January 2012

Virginia May Privatize ABC Stores; It’s about Time

by Ivan Osorio on November 6, 2009

in Deregulate to Stimulate, Economy, Nanny State, Regulation

In a time when the federal government’s involvement in the economy appears to only grow, it’s encouraging to see at least one industry where the trend may soon move in the opposite direction, even if at the state level. Virginia Governor-elect Bob McDonnell has proposed priviatizing the state’s liquor stores — known as ABC stores, for Alcoholic Beverage Control.

As Garrett Peck, author of The Prohibition Hangover, notes in The Washington Post, this is long overdue. (The op ed is due to appear in the Post‘s Sunday edition, but it’s already online.) The ABC system, which several states adopted after the end of Prohibition in 1934, is today an anacrhonism that doesn’t even work very well.

ABC was once about promoting temperance, but the abstinence movement has basically died. Two-thirds of American adults drink alcohol. In reality, Virginia ABC is now about generating revenue for the state — and at that, it isn’t particularly efficient. Virginia can make more money — as can localities — by privatizing the system, both from auctioning the licenses and through ongoing tax revenue. The private sector will assume the operating costs, shifting ABC authority to where it properly belongs — regulation and enforcement.

And then there are the consumer implications.

Virginia’s ABC stores are a tower of mediocrity. They are centrally managed retail outlets that would have been palaces in the Soviet Union, but today they are anachronistic. They offer highly limited choices, often lacking exciting new brands or those with a cult following. Staff members generally aren’t knowledgeable about how to mix drinks or make cocktails. And the prices are artificially high because there is no competition: The state decides what to charge.

For more on The Prohibition Hangover, see here.

European Regulators Target Another American Tech Company

by Elizabeth Jacobson on November 6, 2009

in Tech & Telecom

The European Commission is once again targeting an American tech company with an antitrust investigation. This time the EC has its sights set on Oracle and it’s $7.4 billion bid for Sun Microsystems. In short, the worry is that if Oracle acquires Sun, along with it’s popular open-source database software MySQL, that somehow competition in the database market will become nonexistent.

But as Matt Asay at Cnet.com pointed out this week, competition is alive in well in the database market. Amazon recently announced that it will launch its own version of the MySQL software, proving that the EC’s probe is a dead-end. By gaining MySQL, Oracle would gain a foothold in a new market of database users (web-based and small businesses). Asay’s conclusion:

Oracle’s bid for Sun/MySQL, in other words, isn’t about squelching competition, but rather about enhancing it. Amazon’s RDS proves that strong, viable competitors to MySQL can arise from within the MySQL community, which disproves the EC’s argument that Oracle’s control of MySQL will somehow crush competition.

Clearly, the case against the Sun-Oracle deal is without merit. The EC needs to quit targeting American’s most innovative companies.

CEI Weekly: Cuomo’s Antitrust Witch Hunt

by Charles Huang on November 6, 2009

in Economy, Energy, Environment, Features, Legal, Regulation, Zeitgeist

CEI Weekly is a compilation of articles and blog posts from CEI’s fellows and associates sent out via e-mail every Friday. Also included in the Weekly newsletter is a brief description of CEI’s weekly podcast and a feature on a major CEI breakthrough made during the week. To sign up for CEI Weekly, go to http://cei.org/newsletters.


CEI Weekly
November 6, 2009


>>CEI Blasts Antitrust Lawsuit Against Intel
CEI’s Ryan Radia criticized New York Attorney General Andrew Cuomo and his groundless antitrust case again Intel. Radia accuses Cuomo of “using his authority to make headlines at consumers’ expense,” and “[delaying] innovation in the computer chip market.” Read the full news release here.
>>Wayne Crews and Ryan Radia’s analysis of the lawsuit is cited in articles in Reuters, PC World, PC Mag, and PC Advisor. Crews’ complete analysis is available on Openmarket.org


>>CEI Decries Sen. Boxer’s Disregard in Passing Cap-and-Trade Bill Through Committee
Refusing to wait for a complete analysis of the economic impacts of S. 1733 (the Clean Energy Jobs and American Security Act), Committee Chairman Barbara Boxer rammed the bill through the Environment and Public Works Committee. CEI discusses what may have caused Boxer to disregard the Senate committee rule that requires at least two members of the minority party to be present.
>>CEI’s Myron Ebell was quoted in USA Todayon a survey of economists’ opinions on climate agreements to limit global warming.


