January 2012

Entitlement America? Who Has More Disposable Income?

by Lee Doren on November 22, 2010

in Economy

I just read an interesting report about disposable income in America. The claim is that the head of a household of four making minimum wage has more disposable income than a family making $60,000 a year. How is this conclusion reached? Well, supposedly after all government benefits, including food stamps and medicaid, the individual making less money can receive significantly more benefits than the person making $60,000.

Although there are some flaws in the report (one example being a failure to include employer healthcare benefits) the report does illustrate some severe flaws in our tax code and welfare system. If it turns out that individuals can work less, while doing financially better than people who make more money, why work? While some argue the Keynesian multiplier will boost the economy, at some point common sense has to come into play.

The best way to boost the economy is to have all citizens working productive jobs. Adding an unnecessary moral hazard by paying people not to work, while punishing people who do, will invariably result in a worse economy.  Sadly, anyone who advocates against the status quo is often accused of hurting the poor.

Photo Source and here.

Unions’ Shifting Lame Duck and NLRB Agenda

by Ivan Osorio on November 22, 2010

in Bailout Watch, Economy, Labor, Regulation

With Democrats losing control of the House of Representatives and a substantial number of seats in the Senate, organized labor’s hopes of seeing its legislative agenda enacted are fading fast. But that won’t keep union bosses from trying, in two ways. First, a last-ditch push in the current lame-duck session of Congress; and second, shifting efforts away from the legislative to the regulatory process, specifically in the National Labor Relations Board (NLRB). Thankfully, this shift in union strategy is getting some public attention — and more is needed.

In Congress, Big Labor’s allies are most likely to focus on passing bills bailing out underfunded union pensions and forcibly unionizing state and local government public safety employees. As my colleague F. Vincent Vernuccio and I noted recently in Forbes regarding the proposed bailout:

During the lame duck session, the main Big Labor priority to watch out for is a union pension bailout. Introduced in the House (Create Jobs and Save Benefits Act, H.R. 3936) by Rep. Earl Pomeroy (D-N.D.) and in the Senate (Create Jobs and Save Benefits Act, S. 3157) by Rep. Robert Casey (D-Penn.), this legislation would create a new fund within the Pension Benefit Guaranty Corporation ( GRTYA.PK - news -people ) (PBGC), through which it would direct taxpayer dollars to shore up some underfunded union pension plans. The use of public funds to insure private pension plans is a first for PBGC and stark departure from the way it has operated since its creation in 1974.

Earl Pomeroy lost his reelection bid, which makes the prospects for his legislation dim. However, just because unions lost one champion of this legislation does not mean they cannot find another. Pomeroy was an odd sponsor of such legislation anyway; unions are not exactly political powerhouses in North Dakota, which is a right to work state.

The so-called Public Safety Employer-Employee Cooperation Act (S. 3194, H.R. 413) would corral public safety — police, firefighter, and EMT personnel — into unions. For organized labor, this may be its best option for a long-term growth strategy, now that more union members works for governments than for private businesses. But states and cities struggling to balance their overstretched budgets, higher labor costs is the last thing they need. As National Right to Work Committee President Mark Mix notes in The Washington Examiner:

Last year, even as the nation’s economy endured a severe recession, state and local employee real compensation rose by nearly 3 percent. Meanwhile, businesses whose revenues were plummeting had no choice but to cut back real compensation for private-sector employees by 4 percent.

Incredibly, Reid and many likeminded senators and representatives now appear eager to put an even more onerous burden on private-sector employees and employers so that already bloated unionized government payrolls can keep expanding.

The Public Safety Employer-Employee Cooperation Act would force countless policemen, firefighters and emergency medical technicians to accept as their monopoly-bargaining agent a union they never voted for, and want nothing to do with. All contrary state laws and local policies would be overridden.

Even in many states that already authorize public-safety union monopolies, the bill would widen their scope. That’s why the vast majority of the 50 states will be forced either to rewrite their public-sector labor statutes, or hand over control of their public-safety officers to the federal government, if it becomes law.

Moreover, as former Service Employees International Union second-in-command Anna Burger has boasted, it would “create a national collective,” i.e. monopoly, “bargaining standard for all [state and local] public workers.”

Meanwhile, the fight over card check and other pro-union legislation is shifting to the NLRB, where Board members Craig Becker and Mark Gaston Pearce — both recess-appointed by President Obama — are likely to push Big Labor’s agenda. As Katie Gage of the Workforce Fairness Institute notes in The Daily Caller:

Recently, the NLRB has taken action to favor labor bosses over employees and employers. Obama’s appointees to the board are carrying Big Labor’s water, and our freedoms and jobs are at risk.

