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OpenMarket: November 2012

  • New Pressure On Schools To Adopt Quotas, Speech Codes, And Low Standards?

    November 30, 2012 6:36 PM

    Lawsuits against schools and colleges have nothing to do with our troops and their needs. But that didn’t stop Senators from seeking to add a harmful provision long sought by trial lawyers to the 2013 Defense Authorization bill last night. The provision, proposed in Senate Amendment 3215 by Senators Sherrod Brown (D-Ohio), Al Franken (D-Minn.), Bernie Sanders (Vt.) and Sheldon Whitehouse (D-R.I.), would dramatically expand the reach of a federal statute, Title VI, to allow colleges, schools, and recipients of federal funds to be sued for “disparate impact.” Disparate impact is a race-neutral practice that weeds out more minorities than whites despite having no discriminatory motive behind it -- like a standardized test that more minorities fail than whites. The provision would also allow colleges, schools, and other institutions to be sued for unlimited punitive damages.

    Currently, disparate-impact lawsuits against colleges and schools are barred by the Supreme Court's decision in Alexander v. Sandoval, 532 U.S. 275 (2001). Punitive damages under Title VI are barred by the Supreme Court's decision in Barnes v. Gorman, 536 U.S. 181 (2002), where even liberal Justices like David Souter concluded that punitive damages are inappropriate under spending clause legislation like the Rehabilitation Act and Title VI.

    The specter of liability for disparate impact could make schools get rid of standardized tests designed to ensure that students are really learning, and detect failing schools, since all but the easiest standardized tests arguably have a racially "disparate impact."

  • Looting The Future: Union Bosses Violate Spirit If Not Letter Of The Law

    November 30, 2012 2:11 PM

    Hostess’ union-induced shutdown captures the essence of the modern labor movement–more anti-employer than pro-worker. Workers are taking notice of unions’ negative impact on employers, for example, the loss of jobs in the auto, airline, and steel industries -- and now at Hostess.

    As a result of union bosses' self-interest trumping the well-being of its beneficiaries or law, private sector unionization has dropped to an all-time low of 6.6 percent. This statistic should not be shocking when considering the conduct of the Bakery, Confectionary, Tobacco Workers, and Grain Millers union (BCTGM) officials, who represented 5,000 Hostess workers, throughout the bankruptcy proceeding that put the company's 18,500 workers out of a job just in time for the holidays.

    Since January when Hostess filed for bankruptcy, BCTGM officials drew a line in the sand -- no concessions -- even if that meant all their members would become unemployed and even if it was the several hundred union-negotiated wage, benefit, and work rules that factored greatly into Hostess’ demise.

    In The San Jose Mercury News, Thomas Sowell provides an example of Hostess’ union collective bargaining woes:

    The work rules imposed in union contracts required the company that makes Twinkies, which also makes Wonder Bread, to deliver these two products to stores in separate trucks. Moreover, truck drivers were not allowed to load either of these products into their trucks. And the people who did load Twinkies into trucks were not allowed to load Wonder Bread, and vice versa.

  • Today's Links: November 30, 2012

    November 30, 2012 1:54 PM

    OPINION

    VIRGINIA POSTREL: "A Free-Market Fix for the Copyright Racket"
    "While most of the punditocracy was chattering earlier this month about Mitt Romney’s “gifts”gaffe, another Republican took an unexpectedly bold stand about a huge and controversial special-interest handout that largely benefits Democratic constituencies. A young Capitol Hill staff member named Derek S. Khanna published a Republican Study Committee policy brief titled 'Three Myths About Copyright Law and Where to Start to Fix It.' The paper attacked the current copyright system, particularly the continual and retroactive extension of copyright terms at the behest of entertainment-industry lobbyists."

    ADI ROBERTSON: "New World Order: is the UN about to take control of the internet?"
    "The future of the web will be decided in a dark room by UN politicians and authoritarian governments — at least according to Google and some other opponents of the International Telecommunication Union’s plan to reform its 25-year-old guidelines. Leaked documents have shown that ITU members are interested in adding more internet regulations to the ITU’s mostly telecommunications-focused rules, something critics worry will let countries justify repressive filtering of the internet or upset the current balance of power by pushing more regulation."

    PAUL HOWARD & YEVGENIY FEYMAN: "The Obamacare bait and switch"
    "Democrats sold -and continue to sell the ACA - as a way to cover the 'millions of people' with pre-existing conditions who can't get affordable insurance. For instance, in defending their recently released guaranteed issue regulations, HHS claimed that 129 million Americans have pre-existing conditions. This is a huge bait and switch. The vast majority of Americans with 'pre-existing conditions' already have insurance. Why? Age is strongly correlated with developing a chronic illness - and seniors are covered by Medicare."

