January 2012

Kellogg’s Flaky Reasoning (the foundation)

by Michael Fumento on May 12, 2010

in Features, Odds & Ends

A year ago both the WHO and the UN warned that swine flu, which at the time had killed a grand total of eight people worldwide, could be the next Spanish flu–which killed around 50 million people. The only reason either body gave was precisely because swine flu seemed quite mild as did Spanish flu initially. So let’s get this straight: Had swine flu come out of the starting gates knocking people over like tenpins it would have been more reassuring?

Now the W.K. Kellogg Foundation has awarded $75 million in grants to civic groups “working to eliminate racial disparities in communities across the country,” the biggest amount the foundation has ever targeted at a single goal.

The reason, as the Washington Post put it, is “concern about the notion that issues of race had become less important since President Obama’s election.”

So just as it’s worrisome that a new strain of flu is mild, it’s worrisome that we have our first black president?

Someone has got to sit me down and explain this to me.

Risky alternatives for online gamblers post-UIGEA

by Michelle Minton on May 11, 2010 · 1 comment

in Odds & Ends, Personal Liberty, Tech & Telecom

On June 1st, it seems inevitable that banks will have to be in compliance with the Unlawful Internet Gambling Enforcement Act (UIGEA); the vague and feckless regulation that seeks to prohibit internet gambling by leaving banks and credit processing services no choice but to refuse to handle money that could in any way be connected with gambling online.

The lead opponent of the regulation, Barney Frank, (the man responsible for the delay of implementation and compliance dates thus far) reported that treasury Treasury Secretary Timothy Geithner had struck a deal with Arizona republican Senator Jon Kyl that there would be no more delays for UIGEA if Kyl would end his blockage of treasury nominations–which he did in February. Therefore, it is safe to assume that, come June 1st, UIGEA will be in full swing. So, what does this mean for poker players online? In short, it means that “gambling” online will have a whole new meaning in that, the creative new ways they find to play for money online will hold a host of hidden dangers. A few alternative methods gamblers are beginning to turn to include:

E-wallets: online credit processing such as E-WalletXpress, EcoCard, and NetCents that allow customers to fill an online account with money to be used on other sites. While this is an effective way to make deposits with online casinos, withdrawing funds can become complicated. Many digital wallets have limits and fees on withdrawing activities and are not FDIC insured.

Prepaid cards: function much like credit cards. Withdrawing funds would most likely require gamers to have online casinos issue check or a wire transfer.

Gift cards: associated with credit card companies like MasterCard and visa, UIGEA does apply to these cards and some evenly explicitly express the fact that they are not to be used in association with online gambling, yet, many Internet gamblers have continued to successfully use them in order to deposit and withdrawal funds related to online gaming.

Most of these methods have fees associated with them, are not FDIC insured, and have no guarantee that funds will be payed out. Unlike major credit card companies, there are more risks associated with using non-standard credit processing methods. As the department of justice crack down on the various methods that consumers will no doubt find to continue engaging in online gambling, these consumers will be forced farther and farther into the shadow where there are fewer protections and more opportunity for scams. This is one major problem with UIGEA that I and other proponents of freedom have noted: making the activity illegal doesn’t protect consumers and doesn’t stop them from gambling–it simply hides the activity and removes any legal recourse they might have when others act unlawfully. This is an instance of government doing exactly the opposite of the legitimate function of government. Rather than leaving citizens free to choose their own course of action and protecting them in the event of criminal or fraudulent acts, government is preventing the freedom of choice and leaving them high and dry when their rights are violated.

Regardless of what happens with Jim McDermott’s taxation legislation UIGEA needs to be repealed. Internet gambling should be legal not because some legislation makes it so, but simply because it is not the place of government to ban individuals from engaging in voluntary activities that do not infringe on the rights of others.

