July 14, 2014 11:57 AM
63 new regulations, from poultry plans to headaches.
July 11, 2014 11:55 AM
Progressive commentators like the New York Times’ Paul Krugman wrongly blame Greece’s economic troubles on governmental “austerity.” But even in the aftermath of Greece’s economic collapse, its government has been anything but austere, spending at levels much higher than in most of Greece’s post-war history. And Greece’s overbearing bureaucracy continues to extend its tentacles deep into the economic life of its citizens, suffocating job creation and small business start-ups.
Greece’s Prime Minister tried to cut government spending, but courts blocked many of the cuts, making a mockery of the country’s efforts to achieve fiscal responsibility. As the New York Times itself notes, Greece’s Prime Minister tried to make:
“painful cuts to salaries, pensions and jobs for public workers over the last four years, saying they were needed to satisfy the demands of the international creditors that bailed the country out. But the Greeks hurt by those steps, and the nation’s courts, have a different idea.
“Steadily, citizens groups — including police officers, university professors, cleaning workers and judges themselves — have challenged the cuts as illegal or unconstitutional. And in case after case, Greek courts have agreed, presenting a nearly existential question for the government: Can it actually shrink the state?
“The mounting pile of judgments has now become a serious obstacle to the austerity drive of Prime Minister Antonis Samaras, with the International Monetary Fund warning this week that the “adverse court rulings” threaten to undo the country’s reforms, which its creditors are scheduled to begin reviewing in July.
July 10, 2014 3:24 PM
July 9, 2014 3:05 PM
According to the explicit language in the Affordable Care Act, tax credits for purchasing federally-regulated health insurance on the “Obamacare” exchanges are only supposed to be available "through an Exchange established by the State." Since 34 states have not set up an Obamacare exchange (leaving their residents to use the federal Obamacare exchange instead), it seems obvious that the credits are legally not available in those states.
But the IRS decided to dole out the tax credits in those states anyway, allowing 87 percent of Healthcare.gov customers to receive taxpayer subsidies to purchase health insurance, by arguing the federally-created exchange can somehow be “an Exchange established by the State.” Don’t laugh; two liberal trial court judges bought the argument in cases like Halbig v. Sebelius, which is now on appeal to the U.S. Court of Appeals for the D.C. Circuit, and King v. Sebelius, which is on appeal to the Fourth Circuit. Decisions by those appeals courts are expected any day now.
July 9, 2014 11:32 AM
Today, the Competitive Enterprise Institute released the first installment of CEI’s new three-part series, The High Cost of Big Labor, which looks at the economic impact of labor policies on U.S. states.
In “Understanding Public Pensions: A State-by-State Comparison,” economist Robert Sarvis ranks the states based on their pension debt. This debt burdens labor markets and worsens the business climate. To get a clear picture of the extent of this effect around the nation, this paper amalgamates six studies of states’ pension debts and ranks them from worst to best. Today, many states face budget crunches due to massive pension debts that have accumulated over the past two decades, often in the billions of dollars. There are several reasons.
One reason is legal. In many states, pension payments have stronger legal protections than other kinds of debt. This has made reform extremely difficult, as government employee unions can sue to block any scaling back of generous pension packages.
Second, there is the politics. For years, government employee unions have effectively opposed efforts to control the costs of generous pension benefits. Meanwhile, politicians who rely on government unions for electoral support have been reluctant to pursue reform, as they find it easier to pass the bill to future generations than to anger their union allies.
A third contributing factor has been math—or rather, bad math. For years, state governments have understated the underfunding of their pensions through the use of dubious accounting methods using a discount rate—the interest rate used to determine the present value of future cash flows—that is too high. This affects the valuation of liabilities and the level of governments’ contributions into their pension funds.
July 8, 2014 10:28 AM
Puerto Rico’s economy has been in recession for years, and its public utilities are on the verge of defaulting on their debts. Judging from a recent New York Times story, tax increases designed to prevent Puerto Rico from defaulting have crushed many small businesses. Hiring, especially by small businesses, is also discouraged by local labor laws that make it harder to discharge problem employees than in any other jurisdiction in America. (Puerto Rico is not an at-will employment state, unlike 49 of the 50 U.S. states. That makes it dramatically harder to fire lackluster employees in Puerto Rico than in the rest of the United States.)
But that didn’t stop its legislature from recently passing a bill to hold employers liable for vaguely-defined workplace “bullying,” further increasing labor costs.
