OPINION

SHIKA DALMIA: “GM Profits, But Taxpayers Are Still On the Hook”
“Three years after being rescued by a taxpayer bailout, General Motors (GM) last week announced some rather ambitious profit targets for 2012. But even if it meets these targets — a big if — taxpayers should not wait on one foot to recover their remaining “investment” in the company.”

TYLER COWEN: “Break Up the Banks? Here’s an Alternative”
“The more a bank is legally limited in terms of easily measurable size, the more it may resort to off-balance-sheet activities to make up the difference. ‘Breaking up big banks’ may really mean making these less-transparent bank activities much more important to a bank’s fate. [...] There is a better alternative: expanding the liability for major financial institutions. If a shareholder invests a dollar in a big bank, why not make that shareholder liable for the first $1.50 — or more — of losses as insolvency approaches? In essence, we would be making the shareholders liable for the costs that bank failures impose on society, and making the banks sort out the right mixes of activities and risks.”

MEGAN MCARDLE: “New Drugs Cost Even More Than You Think”
“For every approved drug, pharma spent between $4 billion and $11 billion on R&D.  Yes, there’s probably some wiggle room on the accounting, but not that much–your auditor is not going to let you reclassify your new delivery trucks, or a Human Resources SVP, as a research expense.  As Herper points out, this isn’t necessarily a vindication of pharma–one could demand to know why they have to spend so much money to develop new drugs.  Yes, I know, it’s getting harder to find approvable new drugs, but the industry has been flailing for ten years, and so far, the only answer they have hit on seems to be ‘more layoffs!’”

NEWS

BUDGET – Obama Sends FY2013 Budget Proposals to Congress
“President Barack Obama on Monday sent Congress a new budget that seeks to achieve $4 trillion in deficit reduction over the next decade while at the same time showering billions of dollars of increased spending on areas aimed at giving the economy a quick boost.”

ENVIRONMENT – Obama Administration Slows Environmental Rules As It Weighs Political Costs
“Rules aimed at curbing emissions from cars and light trucks are on hold because the White House has yet to give the Office of Management and Budget the go-ahead to review them. And a proposal to regulate soot, ready last fall, will not be issued before June.”

HEALTH – Catholic Bishops Oppose Compromise on Birth-Control Insurance
“Catholic bishops said Friday night that they would not support the Obama administration’s proposed compromise on a controversial rule that requires most employers to fully cover contraception in their workers’ health plans.”

OPINION

DON BOUDREAUX: “The Twistocracy”
“[U.S. Senator Kirsten] Gillibrand (D-NY) said: ‘The power to decide whether or not to use contraception lies with a woman – not her boss.  What is more intrusive than trying to allow an employer to make medical decisions for someone who works for them?‘ The twisted logic underlying Ms. Gillibrand’s worldview is stunning.  First she wants to collectivize health-care funding.  Second, she then expresses indignance that express orders by the state on how private parties spend their funds are resisted by those private parties.  And third, she parades her indignance as being a defense of private spheres of actions that ought not be intruded into by outsiders!”

PETER SCHWEIZER: “Warren Buffett: Baptist and Bootlegger”
“Warren Buffett is very much a political entrepreneur; his best investments are often in political relationships. In recent years, Buffett has used taxpayer money as a vehicle to even greater profit and wealth. Indeed, the success of some of his biggest bets and the profitability of some of his largest investments rely on government largesse and “coddling” with taxpayer money.”

KATY WALDMAN: “Uncle Sam Is Not Coming For Dinner”
“America is fat, but Americans disagree about what this means. Either the country’s obesity rates—one third of all adults are obese—are a dangerous health crisis, or they show that the nation is healthier and wealthier than ever. Either the government must act immediately to curb our waistlines, or we must act to curb our bloated government. These were the questions debated in NYU’s Skirball Center last night at theSlate/Intelligence Squared live debate, in which four health and policy experts argued the motion that “Obesity is the government’s business.””