Note: UIGEA does not make the act of gambling online illegal, it simply makes it illegal for any credit processing service to deal with funds associated with “unlawful” internet gambling. Because the UIGEA neglects to define which online gambling activities are unlawful, most legitimate credit processing companies will choose to deny any and all transactions having anything to do with gambling (for example MasterCard has already begun blocking gambling-related transactions).

Though it appears that the House Ways and Means committee will hold a hearing this month on Rep. Jim McDermott’s legislation to legalize and tax Internet gambling, the effects of UIGEA have long been felt in the online gambling community–with various casinos refusing US-based players, credit card companies blocking transactions, and now the department of justice is using the regulation to prop up its despicable persecution of American citizens engaging in voluntary behavior that it doesn’t approve of.

Bipartisan letter urges action on Korea FTA

by Fran Smith on May 11, 2010

in International, Legal, Trade

On May 10, 2010, two high-ranking senators, a Democrat and a Republican, sent a joint letter to President Obama asking him to take action on the stalled free trade agreement with South Korea.  In their letter, Senate Foreign Relations Committee Chairman John Kerry (D-MA) and Ranking Member Dick Lugar (R-IN) said that the FTA would be an economic boon to the U.S. and would show solidarity with a close U.S. ally.  The letter noted:

The U.S. International Trade Commission estimated in September 2007 that U.S. merchandise exports to Korea would increase by $10-12 billion annually as a result of the KORUS FTA and that services exports would expand.  The potential for innovation through competition and collaboration is also immense.

Through inaction, the United States will cede Korea’s vast markets to other countries, a luxury that we cannot afford.  In 2004, China displaced the United States as Korea’s number one trading partner.  Recently, the European Union and India signed agreements with South Korea to lower trade barriers.  As these countries effectively gain preferential access compared to American products, the United States risks missing significant opportunities, while other countries’ economies grow and create jobs from trade expansion.

CEI has long argued for ratification of the agreement.  Here’s a CEI issue analysis that sets out more detailed arguments for the Korea FTA and here’s a short piece on why the three pending FTAs should be ratified.

The Enviro-Left Machine in Action

by Iain Murray on May 11, 2010

in Environment, Personal Liberty, Politics as Usual, Precaution & Risk, Regulation, Sanctimony, Zeitgeist

Fenton Communications has a long history of work within the left-wing advocacy apparatus. I’m delighted to see a great addition to the blogosphere, the Junk Science Mom, drill down into Fenton’s involvement in the manufactured campaign against bisphenol A, the plastics additive known as BPA. JSM presents a pretty good case study of how scare campaigns are orchestrated and nicely stitches together the interconnected relationships between activist groups, commercial businesses that stand to profit from these campaigns and the people who tie them all together (yet another example of a bootlegger-and-Baptist alliance). Fenton’s own website not only extols the firm’s success working with a corporation that specializes in BPA-free products it also trumpets the PR firm’s “partnership” with the Environmental Working Group and the Natural Resources Defense Council, both of which are virulently anti-BPA. Check it out!

The Toyota Hobgoblin, my piece in today’s Philly Inquirer

by Michael Fumento on May 10, 2010

in Nanny State, Odds & Ends, Regulation

‘The whole aim of practical politics,” wrote H.L. Mencken, “is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.”

Last year’s hobgoblin was swine flu. The President’s Council of Advisors on Science and Technology warned of as many as 90,000 excess flu deaths, and the federal government declared two national emergencies. Yet, flu season’s over and the CDC estimates estimates we’ve had perhaps a third the usual number of flu deaths.

This year’s hobgoblin is Toyota. You know, those cars whizzing hither and thither, smashing into walls, doctors’ offices, nail salons, and–here’s the best one–a Toyota dealership!

“Stop driving” recalled Toyotas, Secretary of Transportation Ray LaHood told owners in February. Congress has held three days of hearings on the matter. Never mind that despite its bad press last year, Toyota easily grabbed first place in Consumer Reports‘ reader survey. Edmunds.com found that while Toyota ranked third in U.S. car sales over the past decade, it ranked only 17th in safety complaints to the National Highway Traffic Safety Administration.

