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  • The Improvisational Fed, Unpredictable Regulations

    February 11, 2016 4:03 PM

    Improvisation can be a wonderful thing when performed by talented hands—Charlie Parker, Miles Davis, and the like. The Federal Reserve, for the last 15 years or so, has fancied itself an improvisational talent on that level. When trouble strikes, the Fed will just figure it out, even if nobody knows in advance what it will do. But like most humans, Ben Bernanke was no Charlie Parker, and Janet Yellen is no Miles Davis. They should consider a return to the Paul Volcker/early Alan Greenspan adherence to a defined rule.

    The rest of the executive branch has a similar lesson to learn—more complexity and an ever-increasing stock of rules means less predictability and more uncertainty for businesses, investors, and consumers. Agencies’ increasing tendency to regulating through non-transparent “dark matter” means only makes the problem worse.

    As far as the Fed goes, the point is not so much which rule a central bank should adopt, but that it must have a rule in the first place, and follow it consistently. Here are three possibilities. 

    One is a Taylor rule, which the U.S. Federal Reserve followed for the better part of the 1980s and 1990s, with good results. A Taylor rule raises interest rates when growth and inflation are high, and lowers interest rates when growth and inflation are low. In other words, if the economy looks like it might be overheating, the Fed automatically touches the brakes a little bit. And if it looks sluggish, the Fed pushes the gas pedal a little bit, by predictable, predefined amounts.

  • House Committee Narrowly Approves Eleanor Holmes Norton's Deadly E-Cigarette Science Denialism

    February 11, 2016 2:35 PM

    Following three government reports in the 1980s highlighting the low cabin air quality caused by cigarette smoking and the health risks of passive smoke, Congress banned smoking aboard airliners.

    This prohibition is currently codified at 49 U.S.C. § 41706, and refers to “smoke” and “smoking,” which are banned on domestic and international flights. A popular new alternative to smoking is the electronic cigarette. Unlike cigarettes, e-cigarettes do not combust tobacco and do not produce smoke. Instead, they heat a liquid that generates vapor containing nicotine and is absorbed by the user’s lungs.

    According to the latest scientific research, e-cigarettes are around 95 percent safer than cigarettes for users. The same comprehensive U.K. government review found that vapor products “release negligible levels of nicotine into ambient air with no identified health risks to bystanders.Another study found exposure to passive vapor in enclosed spaces likely poses extremely low health risks relative to tobacco smoke. 

  • Permanent Moratorium on Internet Taxation in Customs Bill

    February 11, 2016 1:24 PM

    Today the Senate voted 75-20 in favor of the conference report accompanying H.R. 644, the Trade Facilitation and Trade Enforcement Act of 2015, the so-called customs bill.

    While the majority of the bill deals with customs duties and procedures, there are some notable provisions in the conference report that won support. Chief among these is a permanent moratorium on Internet taxation, replacing temporary holds on states and localities taxing Internet access or placing multiple and discriminatory taxes on Internet commerce. That’s good news for consumers, who increasingly are purchasing goods and services on internet sites.

    A House amendment to H.R.644 specifically amends the Bipartisan Congressional Trade Priorities and Accountability Act (the Trade Promotion Authority Act) by ensuring that the negotiating objectives for trade agreements outlined there cannot include measures that would obligate the U.S. to limit greenhouse gas emissions.

  • A Banner Day for Rule of Law, Constitution, and Common Sense

    February 10, 2016 11:02 AM

    In an unexpected and unprecedented decision, the Supreme Court last evening granted an application by more than two dozen states to stay implementation of the Clean Power Plan during pendency of petitions for review.  

    Absent a stay, the imminent danger was that EPA could effectively escape judicial review in implementing the rule, which is President Obama’s marquee climate policy. Last year, for example, the Supreme Court checked EPA’s absurd Utility MACT, but not before 80 percent of utilities spent billions of dollars implemented the rule during the three years that it took for the legal challenge to run its course through federal courts. So, EPA had already won, even before the Court ruled the rule was impermissible.

    The Clean Power Plan posed the same threat. Capital-intensive businesses like utilities must plan on a multi-year horizon, at least five years out. Indeed, power plants take years to build. The electric sector simply cannot wait for the slow wheels of justice to turn. As such, utilities likely would have locked in compliance during judicial review, regardless whether the regulation was determined to be illegal.

    With last evening’s decision, the Court avoided a repeat of the Utility MACT injustice and, in so doing, scored a win for the rule of law, the Constitution, and common sense. Regarding the rule of law, I explained yesterday that the Clean Air Act plainly prohibits EPA’s Clean Power Plan, and the agency’s argument to the contrary is a “monument to disingenuousness.” From a constitutional perspective, the Court’s stay prevents EPA from “commandeering” states—in violation of the Tenth Amendment—by forcing them to spend significant administrative resources implementing federal climate policy they oppose. And from a common sense standpoint, the Court’s decision arrests EPA’s attempt to overhaul the nation’s electricity sector in order to achieve climate “benefits” that are too small to be measured.