>>Shaping the Debate
New Report: Cap-and-trade is a Bust in Europe
Iain Murray’s quote in the Washington Examiner

Yes, Virginia Fox
Wayne Crews and Ryan Young’s op-ed in the American Spectator

Eliminating Antitrust Exemption Will Kill Health Care Competition
Greg Conko and Kevin Hilferty’s op-ed in the Investor’s Business Daily

‘Amazon Taxes’ Fad Harmful to States, Consumers, Business
Ryan Young’s op-ed in the Heartland Institute


>>Best of the Blogs
Cap-and-Trade Global Warming Bill is a Scam, Experts Reveal
by Hans Bader
Two EPA lawyers criticized the cap-and-trade energy bill passed by the House as a scam, noting in The Washington Post that it will be manipulated to profit politically connected corporations and reward certain kinds of pollution, while not cutting greenhouse gas emissions.  A similar scheme enacted in Europe in the name of fighting global warming enriched polluters, while not reducing emissions, which actually rose faster in most of Europe than in the U.S.

MPAA: Net Neutrality Will Kill Film Industry
by Elizabeth Jacobson
The Motion Picture Association of America has come out against net neutrality… sort of. In its filing with the FCC late last week, the MPAA reminded the commission of the importance of content companies in driving new infrastructure technologies, and claims that protecting these content companies (i.e. forcing ISPs to filter out file-sharers) is vital for the future health of the internet.


>>Liberty Week Podcast
Episode 67: Cash for Kids in Court
We start with the looming off-year elections, the unexpected lack of tropical storms and a cash for kids scandal in Pennsylvania. We finish with the fall of a spam king and the swine that didn’t squeal.


>>Support CEI

Like what you read?

The Competitive Enterprise Institute’s 25-year record of success is made possible by our over 3,000 supporters. Make sure to stop by www.cei.org/support and make a donation to continue your support or become a supporter. Curious about all the possible ways to donate to CEI? Contact Al Canata at acanata@cei.org or 202-331-2280 to find out more.

Charles Huang

Web and Media Associate

Competitive Enterprise Institute

chuang@cei.org

http://www.cei.org

http://www.openmarket.org

202-331-1010

Cato Institute’s Ed Crane on limited government vs. the parties

by Wayne Crews on November 6, 2009

in Agenda for Congress, Economy, Personal Liberty

Ed Crane writes today in the Los Angeles Times that “Limited-government conservatives have been undermined by big-government neoconservatives,” and that “it is difficult to find noninterventionists in either party.”

The Democrats demonstrate a disdain for capitalism, free trade and the validity of contracts. They cheer the restriction of certain types of speech on campus and in federal law….Lately, the Democrats have been popularly associated with principled opposition to waging war in far-flung corners of the globe. But evidence on the ground today tells a somewhat different tale.

As for the GOP, it has outwardly abandoned the limited-government principles of Barry Goldwater and Ronald Reagan. Little other evidence is needed than the Medicare prescription drug benefit — with its $13-trillion unfunded liability — passed with a strong-arm campaign by the Bush White House and a Republican congressional majority.

Crane put some of the blame for the GOP’s shift on the supply-side movement’s emphasis on tax cuts and economic growth: “Supporters of those ideas didn’t talk about spending cuts, much less the proper role of government. They had the effect of replacing ‘liberty’ as the motivating force behind the GOP with ‘growth,’ a somewhat less-inspiring ideal.” Indeed a gigantic government may still periodically balance it’s fiscal budget (as occurred in the U.S. from 1998-2001); so it’s important to maintain liberty itself as the goal, rather than “good government.”

