Communications Coordinator Lee Doren breaks down a bizarre class action lawsuit against Chuck E. Cheese’s. The suit accuses the company of offering gambling services to minors.
January 2012
As unions continue to decline in their private sector membership, union leaders are seeking political solutions to their problems. President Obama will need organized labor’s support for his reelection campaign, and thus has good reason to stay on unions’ good side. His administration has been pushing unionization through regulation — enacting regulatory changes favoring unionization without input from Congress.
Two key agencies in this effort are the National Labor Relations Board (NLRB) and the National Mediation Board (NMB). The NLRB supervises the National Labor Relations Act, which covers labor relations for most private sector employees, and the NMB does the same for the Railway Labor Act (RLA), which covers railroad and airline employees.
The NLRB is threatening to sue Boeing for building a new a plant in South Carolina, a right-to-work state, as well as four states — Arizona, South Carolina, South Dakota, and Utah — for enacting amendments to their constitution that protect secret ballots in union organizing elections. Boeing’s South Carolina plant is new and was built to add to its capacity for building its new 787 Dreamliner; it was not built to shift production from the company’s unionized Puget Sound facilities.
A year ago, the NMB changed RLA voting rules from requiring a union to win a majority of votes in a bargaining unit to be certified as its monopoly bargaining representative to a majority of votes cast, which made it possible for a union to become certified with only a minority of bargaining unit members voting for it. (The FAA Reauthorization Bill, passed by the House on April 1, restores the old rule, but the bill still needs to go through conference committee.)
Now some Republican House members are trying to look into the politicization of these agencies.
On May 12, House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.), along with Reps. Dennis Ross (R-Fla.) and Trey Gowdy (R-S.C.), wrote to NLRB Acting General Counsel Lafe Solomon, requesting documents pertaining to its lawsuit threats against Boeing and the four states with secret ballot amendments — including any communications with union officials.
And yesterday, Reps. Issa and Ross wrote to NMB Chairman Harry Hoglander, requesting documents related the NMB’s change of the RLA voting rule — also including communications with union officials.
The NMB documents are due to Committee on May 24, and the NLRB documents on May 27. It will be an interesting June.
The Atlas Economic Research Foundation‘s Tom Palmer has a new video explaining why profits are moral and how the profit motive brings out the best of humanity. Watch it:
Tech:
Netflix proclaimed ‘King’ of North American Internet use:
“Heralding the rapidly approaching Internet traffic jam, streaming video juggernaut Netflix Inc. is now the largest user of Internet bandwidth in North America, according to data released by a Canadian company Tuesday.”
Global Warming / Environment / Energy:
Climate change: the UK must end its double-dealing:
“As David Cameron finally aims to put some muscle behind his supposed green credentials, by backing more ambitious domestic cuts in CO2 over the coming years, it’s worth noting that there’s still a fair amount of two-faced behaviour from his government. In particular, the UK’s performance internationally has been more in the spirit of good old British neo-colonialism, that is: “Do as we say, not as we do.””
I’ve previously written about the dangers of form-based codes (see here, for instance), the Euclidian zoning replacements that, rather than gut government planning abilities, enhance the ability of city planners to further distort the real estate market, land-use choices, and transportation networks. From the Paso Robles Press, via Chad Emerson:
According to city officials, there will be semi-annual reviews slated for the plan, where adjustments can be made. It was an idea supported by various members of the council including City Councilman John Hamon.
Hamon said that with regard to future adjustments and design, “the city on the west side, again, from 100 years as it was originally laid out, we have kind of deviated – now we’re kind of I think trying to get back on focus back with a certain plan. I think that the form-based codes that we have are unique, I don’t think anybody else has those kinds tools at their disposal, and I think it’s going to be a great piece of work for anybody to grab a hold of.”
Three members of the public spoke on the item: Tom Flynn, property owner representing the Flynn family; property owner Tom Madden; and Downtown Paso Robles Main Street Association Executive Director Norma Moye. Madden expressed ongoing concerns about how future zoning would affect existing uses, which would be re-established, as well as screening requirements. Flynn disputed the public participation process and warned that property owners still may not be aware of the changes, “and there’s a lot of big surprises for folks.”