Cases that have been decided and closed for years are now being reopened by these new board members, who aim to change pro-worker and pro-small business decisions into pro-union boss ones.

For example, most recently, the board backed unions in their practice of holding protest signs at small businesses who use contract workers, claiming that the signs are not coercive.

In addition, the NLRB is now considering implementing electronic voting services for remote elections as opposed to worksite elections where physical ballots are both cast and counted, a move that would open elections to potential fraud and workers to intimidation.

And now there is discussion that this “independent federal agency” will shorten the amount of time for workplace elections even though most take place within a month. While Big Labor bosses could begin planning and organizing months ahead of an election being called, small business owners could be caught unaware and have only a few days to make their case to their own employees.

The lame-duck session ends next month, but Becker’s and Pearce’s recess appointments run through the end of the next session of Congress, so they’ll be on the Board through 2011. The NLRB bears watching.

For more on labor, see here and here.

Alcohol Industry Infighting Leads to Wacky and Costly Regulation

by Angela Logomasini on November 22, 2010

in Nanny State, Personal Liberty

If the ban on alcohol-containing energy drinks tells us anything, it’s that American alcohol policy continues its tradition of being very wacky. If you need more examples see Enobytes: Top Ten Wackiest Wine Laws.  And not all of this dumb regulation is old. These days, it’s hard to find a public park with you can enjoy a glass of wine at a picnic, as many have recently banned this “egregious” activity.

Such anti-consumer regulations are advanced for a number of reasons. Blogger Tom Wark points out that the absence of a consumer advocacy organization has led lawmakers to simply serve special interests at the expense of consumers. Another key problem is that various parts of the alcohol industry work at odds. This situation eventually undermines the credibility of the whole industry.

For example, consider the infighting between wine, beer, and spirit producers regarding privatization of spirits and supermarket sales. As it now stands, 19 states do not allow spirit sales in supermarkets but allow supermarkets to sell beer and wine (some only allow beer in supermarkets). This simply makes life less convenient for consumers. Wine and beer lobbies don’t seem to mind discrimination against spirits probably because they think it makes them more competitive. For example, a comment to a recent post on Winepolicy.com noted one reason wine and beer industry players opposed Washington State ballot initiatives on spirits privatization (The Washington Wine Institute opposed privatization, for example): they fear losing supermarket-shelf space.

Ironically, wine and beer folks do not help themselves with such positions. They simply reinforce the idea that their very own products–which also contain alcohol–are somehow bad for consumers. That idea helps push regulation on the entire industry.  In fact, that was one factor that advanced the concept of prohibition. Richard Mendelson points out in his book From Demon to Darling: “Wine and Beer Interests proved themselves willing and eager to throw the liquor men to the drys,” he notes (pg. 46). Yet that strategy simply helped build the case for prohibition of all alcohol.

It was would wiser for wine, beer, and spirits industry players to understand the value that comes from working together to promote the image of the entire industry. Alcohol producers and retailers would benefit if they all promoted a positive image of the industry and supported market competition. The end result would be more rational and fairer regulatory policies for everyone rather than wacky and special-interest regulation.

Image credit: Joe Shlabotnik’s flickr photostream.

Six Ways Congress Can Fix COICA Copyright Bill

by Ryan Radia on November 22, 2010

in Intellectual Property, Legal

Over at the Technology Liberation Front, I discuss the “Combating Online Infringements and Counterfeits Act” (COICA), which the Senate Judiciary Committee unanimously approved last week. The bill would enable the U.S. Attorney General to obtain a court order disabling access to web domains that are “dedicated to infringing activities.”

These “rogue websites” are a real problem, as the website Fight Online Theft explains, so it’s a good thing that Congress is working to address them. However, some of COICA’s provisions raise profound constitutional concerns, and the bill lacks adequate safeguards to protect against the unwarranted suspension of Internet domain names, as the website Don’t Censor the Net argues. The bill also doesn’t provide a mechanism for website operators targeted by the Attorney General to defend their site in an adversary judicial proceeding. This week, a group of over 40 law professors submitted a letter to the U.S. Senate arguing that COICA, in its current form, suffers from “egregious Constitutional infirmities.”