  • Obama Breaks Pledge Against Middle-Class Tax Hikes By Proposing Tax Increase On Dividends, Capital Gains

    November 30, 2012 12:46 PM

    President Obama is now calling for tax increases on dividends and capital gains, even for middle-class families making less than $250,000 per year. This violates his campaign pledge on taxes, in which he said on Sept.12, 2008: “I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes." He repeatedly promised "you will not see any of your taxes increase one single dime.” But the president now calls for an "immediate increase in taxes on capital gains and dividends" as part of a deal to address the so-called "fiscal cliff," in which automatic budget cuts and tax increases will kick in beginning Jan. 1, 2013 (including the end of the Bush tax cuts, such as  the 2003 cuts in taxes on dividends and capital gains; and additional new Obamacare taxes on investment income).

    Rather than cutting spending, which is now at record levels, President Obama demands "new stimulus spending starting with $50 billion next year," billions in additional government spending on other programs, a "permanent increase in" America's national-debt limit," and "an effective end to congressional control over the size of the national debt." He wants to cancel the scheduled automatic budget cuts, which would substantially reduce America's record trillion-dollar deficits. He wants to replace them with much smaller, and perhaps imaginary, "unspecified cuts in nonentitlement programs" to be negotiated in the future after Congress agrees to his demand to increase taxes on thrifty people who have capital gains and dividend income, as well as his demand for an "immediate increase" in the "tax rates of" the "richest Americans."

    Obama previously broke his anti-tax pledge by signing into law new healthcare taxes, such as tax penalties on middle-class people who do not buy government-approved forms of health insurance, taxes on various health plans and health-savings accounts, and taxes on investment income starting in 2013 for those who make more than $200,000 a year to pay for Obamacare (or married people filing separately who make more than $125,000 per year). He also broke this pledge by signing into law an SCHIP excise tax increase to pay for increased federal spending, and by unsuccessfully proposing a huge new energy tax that could cost American households an average of $1,761 per year.

  • Immigration Reform Is Not A Zero Sum Game

    November 29, 2012 3:46 PM

    Tomorrow, the House of Representatives will vote on Republicans’ first post-election attempt at pro-immigration reform. But their bill, the STEM Jobs Act (H.R. 6429), sponsored by Rep. Lamar Smith, R-Texas, eliminates as many visas as it creates. Worse, it uses the illusion of immigration reform to actually decrease immigration. If the GOP wants to rehabilitate its immigration image, it should not begin by creating winners and losers -- and this bill creates many more losers than winners.

    The bill grants 55,000 green cards to college graduates of U.S. universities with degrees in science, technology, engineering, and mathematics -- the STEM fields. But it simultaneously eliminates the same number of green cards under the Diversity Visa Program, which awards visas mainly to low-skilled immigrants from underrepresented countries -- mostly in Africa.

    If this bill passes, it would create a dangerous precedent that GOP-sponsored immigration reform means eliminating visas for the less educated to give to the highly educated. Such a false choice will doom immigration reform by making America’s immigration system even more discriminatory and restricting avenues for legal immigration -- which inevitably leads to more of the illegal kind.

    This legislation is even worse than a trade. It actually would reduce legal immigration overall. Last year, the United States graduated just 30,000 foreign-born doctorate and master’s degree students in STEM fields, which means if you assume 75 percent apply, less than half the total number of visas will be used. Because the bill forbids the unused visas from being used in other categories or from being rolled over after 2014, it actually results in a huge reduction in immigration over time.

  • Today's Links: November 29, 2012

    November 29, 2012 12:31 PM

    OPINION

    NATE SILVER: "In Silicon Valley, Technology Talent Gap Threatens G.O.P. Campaigns"
    "Companies like Google and Apple do not have their own precincts on Election Day. However, it is possible to make some inferences about just how overwhelmingly Democratic are the employees at these companies, based on fund-raising data. (The Federal Election Commission requires that donors to presidential campaigns disclose their employer when they make a campaign contribution.) Among employees who work for Google, Mr. Obama received about $720,000 in itemized contributions this year, compared with only $25,000 for Mr. Romney. That means that Mr. Obama collected almost 97 percent of the money between the two major candidates. Apple employees gave 91 percent of their dollars to Mr. Obama. At eBay, Mr. Obama received 89 percent of the money from employees."

    JULIAN SANCHEZ: "Adventures in FOIA-Land (or: Red Tape Is Not Transparent)"
    "The Justice Department’s Inspector General has just completed their most recent review of surveillance under the FISA Amendments Act of 2008, which is set to expire at the end of this year. The report, however, is classified—meaning the public is unlikely to see it before Congress votes to reauthorize the law for another five years during the lame duck session. Steven Aftergood of the Federation of American Scientists is trying to get a declassified version released—but he’s probably got a long wait ahead of him."

