The great economist Joseph Schumpeter believed that people are fallible creatures. Because of our fallibility, even the scientific method isn’t entirely objective. Ideology is reflected in, say, a scientist’s (or an economist’s) choice to research one topic instead of another, or the patterns they find (or miss) while interpreting the data:
It embodies the picture of things as we see them, and wherever there is any possible motive for wishing to see them in a given rather than another light, the way in which we see things can hardly be distinguished from the way we wish to see them.
–Joseph Schumpeter, History of Economic Analysis, p. 42
Tech:
And Speaking of the Inalienable Right to Pursuit of Happiness…:
“. . Happy Fourth to you all! Along with 90 (and still counting) other Internet law and IP law professors, I have signed a letter (drafted by Dave Levine, Mark Lemley, and me) in opposition to Sen. Leahy’s “PROTECT IP Act.” [The letter is posted below — the text of the bill, if you’re into that sort of thing, is posted here.]
PROTECT-IP Letter, Final”
China Wants to Buy Facebook:
“On Thursday, Business Insider reported that China is trying to buy “a huge chunk” of Facebook.”
Unlicensed: Are Google Music and Amazon Cloud Player illegal?:
“Amazon.com made waves in March when it announced Cloud Player, a new “cloud music” service that allows users to upload their music collections for personal use. It did so without a license agreement, and the major music labels were not amused. Sony Music said it was keeping its “legal options open” as it pressured Amazon to pay up.”
Secret Service to probe Fox News cyberattack:
“The U.S. Secret Service will investigate the hijacking of a Fox News Twitter account by hackers who posted false reports that U.S. President Barack Obama was assassinated.”
Global Warming / Environment / Energy:
Sulphur from Chinese power stations ‘masking’ climate change:
“The huge increase in coal-fired power stations in China has masked the impact of global warming in the last decade because of the cooling effect of their sulphur emissions, new research has revealed. But scientists warn that rapid warming is likely to resume when the short-lived sulphur pollution – which also causes acid rain – is cleaned up and the full heating effect of long-lived carbon dioxide is felt.”
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Last week, a divided Sixth Circuit Court of Appeals struck down the Michigan Civil Rights Initiative, which amended Michigan’s constitution in 2006 to ban racial discrimination and preferences in government contracts, employment, and education. In a 2-to-1 ruling, the judges claimed that the constitutional amendment violated the Constitution’s equal protection clause by eliminating racial and gender preferences. The two judges in the majority were appointed by Clinton; the dissenting judge was appointed by Bush.
The ruling contradicts common sense — how can the Equal Protection Clause require that people be treated unequally? — and turns the Constitution upside down. The ruling in Coalition to Defend Affirmative Action v. Regents of the University of Michigan also contradicts multiple prior court rulings over the years. A virtually identical state constitutional amendment in California, known as Prop. 209 or the California Civil Rights Initiative, was upheld in 1997 by another federal appeals court, the Ninth Circuit Court of Appeals, in Coalition for Economic Equity v. Wilson, a ruling that the Supreme Court declined to overturn. It was also upheld by the California Supreme Court in a 6-to-1 vote in Coral Construction, Inc. v. San Francisco (2010).
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In the Daily Caller, Chris Edwards has an interesting article about why government spending doesn’t “stimulate” the economy over the short-run or the long-run. Rather than growing the economy, stimulus packages are typically wasteful wealth transfers akin to a “leaky bucket,” which harm the economy in the long run, whether or not there are any short-run stimulus effects.
As Edwards notes, “Despite ongoing federal deficits of more than $1 trillion a year, many liberals are calling for more government spending to ‘create jobs.’” But if government spending creates jobs, it’s hard to understand why unemployment has soared, even as government spending has exploded in recent years: “Federal spending has soared over the past decade. As a share of gross domestic product, spending grew from 18 percent in 2001 to 24 percent in 2011.” As he notes, “government spending and taxing creates ‘deadweight losses,’ which result from distortions to working, investment and other activities. The CBO says that deadweight loss estimates ‘range from 20 cents to 60 cents over and above the revenue raised.’ Harvard University’s Martin Feldstein thinks that deadweight losses ‘may exceed one dollar per dollar of revenue raised.’” Due partly to this “leaky-bucket” effect, Texas A&M economist Edgar Browning concluded that “It costs taxpayers $3 to provide a benefit worth $1 to recipients,” and that “today’s welfare state reduces GDP — or average U.S. incomes — by about 25 percent.”
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Leaders of government employee unions must be feeling lonely these days. Across the country, Democratic state and local elected officials — traditional union allies — are asking their public employee unions for concessions, in order to bring their governments’ finances under control.
This week, Chicago Mayor Rahm Emanuel, a Democrat, presented the unions representing city employees with a tough choice: Agree to cost-saving concessions or endure layoffs. Emanuel said he had identified the first 625 employees who would face layoffs if the unions do not agree to concessions.
This trend could continue if voters reward those politicians who impose budget discipline, taking on entrenched union interests. As William Kovacs and I note in the new issue of Labor Watch, economic reality is finally winning out over politics in some areas.
To gain some measure of control over their runaway public ?nances, Democrat-controlled states are acknowledging that they will have to make tough decisions that Big Labor will hate. Despite accepting millions of dollars in union campaign contributions, some Democratic of? ceholders are ignoring Big Labor’s demands. They are seeking budget cuts and union concessions.
“Public unions have a symbiotic relationship with the Democratic Party,“ observes Manhattan Institute senior fellow Daniel DiSalvo. “They provide essential campaign dollars and boots on the ground to Democratic candidates. … Therefore, most efforts to alter collective bargaining rules, to give government managers greater autonomy to innovate, or to reduce the costs of compensation, are likely to come from Republicans.”