NEWS

LEGAL: Tribe Suing Beer Makers Over Alcohol Problems
“A Native American tribe sued some of the world’s largest beer makers Thursday, claiming they knowingly contributed to devastating alcohol-related problems on South Dakota’s Pine Ridge Indian Reservation. The Oglala Sioux Tribe of South Dakota said it is demanding $500 million in damages for the cost of health care, social services and child rehabilitation caused by chronic alcoholism on the reservation.”

TSA – No Female TSA Agents Means No Flight For Denver Woman
“A Denver woman claims she couldn’t board a flight from Wyoming to Denver because of her gender. [...] ‘They asked if I was on the flight to Denver, I said yes, they said that they couldn`t screen me because they sent all the female TSA agents home,’ Winning said.”

HEALTH – FDA Outlines Path for Lower-Prices Biotech Drugs
“The guidelines issued by the FDA on Thursday are the final step in a decades-long effort to lower the price of biotech drugs, high-tech injectable medications that cost the nation billions of dollars each year.”

OPINION

MARK BUCHANAN: “A Bar May Be The Place to Understand Markets”
“Economists have wondered for decades why markets have ‘excess volatility’ — that is, why prices move up and down more than they should by any sensible reckoning of assets’ fundamental value. [...] Imagine a college bar with music and cheap drinks every Thursday night. Naturally, lots of students want to go. Trouble is, it’s a tiny place, and they will enjoy it only if 60 percent or fewer of them go. Otherwise, they will suffer miserably in the cramped heat. Hence, each week, every student faces a tricky decision: How to do what most other people will not do.”

FARHAD MANJOO: “The Thermostat Wars”
“Late last year Tony Fadell, the guy who created the iPod at Apple, launched Nest, a new company that aims to reinvent household devices. Nest’s first product is a beautiful, easy-to-use, $249 ‘learning thermostat.’ It launched to rave reviews, and sold out instantly. [...] Honeywell filed a wide-ranging patent infringement suit against Nest, alleging that the startup used seven different Honeywell inventions. [...] The Honeywell v. Nest lawsuit is being justifiably criticized as another black mark on our broken patent system. If Honeywell invented all these cool features, why didn’t it make something of them?”

MARK CALABRIA: “Bernanke’s Anti-Stimulus”
“One of the direct results of the Federal Reserve’s zero interest rate policies has been a massive reduction in interest income going to households. Since 2008, household interest income has fallen by about $400 billion annually. That’s $400 billion each year that families have not had to spend.”

NEWS

GOVERNMENT SURVEILLANCE – CCTV Police Officer ‘Chased Himself’ After Being Mistaken For a Burgler
“As the probationary officer from Sussex Police searched for suspects, the camera operator radioed that he had seen someone ‘acting suspiciously’ in the area. But he failed to realise that it was actually the plain-clothed officer he was watching on the screen, according to details leaked to an industry magazine. The operator directed the officer, who was on foot patrol, as he followed the ‘suspect’ on camera last month, telling his colleague on the ground that he was ‘hot on his heels’.”

NANNY STATE – Caddo Commissioner Continues Push for Public Pajama Ban
“Williams, a self-described conservative in the dress code area, told other commissioners in a fiery speech that there should be respect for law and order, and asked them ‘Are we going to do let this generation tell us what to do, or are we going to be leaders and lead this community?’”

FOOD – Americans Getting Too Much Sodium, But Not From Salty Snacks
“For the report – released Feb. 7 – the Centers for Disease Control and Prevention compiled a list of the top 10 sources of sodium in the U.S. diet. These 10 foods were found responsible for 44 percent of all sodium consumed,HealthPop reported. But salty snacks, such as potato chips, were last on the list. [...] If not salty snacks, then what was the biggest contributor of sodium? Bread and rolls – accounting for twice as much sodium as salty junk food.”

OPINION

SEN. ROB PORTMAN and SEN. MARK PRYOR: “A Push for Smart Regulations”
“The Regulatory Accountability Act, which we introduced along with Sen. Susan Collins (R-Maine), would set the stage for lower-cost rules, greater transparency and a more stable regulatory environment for job creation and investment. First, drawing on executive orders by presidents of both parties over three decades, our legislation requires agencies to evaluate the costs and benefits of proposed regulations; consider the potential effect on jobs and the economy and choose the least burdensome approach that accomplishes the intended policy goals.”