    BLOOMBERG NEWS EDITORIAL: "Cheaper, Better Air Traffic Control"
    "As U.S. President Barack Obama and lawmakers scavenge for mutually acceptable spending cuts in order to strike a budget deal by Jan. 1, here’s an easy one: The $10 million a year wasted on overstaffed and unneeded Federal Aviation Administration facilities."

  • L.A. Public Pension Problem A Microcosm Of California’s Financial Woes

    November 28, 2012 2:21 PM

    Former Los Angeles Mayor Richard Riordan abandoned efforts this week to gather signatures for a ballot initiative to reform the city’s public pension plan. Riordan said he didn't think he could acquire 300,000 signatures by the December 28 deadline to get his measure, which would require city workers to contribute more toward their pensions and convert all employees to 401K-type plans, on the May ballot.

    It will come as no shock that Service Employees International Union Local 721, which represents public service workers in Southern California, and the Los Angeles Police Protective League led the opposition to Riordan’s initiative.

    Tyler Izen, the president of the L.A. Police Protection League, said Riordan’s plan was “both simplistic and costly ... for the taxpayers.” But what is truly costly is avoiding reform. According to the Los Angeles Times, the city's pension shortfall hinders its ability to balance its budget. Miguel Santana, L.A.'s chief financial officer, said the faces a $222 million budget shortfall now and a $427 million gap by 2014-15.

    "We're always in crisis mode," Santana said. "We're always trying to close that shortfall."

  • CEI Podcast For November 27, 2012: Rachel Was Wrong

    November 27, 2012 5:02 PM

    Senior Fellow Angela Angela Logomasini talks about her forthcoming CEI study, "Rachel Was Wrong: Agrochemicals’ Benefits to Human Health and the Environment."

  • Guest Workers Can Help End Illegal Immigration

    November 27, 2012 1:07 PM

    The debate over immigration reform has focused on its long-term effects on America’s culture as well as its economy. But that obscures the fact that for many foreigners seeking to come to the United States, their goal is not to become Americans, but to alleviate economic problems in their home country. These workers have little interest in assimilating or voting. They simply want to work for a while, sometimes for just a few months, and return home.

    Last August, the Republican Party adopted a plank in its national platform arguing for “a new guest worker program.” Critics have derided this permission to relocate temporarily without a guarantee of citizenship as either mere crumbs for the workers or corporate welfare for their employers. In fact, a workable guest worker program would expand the market’s ability to accommodate the natural flow of labor, which has been distorted by government policy for too long.

    Temporary migration is a market phenomenon, not a government program. During a period when travel was vastly more expensive than it is today, surveys at the turn of the 20th century found that most Italian immigrants to the United States planned to return to Italy after accumulating capital working in America. While many never fulfilled these plans, 40 percent of the 2.1 million Italians who came to America during that time eventually returned home. More recently, from 1986 to 1990, most undocumented Mexican workers stayed for less than 2 years and more than 86 percent returned home within five years.

  • Intrade Is Only The Latest CFTC Outrage

    November 27, 2012 11:41 AM

    Every so often, a government agency will do something so outrageous it will shock even even everyday critics of "big government," as well as draw criticism even from advocates of so-called "good government" intervention.

    For the Commodity Futures Trading Commission (CFTC), that moment was yesterday when it filed a civil lawsuit against the respected Intrade online prediction market and its parent company the Trade Exchange Network (TEN) Limited, accusing them -- according to a CFTC press release -- of being "in violation of the CFTC’s ban on off-exchange options trading." Intrade and TEN responded in kind by closing off participation by U.S. residents.

    In TV critics' parlance, the CFTC should know it has "jumped the shark," when it is attacked by prominent election statistics blogger Nate Silver of The New York Times. The Times is the same newspaper whose editorial page showered almost nothing but praise on the CFTC in its previous crusades for "financial reform."

    Yet most of the time when incidents such as this occur, a closer examination of the pattern and practice of the government entity shows that although the action is indeed outrageous and worthy of condemnation, it is not exactly out of step with what the agency already had been doing. In other words, the agency or commission should have stoked outrage much earlier.

    This is the case with this action of the CFTC. Its citation of Intrade as an unregistered venue for  "off-exchange options trading" -- ludicrous as this may sound to Intrade participants who know it's a simple prediction market -- is simply an extension of the position taken by the CFTC that it can regulate virtually any commodity-related activity as a future, option or swap unless Congress provides a specific exemption for this activity.

    The CFTC has taken this position -- off and on -- for decades, but it has been pushed to its logical extremes by Obama-appointed chairman Gary Gensler. Although this is the first action under his tenure to attract this type of attention, it's not the first to garner Gensler a bipartisan rebuke. Members of Congress of both parties have been shocked, for instance, by his attempts to regulate small farm cooperatives as "swap execution facilities" under the Dodd-Frank financial regulatory overhaul of 2010.

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