January 2012

2011 Federal Register Tops 70,000 Pages

by Ryan Young on November 10, 2011

in Regulation

Yesterday, the 2011 Federal Register hit the 70,000 page milestone. This is just the 14th time in the Register‘s 76-year history the unadjusted page count has gotten that high. And remember, it’s still November. It’s on pace to top 80,000 pages.

To be more precise, assuming 250 working days this year, the projected page count is currently 80,641. That would place 2011 in top-five territory for all-time unadjusted page counts. President Carter set the record in his final year with 87,012 pages.

Adjusting that count for thousands of blank pages and jumps yields 73,258 pages, a then-record that was broken five times by George W. Bush and once (so far) by Barack Obama. He set the new record adjusted page count last year with 81,405.

The usual caveat applies here. Federal Register page counts are not a perfect measure of regulatory activity. A rule that costs little can ramble on for dozens of pages; a rule costing billions can fit on a single page. But when page counts threaten all-time records, it’s a pretty good indicator that the regulation industry is booming.

In short: the next time someone complains about America’s unregulated cowboy capitalism, you should ask them where such a thing might actually be found.

Today’s Links: November 9, 2011

by Nicole Ciandella on November 9, 2011

in Odds & Ends

OPINION

MICHAEL GRAHAM: “Obama Has a Lot to Learn”
“In this political moment, the three big lies are ‘Social Security is solvent,’ ‘Everyone should go to college,’ and ‘Honey, I swear I don’t know whose thong that is in Herman Cain’s glove box.’”

TIM CAVANAUGH: “‘They About Had an Orgasm in Biden’s Office When We Mentioned Solyndra‘”
“Newly released Solyndra emails reveal that our nation’s destiny is in the hands of men who use the Comic Sans font in email.  The exchanges between George Kaiser, a billionaire for President Obama, and Solyndra board member Steve Mitchell, manager of Kaiser’s Argonaut Private Equity fund, also seem to contradict claims – made  by both Kaiser and the White House – that Kaiser had never discussed Solyndra with Obama Administration officials. ”

MEGAN MCARDLE: “A Puzzling Model of Negative Interest Rates”
“It is fascinating to read how the sudden dearth of labor completely upended the old economic hierarchy, impoverishing the aristocrats and fattening the purses of the peasants.  The aristocrats sued for the enforcement of the old laws, but it did them no good; the peasants still didn’t show up to work their lands, which made their vast landholdings suddenly worth much less.)”

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A Backdoor Tax on the Poor

by Ryan Young on November 9, 2011

in Economy, Politics as Usual, Regulation

For some time now, the IRS has been flirting with what’s called a return-free system. Instead of you having to sit down and fill out your 1040, the IRS would fill it out for you and tell you how much you owe.

It’s being touted as a time-saver. But it would also raise taxes on the poor. No matter how much personal information the IRS collects on someone, it is almost certain to miss deductions that person qualifies for.

There is also the tiny little conflict of interest that occurs when one’s tax collector is also one’s tax preparer. In an op-ed in The Hill, I explain why people of all political stripes should oppose a return-free program:

A return-free tax system has something for everyone to hate. Progressives should be up in arms over its disproportionately hurting the poor. So should privacy advocates; the IRS does quite enough snooping as it is. And conservatives should oppose return-free because, even though tax rates would remain unchanged, it is still a tax increase.

There are much better ways to reduce the 26-hour burden Americans face every year. The obvious solution is to simplify the 70,000-page tax code.

Read the whole thing here.

Cheers to Washington State Voters

by Angela Logomasini on November 9, 2011

in Features, Nanny State, Personal Liberty

Post image for Cheers to Washington State Voters

Yesterday, Washington State voters passed an initiative to privatize spirit sales and facilitate a more open market. It essentially breaks up the state’s mandatory “three-tier system” for alcohol distribution. Michelle Minton and I have written about it here and here.

Now that the initiative has passed, the state can start issuing licenses to grocery stores and Costco to sell spirits beginning in June 2012. In addition, it allows Costco to buy direct from producers, centrally warehouse the liquor, and then distribute to its stores — passing savings on to consumers. Under Washington State Law, lawmakers cannot modify the initiative for two years, preventing the legislature from reversing it before implementation. Hopefully, within two years time, state lawmakers will be open to expanding the right to sell spirits to smaller shops. The new law only grants that right to those who eventually buy existing government stores and retailers with 10,000 or more square feet of space.

Costco and supermarkets can sell all kinds of alcohol in some states, but some limit private retailers to sell beer or beer and wine. See Costco’s list here. Now Washington retailers can sell all three! Costco may take its battle to other states… perhaps starting with Oregon. Let’s hope they prevail in Oregon and beyond.