Flynn said that it will “negatively impact future development by increasing policies, codes, restrictions and ultimately adding to the long list of never-ending government intrusion into our lives.”
Mr. Flynn is exactly right. From a property rights standpoint, these are huge steps in the wrong direction. Form-based codes will spawn future, more terrible planning, and they give elected officials and government bureaucrats more power to centrally plan more aspects of development and use. I mean, this is what form-based codes are all about! Planners knowing better than property owners, etc. Except that rather than merely codifying broad separation of uses of land (with the accompanying dimension standards), the local planning agency has the power to enforce site-based development “character”: landscaping, signage, architectural design, etc. And not only will our property rights be diminished, but future development will also be more boring and uncreative — and more expensive.
As I passed by the Commerce Department on my way in to work this morning, I saw the bureaucrats had erected a banner for Trade Week, declaring: “Exports, Growth, Jobs.” How typical of them, I thought, to ignore half of trade – the imports that we produce the exports to buy. Trade is about exchange, where each side gets something it wants. Concentrating only on one half of the exchange – the half you voluntarily give up — is an odd way to characterize trade.
Of course, the connection between trade and growth has long been recognized. Here’s a useful overview of the connection from Deutsche Bank in 2005:
Open economies benefit from the international exchange of ideas and thus permanently experience technological progress. This in turn is the key source of longterm economic growth. Greater openness also means fiercer competition. This obliges politicians to constantly improve the institutional framework and prompts companies to continually optimise their production processes and develop new products.
The corollary — that protectionism impedes growth, and sacrifices jobs — is one that bears repeating. At a time when new jobs are still hard to come by, free trade is an important way to boost employment, allowing the optimal specialization by Americans, resulting in optimal benefit for us — and for our trade partners. Indeed, as Matt Ridley argues in The Rational Optimist, free trade seems to have been vital in the progress of mankind from nomadic practices to civilization.
Recently, however, a new concept has grown up — that trade ought to be “fair” rather than free. Conventional trade, the theory goes, exploits those who produce the export good by paying them far too little in return, and that paying more for trade goods that are produced according to our values – using sweatshop-free labor or in an “environmentally conscious” fashion, for example — represents a much better way to do business. Thus was born the phenomenon of “fair trade” goods, most often seen in the shape of “fair trade” coffee.
In 2002, four fraternity brothers from the University of Montana founded an online gambling platform that became one of the most popular online casinos for Americans. However, after years of scandal, the Black Friday DOJ shutdown, and a PR nightmare lasting for nearly four years, it appears as though the company is officially down for the count, taking millions of dollars in player money and hundreds of jobs with it. The one glimmer of hope for spectators was that, unlike the other poker companies facing pressure from U.S. authorities, Ultimate Bet/Absolute Poker was fighting back against the DOJ.
Absolute Poker, which merged with Ultimate Bet (UB), was still in the process of rebuilding its reputation after 2007 when the company was involved in what has been described as the largest cheating scandal in online poker history. One of the original investors for the company that developed the sites software, Russ Hamilton who had the developers create a “super user” account that could see the cards of all players. Ostensibly, Hamilton told the developers the account would be used to catch cheaters. Ultimately, it was used to cheat players out of more than $22 million.
Then came Black Friday. As I and many others, including my colleague Brian McGraw, have written about, on April 15, 2011, the DOJ and the District Attorney’s office in NY unsealed an indictment against the major online poker companies serving U.S.-based customers. Two founders of Absolute Poker were among those cited in the indictment which alleges:
[T]he sites committed bank fraud, money laundering and illegal gambling offenses by “tricking” U.S. banks into processing online gambling transactions, a violation of the Unlawful Internet Gambling Enforcement Act of 2006. The indictment seeks at least $3 billion in penalties and forfeiture.
Prior to the indictment, shareholders were reportedly planning on selling the company — now that seems all but impossible.
