated and enforced net neutrality principles. A few years later, legislation will be introduced again to mandate net neutrality in all U.S. networks. Backers of the legislation will refer to the networks built under the stimulus plan pointing out how flawlessly they are running, and how neutrality principles have provided for that condition because the FCC can watch dog the network.
This is about the point when infrastructure side innovation will take a bow. Techniques like providing the user the freedom to prioritize their own packets through flagging in their personal user accounts, or tiered application based service will never be. Maybe the market will demand neutrality in packet exchange. Or possibly the market will demand specialized service that caters toward individuals streaming high bandwidth, time sensitive HD video or gamers where micro-seconds are of extreme importance and lag can destroy the entertainment experience, and where others simply don’t care about neutrality because all they use the Internet for is non-time sensitive email and casual browsing.
These are most certainly things that the market should be determining and not the government via regulation, especially for a technology that in the grand scheme is still in its infancy. So a warning goes out to those companies itching to get their hands on this grant. The first taste is free, but the second ends in regulated neutrality.
Update: I actually wrote this piece two days ago, but we have been having some server issues and it just went up today. So today, according to the Washington Post, “the House Energy and Commerce Committee backed including about $3 billion in grants to expand Internet service as part of a larger economic stimulus bill, including a provision requiring “open access” in wireless service and on the Internet.” More “open acess” requirements leading to more enforced and government regulated net neutrality on networks built with stimulus grants. This is obviously the pro-neutrality lobbies plan of attack, and boy have they got the ball rolling quickly.
Normal 0 false false false MicrosoftInternetExplorer4 Tucked in the massive stimulus bill passed by the House Appropriation Committee is a $4.5 billion appropriation for the Army Corps of Engineers. While the vast majority of the appropriation is for the construction of new water resource projects and for the backlog of maintenance of existing water resource projects, there is also a $25 million appropriation for the Corps of Engineers regulatory program. The Corps regulatory program is the cadre of bureaucrats responsible for processing permits under Section 404 of the Clean Water Act, in other words wetlands permits.
Presumably, the Corps is justifying the increase in their regulatory budget by claiming a backlog in processing permits. But if Congress were serious about creating jobs, a more effective approach would be for Congress to force the Corps to follow their own permitting regulations. Corps regulations specify that a permit is supposed to be processed within 60 days of receiving a completed application. Forcing the Corps to actually process the permits in the required 60 days would be a far more effective approach than pouring more money down a regulatory rat hole.
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Welcome to a very special Inaugural Edition of LibertyWeek with your hosts Richard Morrison and Cord Blomquist and Special Guest Ivan Osorio. We get started with The Day in Wikipedia and the Tweet of the Week, and then we discuss the many celebratory balls that can be found around town to mark the beginning of the new presidency. Bank of America headlines the next segment with its request for an additional $20 billion in bailout money, and then we look into what could become the first real scandal of the 44th President’s (first) term. Eventually we find our way to On the Waterfront with Ivan Osorio, where our favorite Editorial Director and labor policy analyst fills us in on the questionable activities of the Service Employees International Union and its President, Andy Stern.
Listen here.
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