    The states submitted their application in late January to Chief Justice Roberts, who, in turn, sought counsel from his peers. As per usual, Justice Kennedy was the swing vote in the 5-4 decision. Justice Kennedy has a history of being solicitous of states’ “dignity” within American federalism, so I suspect he was impressed by the number of states that opposed the Clean Power Plan.

    Where do we go from here?

  • FOIA Production on Clinton Email Scandal and Security Training

    February 10, 2016 1:10 AM

    The following documents were produced in response to CEI's FOIA requests seeking records of IT and cybersecurity training by then-Secretary of State Hillary Clinton and her aides Huma Abedin and Cheryl Mills. Our two requests were broken down by the State Department into three and assigned FOIA numbers ending in:

    • 05781 (cyber security training records Clinton, Abedin, Mills)
    • 05043 (IT training records for Clinton)
    • 05069 (Separation docs Clinton, Abedin, Mills)

    We have received staggered productions given the requests involved various offices where responsive records might be found.  

    This production is related to our lawsuit CEI v. United States Department of State. The original FOIA requests were a part of CEI's inquiry into the development of a successor regime to the Kyoto Protocol on global warming, and the decision to pursue treaties (particularly the Paris climate treaty) as non-treaties. CEI sought documents relating to email record keeping, and security practices of Secretary Clinton and her inner circle, including if they submitted the required attestation whether they possessed any work-related emails on non-official accounts or thumb drives. After receiving no cooperation from the State Department on its key threshold request, CEI was forced to sue. 

  • In Defending Clean Power Plan before the Supreme Court, EPA/DOJ Misrepresent Clean Air Act with Lame Editing Tricks

    February 9, 2016 2:44 PM

    Lawyers for the EPA and the Department of Justice (DOJ) are trying to pull a fast one on the Supreme Court. Through creative formatting, they are misrepresenting the text of the Clean Air Act such that it omits a major constraint on federal power.

    At issue is Clean Air Act §7411(d)(1), which is a regulatory program to control emissions from existing stationary sources. Section §7411(d)(1) allegedly authorizes Obama’s marquee climate policy (known as the Clean Power Plan). Below, I’ve reposted the text of the provision in full.

    §7411(d)(1) The Administrator shall prescribe regulations which shall establish a procedure similar to that provided by section 7410 of this title under which each State shall submit to the Administrator a plan which (A) establishes standards of performance for any existing source for any air pollutant (i) for which air quality criteria have not been issued or which is not included on a list published under section 7408(a) of this title or emitted from a source category which is regulated under section 7412 of this title but (ii) to which a standard of performance under this section would apply if such existing source were a new source, and (B) provides for the implementation and enforcement of such standards of performance.

    To help you unpack this provision, I’ve ordered it below in an outline format that comports with the express structural instructions in the provision’s text: 

    §7411(d)(1) The Administrator shall prescribe regulations which shall establish a procedure … under which each State shall submit to the Administrator a plan which

    (A) establishes standards of performance for any existing source for any air pollutant

    (i) for which air quality criteria have not been issued or which is not included on a list published under §7408(a) of this title or emitted from a source category which is regulated under §7412 of this title but

    (ii) to which a standard of performance under this section would apply if such existing source were a new source, and

    (B) provides for the implementation and enforcement of such standards of performance.

    For challengers of the rule, the crucial language is in subsection §7411(d)(1)(A)(i), which acts to limit the EPA’s authority under the provision. Opponents of the rule argue that this subsection, by its plain terms, sets forth three independent disqualifying factors that constrain EPA’s authority:

    1. EPA can’t issue §7411(d) regulations (i.e., the Clean Power Plan) for pollutants for which air quality criteria have been issued;
    2. EPA agency can’t issue §7411(d) regulations for pollutants on the §7408 list;
    3. EPA can’t issue §7411(d) regulations for sources subject to §7412.
  • RealClear Radio Hour: Budding CEOs and PC University

    February 9, 2016 11:21 AM

    This week on RealClear Radio Hour my guests cover two topics that lie at the heart of how we educate our children: How we can nurture a generation destined to come of age in the new gig economy and how can students withstand the wave of political correctness sweeping our colleges and universities.

    My first guest is Jeff Sandefer, co-founder and middle school teacher at the Acton Academy. Jeff shares his novel approach to education—emboldening children to be heroes on a hero’s journey. Sandefer recounts stories from the Acton Children’s Business Fair and how adeptly children as young as five embrace entrepreneurship.

