January 2012

Obama Defends Misguided Spending Stimulus on One-Year Anniversary

by Wayne Crews on February 17, 2010

in Agenda for Congress, Deregulate to Stimulate, Economy, Odds & Ends, Regulation, Stimulus to Nowhere

Today on the anniversary of Porkulus, President Barack Obama and his staff are defending the massive spending stimulus and sweeping financial, health care, energy efficiency, “green job” and other interventions.

We have called instead for a major “Deregulatory Stimulus” to reject endless political stimulus and liberalize the economy.

Meanwhile, alongside trillions in spending, regulations now exceed $1.2 trillion a year and are growing at the rate of over 3,000 new rules a year.

So the interventions of dozens of Departments, agencies and commissions regulate need rollback too. Along with deregulatory stimulus, the President should review all regulations on the books, and streamline and control the $1 trillion regulatory state.

Here again are things to do, in no particular order:

– Implement a bi-partisan “Regulatory Reduction Commission.”
– Re-discover federalism, that is, circumscribe the federal regulatory role regarding health and safety matters best left to states.
– Improve the ethic of quantifying regulatory costs, and selecting the least-cost compliance method.
– Codify Clinton’s executive order on “Regulatory Planning and Review” (E.O. 12866), or better, Reagan’s E.O. 12291.
– Require OMB’s Regulatory Information Service Center to publish number of major and minor rules produced by each agency, and strengthen its oversight.
– Reinstate the Regulatory Program of the U.S. Government, which used to appear routinely as a companion document to the Budget.
– Enlarge regulatory flexibility and exemptions for small business
– Declare Federal Register notices as insufficient notice to small business
– Hold hearings to boost the scope of the Small Business Administrations’ “r3” regulatory review program.
– Lower the threshold at which a point-of-order against unfunded mandates applies.
– Lower the threshold for what counts as an “economically significant” rule, and improve explicit cost analysis.
– Explore, hold hearings on, and devise a limited “regulatory budget.”
– Establish an annual Presidential address or statement on the state of regulation and its impact on productivity and GDP.
– Sunset regulations after fixed period unless explicit reauthorization is made. (It’s been said that regulations should expire like a carton of milk).
– Implement a supermajority requirement for extraordinarily costly mandates.
– Challenge and reject delegation of legislative authority from Congress to agencies; That is, require Congressional fast-track approval before major or non-quantifiable agency-promulgated regulations take effect.

Bailout for the First Amendment vs. Preservation of Competing Biases

by Wayne Crews on February 17, 2010

in Culture, Personal Liberty, Regulation, Tech & Telecom

Clearly many groups contend there’s a “crisis” in journalism, even to the extent of advocating government support of news organizations, despite the dangers inherent in the concept of government-funded ideas and their impact on critique and dissent.

Georgetown is hosting a conference today called “The Crisis In Journalism: What should Government Do,” (at which Adam Thierer is speaking), with the defining question, “How can government entities, particularly the Federal Trade Commission and the Federal Communications Commission, help to form a sustainable 21st century model for journalism in the United States?”

We actually resolved the question of “What Government Should Do,” in a manner that influenced the entire world, with passage of the Bill of Rights and its First Amendment. The Constitution was ratified by nine states on June 21, 1788. Georgetown, your conference host, was founded January 23, 1789. As far as I can tell, Georgetown didn’t hold a “Crisis In Journalism” conference that week, even though there was little national media industry to speak of and thus much more of a prevailing crisis situation than today, when you stop and think of it.

Then the Bill of Rights was ratified on December 15, 1791–and still no Georgetown conference. Amazingly, at the time, our ancestors thought it appropriate for the federal government to establish a First Amendment and step aside, even though there were no TVs or radios, or Internet and websites, iPods, or stories broken by Twitter. There wasn’t even an FCC yet to ponder a “sustainable 19th century model for journalism in the United States.”

Media at that time barely existed compared to what we have today. Yet there was no crisis. Nor is there a crisis today.

