Gary Howard

Consumer Reports, “National Snitch”?

by Gary Howard on September 2, 2009 · 1 comment

in Environment, Legal, Odds & Ends, Personal Liberty

This week, CEI criticized Consumer Reports for reporting a high-performing shower head to federal authorities-not because it is defective or fraudulently advertised, but because it exceeds government limits on shower head water flow.  CEI General Counsel, Sam Kazman had this to say about the review:

“Consumer Reports has it backwards, [...]Its duty is to consumers, not bureaucrats. It should not be acting as a nosy bathroom cop, trying to toss good products in the slammer just because they violate some intrusive federal regulation. More basically, people ought to be able to use whatever shower fixtures they want, just like they can decide how long a shower to take. This is a really victimless crime.”

Amanda Carpenter of the Washington Times commented on the issue in Tuesday’s paper.

“Sound the alarm. Consumer Reports has alerted the environmental authorities about a law-breaking shower head.”

EPA, meanwhile, is planning to reduce shower head flow even more in the near future.  Mr. Kazman stated that Consumers Union, the magazine’s publisher, “will probably support this, because it, like the federal government, doesn’t care if consumers get soaked.”

Government gets ‘emergency’ control of the internet in new Senate bill

by Gary Howard on August 28, 2009 · 1 comment

in Legal, Personal Liberty, Tech & Telecom

This story just hit the Drudge Report’s front page.  Declan McCullagh at CNET writes today about the latest revision of S.773, a bill that would give the president “emergency control” of the internet in case of a “cybersecurity emergency.”  Wayne Crews, CEI Vice President for Policy,  released a statement on the naming of the cybersecurity chief and wrote an article on this back in May.  See an excerpt below:

Policy makers should avoid collectivizing and centralizing risk management, especially in frontier industries like information technology. Yes, we need government-backed “police forces” to protect private networks and infrastructure, but we also need the “barbed wire” and “door locks” which private companies continuously compete with each other to improve. When government overrules market competition for information/electronic security, it creates barriers to innovative private security solutions. We become less secure, not more.

Some reports indicate that the administration and Congress are seeking government authority over private networks-like power grids and computer networks-in the event of breaches. The very term “cyber” at once means everything and therefore nothing: American telecommunications, the power grid; virtually anything networked to some other computer is fair game to a new czar. The dominant tenor of the cybersecurity debate today is toward greater federal control over private infrastructure.

Washington has a proper role. It entails protecting government’s own networks and setting internal security standards, not regulating private networks. It involves arresting computer criminals and avoiding creating threats to data security in the form of data retention mandates, national ID schemes, proposals to re-regulate encryption, and czars that set terms for all they survey.

Security is an industry, and industries-and abstract concepts like “technology”-do not need czars in Washington. Innovation in information security and privacy protection do not flow from D.C. Rather, a government tech czar would likely grow in “stature” as a target for lobbyists. A federal technology chief could all too easily become an agent for establishing government authority over frontier technologies.

Both suppliers and customers increasingly demand better security from all firms. Improving private incentives for information sharing is at least as important as greater government coordination to ensure security and critical infrastructure protection. That job will entail liberalizing critical infrastructure assets-like telecommunications and electricity networks-and relaxing antitrust constraints so firms can enhance reliability through the kind of “partial mergers” that are anathema to today’s antitrust enforcers.

Private cybersecurity initiatives will gradually move us toward thriving liability and insurance markets for cutting-edge sectors. Heavy-handed cyber-czar gestures and legislation cannot address the lack of authentication and inability to exclude bad actors that is at the root of today’s cybersecurity problems.

Like everything else in the market, security technologies-from biometric identifiers to firewalls to encrypted databases-and cybersecurity services-from consulting to liability insurance to network monitoring-benefit from competition. Corporate information and security officers deal with cybersecurity concerns every day. It’s not clear what government could really fix-but it could break a lot.

See the statement release here.

