September 9, 2014 12:29 PM
It appears Congress will decide the Export-Import Bank’s short-term fate this week. There are several bills with different reauthorization terms, and Rep. Justin Amash and Sen. Mike Lee even have a bill that would shutter the bank altogether. None of the bills have made it out of the House Financial Services Committee, which is chaired by Rep. Jeb Hensarling, who opposes the bank. What will likely happen instead is that Ex-Im reauthorization will be included in a Continuing Resolution (CR), which Congress must pass by September 30 to avoid a government shutdown.
The current battle isn’t whether Ex-Im will be reauthorized, it is how long the reauthorization will last. There are two likely options. Ex-Im opponents would prefer a reauthorization through early 2015. Ex-Im opposition is bipartisan, but the GOP has been more vocal about it, and most political observers are expecting Republicans to gain seats this November. Depending on how the numbers play out, when the new Congress convenes in January, it might be possible for Congressional Republicans to either let Ex-Im’s charter expire, or pass a bill similar to Amash and Lee’s to actively kill the bank, even if they can’t get much Democratic support.
Ex-Im’s defenders would rather keep the shutdown card in their hand; Ex-Im opponents will not risk a shutdown over a program equivalent to less than one percent of the federal budget. That’s why they want Ex-Im’s reauthorization to be the same length of any Continuing Resolution that gets passed, however long that might be. Even though that would be a shorter-term reauthorization, they can continue to renew Ex-Im with each CR that must pass going forward, knowing that it will succeed.
September 9, 2014 10:13 AM
The phrase “if you can’t beat them, join them” seems so applicable in light of the Commonwealth of Dominica announcing plans to distribute bitcoins to all of its citizens. This is a wonderful attempt to integrate people into a burgeoning market. The timing could not have been better, as Ecuador also announced it will introduce its own cryptocurrency. The key difference between Ecuador and Dominica’s plan is that Ecuador plans to implement its currency through its central bank, whereas Dominica plans to disperse bitcoins directly to its citizens. Perhaps fearing competition, Ecuador is also banning Bitcoin, so the central bank’s cryptocurrency will be the only game in town. It’s a fascinating natural experiment in the making.
Forbidding competition is a mistake on Ecuador’s part because competition is what truly allows the best goods and services to develop, so it looks like Dominica’s experiment will be more successful for it citizens.
Moreover, Bitcoin was created to resist centralized institutions, according to the original white paper by Satoshi Nakamoto, the currency’s creator. These cryptocurrencies represent the potential for non-fiat currency to be used on a global scale. This potential should be nurtured, not squandered by governments.
September 9, 2014 8:28 AM
Well, some good news—it’s raining in Los Angeles.
Western droughts combined with questionable water access policies spawn water crises that unfortunately are not unique to the American west and California in particular.
Rather, water access issues are globally contentious. A Wall Street Journal book review on the “unhappy descent” of Turkey’s Meander River invoked common laments that:
In North America, so much water is taken out of the Colorado that it no longer reaches the sea. Nor does the Rio Grande. Or the River Jordan. Or China’s Yellow River.
Access to water in times of plenty and in times of drought is a fundamental infrastructure concern worldwide. Further, the issues surrounding innovation and research in water policy are elements of broader science and manufacturing policy.
Aggravations abound—and so do penalties. One Oregon man catching rainwater on his own property received 30 days in jail for breaking a 1925 law prohibiting personal reservoirs. But when scarcity looms and emotions run high, strange things happen.
In addition to novelties like rainwater theft prosecution, water policy can be fundamentally perverse and distortionary: water supply systems may not cover their debts, operations and capital replacement needs, and as governmental monopolies, they sometimes “are used as cash cows to support more labor-intensive functions of local government, such as fire and police,” as G. Tracy Meehan has noted.
September 8, 2014 6:25 AM
It was a short week due to the Labor Day holiday, but agencies still managed to issue more than 60 new regulations and push the Federal Register over the 53,000-page mark.
September 5, 2014 7:37 AM
That’s what the Charlie Brown, star of comic strip Peanuts and cartoon spokesman for the MetLife insurance firm, might say about the government’s actions against MetLife yesterday.
The Financial Stability Oversight Council (FSOC), an unaccountable, secretive task force of financial bureaucrats created by the Dodd-Frank “financial reform” bill that was rammed through a Democrat-controlled Congress in 2010. Yesterday, FSOC designated MetLife as a “systemically important financial institution” or SIFI. This means that the federal government officially considers MetLife to be “too big to fail” and subject to the same Dodd-Frank bailout regime set up for banks.