The Governor vetoed it, citing its vague definition of bullying, but his other reason given for vetoing the bill (limits on remedies for private-sector plaintiffs) could actually lead to those provisions of the bill becoming even worse for private-sector employers if it is rewritten and passed once again by the legislature.
July 8, 2014 10:02 AM
Over at Rare, I have a piece on the cronyism angle of the Export-Import Bank debate. The Senate will likely vote this on month on whether or not to end the bank:
[I]f government is going to dole out corporate welfare, the most efficient way to do it is to hand out cold, hard cash. Straight subsidies don’t distort international markets or invite corruption the way export subsidies do.
But most cash gifts to corporations are political non-starters. They’re a little too obvious. So companies and allied politicians need cover stories. The Export-Import Bank fits the bill.
An official logo, sophisticated-sounding economic rhetoric, and appeals to American jobs and patriotism are designed to make people feel good about the special favors Ex-Im performs for businesses.
Read the whole thing here.
July 7, 2014 1:48 PM
“If you like your life, home, and auto insurance, you can keep them.”
President Obama didn’t make this promise when he signed into law the Dodd-Frank financial overhaul on July 21, 2010, as he did regarding the health insurance law – Obamacare – that he signed into law a few months earlier that year. But as syndicated columnist Jay Ambrose points out, “if the Dodd-Frank regulatory law does what is now plotted, though he will still share responsibility for the insurance provision that, along with others, could bloody lots of noses.”
As Dodd-Frank approaches its fourth anniversary, Obama is singing its praises. He told National Public Radio on July 2 that Dodd-Frank is “an unfinished piece of business, but that doesn't detract from the important stabilization functions” it has provided
Yet even to lawmakers from Obama’s own party, this “financial reform” legislation is looking more and more like a destabilizing force – much like the so-called “reform” of health insurance. Even at the outset, there were many similarities. Both Obamacare and Dodd-Frank contained about 2,500 pages that were rammed through a Democrat-controlled House and Senate at breakneck speed. Because of the length of the law and speed of passage, many did not understand and/or hadn’t read the bills.
Also as with Obamacare, unintended consequences of Dodd-Frank almost immediately began to surface. First, there was a sharp reduction in free checking due to the price controls on debit card transactions from the Durbin Amendment. Then, community banks and credit unions – including some with close to zero foreclosures – found the “qualified mortgage” rules so costly and complex that they slowed down or stopped altogether the issuance of new mortgages. Then, with regard to a provision with no plausible connection to sound banking and finance, domestic manufacturers found themselves having to trace back numerous materials they utilize to determine if they had originated as “conflict minerals” from the Congo.
But the latest unintended consequence may be the one that bears the most striking similarity to Obamacare. Just as health insurance premiums and deductibles skyrocketed due to Obamacare’s many mandates, so too may those of life, home and car insurance due to provisions of Dodd-Frank. Life insurance rates alone could soar by $5 billion to $8 billion a year, according to the respected economic consulting firm Oliver Wyman. And as with Obamacare, choices of policies will be more limited and some policies may even be canceled.
July 7, 2014 11:08 AM
This is Part 16 of a series taking a walk through some sections of Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State (2014 Edition)
Executive orders matter increasingly in a realm where the domain of private sector authority and control yields to governmental bodies and bureaucracies. (Read more about them in the July 4 special edition of “Red Tapeworm.”)
“Public Notices” published in the Federal Register also matter more as a regulatory state ages and accumulates bulk.
While there are some 3,500 final rules issued annually, there are tens of thousands of public notices, with uncounted “guidance documents,” memoranda and bulletins among them. I discuss the significance of such “Undocumented Regulation,” that occurring beyond the normal, required notice-and-comment procedure of the Administrative Procedure Act here in Forbes (“Despotism Lite? The Obama Administration’s Rule By Memo.”)
The chart nearby shows that the number of notices annually has never dipped below 24,000 since 1996. There were 24,261 in 2013. One wonders how many have pondered the implications of 477,929 notices accumulating since 1995. Now that policies are announced by blog, such as the Department of Treasury’s extensions of certain Obamacare deadlines, notices and actual rules undercount regulation.
Not many, or we’d have long since passed legislation to weed out the overgrowth of federal rules, regulations, red tape. But even harmful and stupid regulations have a powerful constituency among cronies, favored businesses, bureaucrats, self-styled “public interest” groups, and public unions.
July 7, 2014 6:51 AM
It was a short work week due to the 4th of July holiday, but a busy one. Monday’s Federal Register topped 500 pages, and Tuesday alone saw 29 new final regulations.