The Wall Street Journal reports today that the U.S. Department of Agriculture is proposing to “eliminate the ‘white potato’ — defined as any variety but the sweet potato — from federally subsidized school breakfasts and to limit them sharply at lunch.” And my friends Henry Miller and Bruce Chassy covered the topic in a recent piece at NRO. Why? It’s part of an on-going effort to force schools to serve more “nutrient-rich” vegetables and get rid of French fries and Tater Tots. Last year, USDA also removed white potatoes from a list of permissible food items that can be purchased with vouchers under the Department’s Special Supplemental Nutrition Program for Women, Infants and Children (WIC), a program “designed to meet the special nutritional needs of low-income pregnant, breastfeeding, non-breastfeeding postpartum women, infants and children up to five years of age who are at nutritional risk.”
Naturally, eating too many fries or baked potatoes smothered in butter and sour cream can easily lard a kid’s diet with way too much saturated fat. But the actual potato part of the French fry or baked potato is hugely nutritious food, jam packed with important dietary nutrients. They’re a very good source of vitamin C, potassium, and fiber, as well as the B vitamins Thiamin, Naicin, Roboflavin, Folate, and B6. And, unlike many other vegetables, potatoes contain the full complement of eight essential amino acids (though in that regard, most beans are far better than potatoes). Add a little milk (with vitamins D, A, and B12, plus calcium) to make mashed potatoes, and you’ve got yourself a damn fine meal that most kids love, and one that’s very nearly nutritionally complete.
Perhaps just as important, potatoes are relatively cheap, which makes them an ideal source of nutrients and calories for low-income families and school cafeterias. And, to repeat an important point, kids generally like eating potatoes. As the father of a six-year-old boy who is generally not a finicky eater, I know how difficult it is to get kids to eat their vegetables. I can usually find some combination of vegetables that my kid will eat at a given meal. But my job would be far more difficult without the plain old white potato in all its glory. Forcing school cafeterias to give up potatoes will make them substitute more expensive and less well-liked alternatives — many of which are as likely to end up in the trash can as they are in kids’ bellies.
I’ve got no problem with efforts to encourage kids to eat better — particularly to cut back on empty calories and saturated fats. But with its war on potatoes, the USDA is throwing the baby out with the bath water.
Tech:
Scientists Cast Doubt on TSA Tests of Full-Body Scanners:
“The Transportation Security Administration says its full-body X-ray scanners are safe and that radiation from a scan is equivalent to what’s received in about two minutes of flying. The company that makes them says it’s safer than eating a banana [1].”
Global Warming / Environment / Energy:
Pickens’ New Plan: No Wind:
“T. Boone Pickens has a new plan — but fewer allies — in his quest to curb America’s dependency on foreign oil.”
LED bulbs hit 100 watts as federal ban looms:
“Two leading makers of lighting products are showcasing LED bulbs that are bright enough to replace energy-guzzling 100-watt light bulbs set to disappear from stores in January.”
Steve Levitt, author of the well known pop-economics book Freakonomics, has a recent post explaining his opposition to the crackdown on Internet gambling. The whole post is worth reading, but here is a shortened summary of his arguments:
1) Prohibitions that focus on punishing suppliers are largely ineffective. Prohibition of internet poker is no exception.
2) Relative to the consumer surplus generated by online poker, the externalities caused are small. Government interventions should focus on cases where the opposite is true
3) From a moral perspective, it is inconsistent for the government to condone and profit from gambling on the one hand, while criminalizing private providers of Internet poker on the other.
4) Even under the government’s own laws, it would seem that there is little question that online poker should be legal.
Levitt notes that he also recently completed a paper intending to explore the skill v.s. luck argument as it relates to poker. Levitt gathered data from a sample (n=57) of poker tournaments and compared the average ROI for players that had been considered “skilled” based on data from previous years with data from the rest of the field (i.e., unknown players). Levitt found that on average the “skilled” players earned an ROI of positive 30 percent, while the unskilled earned an ROI of negative thirty percent.
(ROI represents the average return on an “investment.” In this case ROI is referring to the average amount of money a poker player wins as a percent of his/her investment, investment equaling the total sum spent in tournament entry fees. So if a player enters 10 tournaments at $100 each, and wins a total of $1500, his/her ROI would equal 50 percent, as the player wagered or “invested” $1000 to earn the $1500.)
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