  • PITFA a Poor Hostage for Internet Sales Taxes

    February 9, 2016 8:36 AM

    Despite the premise of many a political cartoon, U.S. senators aren’t stupid. But a few of them are hoping to bamboozle at least 60 of their colleagues into voting to strip the Permanent Internet Tax Freedom Act (PITFA) out of new customs legislation, the conference version of The Trade Facilitation and Trade Enforcement Act

    The House has already passed PITFA and it would permanently ban unpopular discriminatory taxes on Internet commerce and access being pursued by multiple state legislatures. The original ban has been extended with bipartisan support many times since its inception in 1998. It protects consumers from new and, if telecommunication taxes are any indication, typically high taxes related to accessing the Internet. Its permanence would be a boon for Internet users, innovators, and investors. On its merits, it’s hard to argue against PITFA.

    But as any disaffected primary voter will tell you, sometimes playing politics trumps merit inside the beltway. Case in point: a few senators are seeking to strip PITFA from the customs bill so they can tie a slam-dunk PITFA vote to the hugely unpopular Marketplace Fairness Act (MFA) they all support later on in the session. 

    For the merit-minded among us, it’s important to clarify that the MFA and its House-side equivalent, the Remote Transactions Parity Act, represent the largest expansion of state taxing powers in U.S. history. It would allow states to reach across their borders and tax businesses with no presence in that state. It’s a small business killer, an enabler for spendthrift state politicians, an example of crony capitalism, and is wildly unpopular with voters. It’s hard to argue for MFA on its merits. 

  • House Votes This Week on Common Sense Nutritional Disclosure Bill

    February 8, 2016 3:40 PM

    Many, if not most proposals that make their way through Congress seem to have comically unsuitable names. However, at the end of this week the House of Representatives is expected to vote on a plan to remove one onerous, unneeded Obamacare regulation. A little known provision within Affordable Care Act (ACA) requires retail food establishments with 20 or more locations to list calories for regular menu items it serves on all signs and printed menus. While consumers might benefit from knowing calorie content, this one-size-fits-all mandate puts a big burden on small food retailers, and it could lead to unwanted price hikes. H.R. 2017—the Common Sense Nutrition Disclosure Act really is a common sense solution to the regulatory problem. 

    One problem is that a big cost government mandate may not mean big changes in consumer habits. The rule within ACA was intended to address the obesity problem in the U.S., but, as NYU population-health expert Brian Elbel found in his research on the effects of calorie labeling in New York City and Philadelphia restaurants, the requirement may not have any significant effect on customers’ ordering.

  • CDC Alcohol and Pregnancy Scare Tactics Backfire

    February 8, 2016 11:17 AM

    Are you a woman of childbearing age? Do you binge drink constantly and have unprotected sex on the reg? Well, the CDC wants you to know that you’re putting a potential child’s life at risk with your irresponsible behavior. This message was at the center of a mini-firestorm last week after the Centers for Disease Control and Prevention issued a press release telling women between 15- and 44-years-old they need to either quit drinking entirely or get on birth control. Some couldn’t understand why seemingly reasonable advice was so offensive. Luckily, there are many smart, snarky, female writers out there who leapt at the task of explaining why looking at women as existing in a state of “pre-pregnancy” was condescendingpaternalistic, and tone deaf. It was all of those things, but it was also bad advice.

    The point of the warning was to alert women to the fact that, if they’re not on birth control, they could be pregnant and that their drinking may cause an undetected fetus to develop Fetal Alcohol Spectrum Disorders (FASDs), very serious conditions that are entirely preventable.

    Was the message well-intentioned? Of course, as are all of the CDC’s hyperbolic and sometimes incorrect guidelines and warnings. But it illustrates a fundamental problem with government health advice generally: take a complicated issue, for which the science is not “settled,” and turn it into a population-wide categorical directive. Rather than giving us nuanced information about the actual level of risk (the Fetal Alcohol Spectrum Disorders Center for Excellence puts at 10 in 1,000 births not 1 in 20 as the CDC claimed, by the way), and allowing women to make their own calculation about what risks are worth taking, they’d rather scare us into completely avoiding an activity that has any risk at all. Or put more succinctly, they rely on the precautionary principle.

    Broadly stated, the precautionary principle holds that when the risks of an action are unknown it is best to entirely avoid it. But every choice we make has risks—even choosing to avoid something—and those risks must be weighed against potential benefits. For example, a woman may rather accept the small risk of a condom breaking on one of the six days a month when she could become pregnant, (necessitating the use of emergency contraception or pregnancy termination) than increase her risk of blood clots and cancer by using hormonal birth control or give up her social life and the possible cardiovascular benefits of consuming alcohol.


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