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  • Judge: NLRB Acting as "Litigation Arm" of SEIU

    August 28, 2014 11:00 AM

    A federal judge in Pittsburgh has reprimanded the National Labor Relations Board for its heavy-handed and questionable treatment of University of Pittsburgh Medical Center (UPMC) in a labor dispute between the healthcare giant and the SEIU.


    A UPMC hospital is undergoing a two-part trial over SEIU’s allegations that the company committed unfair labor practices. The first case involves the charge that UPMC management conducted interrogations and surveillance of organizing activity and made implied threats of discipline and arrest. NLRB judges have not yet issued a ruling for that case. The second case involves SEIU’s claim that UPMC is one entity, and therefore vulnerable to unionization, which the UPMC denies because it claims that each hospital is its own entity.


    U.S. District Judge Arthur J. Schwab weighed in and said,


    The Court does not see how these requests have any legitimate relationship or relevance to the underlying alleged unfair labor practices; instead, the requests seek highly confidential and proprietary information (except for a few public documents); the requests have no proportionality to the underlying charges; and, the requests seek information that a union would not be entitled to receive as part of a normal organization effort.


    Judge Schwab also said,


    Indeed, the scope and nature of the requests, coupled with the NLRB’s efforts to obtain said documents for, and on behalf of the SEIU, arguably moves the NLRB from its investigatory function and enforcer of federal labor law, to serving as the litigation arm of the union, and a co-participant in the ongoing organization effort of the union…


    In the end Judge Schwab unfortunately decided to let the NLRB get away with the excessive barrage of subpoenas.


    If the NLRB is indeed stepping out of its investigatory function and acting as air support for the SEIU’s organizing effort of UPMC, it would not be the first time the federal bureaucracy has played favorites under President Obama’s watch.


  • Taxpayers to Subsidize “Ministry of Truthiness”

    August 27, 2014 10:18 AM

    The Washington Free Beacon reports:


    The federal government is spending nearly $1 million to create an online database that will track “misinformation” and hate speech on Twitter. The National Science Foundation is financing the creation of a web service that will monitor “suspicious memes” and what it considers “false and misleading ideas,” with a major focus on political activity online. The “Truthy” database, created by researchers at Indiana University, is designed to “detect political smears, astroturfing, misinformation, and other social pollution.” The university has received $919,917 so far for the project. . . .


    “Truthy,” which gets its name from Stephen Colbert, will catalog how information is spread on Twitter, including political campaigns.


    This seems like a waste of taxpayer money on many levels, and it is conceivable that government officials who are interesting in harassing their critics could make use of this information to violate their free-speech rights (the way the IRS violated the First Amendment by targeting Tea Party and other groups for costly and burdensome investigations, and demanding lots of irrelevant information from those groups that had nothing to do with whether they actually were eligible for 501(c)(4) status).


    It’s not the government’s role to rule to declare ideas “false or misleading.” Under the First Amendment, there’s “no such thing as a false idea,” according to the Supreme Court’s decision in Gertz v. Robert Welch, Inc. (1974).


  • Obama “Fair Pay and Safe Workplaces” Executive Order Will Punish Firms in Pro-Worker States

    August 25, 2014 11:01 AM

    Earlier, we discussed President Obama’s recent Executive Order 13,673, which “will allow trial lawyers to extort larger settlements from companies, and enable bureaucratic agencies to extract costly settlements over conduct that may have been perfectly legal.”


    But it turns out that President Obama’s executive order (which allows the Labor Department to cut off firms’ government contracts over state or federal employment law verdicts or fines against them) has another, more ironic effect: It penalizes companies based in states like California that vigorously enforce labor and civil-rights laws, leading to employers in those states racking up more fines and verdicts against than similarly-behaving employers in other states. That’s the conclusion of Warren Meyer, the head of a campground-operation company based in Arizona, who recently closed his operations in neighboring California to avoid lawsuits.


    He says that “government contractors would be insane to operate in California,” given its “regulatory and judicial culture that assumes businesses are guilty until proven innocent. If state labor violations or suits lead to loss of business at the national level, why the hell would a contractor ever want to have employees in California?”