BEN BAJARIN: “Why Technology and Innovation Are Critical to America’s Future”
“While much technological innovation has taken place in the past 30 years, I believe that we’re just now at the beginning stages of one of the most technologically innovative time periods in our world’s history. It’s important that we ensure the new technological advancements, technology companies and innovations come from the United States.”

NEW YORK POST EDITORIAL: “Curb the Pensions!”
“The unions may be dead set against it, but New Yorkers overwhelmingly support a new pension system for future government employees. [...] Cuomo’s proposal is simple: Let new state and local hires pick between a traditional, but slightly less generous, pension and a 401(k)-style savings plan. Most private-sector workers don’t even get such a choice — but the unions were quick to denounce it as ‘an assault on the middle class.’”

NEWS

IRELAND – Irish Urge Children to Leave Amid Job Losses
“Anthony Roche is urging his unemployed son to emigrate to Australia from Ireland to escape joblessness stemming from the country’s economic collapse. [...] While signs are emerging that Ireland is beginning to recover 15 months after an international bailout, the government says the economy is in the midst of the worst crisis since World War II.”

CITIZENS UNITED – Obama Embraces Super PACS After All
“He may still find super PACs distasteful, but Barack Obama and his campaign have decided to throw their support behind Priorities USA, one that’s been fund-raising on his behalf. In an email Monday night, campaign manager Jim Messina wrote ‘we will not play by two sets of rules,’ and announced the campaign would support the political action committee’s fund-raising.”

DRUG LAWS – Woman Says Innocent Trip to Ala. Spirals Into Meth Charge
“Unless she wins her appeal, a Mississippi grandmother who spent $8.98 on a box of Sudafed must serve a year in jail.”

OPINION

STEVEN HORWITZ: “Creating Jobs Versus Creating Value”
“Picking on New York Times columnist Paul Krugman is one of the largest participation sports on the Internet. And rightfully so, since he often says ridiculous things that demand a response from those who understand basic economics better than he does, despite his having won a Nobel Prize. His January 26 column has him, once again, making such an argument. This time it’s on the subject of job creation.”

CECIL ADAMS: “Your Light Bulb Questions Answered”
“1. Although halogen bulbs don’t offer much of an energy savings over ordinary incandescents, compact fluorescents sure do, and you’d be a fool not to use them whenever you could. Me, I’ve got ‘em all over the house, including right here in the desk lamp.
2. Telling me I have to use them — production and import of conventional 100-watt incandescent bulbs were effectively banned Jan. 1– is a pointless intrusion on my personal rights.”

NANCY SCOLA: “Interview with Aneesh Chopra”
“When the president needs advice on technology policy, he calls on Aneesh Chopra. As the first Chief Technology Officer of the United States, a post created by Barack Obama as the manifestation of a campaign promise, Chopra is charged with advising the president about where technology and innovation can spur job growth, boost industry, and improve quality of life for 21st century Americans when it comes to energy, education, health care, and more.”

NEWS

HEALTH – Canadian-Made HIV Vaccine Approved for Human Testing
“Researchers from the University of Western Ontario in London, Ont. say they have developed an HIV vaccine that uses the whole HIV virus, unlike other attempts that have used just certain genes or proteins from the virus. The virus has been genetically engineered to be ‘non-pathogenic,’ meaning it can’t actually cause HIV in recipients. The idea is the vaccine would prime the body’s T-cells to destroy any cells that might become infected with HIV.”

LAND USE – Can’t Park? Blame a Condo
“In Manhattan the car faces yet another threat, as parking lots and garages are being snapped up to make way for all sorts of development, especially luxury condominiums. In most cases, the lost public spaces are not replaced, because zoning rules discourage developers from adding parking to new residential buildings. The spaces that do get built are likely to be in luxury condominiums — and to go to the highest bidder.”

INDIA – Internet Giants Pull Content After Warning in India Courts
“Internet giants Google Inc and Facebook removed content from some Indian domain websites on Monday following a court directive warning them of a crackdown “like China” if they did not take steps to protect religious sensibilities.”