What this feigned crisis signifies is, on the one hand, pure indulgence of a wealthy society struggling with “creative destruction” in media; and, on the other, the desire for more political control of information flows and public opinion rather than enshrinement of the only condition appropriate to a free society—the preservation of competing biases. These are ultimately far more important than pretended objectivity in both the preservation of our liberties and in the creation of “information wealth.” Too often, the class interest of intellectuals is statism (continue reading Schumpeter for details, I’m not doing it here); and the journalism industry, far from alone among myriad economic endeavors, is highly vulnerable to those same collectivist impulses.

Convincing the public and policymakers that media is in crisis is essential for progressives to maintain influence now: while progressives long since successfully established government agencies with broad political control over communications, today they find themselves desperate to maintain that slipping control in the era in which media abundance undermines those agencies’ very reason for being.

Outrageous and demeaning calls for public funding of journalism, public spaces, information commons, artificial “crises” and other such manipulative indulgences draw their energy from the flawed premise that capitalism and freedom are inimical to civil society and the diffusion of ideas, when they are instead the prerequisites. America established a First Amendment precisely because government and political machinery can threaten these precious values. Competition in creation of goods and services creates tangible wealth; competition in creation of ideas (including scientific research, yet another notion to discuss later) ultimately does the same and enhances liberties. Government funding removes the element of competition, on purpose.

This crisis is phony, except obviously for the specific businesses that are being upended. Media, information, journalism, whatever it gets called, can only be irreparably damaged by censorship, the only crisis to which journalism is ever vulnerable. But it also counts as censorship if progressives control information or succeed in funding it politically and prevent proprietary business models in the content, reporting and infrastructure of the future. A Bailout for the First Amendment is catastrophic policy, even if it’s advocates’ stated goals are merely to make us all enlightened (somewhat left-leaning?) citizens.

(Hat tip to my colleague Alex Nowrasteh for helping me find ratification dates.)

Disappointing, but Not Surprising

by Ryan Young on February 17, 2010

in Economy, Politics as Usual, Zeitgeist

Headline from The Hill – “Pay-go gets passed, then it gets bypassed”

Pay-go budgeting rules — that any spending increases must be offset with spending cuts or tax hikes elsewhere — have loopholes big enough to drive a truck through. One of them, the emergency exemption, is invoked as early as the second sentence of the article.

In theory, pay-go is supposed to be a way to slow the growth of government. But it’s all for show. Nobody really means it. Just invoke the emergency exemption. Then spend all you like. Appearances matter, especially in Washington. But they should not be confused with reality. And reality is that Congress is going to spend and spend some more, no matter what budgeting rules are in place.

Shame on them for trying to make people think otherwise.

One cheer for Obama on nuclear energy

by Michael Fumento on February 17, 2010 · 1 comment

in Employment, Energy, Global Warming, Natural Resources, Precaution & Risk

Obama has done something right concerning nuclear energy; credit where credit’s due. But he also did something very wrong, which we’ll get to.

The president has promised $8.33 billion in federal loan guarantees for a pair of Georgia nuclear reactors, saying it would give new life to the U.S. nuclear power industry. These would be the first new U.S. nuke plants in more than three decades.

More through symbolism than anything else, he’s right about the new life. It’s a liberal Democratic president saying, “Hey! Nukes are okay!”

He also offered words of wisdom. “If we fail to invest in the technologies of tomorrow, then we’re going to be importing those technologies instead of exporting them,” he said. “We will fall behind. Jobs will be produced overseas instead of here in the United States of America. And that’s not a future that I accept.”

Nuclear power already provides about 20 percent of this nation’s energy, even with the same plants that once only provided about 10 percent. They’ve gotten more efficient a lot faster than wind turbine or solar power technology has. Nobody has ever died from a nuclear accident in the U.S., and yet the newer generation of power plant is much safer than, say, Three Mile Island. France gets about 70 percent of its energy from nukes and I’ve been to European cities like Berlin where they have nukes right in the middle of town.

The GOP has called for building as many as 100 new such plants and Sen. Lindsey O. Graham (S.C.) called it a “good first step.”

But that’s all it is.

Heritage Foundation fellow Jack Spencer told the Washington Post, “Loan guarantees do not a nuclear renaissance make.” They don’t fix “the problems that have plagued nuclear energy for 30 years: the regulatory structure and nuclear waste [disposal] and too much government dependence.”