The government has to have that hobgoblin against which to defend it. Toyota was in the wrong place at the wrong time. Read my piece here, but not without your magic anti-hobgoblin crystal.

Obama Nominates Liberal Lawyer Elena Kagan to the Supreme Court

by Hans Bader on May 10, 2010 · 1 comment

in Legal, Personal Liberty, Politics as Usual

President Obama has nominated liberal lawyer Elena Kagan to the Supreme Court.   She currently serves as Solicitor General.  Before that she was dean at Harvard Law School.

You can find my take on the nomination at this link, which quotes the reactions to Kagan’s nomination by liberal, conservative, and libertarian  legal commentators.  (The opinions I express there are solely my own.)

Earlier, I wrote about Obama’s controversial nominations of Goodwin Liu to the Ninth Circuit Court of Appeals, and Robert Chatigny to the Second Circuit Court of Appeals.

LibertyWeek 92: FCC Power Grab

by Richard Morrison on May 10, 2010

in CEI Projects, Features, Podcast, Zeitgeist

Richard Morrison and Marc Scribner team up with William Yeatman, Ryan Radia and Iain Murray, to bring you Episode 92 of the LibertyWeek podcast. We take on the prospects for cap-and-trade climate legislation, the FCC’s broadband power grab, tales from a hung parliament and an exciting new job opportunity in Venezuela.

Mortgage Giant Seeks Another $8.4 Billion in Bailouts, After Obama Lifts $400 Billion Limit on Bailouts for Government-Sponsored Enterprises

by Hans Bader on May 10, 2010 · 2 comments

in Bailout Watch, Economy, Legal, Politics as Usual, Precaution & Risk, Regulation, Sanctimony, Zeitgeist

Mortgage giant Fannie Mae is seeking another $8.4 billion in federal bailout money, after the Obama administration earlier lifted a $400 billion limit on bailouts for Fannie Mae and Freddie Mac, the two government-sponsored mortgage giants that officials say were at the “core” of “what went wrong” in the financial crisis. Last week, Freddie Mac asked for $10.6 billion more in bailouts. The Obama administration is certain to approve the requests: “Late last year, the Obama administration pledged to cover unlimited losses through 2012 for Freddie and Fannie,” reports the New York Times.

Obama’s so-called financial “reform” proposal does nothing to reform Fannie Mae and Freddie Mac, admits Obama’s Treasury secretary, Timothy Geithner, who concedes they were “a core part of what went wrong in our system.” (At the direction of the Obama administration, Freddie Mac is now running up $30 billion in losses to bail out mortgage borrowers, some of whom have high incomes.  Federal regulators sought to make Freddie Mac hide the resulting losses from the SEC and the public.)  By contrast, the Republican alternative “aims to wind down, and break up” Freddie Mac and “limit taxpayer exposure” to its losses.

“American taxpayers are paying for $6.8 billion of the Greek bailout” through contributions to an international bailout fund backed by the Obama administration.   Greece is being bailed out by Europe and the international community because it is running up huge budget deficits due to a bloated bureaucracy and government pensions that let many Greeks retire in their 50s. “The Obama administration wants to use U.S. tax dollars to bail out a nation that is in a financial death spiral brought on by years of amazingly irresponsible deficit spending and similar behaviors often found in socialist states.”

Rioters in Greece killed three bank employees yesterday in their rage over possible budget cuts.  “The protesting civil servant workers trapped the bank employees in a burning building.”

The Obama administration earlier lifted the $400 billion limit on bailouts for Fannie Mae and Freddie Mac, so that they could continue to buy up junky mortgages at taxpayer expense, and showered their executives with $42 million in compensation.