To address these concerns, CEI is urging Congress to amend COICA to provide for more robust safeguards, including:

  • Providing a meaningful opportunity for Internet site operators to challenge before a federal court an Attorney General’s assertion that their site is “dedicated to infringing activities” prior to the suspension of their domain name;
  • Requiring that the Attorney General, upon commencing an in rem action against a domain name, make a reasonable and good faith effort to promptly notify the site’s actual operator of the action;
  • Clarifying the definition of an Internet site “dedicated to infringing activities” to ensure that websites with nontrivial lawful uses that facilitate infringing acts by third parties will not face domain name suspension if their operators:
    • Comply with legitimate takedown requests from rightsholders;
    • Do not receive a financial benefit directly attributable to infringing activities;
    • Do not design their site primarily for the purpose of facilitating infringing activities; and
    • Do not induce infringing activities.
  • Instructing the Department of Justice and federal prosecutors not to request that domain name registrars, registries, or service providers suspend domain names that have not been deemed to be “dedicated to infringing activities,” or otherwise unlawful, by a federal court; and
  • Requiring the Department of Justice to compensate domain name registrars, registries, and service providers for any reasonable costs they incur in the course of disabling access to infringing domain names.
  • Eliminating the provisions requiring the Department of Justice to publish a public listing of Internet Sites “alleged to be … dedicated to infringing activities” but that have not been the target of a successful in rem action by the Attorney General to disable access to their domain name.

Image credit: minkj’s flickr photostream.

Minnesota AFL-CIO Pushes for Wisconsin “High-Speed” Rail

by Marc Scribner on November 22, 2010 · 1 comment

in Economy, Labor, Mobility, Stimulus to Nowhere

I’m currently in my home state of Minnesota, a place known to non-lefty residents as the People’s Republic of Minnesota, a place where the state’s Democratic party affiliate is still called the Democratic-Farmer-Labor (DFL) Party (Democrats here are known as “DFLers”), and a place that is home to the predictable, bland, left-wing newspaper, the Minneapolis “Red” Star Tribune.

Unsurprisingly, the Star Tribune employs a host of authors and editors that sanctimoniously support virtually every government spending program, including really, really stupid ones such as low-density rail transit and non-high-speed “high-speed” rail projects backed by the Obama administration.

Also unsurprisingly, the “Labor” portion of the DFL is backing these not-so-high-speed rail projects, even when the projects are outside of Minnesota. The Green Bay Press Gazette reports that the Minnesota AFL-CIO is pushing Wisconsin Governor-elect Scott Walker to switch his position on the proposed passenger rail corridor in his state — from oppose to in favor.

Last week, I authored an article published in the Milwaukee Journal Sentinel explaining why Walker won’t be killing any high-speed rail projects in his state: because the proposed project is not high-speed rail by industrialized-world standards. The union is clearly not concerned by speeds or costs or any other facts; they just want their government-subsidized jobs, jobs, jobs!

On Sunday, The Cleveland Plain Dealer published an op-ed by Iain Murray and I on the speed angle. Like Wisconsin, voters in Ohio recently elected John Kasich to the governor’s office, who ran on an anti-rail platform.

H/T Ivan Osorio.

Image credit: cursedthing’s flickr photostream.

Al Gore Backtracks on Corn Ethanol

by Brian McGraw on November 22, 2010 · 3 comments

in Energy, Ethanol

Whoops. Turns out Gore thinks he made a mistake; it wasn’t such a good policy in the first place. Who would have known that politicians, even ones as concerned with “saving” the world as Mr. Gore is, do not excel at picking technology winners and are subject to capture by special interests?

Via Reuters.

Though Mr. Gore cast the tie-breaking vote in support of the RFS, he can’t wave the same magic wand and undo the damage:

With a tie-breaking vote by Vice President Al Gore, the Senate upheld today an Environmental Protection Agency rule requiring that ethanol and other renewable fuels get a share of the gasoline additives market.

And here we are, 16 years later, with a still-increasing corn ethanol mandate and tax credit.

Gore makes a number of candid remarks about his intentions and the effect that lobbies have on “green” energy subsidies:

It’s hard once such a programme is put in place to deal with the lobbies that keep it going.

One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee, and I had a certain fondness for the farmers in the state of Iowa because I was about to run for president.

One wonders if President Obama, given his tacit support, will make similar remarks in a few years.