Right. And one major contributor to the problem has been Barack Obama. Opponents of nuclear power say the president shouldn’t be supporting the building of more power plants that will produce even more radioactive material, so long as the government hasn’t figured out where to put it all. Thing is, it had been figured out and Obama killed it.

Over many years and spending billions of dollars, the government decided the best place was caverns in Yucca Mountain, Nevada. But Nevada Sen. Harry Reid wrapped himself in the mantle of demagoguery and declared “Not in my backyard, you don’t!” As he knew it would be, it was popular with the voters. Obama, in what from a scientific viewpoint appears to have been nothing more than a sop to Reid, who faces a tough re-election bid, canceled the project.

Notwithstanding that the vast majority of nuclear waste is incredibly low-level, nevertheless it continues and will continue to have to be stored on site. To the extent it is dangerous, we don’t want that. There was a solution and Obama squelched it.

So fine. After the November elections are settled, it’s time to revisit Yucca Mountain. That will show real support for nuclear power.

O’Neill on the Sorry Heritage of “Overpopulation”

by Ivan Osorio on February 17, 2010

in Culture, Environment, Natural Resources

At Spiked Online, Brendan O’Neil dissects the absurdity of neo-Malthusians who seek to portray themselves as intellectual mavericks, by presenting “overpopulation” as the environmental elephant in the room no one wants to talk about. “If overpopulation is taboo, unmentionable, so inflammably risqué,” asks O’Neill, “then why can you not open a newspaper, switch on the box or listen to any one of millions of green activists without hearing someone say: ‘There are too many people’?”

Probably because population control advocates feel they need to prime their audiences for what they recognize, however reluctantly, as a monstrous idea. While O’Neill doesn’t explicitly state that conclusion, it’s hard not to come to it when he lays out where the neo-Malthusians fit in the West’s intellectual history.

The rise and rise of neo-Malthusianism speaks to today’s powerful sense of misanthropy and lack of social imagination. Everyone from royals to republican commentators, from feminists to fascists (the neo-fascist BNP says ‘The planet is overpopulated!’), accepts there are too many people. Increasingly, social problems such as poverty and inequality, and practical problems such as pollution, are recast as demographic problems, brought about not by the irrational organisation of society, but by people’s own stupidity and fecundity. So the solution becomes, not to have more debate, more politics, more development and more brainstorming for social leaps forward, but to demonise people who have large families, to make fertility into a new f-word, to cajole people into having fewer children, and to limit freedom and choice rather than expand them.

Yet the neo-Malthusians, despite facing no serious challenge from mainstream thinkers, feel defensive about their arguments. Recognising that Malthusianism has a very chequered history – not only in terms of making wildly incorrect predictions but also in terms of its origins in the racist and eugenics movements of yesteryear – today’s Malthusians present themselves as brave intellectual warriors daring to rescue what look like sullied ideas from the past but which are actually (allegedly) sensible. They have discarded the discredited language of eugenics, the outdated talk of ‘too many little black babies’, and even the seemingly PC but actually duplicitous discussion of ‘family planning’ introduced in the 1960s, and now justify their misanthropic people-bashing in the new language of environmentalism. And of course, presenting themselves as taboo-busters also gives the impression that they’re at the cutting edge of public debate and policymaking when in fact their miserabilism is mainstream.

Population controllers would be right to be embarrassed at any association with ideas like eugenics, but, however outraged they may get at people bringing up such a connection, they cannot run away from it. They continue to be wrong for the same fundamental reason Malthus made his famous error: underestimating the potential advances in human productivity to such an extent as to define survival in near-zero-sum terms. As Fred Smith puts it, when the neo-Malthusians see a human being, they see only a mouth, not the brain and hands to go with it.

Worse even, they see a population, they see not a group of individuals, but a soulless mass. Thus, population controllers seeking to portray themselves as taboo breakers makes sense. When advancing an idea that is both morally and economically wrong, a little contrived rudeness adds a dash of honesty.