Mississippi Voters Pass Initiative Restricting Eminent Domain Powers

by Marc Scribner on November 9, 2011 · 1 comment

in Economy, Personal Liberty, Property Rights

Yesterday, voters in Mississippi overwhelmingly passed Initiative 31, which will limit eminent domain condemnations for private benefit. Despite opposition from Republican Governor Hailey Barbour, 73 percent of voters supported amending the state constitution to prohibit that any “property acquired by the exercise of the power of eminent domain under the laws of the State of Mississippi shall, for a period of ten years after its acquisition, be transferred or any interest therein transferred to any person, non-governmental entity, public-private partnership, corporation, or other business entity” [PDF].

So following condemnation, the government condemner cannot transfer the property to any private party for 10 years. Initiative 31 granted the following exceptions:

(1) The above provisions shall not apply to drainage and levee facilities and usage, roads and bridges for public conveyance, flood control projects with a levee component, seawalls, dams, toll roads, public airports, public ports, public harbors, public wayports, common carriers or facilities for public utilities and other entities used in the generation, transmission, storage or distribution of telephone, telecommunication, gas carbon dioxide, electricty, water, sewer, natural gas, liquid hydrocarbons or other utility products.

(2) The above provisions shall not apply where the use of eminent domain (a) removes a public nuisance; (b) removes a structure that is beyond repair or unfit for human habitation or use; (c) is used to acquire abondoned property; or (d) eliminates a direct threat to public health or safety caused by the property in its current condition.

This is a huge step forward in protecting the rights of Mississippi property owners, although George Mason University law professor Ilya Somin explains why it isn’t perfect (note the above exceptions). Governor Barbour has long opposed enhancing property rights protections on the grounds that eminent domain condemnations for private benefit are necessary to promote economic growth. Reason magazine’s Damon Root wrote about crony capitalist Barbour’s veto of reform legislation in 2009.

In 2010, I explained in a CEI OnPoint whitepaper [PDF] why policy makers should be extremely skeptical of eminent domain condemnations used to promote planned redevelopment and economic growth. It was the U.S. Supreme Court’s infamous 2005 Kelo v. New London decision that set off a nationwide movement to restrict takings abuse, and Mississippi becomes the 44th state to react to the Supreme Court’s awful ruling. Now in 2011, the Kelo site cleared to make way for a planned mixed-use development project (since shelved) still remains empty.

Smokers’ Opportunity to Quit Smoking Opposed by Blinkered Anti-Tobacco Zealots

by Hans Bader on November 8, 2011 · 2 comments

in Health and Illness, Nanny State, Regulation, Sanctimony

As The New York Times‘ John Tierney notes, a tool to quit smoking and save lives is being blocked by anti-tobacco zealots:

If you want a truly frustrating job in public health, try getting people to stop smoking. Even when researchers combine counseling and encouragement with nicotine patches and gum, few smokers quit. Recently, though, experimenters in Italy had more success by doing less. A team led by Riccardo Polosa of the University of Catania recruited 40 hard-core smokers — ones who had turned down a free spot in a smoking-cessation program — and simply gave them a gadget already available in stores for $50. This electronic cigarette, or e-cigarette, contains a small reservoir of liquid nicotine solution that is vaporized to form an aerosol mist. . . . But there’s a powerful group working against this innovation — and it’s not Big Tobacco. It’s a coalition of government officials and antismoking groups who have been warning about the dangers of e-cigarettes and trying to ban their sale.” . . .

“E-cigarettes could replace much or most of cigarette consumption in the U.S. in the next decade,” said William T. Godshall, the executive director of Smokefree Pennsylvania. His group has previously campaigned for higher cigarette taxes, smoke-free public places and graphic warnings on cigarette packs, but he now finds himself at odds with many of his former allies over the question of e-cigarettes. “There is no evidence that e-cigarettes have ever harmed anyone, or that youths or nonsmokers have begun using the products,” Mr. Godshall said. On a scale of harm from 1 to 100, where nicotine gums and lozenges are 1 and cigarettes are 100, he estimated that e-cigarettes are no higher than 2.

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Moral Hazard in Super Committee

by Daniel Rivera Greenwood on November 8, 2011

in Politics as Usual, Zeitgeist

The Joint Select Committee on Deficit Reduction, commonly referred to as the Super Committee, is a bipartisan committee looking for ways to prevent a sovereign default from occurring in the United States, by cutting $1.5 trillion from the 2012-2021 budgets. While in the face of current events this may seem sensible, politicians are taking advantage of the secretive nature of the Super Committee to introduce costly new programs in bills.

Recently, 27 House members sent a letter to congressional Super Committee co-chairs last week, voicing concerns that members of the agricultural committee were using the deficit reduction process to keep and introduce new programs into the Farm Bill, without any sort of oversight. The letter (which can be found here), signed by representatives from both parties, mentions the lack of congressional review and oversight stemming from the fact that “recommendations [from the Super Committee] are not subject to amendment or filibuster. Congress implemented these rules to dull the pain of politically contentious but fiscally responsible measures. Yet, it has become apparent that some believe they can create new programs and entitlements with limited Congressional scrutiny and input.”