Obesity Letters Assume Parents Can’t See Their Children

by Brian McGraw on November 22, 2010

in Global Warming, Health and Illness, Nanny State, Personal Liberty, Politics as Usual, Regulation, Zeitgeist

A school district in Arizona is implementing a controversial program that has the world talking: they will be weighing students and sending notes home to parents — too big, too small, and just right. The editorial board at the Arizona Daily Star is in support. The Daily Caller is not.

According to this link, Arizona is right in the middle of the obesity chart, with 25-29 percent of its members qualifying with a BMI of over 30. BMI is simply a measure of your height and weight, where “appropriate” weights are established for each heights. For a large population, the BMI measurement is reasonable, but it has a number of shortcoming — as many NFL athlete’s who are in remarkable shape would be labeled as obese due to their muscle mass.

Shaming parents and children is unlikely to solve whatever problem the school board believes is its responsibility to solve. If they want to help, they could start with calling attention to the removal of food subsidies, many of which go directly to the same foods that are publicly demonized and attributed to obesity.

See: Why a Big Mac Costs Less Than a Salad

Image credit: knezovjb’s flickr photostream.

Morning Media Summary

by Lee Doren on November 22, 2010

in Economy, Energy, Environment, International, Legal, Personal Liberty, Regulation, Trade

Tech:

FCC chief on net neutrality: Trust me:
“FCC chairman Julius Genachowski now finds himself caught between unfulfilled promises made to the tech community to keep the internet open, and a Republican Congress ready to portray any new rules on broadband ISPs as heavy-handed, economy-killing regulation.”

FCC member condemns Google and Verizon over net neutrality plans:
“A Federal Communications Commissioner has condemned the Verizon-Google take on net neutrality. Michael Copps (pictured) said the public should not stand for deals “that exchange Internet freedom for bloated profits.””

Intel: 1,000-core processor possible:
“An experimental Intel chip shows the feasibility of building processors with 1,000 cores, an Intel researcher has asserted.”

Rupert Murdoch creates ‘iNewspaper’ – with help of Steve Jobs:
“Rupert Murdoch, head of the media giant News Corp, and Steve Jobs, the chief executive of Apple, are preparing to unveil a new digital “newspaper” called the Daily at the end of this month, according to reports in the US media.”

FCC moves to ensure ‘net neutrality’:
“Please use the link to reference this article. Do not copy & paste articles which is a breach of FT.com’s Ts&Cs (www.ft.com/servicestools/help/terms) and is copyright infringement. Send a link for free or email ftsales.support@ft.com to purchase rights.”

Global Warming / Environment / Energy:

Nations That Debate Coal Use Export It to Feed China’s Need:
“Even as developed countries close or limit the construction of coal-fired power plants out of concern over pollution and climate-warming emissions, coal has found a rapidly expanding market elsewhere: Asia, particularly China.”

Dire messages about global warming can backfire, new study shows:
“”Our study indicates that the potentially devastating consequences of global warming threaten people’s fundamental tendency to see the world as safe, stable and fair. As a result, people may respond by discounting evidence for global warming,” said Robb Willer, UC Berkeley social psychologist and coauthor of a study to be published in the January issue of the journal Psychological Science.”

Insurance / Gambling:

Online Gamblers Urged To Call US Representatives During Lame-Duck Session:
“If ever there was a time that the online gambling community should be heard, it is now. Only a month remains in the lame-duck legislative session and this next month will be the last opportunity for changes to current US Internet gaming laws.”

Health / Safety:

Cadmium, Lead Found In Drinking Glasses:
“In separate testing to recreate regular handling, other glasses shed small but notable amounts of lead or cadmium from their decorations. Federal regulators have worried that toxic metals rubbing onto children’s hands can get into their mouths. Among the brands on those glasses: Coca-Cola, Walt Disney, Burger King and McDonald’s.”

Analyst: TSA methods ‘will kill more Americans on highway’:
“The recent public ire toward the TSA’s new pat-down and body imaging screening methods is likely to cause more people to drive automobiles and forego airline travel, say two transportation economists who have studied the issue.”

Arizona school district sends letters home about overweight kids:
“Chubby elementary school children in Flagstaff, Ariz., have more than just bullies to worry about. If they’re too fat, their school will notify their parents.”

Economics:

Obama Jokes About Diverting Air Force One to Visit Hugo Chavez; Sean Penn En Route to Caracas Just in Case:
“The president, on the way back from the NATO summit in Portugal, seems in no particular hurry to return to Slurpeeland.”