Many firms would see being tagged as a too-big-to-fail SIFI as a blessing. As CEI argues in our constitutional challenge to the FSOC, part of our comprehensive lawsuit against Dodd-Frank, the SIFI designation confers on a firm a strong competitive advantage, as investors know the government won’t let it fail. That’s why big banks and MetLife competitor AIG, who have already received billions in taxpayer bailouts, have eagerly embraced their SIFI status.
But MetLife, to its great credit, has public stated it’s not too big to fail and does not want the special privileges that come with the SIFI status. MetLife’s Chairman and CEO Steven A. Kandarian declared publicly last year, “I do not believe that MetLife is a systemically important financial institution.”
Unlike AIG and the big banks, MetLife has never taken a dime in taxpayer bailouts. And all it is asking for now is not a handout, but for the federal government to keep its hands off of the successful business model MetLife has utilized for decades to provide insurance to many satisfied customers.
September 4, 2014 3:13 PM
Government contractors could face a financial death sentence over labor law, civil-rights law, or wage-and-hour law violations under a recent Obama executive order I discussed earlier, EO #13673. By contrast, Federal agencies like the Consumer Financial Protection Bureau often face little penalty for violating the law.
Minority employees at the CFPB allege pervasive discrimination there, reports the Washington Times. The discrimination itself is unproven, but it seems clear that minority employees have been subjected to retaliation for speaking out about what they perceive as discrimination. Such retaliation is typically illegal even when the employee’s complaint of discrimination turns out to be mistaken.
The CFPB responded to allegations of discrimination in pay by essentially raising employee salaries in general, at taxpayer expense (the agency funds itself out of money it takes from the Federal Reserve): minority “employees say the pay increases are just restitution, but because almost everyone got bonuses and promotions, it just raised the playing field instead of equalizing it.” The net result was to reward the agency for its own wrongdoing.
Federal agencies explicitly receive preferential treatment compared to private companies in federal labor and employment laws. Federal agencies are completely exempt from punitive damages under federal employment and civil-rights laws. And a deadline for suing that is 300 days against a private employer may be only 30 days against a federal agency.
September 3, 2014 5:23 PM
Congress comes back from its annual August recess next week. One of the top items on its agenda is deciding the Export-Import Bank’s fate. Ex-Im subsidizes financing for U.S. exporters and their foreign customers. As I outlined here, Ex-Im subsidizes certain businesses at others’ expense. It is a pro-business policy, when what the economy needs are pro-market policies. Ex-Im will also be forced to shut its doors unless Congress reauthorizes its charter by the end of September, making for a golden reform opportunity for corporate welfare opponents.
The merits of the issue are clear enough, but politics is getting in the way. A bill to reauthorizes Ex-Im’s charter would likely pass the Senate, but would have trouble getting through the House. This would ordinarily mean that Ex-Im opponents would succeed in shuttering the agency, since Ex-Im’s expiration is automatic without reauthorization. That means Ex-Im supporters will probably pursue other means, such as tucking Ex-Im’s reauthorization into a must-pass appropriations bill. Ex-Im opponents would have no choice but to swallow that poison pill, or risk another politically costly government shutdown.
September 3, 2014 9:37 AM
This week marks the due date of public comments on the 2014 edition of the Draft Report to Congress on the Benefits and Costs of Federal Regulation.
Unable to resist the urge, we filed comments: The Federal Office of No: Enhancing the Executive Branch Role in Challenging Federal Regulation.
Despite this Office of Management and Budget report’s being the federal government’s only picture of itself with respect to regulatory benefits and costs, just seven rules in the document featured both benefit and cost analysis.
Yes, seven rules, in an era in which dozens of departments and agencies issue over 3,500 rules and regulations every year.
Independent agencies like those implementing the Dodd-Frank financial law (Consumer Financial Protection Bureau, Commodity Futures Trading Commission, Securities and Exchange Commission) get a pass.
Agency guidance documents, memoranda, bulletins and notices also get no review, and were never even subject to the Administrative Procedure Act process that governs ordinary regulation.
There are plenty avenues for making government bigger. So it makes one wonder, what if the president used the “pen and phone” to shrink government rather than grow it?
September 3, 2014 7:12 AM
In a week like any other, federal agencies issued regulations for everything from dairy farmers’ profit margins to Canadian apple exports.
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.