    Whether a large company is sued for discrimination or labor law violations often has more to do with its location than whether it violated the law. A recent study shows that “California has the most frequent incidences of [employment-practices] charges in the country, with a 42 percent higher chance of being sued by an employee for establishments . . . over the national average. Other states and jurisdictions where employers are at a high risk of employee suits include the District of Columbia (32% above the national average) [and] Illinois (26%).” It’s because of their location, not because California employers are more racist or anti-union than employers in other states (indeed, California employers spend more time and money on compliance mechanisms than employers elsewhere).


    The president probably thought his order would incentivize compliance with federal labor norms (it allows contracts to be cut off for violations of federal labor laws and roughly “equivalent” state laws). But in effect it punishes employers in states that vigorously enforce civil-rights and labor norms through state laws that ban the same thing as federal law, but through much harsher penalties. (For example, federal law bans sex discrimination in hiring, but caps emotional distress and punitive damages for even the largest employers at $300,000 under Title VII of the Civil Rights Act. But California’s Fair Employment and Housing Act allows unlimited compensatory and punitive damages for the same exact discrimination, leading to multi-million dollar damage awards in some seemingly ordinary discrimination cases.)


    The variation between California and other states in how often workers sue reflects the fact that some parts of the country are much more generous to workers who sue their employer than other parts of the country. How many lawsuits an employer faces is a function of how much workers and their lawyers expect to recover if they win a lawsuit.


  • CEI’s Battered Business Bureau: The Week in Regulation

    August 25, 2014 8:07 AM

    The Federal Register burst past the 50,000-page mark with Friday’s 878-page effort, which also contained 21 final regulations and four “significant” documents.


  • Cops to Destroy Rare Wine Collection in Pennsylvania

    August 22, 2014 2:12 PM

    In the fifth century BCE, famous Greek tragedian Euripides supposedly said, “where this no wine there is no love.” This certainly holds true in present day Pennsylvania, which has one of the nation’s strictest alcohol regulatory regimes. And according to Tom Wark, executive director for the American Wine Consumer Coalition, Pennsylvania is “the worst state to live in if you're a wine lover." In Philadelphia, one man surely isn’t feeling the brotherly love after police raided his home and seized 2,426 bottles of rare wine—with an estimated value of more than $125,000—that the police reportedly plan to “destroy.”

  • Eric Holder Avenges Investor Fraud by Taking from Defrauded Investors

    August 22, 2014 1:54 PM

    “Bank of America failed to make accurate and complete disclosure to investors and its illegal conduct kept investors in the dark,” declared a government official in a Department of Justice press release announcing yesterday’s record settlement in which Bank of America agreed to fork over $16.65 billion to settle charges it and companies it had purchased had deceived investors.


    Back in Washington from Ferguson, Mo., Attorney General Eric Holder announced at a press conference: “As part of this settlement, Bank of America has acknowledged that, in the years leading up to the financial crisis that devastated our economy in 2008, it, Merrill Lynch, and Countrywide sold billions of dollars of RMBS [residential mortgage-backed securities] backed by toxic loans whose quality, and level of risk, they knowingly misrepresented to investors.”


    Yet how much from this settlement goes to the investor victims? Nada! In fact, the settlement takes billions from the very investors who were defrauded.


    More than $9 billion from this settlement goes to the federal and various state government coffers. And, as Holder proclaimed at the press conference: “Under the terms of this settlement, the bank has agreed to pay $7 billion in relief to struggling homeowners, borrowers, and communities affected by the bank’s conduct. This is appropriate given the size and scope of the wrongdoing at issue.”


    But whatever Bank of America’s misdeeds – and there were many by the company and those it purchased (Countrywide and Merrill Lynch) – it is certainly not “appropriate” to take from the investors the government itself says were victims to give to homeowners that the government never alleges were defrauded.


  • Duplicative New Affirmative-Action Rule Drives Up Taxpayer Costs and Restricts Competition

    August 20, 2014 4:42 PM

    Does it make sense to require a park campground operator that has a few hundred employees at 120 different locations to come up with 120 separate affirmative-action plans, one for each site? Just because it also receives a measly $52,000 federal contract to clean bathrooms used by tourists (which it does very cheaply, at cost, in order to make its nearby concessions more attractive)?