Reason Prevails in Oregon

by Angela Logomasini on February 16, 2010

in Environment, Nanny State

Oregon Senators this week have voted down regulations that could have led consumers to less safe, glass baby bottles. Three Democrats in the Senate joined the Republicans to defeat a ban on baby bottles, sippy, cups, and other products made with the chemical Bisphenol A. CEI’s friends at the Cascade Policy Institute provided educational materials (in partnership with CEI) on the science and apparently legislators decided that reason and the facts should prevail over all the hype. And the hype has been significant, as noted here on Open Market: See here, here, and here. This is a tremendously important victory for reason and freedom. Unfortunately, most states are moving in the opposite direction.

The Case for Sugar

by Nicole Ciandella on February 16, 2010

in Nanny State, Odds & Ends

Happy Valentine’s Day, from Salon.com! According to Salon’s well-timed interview with food expert Brian Wansink, sugar isn’t the absolute evil you’ve been told it is.

Wansink, author of Mindless Eating: Why We Eat More Than We Think, explains that there is, in fact, a place for sugar in our world:

The thing is, there was a kind of witch-hunting phase where we demonized sugar back in the late ’80s. But if you look at it, there’s a really nice case to be made for sugar. Let’s use chocolate milk as an example. If you’re trying to get kids to drink milk, and you add just a little more chocolate and a little more sugar, and add 30 more calories to it, you know, I don’t really think that’s bad compared to them ordering Goofy Grape punch with the same number of calories and really nothing in it.

He goes on to defend sweetened protein bars, corn syrup, and Domino’s new pizzas (which apparently taste less like cardboard than their old pizzas).

Wansink’s argument is certainly nothing extraordinary; his chocolate milk example is just a slightly more sophisticated version of the vegetables-in-the-mashed-potatoes trick. What is extraordinary—shocking, even—is that a food expert is going against the mainstream and is telling the truth about the costs and benefits of sugar.

Toyota “sudden acceleration deaths” suddenly accelerate

by Michael Fumento on February 16, 2010 · 2 comments

in Precaution & Risk

Predictably, in the wake of the media blitz about the alleged dangers of Toyotas suddenly accelerating, reports of fatalities linked (note: not “caused by”) such incidents has shot up.

In December the figure stood at 19, and then in January bumped up to 21. Since January 27th, when Toyota ordered a widespread recall, 13 more fatalities have been reported to the National Highway Traffic Safety Administration. Somehow people’s memories have suddenly become a lot sharper, haven’t they?

Fortunately, the media seem wise to this. For example, today’s LA Times reports its own analysis “shows that all but one of the deaths reported to NHTSA by motorists in 2010 actually occurred in prior years – as far back as 1992 – suggesting that recent public attention to the issue spurred people to file complaints regarding past incidents. Most of the incidents occurred between 2003 and 2009.”

This is typical behavior in the light of something suddenly being seen as dangerous. If the media declare a drug is being investigated, suddenly people come out of the woodwork to make claims against the drug. I described that in an article about the alleged link between the acne medicine Accutane and suicide, in quoting an FDA spokeswoman saying, “When there’s public awareness or publicity about a drug for any reason, there may be an increase in reports because people may not have otherwise thought about associations.”

And it’s understandable human behavior that I think is usually innocent.

Usually.

But one can’t help but notice that when you google “Toyota deaths” the top link goes to one law firm soliciting Toyota accident clients while the sponsored link on the right takes you to another law firm. (The inset shows part of an advertisement from one of those firms.)

Come to think of it, people trying to get easy money is also understandable human behavior.

Increase small biz lending not gov spending

by Michelle Minton on February 16, 2010

in Bailout Watch, Deregulate to Stimulate, Economy, Politics as Usual, Stimulus to Nowhere

President Obama seems to genuinely want to help people and improve the economy. However, he also seems to genuinely believe that the best and most effective way to accomplish these goals is through government intervention and wealth redistribution. In his State of the Union address, President Barack Obama pinpointed several particular policy-goals, one of which was to stimulate increased lending to small businesses. How does Obama propose to encourage such lending? Someone with a different perspective might look for ways to remove regulatory barriers to increase lending, but President Obama’s plan is to simply shuffle $30 billion in TARP funds to community banks, no doubt with many strings attached.

However, there’s a much simpler way to increase small business lending, one that requires zero taxpayer dollars and presents no risk to the financial system: allow credit unions to increase their lending to small businesses and low-income residents.