U.S. in Vast Insider Trading Probe:
“Federal authorities, capping a three-year investigation, are preparing insider-trading charges that could ensnare consultants, investment bankers, hedge-fund and mutual-fund traders, and analysts across the nation, according to people familiar with the matter.”

Warren Buffett Tells ABC Rich People Should Pay Higher Taxes:
“Billionaire Warren Buffett said that rich people should pay more in taxes and that Bush-era tax cuts for top earners should be allowed to expire at the end of December.”

Legal:

Tobacco fund heads to total depletion:
“W hen Gov. Haley Barbour took office there was about $630 million in the state’s supposedly “inviolate” Health Care Trust Fund – the repository of the state’s tobacco settlement.”

Red-light camera programs see cities’ support fading:
“Democrats were not the only losers on Election Day. Traffic cameras designed to catch red-light runners also took a ballot box beating as they were voted down in Houston and at least four other cities nationwide.”

News: Challenge on Textbook Pricing:
“But a case that came before the U.S. Supreme Court last week suggests that the textbook companies might soon face an even stronger threat: themselves.”

TSA pat-down leaves traveler covered in urine:
“A retired special education teacher on his way to a wedding in Orlando, Fla., said he was left humiliated, crying and covered with his own urine after an enhanced pat-down by TSA officers recently at Detroit Metropolitan Airport. “

In Shift, TSA Chief Says Screenings to Be ‘Minimally Invasive’:
“The head of the agency responsible for airport security, facing protests from travelers and pressure from the White House, appeared to give ground Sunday on his position that there would be no change in policies regarding invasive passenger screening procedures.”

Labor:

Minnesota union wants high-speed rail Wisconsin:
“A Minnesota labor union is urging Wisconsin’s Republican Gov.-elect Scott Walker to change his mind and allow a high-speed train to be built between Milwaukee and Madison.”

Transportation/ Land Use:

High-speed rail backers fret about Gov. – elect Scott:
“Emotions ran hot and cold during a high-speed rail show at the Orange County Convention Center. Those wanting to build, operate and ride the high-speed train that’s supposed to link Orlando and Tampa beginning in 2015 spoke excitedly of its 168 mph speed, its potential to connect with SunRail, and its ability to stimulate if not transform Central Florida’s economy.”

GM IPO Raises Billions, But Company Faces Hidden Challenges; Bailout Still Not Repaid

by Hans Bader on November 20, 2010 · 2 comments

in Bailout Watch, Economy, Energy, Labor, Legal, Regulation

General Motors raised more than $20 billion in an initial public offering (IPO) this week, selling millions of shares owned by the federal government, and reducing the government’s ownership of GM from 61 percent to 33 percent.

GM stock is worth money partly because its government ownership stake allows it to claim up to $45 billion in tax savings that it would otherwise have had to forfeit as a result of its bankruptcy. GM is also receiving lots of taxpayer subsidies for its Chevy Volt, despite recent revelations that it lied about that car, which it was trumpeting in a “publicity stunt” to curry favor with politicians crusading against global warming.

GM still owes taxpayers at least $29.4 billion, and its finance arm owes taxpayers an additional $14.6 billion. In a sense, taxpayers lost money on the sale. (They got at least $9 billion less for the stock that was sold in last week’s IPO than they originally paid for that stock.)

Slate’s Mickey Kaus, who reluctantly supported the auto bailouts, thinks that people who bought GM stock were “suckers,” since GM faces hidden perils, still has too much red tape and inefficiency, lacks “effective internal controls,” and is the beneficiary of accounting gimmicks and unrealistic assumptions about its future market share.

John Berlau, who studies financial markets at CEI, had a much more grim assessment of the GM bailout and its IPO.

Earlier, GM lied about whether it had paid back taxpayers for its bailout, triggering an FTC complaint by CEI.

Image credit: hanneorla’s flickr photostream.

Regulation of the Day 160: Sleeping in Public

by Ryan Young on November 19, 2010

in Regulation, Regulation of the Day

In Roselle Park, New Jersey, it is against the law to fall asleep in public. It is intended to address Roselle Park’s homelessness problem. Maybe the theory is that if you pass a law banning homelessness, or at least its trappings, nobody will be homeless anymore.

Or maybe it will merely keep them out of sight, and out of mind. After all, it can be depressing to see people sleeping on benches, at bus stops, and in parks. Especially if they clearly have nowhere else to go. And they can’t have that in Roselle Park.

Image credit: city of delusion’s flickr photostream.

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