    To any economist, the answer would be “no.” But to the Obama administration, the answer is “yes.” If a federal contractor gets $50,000 annually from the federal government, or “serves as a depository of Government funds in any amount” or has “government bills of lading” worth $50,000, it generally has to have a separate affirmative action plan for “each of its establishments,” under a regulation issued by the Department of Labor in March 2014. 

  • Newsweek’s Cover Story on Internet Gambling Plays Fast and Loose with Facts

    August 20, 2014 4:00 PM

    Newsweek’s recent cover article on online gambling, “How Washington Opened the Floodgates to Online Poker, Dealing Parents a Bad Hand,” by Leah McGrath Goodman, has elicited a wide range of deservedly negative responses. The title alone indicates its blatant bias. However, Goodman’s one-sided article presents a good opportunity to dispel many of the falsehoods and unwarranted fears swirling around the online gambling discussion.


    Until 2011 the Federal Wire Act “had been viewed by U.S. courts—and the DOJ’s own Criminal Division—as prohibiting all forms of online gambling.”


    According to Goodman, in 2011 the DOJ’s Office of Legal Counsel (OLC) singlehandedly changed the meaning of a law passed by Congress in the 1960s when she issued an opinion on the Federal Wire Act. Goldman absurdly asserts that the OLC’s 2011 decision “came down to the placement of a comma,” when even a superficial skimming of the 13-page memo demonstrates a careful analysis of the Wire Act’s language and a thorough consideration of legislative and case law history—all of which show that the longstanding understanding of the Wire Act, by the author (Attorney General Robert F. Kennedy), Congress, and the Courts was that it only applied to sports betting. 


    For example, at a 1951 hearing of the Senate investigative committee that came to be known by his hame, Sen. Estes Kefauver (D-Tenn.), asked Assistant Attorney General Herbert J. if the bill would prohibit the use of telephone for “numbers games.” Miller replied, “This bill, of course, would not cover that because it is limited to sporting events or contests.” [Emphasis added]


    As for the courts, only one published opinion has found that the Wire Act applies to non-sports gambling.


    It’s even questionable as to whether or not the Wire Act should apply to Internet wagering. Obviously, the Internet did not exist when the law was enacted, but importantly, a year after it became law Congress attempted and failed to expand the law to emerging technologies. Despite this, the DOJ under Clinton and subsequent administrations believed the Wire Act applied to online gambling.


  • Voter Ignorance and Political Reform

    August 20, 2014 3:43 PM

    If you’re a voter in Los Angeles, you just may wind up with an unexpected windfall the next time you cast your ballot.  The Los Angeles Ethics Commission last week recommended that the City Council consider using cash prizes to encourage registered voters to actually vote. Commission President Nathan Hochman tossed out figures of $25,000 and $50,000, to be potentially awarded to one or more randomly chosen voters in each election. This is sure to find a place on the annual “The Government Is Spending My Money on What?” lists in the fiscal conservative world.


    Of course not everyone is in favor of encouraging larger numbers of people to vote in the first place, prize or no prize. Last summer our friends at the Adam Smith Institute in London brought to our attention a poll by Ipsos-MORI on the startling degree to which much of the general public misunderstands important public policy topics. The poll finds that large chunks of the British public wildly overestimate the amount of taxpayer money spent on things like foreign aid and unemployment benefits while underestimating the amount spent on government pensions. Ipsos also found that perceptions of the rates of social indicators like teen pregnancy and violent crime are much higher than they actually are.

  • The Not-So-Free Market at Work

    August 19, 2014 3:24 PM

    In the mail, I recently received a brochure from a firm called Solar Solution LLC, claiming to be the District of Columbia’s #1 solar installer. Included was the following table showing the initial estimated cost and then, in subsequent columns, the multiple layers of subsidies one might obtain. These include the 30 percent federal tax credit, the D.C. solar grant, and the Solar Renewable Energy Credit.



    The effects are significant – a system initially estimated at $29,400 translates into an out-of-pocket cost of only $6,300. Clearly, Solar Solution is doing a brisk business with their current business plan. Given their success, they may be tempted to branch out to other services. The list of technologies that would become commercially successful with a 79 percent taxpayer discount is long indeed.


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