EPA Whistleblower’s Office May Get Shut Down

by Gary Howard on August 26, 2009

in Environment, Global Warming, Politics as Usual

Following a whistleblower report that criticized a global warming rule, the Environmental Protection Agency (EPA) is reportedly considering shutting down the agency office in which the critical report originated.  Dr. Alan Carlin, the senior analyst whose report EPA unsuccessfully tried to bury, worked in EPA’s National Center for Environmental Economics (NCEE).  According to a story in last Friday’s Inside EPA, the agency is now considering shutting that office down.
The Washington Times ran an editorial yesterday, critical of the potential shut down of the internal review office by the EPA.
In June, the Competitive Enterprise Institute made waves by releasing internal e-mails from the Environmental Protection Agency. In those messages, a top administrator told a key researcher that the researcher’s new report would not be released. Why? Because it does “not help the legal or policy case” for a controversial decision to treat global warming as a health hazard. In short, because researcher Alan Carlin’s conclusions differed from the administration’s political agenda, his research was ignored.
CEI General Counsel Sam Kazman appeared on the G. Gordon Liddy radio show yesterday to talk about the scandal, and the EPA’s plans to shutter the office that produced the controversial report.  Kazman reiterated what he said in a statement on Monday about the issue:
“Economists are the most likely professionals within EPA to examine the real-world effects of its policies,” said Kazman.  “For this reason, the NCEE is a restraining force on the agency’s out-of-this-world regulatory ambitions.  EPA would love to get that office out of the way, especially since it has within it civil servants like Dr. Carlin, who are willing to expose the truth about EPA’s plan to restrict energy use in the name of global warming.”
Blogger Michelle Malkin also takes the EPA to task for the move:

Over the past two months, I’ve chronicled the plight of EPA whistleblower Alan Carlin at the hands of Team Obama’s dissent-stiflers.  My friends at the Competitive Enterprise Institute first blew the lid on the story and continue to monitor the war on EPA watchdogs.  The latest development? EPA may get rid of a key internal review office that has provided too many inconvenient truths

Stay tuned for more developments in this story.

R.I.P. Bob Novak: 1931-2009

by Gary Howard on August 18, 2009

in Odds & Ends

We have recently learned about the passing of esteemed columnist Robert Novak.  Kenneth Tomlinson has a column paying tribute to Novak today at Human Events online that may sum up how many feel about him.

Throughout my life, I followed Bob Novak journalism like I followed the careers of my favorite sports figures. Later, as editor-in-chief of Reader’s Digest, I would become one of Novak’s nominal bosses, though the fact was that every time I worked with him or was associated with him in any way, it was I who felt privileged. Few journalists have ever affected this country like Bob Novak.

Tim Carney, a former CEI Warren Brookes Journalism Fellow and former Novak reporter, also has a column about Novak today Human Events.  He had  this to say about his former boss:

For many of us, though, Novak’s resistance to the calls for conformity, his constant openness to new ideas and facts, and his willingness to change his mind set a crucial example.

Novak was a friend to CEI’s founder and president Fred Smith, a mentor to a few of CEI’s current and former employees and allies, as well as a journalist well-respected by both sides of the political divide.  Condolences go out to his family.  He will be missed.

UBS and IRS reach an “agreement”

by Gary Howard on August 13, 2009 · 1 comment

in International, Legal, Personal Liberty

Yesterday my colleague at CEI, John Berlau, released a statement about the recently announced deal between Swiss bank UBS and the IRS.  It is being reported that the bank may end up turning over at least a portion of the over 50,000 names just to get the U.S. off its back.  As it seems, any agreement reached in this case will be the result of UBS being bullied by the IRS to divulge its customers names simply because it says so.  The potential slippery slope is evident.  In this scenario, the Federal government can persuade foreign companies to ignore the laws of their home nations basically by force.  Berlau makes the point that I have  been making in all of my blog posts on this issue, that advocates of civil liberties:

“should be alarmed by the U.S. government’s sweeping disregard of privacy interests in its demands to the Swiss”

These actions by Federal authorities are setting a bad precedent for the privacy of American citizens.  When the government can demand to know every detail of your financial life, what is there to stop it from exerting control over it? In addition, as I have said in past posts (and here), the disregard for the sovereignty of fellow nations exhibited by these demands is also concerning.  I agree with Berlau in his assessment that being in a similar situation, the U.S. might not be so willing to allow American companies to ignore its laws in order to acquiesce to another nation’s demands.

If  UBS stood firm by making an agreement that doesn’t violate Swiss law or the privacy rights of those U.S. citizens,  maybe long-standing privacy protections will hold up for now.  But it is doubtful this is the case.  It is more likely that UBS has capitulated, at least to a degree, and the slope begins to slide into scary territory.  Unfortunately, some will frame this in class warfare terms, and declare that we should have no sympathy for folks with secret Swiss bank accounts.  Because its unfair, accordng to the feds, that they are cheating and getting out of paying taxes like the rest of us have to.  Except for the fact that we don’t know if that is completely true, and maybe the question we should be asking is whether the taxes we pay are fair at all.