CEI Weekly is a compilation of articles and blog posts from CEI’s fellows and associates sent out via e-mail every Friday. Also included in the weekly newsletter is a brief description of CEI’s weekly podcast and a feature on a major CEI breakthrough made during the week. To sign up for CEI Weekly, go to http://cei.org/newsletters.

CEI Weekly

February 3, 2012

>> Featured Story

In 2011, CEI labor policy analysts created the Big Labor vs. Taxpayers Index to measure the influence of union lobbyists on state governments. The purpose of the Index was to educate lawmakers and taxpayers about union handouts at the state level. Now, in early 2012, the Index is certainly making a difference: Oklahoma Senator David Holt is introducing legislation to empower Oklahoma taxpayers, citing his state’s poor ranking on CEI’s Index. Read Research Associate Jack Mann’s OpenMarket commentary on Sen. Holt’s announcement for more details.

>> SHAPING THE DEBATE

Countering the Assault on Capitalism
Fred L. Smith’s article in Economic Affairs

McDonald’s and Pepsi’s Different Response to Pressure
Fred L. Smith’s letter to the editor in The Wall Street Journal

The FDA Has It Dead Wrong
Michelle Minton’s op-ed in The Hill

Cuba, Where Sheep Are Trained to Venerate Wolves
Bill Frezza’s column in Forbes

Dodd-Frank Shields Fannie and Freddie
Hans Bader’s letter to the editor in The Richmond Times-Dispatch

Opposition to Arctic National Wildlife Refuge Drilling Takes Right Turn
Marc Scribner’s citation in Politico

How Europe Became a Dirty Word in the U.S. Election
Iain Murray’s citation in BBC News

>> Best of the Blogs

Facebook Filing Blasts Obama-Bush Overregulation of Sarbanes-Oxley and Dodd-Frank
By John Berlau

Drip Drip Drip: Yet Another Green Energy Stimulus Recipient Hits the Skids
By William Yeatman

Update on Chevy Volt Hearing
By Marlo Lewis

Justice Kagan Should Recuse Herself From Obamacare Case
By Hans Bader

President Obama Wants to Help the Little Guys — Especially If They’re Names Boone Pickens and George Soros
By Myron Ebell

OPINION

ADAM SNEED: “The Wrong Way to Monitor Internet Cafes for Terrorists”
“If you’ve ever cared about privacy while using the Internet in public, you might be a terrorist. At least that’s the message from the FBI and Justice Department’s Communities Against Terrorism initiative. The project created flyers to help employees at several types of businesses—including military surplus stores, financial institutions, and even tattoo shops—recognize “warning signs” of terrorism or extremism. An admirable goal, perhaps, but the execution is flawed—particularly for the flyers intended to help suss out terrorists using Internet cafes.”

KYLE SMITH: “What If Barack Obama and Paul Krugman Ran a Business?”
“So let’s consider how American businesses might be run if Obama and his allies were CEOs. We’ll begin from scratch. What kind of business shall we launch? Clearly it should be domestic manufacturing, because our goal is to create lots of jobs for the middle and working classes. Our company can’t be something hollow like Apple or Nike, which create a few white-collar jobs for engineers, designers and marketers but make their products overseas. Moreover, as we are people of conscience, we will place profit considerations behind doing good for the community.”

THOMAS SARGENT: “An American History Lesson for Europe”
“In 1789, the political price for our federal constitution included a bailout of the 13 indebted states. But it was by refusing to bail out the states a second time in the 1840s that the United States preserved its federal system, with substantial fiscal independence for state governments. Facing a similar moment, Europe might learn from our experience.”

NEWS

ANTITRUST – France Convicts Google Maps for Unfair Competition
“A French commercial court has found Google guilty of abusing the dominant position of its Google Maps application and ordered it to pay a fine and damages to a French mapping company.”