It’s not clear how one votes for limited governement anymore, so I enjoy my “Abstain” shirt. But Non-interventionism–how nice a platform that would be, from either party.

Free Kareem D.C. Rally Today!

by Elizabeth Jacobson on November 6, 2009

in Bureaucrash, Odds & Ends, Personal Liberty

The Free Kareem protest is going on today at 12 pm outside of the Egyptian Cultural and Educational Bureau on New Hampshire just south of Dupont Circle. If you’ll be in the area, please stop by and show your support for Kareem Amer, the blogger who is serving a four-year prison sentence for criticizing the Egyptian government.

UPDATE: Check out photos and video from today’s rally.

Friday Fun: Brett Bowl II

by Ryan Young on November 6, 2009

in Culture, Odds & Ends

Last Sunday’s Packers-Vikings game was a big one. Brett Favre beat his old team on its home turf. If you’re not sick of all the hype, check out my take on what the game means for Packer fans over at The American Spectator Online.

More on Secy. Chu’s convoluted climate economics

by Marlo Lewis on November 5, 2009

in Global Warming

In recent testimony before the Senate Environment and Public Works Committee, energy secretary Steven Chu makes a convoluted case for S. 1733, the Clean Energy Jobs and American Power Act, a.k.a. the Kerry-Boxer cap-and-trade bill.

Chu argues roughly as follows. Global investment in wind turbines and solar panels could reach $3.6 trillion by 2030. China is investing heavily. If we don’t ramp up our investment in “clean tech” products, we’ll be left behind, become increasingly dependent on foreign producers, and China will eat our lunch. The key to growing the U.S. clean-tech sector is to “put a price on carbon” — establish a “cap on carbon emissions that ratchets down over time.”

This is poppycock, as I explain today on MasterResource.Org, the free-market energy blog. 

Yes, China is investing heavily in solar panel and wind turbine manufacture, but China does not cap carbon. Also, only a small fraction of China’s production of solar photovoltaic generators — 20 megawatts out of 820 megawatts produced in 2007 — is for China’s domestic market. So capping domestic carbon emissions is not a prerequisite to success in exporting clean-tech products, nor is having a large domestic market for such products. The experience of the very country Chu spotlights as model and threat rebuts rather than supports the case he wants to make.

A key point Chu completely ignores is that, apart from certain niche markets, “clean tech” products consume more wealth than they create. That’s why they cannot “compete” without benefit of market-rigging mandates, subsidies, and penalties levied against fossil energy.

A fresh example of this inconvenient fact comes to us today from the great state of Massachusetts, home of Sen. John Kerry, chief sponsor of S. 1733, and Rep. Ed Markey, co-sponsor of the House companion bill, H.R. 2454, a.k.a. Waxman-Markey.

The Boston Globe reports that, ”A little more than a year after cutting the ribbon of a new factory in Devens built with $58 million in state aid, Evergreen Solar has announced it will shift its assembly of solar panels from there to China.”

Evergreen received “$58.6 in grants, loans, land, tax incentives, and other support,” says the Globe. Yet, ”Through the first nine months of this year, Evergreen lost $167 million, compared with $33.6 million for the same period last year.”

What would Chu have to say about this? Evergreen is not losing money because there’s no cap on carbon. Massachusetts is one of several states participating in a cap-and-trade program known as the Regional Greenhouse Gas Initiative (RGGI).

Why is Evergreen expanding operations in China?  ”Lower costs.” Such lower costs include lower-cost energy. To repeat, China does not have cap-and-trade; it does not put a price on carbon.

Now, I’ll wager that Evergreen would be losing money even if Massachusetts were a Kyoto-free zone. But we may surmise that Evergreen would not shift its operations to China if China’s economy were carbon-constrained.

Chu should at least consider the possibility that pricing carbon would vitiate what little competitiveness the U.S. clean-tech sector has. Low-cost energy is a source of competitive advantage, as China powerfully demonstrates. By increasing energy costs, cap-and-trade would make all U.S.-based manufacture less competitive, including companies specializing in clean-tech products.