Throughout the economic crisis, while banks and other financial institutions withdrew lines of credit and gave questionable bonuses to their executives, credit unions have continued to lend. They could lend even more if not for the regulations that prevent them from doing so.

Like banks, credit unions offer a mix of financial services, including checking and savings accounts (credit unions  call them “share accounts”), credit cards, and loans. However, credit unions differ from banks in that they are limited to serving a specific consumer base, known as their “field of membership.” This could be defined as the employees of a company, residents of a defined geographical region, or members of a church.

Credit unions are also more limited than banks on the types of loans they are allowed to write and the rates that they may charge. Additionally, credit unions are non-profit organizations that do not seek to generate a profit and do not pay federal income taxes-any returns earned from member business lending is returned to the members or used for the operation and growth of the credit union.

Credit unions have been fighting for a decade to lift the cap on the amount of lending that they are allowed to engage in. As recently as September 2009, the Credit Union National Association issued a letter to the president asking for him to support a measure in Congress that would life the cap on credit union business lending from 12.25 percent of their assets to 25 percent and that would allow them to include “underserved” areas as part of their field of membership. The bill, the Promoting Lending to America’s Small Businesses Act of 2009 (HR 3380), has been stuck in the House Financial Services Committee since July 2009.

Increasing credit unions’ ability to lend will not solve all of our economic woes-they control only around 6 percent of the country’s total deposits. However, freeing up credit unions to use their capital to stimulate and sustain small businesses can only help, and it will have a significant impact on areas of the country underserved by banks, at no cost to the taxpayer.

If Congress and President Obama are serious about increasing access to credit right away, they should focus less on redistributing taxpayer dollars and more on freeing the institutions that have capital and want to lend to small businesses.

Bisphenol baloney takes another hit

by Michael Fumento on February 15, 2010

in Health and Illness, Nanny State, Stimulus to Nowhere

In a provocatively entitled paper in the current issue of the prestigious journal Toxicological Sciences, Richard M. Sharpe asks “Is It Time to End Concerns over the Estrogenic Effects of Bisphenol A?”

In a word, “yes.” Bisphenol A, or BPA, is an incredibly valuable chemical added to plastics like baby bottles to make them harder and stronger. It’s been in use for many decades. And the greens want to get rid of it because they say it’s dangerous.

Yet as I wrote recently in Investor’s Business Daily,”Countries that have evaluated BPA in the last three years, as Trevor Butterworth of the STATS think tank has documented, include Norway, France, Germany (twice), Australia, New Zealand and Japan. Add to that a World Health Organization collaborative center. Each has found BPA safe.”

(CEI’s Angela Logomasini also recently wrote an excellent paper on BPA safety.)

But:

The lynch mob is after BPA because it’s a weak synthetic estrogen. These chemicals have been under fire since the publication of the 1996 book “Our Stolen Future,” which one review aptly described as “an alarmist tract with a polemical style clearly crafted for its political, not scientific, impact.” (With a foreword by Al Gore, no less.)

Never mind that over 150 plants produce chemicals that also mimic estrogen, many of them foods that contain so much that they’re often recommended as natural hormone replacement therapy. The overall estrogenic effect of natural chemicals, according to Texas A&M University toxicologist Stephen Safe, is 40 million times that of the synthetics. Yes, it’s just the environmentalist saw: “Man-made bad; natural good.”

And so we keep throwing massive amounts of money to scientists to study it more and study it more and study it more.

Recently National Institute of Environmental Health Sciences Director Linda Birnbaum announced $30 million in grants for two more years of BPA research, using money from the stimulus act, to “address many of the research gaps” regarding the chemical. Yet over 5,400 medical journal articles have already been published on BPA safety. How many gaps can that leave?

Sharpe comments on poorly done initial studies by an environmental aspect that I described, then writes:

Fundamental, repetitive work on bisphenol A has sucked in tens, probably hundreds, of millions of dollars from government bodies and industry which, at a time when research money is thin on the ground, looks increasingly like an investment with a nil return. All it has done is to show that there is a huge price to pay when initial studies are adhered to as being correct when the second phase of scientific peer review, namely, the inability of other laboratories to repeat the initial studies, says otherwise.

At some point it’s time to say “Enough!” and we passed that point with BPA a long time ago.

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