FIRST AMENDMENT – U.S. Press Freedom Fell 27 Places Last Year to 47th in the World
“Reporters Without Borders’ just-out World Press Freedom Index, which uses a complex point system to track and compare journalistic freedoms, describes a number of countries eroding those rights in the past year, including the U.S. Our own ranking dropped to 47th place from 20th the year before. According to the report, the decline came as police cracked down on journalists who were covering mass gatherings, often as part of the “occupy” movements. ”

SUPER BOWL – Indiana Sunday Liquor Law Could Crimp Super Bowl Parties
“State law bars liquor and convenience stores from selling carryout booze after 3 a.m. Sunday until 7 a.m. Monday, leaving Super Bowl revelers – perhaps out-of-towners not versed in all things Indiana – in the lurch if they go looking for an 11th-hour six-pack or bottle of wine on game day.”

OPINION

JAMES PERON: “Why Libertarians Need to Talk to the Left and How to Do It”
“A local libertarian party group once complained to me that the gay community never showed interest in them.  A few months later, the Pride festival was coming up and I suggested having a libertarian booth there. I said I would pay half the cost. They rejected the idea as too expensive, which I found that odd since every month they set up booths costing similar sums at gun shows with smaller attendance. [...] Why? Because they are infected with what I call “Me-Libertarianism,” that myopic kind of libertarianism that only sees issues as important if they impact the typical libertarian. Who is that typical libertarian? A middle-aged, white, heterosexual male. Issues that don’t impact that demographic just aren’t important and many bluntly tell you so. Abortion rights aren’t important. Immigration isn’t important. Equality of rights for gay people isn’t important. They just ignore all those issues because they don’t impact them.”

FRANCIS FUKUYAMA: “What Is Governance?”
“The beginning point of the project is definition of governance that excludes the degree to which governments are either democratic or subject to a rule of law that constrains the executive. The reason for this is simple: it seems obvious to me that countries can be better or worse governed regardless of whether they are liberal democracies or not. Singapore is not Zimbabwe, despite the fact that neither is democratic. Separating the quality of the state from either the rule of law or democratic accountability is one of the foundational ideas in The Origins of Political Order. The reason I want to make this separation is to then be able to empirically evaluate the relationship of governance to democracy and the rule of law.”

PETER ORSZAG: “Fracking Boom Could Finally Cap Peak Oil Myth”
“The U.S. oil market could be on the verge of its own fracking revolution, similar to what the natural-gas market is already experiencing. As a result, domestic production is now projected to rise significantly over the coming decades, reducing the relative share of imports in U.S. oil consumption.”

NEWS

PRIVACY – Online Privacy At Risk With Pending Legislation
“The Protecting Children from Internet Pornographers Act of 2011 would require Internet providers to retain archives of every subscriber’s online activity for up to 18 months, including phone records, credit-card numbers, websites visited and bank-account data.”

WELFARE – House Set to Ban Welfare Payments at Strip Clubs
“As the recession continues onward, House Republicans are worried that those receiving welfare payments may be having a bit too good of a time.”

LAW ENFORCEMENT – Memphis Police Delete Photographers’ Cell Phone Pictures
“If you are on a public street and take pictures or video of Memphis Police with your cell phone, you could end up in the back of a squad car and your pictures could be deleted. ABC 24 News photographer Casey Monroe said that’s what happened to him Sunday morning. Police never charged Monroe with a crime, but this could happen to anyone with a cell phone camera.”

OPINION

SANJIV AHUJA: “Lost in D.C.’s Iron Triangle”
“LightSquared, encouraged by the Federal Communications Commission under both the Obama and Bush administrations, has spent billions building a new wireless broadband network on parts of the spectrum we legally own. [...] But then last year, the Space Based Positioning Navigation and Timing Executive Committee was asked to evaluate our plans. This government panel was created in 2004 to guide GPS policy, and we believe it has been captured by the GPS industry. For example, the vice chairman of the committee’s advisory board sits on the board of directors of a GPS company that has spent more than a million dollars lobbying against LightSquared’s technology.”

ANDREW COHEN: “Quietly, U.S. Moves to Block Lawsuits From Military Families”
“Politicians and bureaucrats of all persuasions typically trip over themselves when it comes to praising the values and virtues, the courage and the sacrifice, of America’s military families. [...] But while public officials are out waving the flag toward these families, federal lawyers in court are now quietly trying to expand the U.S. government’s legal immunity from exposure to medical malpractice claims brought by those very same military folks. Now, the feds want the courts to recognize a bold application of an old doctrine — an already heavily criticized old doctrine — that would bar many plaintiffs, whose loved ones serve their country, from exercising the right merely to be able to present the substance of their claims at trial.”