However, DiSalvo has noticed that larger changes are taking place. Writing in The Washington Examiner, he argues that, “[T]here are outside forces that may make reform inevitable. Global competition and technological innovation will demand it. That is if the huge unfunded liabilities for pensions and health care don’t catch up with state and local governments ?rst.”
For more on the divisions between Democrats and government employee unions, see here.
Back in April of this year Massachusetts Attorney General Martha Coakley issued emergency regulations prohibiting Internet gambling at “cyber cafés” and “phone card businesses,” claiming the regulations were needed to “protect consumers.” Now, despite complaints from businesses targeted by these regulations, Coakley has instituted a permanent ban on the operation of the establishments, in particular “where a gambling purpose predominates over the bona fide sale of bona fide goods or services.” Interestingly this ban comes at a time when Massachusetts legislature, facing tight economic times, has cut upwards of $3 billion from the state’s budget since fiscal year 2009. Projections are the 2012 budget will continue that trend.
The aforementioned circumstances make the decision to ban these businesses all the more confusing. Colleagues here at CEI have discussed at length the nonsensical nature of these regulations and the benefits that can accrue by legalizing Internet gambling. In this particular case, there are questions as to whether the activities were violations of Massachusetts law in the first place, as Coakley claims. Legislators and the governor meanwhile are engaged in “closed-door” sessions considering the approval of new casinos and the placement of slot machines at race tracks. There’s no inconsistency there.
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Yesterday, Senate Republicans successfully blocked a Finance Committee meeting to consider free trade agreements (FTA) with Korea, Colombia, and Panama.
The reason? President Obama and many Democrats have coupled their support for the trade agreements with the inclusion of funding for the employment Trade Adjustment Assistance (TAA). Most Republicans are in support of the trade agreements, but disapprove the inclusion of TAA. As Sen. Orrin Hatch (R-Utah) explained, “If the president and his Democratic allies want to pass TAA, go ahead and pass TAA. Have at it. Let it stand on its own accord like we always have in the past. But don’t attach it to these agreements.”
The Colombia free trade agreement was signed in 2006 and the Panama and South Korea agreements were signed in 2007, however, they must pass Congress before they can take effect.
Under a special set of rules known as “fast track” trade promotion authority, free trade agreements can be negotiated by the president, but must be sent to Capitol Hill for approval. Congress, meanwhile, must approve or disapprove of an agreement in its entirety. The agreement cannot be amended.
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Amazon.com is standing strong against California’s attempts to extort money from the online bookseller. Just a few days ago, Governor Jerry Brown (whose aura smiles and never frowns) signed a bill into law aimed at extracting taxes from online retailers. As it is now, the state requires consumers to keep receipts of online purchases, calculate sales tax on those purchases, then send a check to Sacramento. Obviously, this policy proved difficult to enforce.
California’s Board of Equalization (the sinister-sounding body charged with collecting the state’s sales tax) issued a stern warning to Amazon and its comrade-in-arms Overstock.com: pay up or we’re coming after you. California’s case against the retailers rests on going after affiliates and subsidiaries in the state. Amazon has already begun cutting affiliates like gangrenous limbs. California still thinks the law will work; fortunately, they might be wrong, as a Declan McCullagh of CNET writes:
The only problem for enthusiastic politicians and tax collectors is that the new law might not be entirely, well, legal.
In 1994, a California appeals court rejected state tax collectors’ arguments when they tried a similar approach. The case involved a Colorado-based company, Current, which sold greeting cards, gift wrapping paper, and so on through the mail. It had no contacts with California.
Current’s parent company, Deluxe Corp., did do business in California. The state Board of Equalization, operating under the theory that the finer points of corporate structure weren’t that relevant, levied $344,088 in taxes on Current.
The appeals court tossed out that argument, saying that courts in Pennsylvania, Illinois, and Connecticut had considered similar cases and had all ruled against the tax collectors. Those decisions were “persuasive,” a three-judge panel unanimously ruled, and Current and Deluxe “did not have integrated operations or management” and were “separate and distinct corporate entities.”
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A California Democrat is seeking to expand the bureaucracy of the FCC in order to protect Americans from dropped calls. Rep. Anna Eshoo (D-Calif.) proposes making regulations that would mandate phone companies to “accurately” inform customers about the specifics of their advertised “high” or “lightning-fast” network speeds. Additionally, the bill would enforce minimum data speeds upon networks regardless of the many factors affecting performance at any given time. In Eshoo’s shortsighted crusade against cell phone frustration, she ignores the costly burden of these new requirements, which will only inhibit business and slow innovation in a sector packed with potential to advance. Ultimately, isn’t it the customer’s job to do adequate research into a product before buying it? I suppose someone had one too many dropped calls and is out for revenge.
Eshoo’s logic is downright silly. If she is going to attack a blatantly subjective advertising tactic used by phone companies and every other business in the world, then she might as well investigate whether neighborhood pizza shops accurately represent their pizza when they claim it is “best in the world,” whether action figures are truly “loads of fun” as the brands say in the commercials, or whether Lucky Charms are actually “magically delicious.”
Perhaps the most disturbing part of the proposal, however, is the section that seems to call for price controls, as Politico reports that the bill “would also require the Federal Communications Commission to evaluate the speed and price of high-speed wireless data service.” I’ll bet Ms. Eshoo thinks that people are slaves to the phone companies too… who are incapable of changing providers if they feel one has misrepresented its product.
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