November 5th March on the Capitol Against Government Takeover of Healthcare

by Richard Morrison on November 5, 2009

in Video, Zeitgeist

[youtube:http://www.youtube.com/watch?v=wrErshmvP0M 285 234]

Guy Fawkes Day: V for Vendetta

by Richard Morrison on November 5, 2009

in Video, Zeitgeist

[youtube:http://www.youtube.com/watch?v=-PANE7VugQA 285 234]

Climate Policy Imperils China, India

by Marlo Lewis on November 5, 2009 · 2 comments

in Global Warming

Jonathan Pershing, head of the U.S. delegation at the UN climate talks in Barcelona, says China should cut its CO2 emissions 50% by 2050.

Reuters reports:

BARCELONA, Spain, Nov 5 (Reuters) – China should roughly halve its greenhouse gas emissions by 2050 to keep the world on a safe climate path, the head of the U.S. delegation at U.N. climate talks in Barcelona said on Thursday.

Leading industrialised countries say that the world must halve greenhouse gases by 2050 to avoid the worst effects of climate change, and have committed to lead by cutting their own emissions by 80 percent.

China should cut by about 50 percent, leaving space for poorer countries to grow their economies, Jonathan Pershing told Reuters.

“If you put China in there at a 50 percent reduction, if we’re a bit higher, that gives lesser developed countries a bit lower. If they are in that middle band, plus or minus some percentage, that seems about right.”

China would be on course to meet that goal if it repeated its present energy efficiency five-year plan into the future, he added. “They’re doing pretty well,” he said.

As discussed in previous posts, meeting the EU/UN/Al Gore CO2 “stabilization” goal — 450 parts per million by 2050 — would require heroic (suicidal?) sacrifices on the part of developing countries. Stabilization at 450 ppm would require, at a minimum, a 50% reduction in global emissions by 2050. Because most of all the increase in global emissions over the next four decades (indeed, the next 90 years) is projected to come from developing countries, meeting the stabilization target would require developing countries to lower their emissions more than 60% below baseline projections even if industrial countries magically achieve zero net emissions by 2050!

Barring technological breakthroughs (in their nature unpredictable) that dramatically lower the cost and improve the performance of non-emitting energy technologies, the only way developing countries could comply is by restricting their use of energy. Yet developing countries are poor in no small part because they lack access to abundant, affordable energy. The 450 ppm goal is a recipe for “stabilizing” global poverty.

Don’t be fooled by Pershing’s remark that all China needs to do is keep repeating its “five-year” plan. Supposedly, China is already “well on the way” to reducing its energy intensity 20% by 2010. Based on the only data available, Roger Pielke, Jr. finds that China has cut intensity only 7.4% from 2005 to 2008, “meaning that it has a long way to go to reach a 20% target by 2010.” Besides, even if the first five-year emission intensity reduction plan succeeds, it represents the low-hanging fruit. Replicating that achievement every five years would become increasingly costly and difficult.

That a 450 ppm CO2 stabilization target cannot be met unless China slams the brakes on its economy has been clear from basic emissions arithmetic for some time. What’s new is that a U.S. Government official is quantifying, in the context of climate treaty negotiations, what “meaningful participation” by China actually means.

So far, India and China have escaped Kyoto-style energy rationing. This makes their products more competitive in global markets, and pulls capital and jobs away from CO2-regulated economies.  But we’re only two years into the first (2008-2012) Kyoto compliance period. At some point, free riders have to pay up or get off the train.

The EU, Japan, and the United States (if it ratifies Kyoto II) will not accept a permanent arrangement under which they bear all the costs of energy rationing, fork over billions in technology transfers and climate assistance to developing countries, and export more jobs to India and China.

The longer the Kyoto project endures, the greater the pressure India and China will face — in the form of carbon tariffs, for example — to join the club of the carbon-constrained.

If India and China want to protect their right to grow and avert an economically-debilitating era of trade conflict, they should get off the global warming bandwagon as soon as possible. A balanced assessment of the science does not justify alarm. India and China already act on the premise that global warming policy is more dangerous than global warming itself. It’s time for their words to match their deeds.

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