Trustbusters should call off fishing expedition in Microsoft-Yahoo deal

by Gary Howard on August 11, 2009

in Legal, Tech & Telecom

In today’s Seattle Times, CEI Information Policy Analyst Ryan Radia and CEI Policy Fellow Jonathan Hillel talk about the U.S. Senate Antitrust Subcommittee’s threat of “careful scrutiny” over the recent Microsoft-Yahoo deal.  Read the piece here or see below.

MICROSOFT and Yahoo want to join forces in Internet search to better compete against Google. But first, they need the blessing of government antitrust enforcers. Senate Antitrust Subcommittee Chairman Herb Kohl, D-Wis., already has threatened “careful scrutiny” of the deal. But trustbusters should not go fishing for problems in the Internet search market. In the relentlessly fast-moving digital economy, government intervention contorts the market and ultimately harms consumers.

Under their proposed decadelong pact, Yahoo searches will be powered by Microsoft’s Bing search engine, which launched this June. The two search firms will maintain separate Web sites, but Microsoft will administer the technical side of both. Microsoft will also gain access to Yahoo’s vast volume of searches and query data. In exchange, Yahoo will receive 88 percent of ad revenues from searches performed on its own site.

As Steve Lohr of The New York Times noted recently, the scale advantages resulting from the arrangement will be significant. By teaming up with Yahoo, Microsoft will gain a much larger share of Internet searches, helping it attract a bigger slice of the $11 billion search advertising market.

An equally important benefit of the deal is “data scale.” Search engines are forever tweaking their underlying algorithms using complex statistics and machine learning. More searches mean more data can be mined – and, therefore, more accurate results. This, too, can fuel ad sales by making targeted placements more attuned to user preferences.

Both Yahoo CEO Carol Bartz and Microsoft Chief Steve Ballmer have admitted that scale is the driving force behind the deal. To antitrust enforcers, however, “scale” is often a major red flag. This is because the Justice Department assumes that in markets where competitive advantage stems from firms’ size and market share, the consolidation of existing competitors thwarts the entry of newcomers.

Scale may make Microsoft and Yahoo more competitive, but it hardly guarantees them success. Indeed, history tells us that innovation, not scale, is the one true silver bullet in Internet search. Google earned its crown nearly a decade ago by revolutionizing search technology, devising the revolutionary PageRank system for indexing the Web and toppling AltaVista in the process. More recently, Microsoft’s Bing has made inroads by combining a clever cataloging system with alluring design.

In the same way, the firm that ultimately dethrones Google will likely do so by offering superior search technology, not simply more of it.

The Microsoft-Yahoo deal has also raised concerns over “network effects.” This refers to the phenomenon whereby a technology becomes more valuable to its users as the size of its user base grows. Concerns over network effects were at the center of Microsoft’s antitrust woes beginning in the late 1990s.

Yet online search is not a network market. The reason Google attracts so many users is not because it already has lots of them, but because it gives the best search results. Once again, innovation, not scale, is the real trump card in the Internet search market.

Farhad Manjoo of Slate recently observed that search engines including Cuil, Wolfram Alpha, Topsy and Bing all emerged as viable players in Internet search despite Google’s supposed dominance. To be sure, none of these search engines have yet threatened Google. But since Web users can switch search engines with a few clicks of the mouse, sustaining market share over time is impossible without continual innovation.

Antitrust policing lags far behind the rapid-fire evolution of dynamic Internet markets. It is no accident that Web search depends on innovation; rather, this is the very nature of the modern information economy. The Justice Department should stop worrying about scale and keep its hands off the Internet search market.

Ebell ranked in top 10 of most-respected global warming skeptics

by Gary Howard on July 31, 2009

in Environment, Global Warming, Odds & Ends

CEI Director of Energy and Global Warming Policy, Myron Ebell, has been ranked number three on Business Insider’s “The 10 Most Respected Global Warming Skeptics.”  See an excerpt below.

Myron Ebell may be enemy #1 to the current climate change community. Ebell works for the free-market thinktank Competitive Enterprise Institute and, according to his own bio, has been called a climate “criminal” and a leading pusher of misleading ideas.

UBS v. IRS saga continues

by Gary Howard on July 29, 2009

in International, Legal, Personal Liberty

Today, Wall Street Journal reports that a Miami court has set meeting Friday between the IRS and UBS to look at where they are in settlement negotiations over the case of the IRS demanding that the Swiss bank turn over the names of more then 50,000 U.S. citizens alleged to be tax evaders.