Fannie and Freddie helped spawn the mortgage crisis by acting as loan toilets, buying up risky mortgages and thus creating an artificial market for junk.  “From the time Fannie and Freddie began buying risky loans as early as 1993, they routinely misrepresented the mortgages they were acquiring, reporting them as prime when they had characteristics that made them clearly subprime.”  They paid their CEOs millions, and engaged in massive accounting fraud — $6.3 billion at Fannie Mae alone — to increase the size of their managers’ bonuses.  As Government-Sponsored Enterprises, they were exempt from the capital requirements that apply to private banks, so they did not have enough reserves to cover their losses when their mortgages started defaulting.

Banking expert Peter Wallison, who warned for years about the risky practices of Fannie and Freddie, says Obama’s proposals will lead to “bailouts forever.”  Obama claims that it will not lead to more bailouts.  But as Congressman Brad Sherman (D-Calif.) admitted, the “bill has unlimited executive bailout authority. . .The bill contains permanent, unlimited bailout authority.”

Government pressure on banks to make loans in economically-depressed neighborhoods was a major cause of the mortgage crisis.  If Obama has his way, that pressure will increase.  The House earlier approved Obama’s proposal to create a politically-correct entity called the Consumer Financial Protection Agency. “The agency would be in charge of enforcing the Community Reinvestment Act, a law that prods banks to make loans in low-income communities.”  It would do so without regard for banks’ financial safety and soundness, even though the Community Reinvestment Act was a key contributor to the financial crisis.

Friday Regulation Roundup

by Ryan Young on May 7, 2010

in Deregulate to Stimulate, Nanny State, Regulation

Some of the stranger governmental goings-on I’ve dug up recently:

-Since 1960, it has been illegal to fly a kite in Schaumburg, Illinois.

-If you are a tree in need of help, the federal government has a Tree Assistance Program.

-$18,881 of stimulus money spent on a single sign in Wyoming.

-Concerned about your fecundity? Consult the federal government’s Reproductive Health Drugs Advisory Committee.

-Northern Arizona University spends $75,000 in stimulus funds to install electronic sensors to see if students skip class. (hat tip to The Wall Street Journal‘s Kim Schatz)

-In Alabama, it is against the law to sell artificially colored potatoes.

-Need help with your math homework? Consult the government’s North American Numbering Council.

-In Yukon, Oklahoma, it is illegal for a patient to pull a dentist’s tooth.

Lindsey Graham: “It’s not a global warming bill to me.”

by Marlo Lewis on May 7, 2010 · 7 comments

in Global Warming

Today’s Greenwire (subscription required) includes an edited transcript of an interview with Lindsey Graham (R-SC) that recalls Bill Clinton’s famous line, “It all depends on what the meaning of ‘is’ is.”

Graham was at pains to explain his position on the Kerry-Graham-Lieberman cap-and-trade bill. On the one hand, he asserted that, “I’m in this to win.” On the other hand, he pulled the rug out from under Kerry and Lieberman two weeks ago when he backed out at the last minute from a press conference at which the bill was to be unveiled, and he is not expected to join them when they introduce the bill next week. Sen. John Cronyn (R-TX) aptly described Graham as the hokey pokey man: “You put your right foot in. You take your right foot out. I’m not sure where he [Graham] is right now.”

Although the bill includes a cap-and-trade program for the electric power sector, which is to be extended over time to other sectors of the economy, Graham is still asserting that it’s neither a cap-and-trade bill nor a global warming bill. He stated: “It’s not a global warming bill to me. Because global warming as a reason to pass legislation doesn’t exist anymore.” He also explained: “There is no bipartisan support for a cap-and-trade bill based on global warming.”

Permit me to translate Graham’s Clintonese: “We want capntrade even if the original and central rationale is no longer credible, and oh, by the way, we’re not calling it capntrade anymore. I’m in this to win but I’ll be a no-show when Kerry and Lieberman introduce the non-global warming, non-capntrade, global warming-capntrade bill.”

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