GLENN GARVIN: “Stop Bothering the Fed, You Peasant Taxpayers!”
“Breaking news: When it came to the collapse of the bubble that touched off the 2008 meltdown of the U.S. economy, the Federal Reserve was a placid herd of clueless blockheads. Less than two years before the housing market turned kamikaze, Fed officials were gathering around conference rooms congratulating one another on what a genius job they were doing managing the economy.”

NEWS

HOMELAND SECURITY – British Pair Arrested in U.S on Terror Charges Over Twitter Jokes
“Leigh Van Bryan, 26, was handcuffed and kept under armed guard in a cell with Mexican drug dealers for 12 hours after landing in Los Angeles with pal Emily Bunting. The Department of Homeland Security flagged him as a potential threat when he posted an excited tweet to his pals about his forthcoming trip to Hollywood which read: ‘Free this week, for quick gossip/prep before I go and destroy America?’”

PUBLIC SECTOR WORKERS – CBO: Federal Workers Make More Than Their Private Sector Counterparts
“The Congressional Budget Office has found that the federal government pays slightly more in average wages and significantly more in benefits than the private sector. But the advantages mostly accrue to less-educated workers, while compensation for federal employees with professional and doctoral degrees lag significantly behind their private-sector counterparts.”

FDA – Whistleblowers Sue FDA Over Email Monitoring
“The Food and Drug Administration is being accused of monitoring the personal e-mails of six employees who had previously reported inappropriate device approvals to Congress and the press.”

OPINION

MARK P. MILLS & JULIO M. OTTINO: “The Coming Tech-Led Boom”
“In January 1912, the United States emerged from a two-year recession. Nineteen more followed—along with a century of phenomenal economic growth. Americans in real terms are 700% wealthier today. [...] In January 2012, we sit again on the cusp of three grand technological transformations with the potential to rival that of the past century. All find their epicenters in America: big data, smart manufacturing and the wireless revolution.”

NICK GILLESPIE & MATT WELCH: “Learning From Kodak’s Demise”
“The human brain is capable of memorizing 67,890 digits of pi, composing side two of Exile on Main Street, and inventing a dog-to-human translation device called the Bowlingual. Yet, we often-brilliant, always-innovating bipeds find it impossible to imagine changing the trajectory of the world we think we live in by more than a few degrees at any given moment. Whatever dominates today we assume will dominate tomorrow. This is true for our private lives, this is true for commerce, and this is especially true for politics.”

ALICE G. WALTON: “Cell Phones Are More Annoying Than They Are Dangerous”
“With increased use come questions concerning the safety of these mobile devices. Many have been concerned, or even panicked, over the possibility of cell phones increasing one’s risk for brain cancer. Also disturbing is the fact that people are talking — or perhaps worse, texting (DOC) — while driving, and getting into accidents because of it. And then there’s sexting, which has a ‘reputation as a teenage pastime,’ according to the New York Times. Brain tumors, car accidents, and virtual sex contact: Cell phones seem to carry a wealth of hazards. However — and there may still be some lingering questions — more studies are coming in to suggest that cell phones aren’t as strongly connected with any of these phenomena as we once thought. ”

NEWS

ZERO TOLERANCE – Hercules Family Battles Sex Assault Claim Against Six-Year-Old
“An East Bay dad claims a game of tag on the playground resulted in his 6-year-old son being accused of sexual assault – a decision he said was an overreaction by school officials.”

LAW ENFORCEMENT – Cop in Quota Fight
“A cop assigned to the Upper West Side is claiming he suffered retaliation for not writing enough summonses and doing too few stop-and-frisks under a quota system the NYPD insists doesn’t exist.”

ACTIVISM – Critics of Capitalism Call Global Protest in June
“Thousands of critics of capitalism meeting in Brazil called Sunday for a worldwide protest in June to press for concrete steps to tackle the global economic crisis.”