As I have said in past posts on this issue (in which I have been admittedly hard on UBS-but with a purpose), and as UBS seems to now be reiterating, turning over those names would be in contradiction of  Switzerland’s banking privacy laws and its legal view of tax evasion.  Banks in Switzerland are not required to ignore their country’s banking secrecy laws simply because another nation requests them to do so.  This is a sticking point for the IRS, who is using the DoJ to try and get after UBS.  Another factor in the fight to get UBS to crack is the growing pressure from other nations and international NGOs like the Organization for Economic Cooperation and Development (OECD) with its agenda, and Financial Action Task Force (FATF) with its “retaliatory measures,” mentioned in earlier posts. These groups are using the straw men of money laundering and terrorism to force Swiss capitulation.  It has reached a point of absurdity.  Aside from the U.S. government’s attempts at intimidation, the German government even suggested placing Switzerland on the international blacklist.  I guess “Everybody Hates Switzerland” now, until they can get their hands on that money.

Of course, the average citzen is not concerned about the rights of those who can afford to have swiss bank accounts.  Although they should be.  This not only raises concerns about financial privacy, it also raises concerns about sovereignty, civil rights, and a host of other things.  A person’s financial records should be considered as sacred as their medical records.  However, we may soon be entering an era where both are collected and archived by the government.  Only a person who believes Stalin was an OK guy would think that was a good idea.

Justice Dept. Should Leave the Microsoft-Yahoo Search Deal Alone

by Gary Howard on July 29, 2009

in Economy, Legal

Statements of Ryan Young and Wayne Crews

Washington, D.C., July 29, 2009 – Today, Microsoft and Yahoo announced a ten-year partnership of their search businesses in order to better compete against Google. The Department of Justice, citing antitrust concerns, is likely to investigate the deal before allowing it to go through. Competitive Enterprise Institute technology policy experts Wayne Crews and Ryan Young argue that regulators can best serve consumer interests by leaving well enough alone.

Ryan Young, Fellow in Regulatory Studies:

“What is there to investigate? Microsoft and Yahoo are trying to outcompete Google. To succeed, they will need to put together the best search engine they can. The firms believe their announced partnership will help them achieve that goal. They should be allowed to try – their own money is at stake if they fail. Either way, Internet users stand to benefit. Bing and Yahoo Search should improve from the proposed partnership, which will also force Google to make its own search engine better, lest it be left behind. This is how a competitive, contestable market works. The goal of antitrust policy is to benefit consumer welfare, but there is nothing regulators can do to make an already fiercely competitive market even more so.”

Wayne Crews, Vice President for Policy and Director of Technology Studies:

“This administration is already suspicious of allegedly ‘dominant’ firms in the high tech sector – but consumers are better off when regulators let markets evolve naturally, rather than guiding them from above. The Microsoft-Yahoo alliance has the potential to offer great value to consumers. The dangers of arbitrarily blocking such voluntary business arrangements, or needlessly delaying them, are severe. Regulatory intervention in the high-tech sector thwarts the natural evolution of the market. Worse, it distorts the response of competitors. Antitrust investigations steer the market in unnatural directions, creating instabilities in entire industry sectors.

“Consumers have more to fear from government bureaucracies that have the power to stop progress cold than they do from free enterprise looking to create the next big thing. Should the Microsoft-Yahoo partnership not pan out, rivals, partners, consumers, investors, advertisers, and even global competitors are perfectly capable of dealing with any challenges to competition. Consumers stand to lose if Washington gets involved.”

Radia reacts to Zittrain in NY Times

by Gary Howard on July 27, 2009

in Tech & Telecom

CEI Information Policy Analyst Ryan Radia responds to Jonathan Zittrain’s “Lost in the Cloud” in today’s New York Times.  Read it here or see below.

To the Editor:

In discussing the privacy risks that have accompanied the growth of the Internet, Prof. Jonathan Zittrain rightly bemoans the willingness of governments to violate individuals’ privacy rights. Unfortunately, he proposes new legal restrictions that would stifle online innovation while doing little to enhance consumer privacy.

Mr. Zittrain proposes a “fair practices law” that would require companies to release personal data back to users upon request. Such a rule may sound workable, but purging specific data across globally dispersed server farms is no simple endeavor. Who is to pay for the implementation of such privacy procedures – especially for free services like Facebook or Twitter that have yet to turn a profit?

A better approach to online privacy is to educate users on safeguarding personal information. Ultimately, however, the only foolproof approach to protecting sensitive data online is to simply not disclose it.


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