It is alarming that even when the United States government faces large budget deficits (which has forced Congress to raise its debt ceiling), congressmen try to sneak in costly amendments, regulations, and earmarks that will benefit only a few individuals in privileged areas. The nature of the political system rewards politicians who look for irresponsible and unjust “pork” for their districts, while fiscally responsible members tend to be penalized by their own voters. This is the tragedy of the political system, and the result of large national policies that create concentrated benefits, but diffused costs.

Today’s Links: November 8, 2011

by Nicole Ciandella on November 8, 2011

in Odds & Ends

OPINION

RICHARD EPSTEIN: “Three Cheers For Income Inequality”
“As recent polling data reveals, the American public is driven by two irreconcilable emotions. The first is a deep distrust of government, which has driven the approval rate for Congress below ten percent. The second is a strong egalitarian impulse that directs its fury to the top one percent of income earners. Thus the same people who want government to get out of their lives also want government to increase taxes on the rich and corporations.  They cannot have it both ways.”

MARIO VARGAS LLOSA: “Literature and the Search for Liberty”
“The blessings of freedom and the perils of its opposite can be seen the world over. It is why I have so passionately adhered to advancing the idea of individual freedom in my work. ”

ROGER PARLOFF: “Uncle Sam’s New Crusade Against Banks”
“As if the banks didn’t have enough problems. Uncle Sam is now suing 18 of the country’s largest banks for selling $200 billion in toxic mortgage-backed securities to Fannie Mae and Freddie Mac. Columbia Law School professor Jack Coffee termed the action ‘the most aggressive attempt by federal authorities to litigate financial claims since the S&L crisis of the 1980s.’”

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Liquor Privatization Would Edge Washington State Toward Freedom

by Michelle Minton on November 8, 2011 · 3 comments

in Features, Nanny State, Personal Liberty, Regulation

Post image for Liquor Privatization Would Edge Washington State Toward Freedom

Today voters in Washington State will finally have their say in whether or not to get the state out of the business of selling liquor. For months, advertisements on both the “yes” and the “no” side of the fight have filled the media. Many  observers lamented how much money has been spent on the issue. But in Washington State, this isn’t exactly new. For two years running, supporters and detractors of measures to sell off the state-run liquor store and liquor wholesaling business have shoveled millions of dollars into advertisements. This year’s attempt, Initiative 1183 has provoked a flood of cash like never before. Interested parties on both sides have given millions of dollars to sway voters.

The reasons are obvious: Wholesalers believe the measure could be the beginning of the end of the government propping up their business, and big box retailers hoping to earn a license to sell alcohol believe the passage of the bill will result in a significant increase in profit. But what is the best scenario for the consumer?

Washington, one of only 12 states that continue to run the wholesale and retail liquor operations (six additional states control just wholesaling operations), has explored the idea of getting government out of the liquor business in various ways for a number of years. Last year, voters could choose between two separate initiatives on the ballot that would have privatized the state liquor system in one way or the other. Both initiatives failed to garner enough support for passage, but one only fell just short. This year’s effort, I-1183, would sell the state-owned liquor wholesaler as well as the state-run liquor stores, allowing private wholesalers and retailers to compete for Washington’s liquor dollars. Two elements of the proposal have made this latest initiative particularly worrisome for some in the business of booze.

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Surface Transportation Board Rejects Misguided Push to Re-Regulate the Railroad Industry… For Now

by Marc Scribner on November 7, 2011

in Mobility, Regulation

Late last week, the Surface Transportation Board (STB) refused [PDF] to initiate a rulemaking (Ex Parte 711) proceeding that was petitioned by the shippers’ primary lobby group, the National Industrial Transportation League (NITL). This docket was opened following the conclusion of an informational proceeding (Ex Parte 705) on competition in the railroad industry. The STB deferred a decision on whether or not to start a rulemaking proceeding while it continues to weigh the arguments and evidence submitted into the Ex Parte 705 docket.

The Ex Parte 711 proceeding called on the STB to force railroads into reciprocal switching arrangements for some so-called “captive shippers.” Essentially, the NITL wanted to force major U.S. railroads to switch each others’ traffic, arguing that this would enhance competition. The problem, as we at CEI pointed out in our comments to the STB, is that network industries such as railroads are totally different than your typical product industry and that flawed, traditional “pro-competitive” antitrust arguments are completely meaningless in this context. The railroad industry was deregulated 30 years ago after excessive federal regulation had nearly destroyed it. Most observers consider today’s reinvigorated railroad industry a major deregulatory success story. But not those who used to face government-imposed, sub-market prices. Ever since 1980′s Staggers Act, which deregulated the U.S. railroad industry, the same “captive” shippers have been complaining that they are being treated unfairly by the railroads.

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