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OpenMarket: July 2012

  • Milton Friedman Turns 100

    July 31, 2012 4:30 PM

    If he were still alive, Milton Friedman would be celebrating his 100th birthday today. I saw him speak a couple times, and even met him once.

  • Regulation Of The Day 225: Boobie Pillows

    July 31, 2012 11:55 AM

    Kern County, California's government takes morality very seriously. Chapter 9.12.010 of the County Code states that “No vendor shall vend stuffed articles depicting the female breasts (sold as "boobie pillows") within one thousand (1,000) feet of any county highway.”

  • Unruly Lead Paint Rule

    July 31, 2012 11:47 AM

    The U.S. House of Representatives Committee on Oversight and Government Reform recently released an interesting report on regulatory impediments to job creation. Among the items discussed is the U.S. Environmental Protection Agency standard related to remodeling homes that contain lead-based paint. The standard requires contractors to test pre-1978-built homes for lead paint and then apply certain safety practices if they find it. It also requires contractors to take classes and gain certifications to work in homes with lead paint. A provision originally allowed homeowners with no children or pregnant women in the home to opt-out of testing, etc., but the Obama EPA eliminated that provision even though lead only poses risks to children under six who are exposed to relatively high amounts over a period of time.

    There are many problems with the standard, but perhaps the most obnoxious is the fact that it encourages people to either break the law by hiring non-certified contractors or to avoid using professionals altogether. Accordingly, rather than improve safety, it simply harms small businesses that are working hard to be good citizens by complying with the law. The Committee report explains:

  • Chick-Fil-A And Free Speech: New York City Council Speaker Pressures University To Punish Restaurant For Speech

    July 30, 2012 4:59 PM

    New York City Council Speaker Christine Quinn wants to kick Chick-fil-A out of New York because its CEO said he opposed gay marriage.  She sent the head of New York University, which leases space to the one Chick-fil-A restaurant in New York City, a letter stating, "Chick-fil-A is not welcome in New York City as long as the company's president continues to uphold and promote his discriminatory views [...] I urge you to sever your relationship with the Chick-fil-A establishment that exists on your campus."  My guess is that the university will regard this letter more as an unstated threat than as a mere statement of the Speaker's opinion, since universities are pervasively subject to ad hoc government regulations and ordinances, making it imperative to cultivate municipal officials' goodwill.  (For example, a university that annoys municipal officials can end up with an enrollment cap, or lose lucrative eminent domain prerogatives.  Business owners are often subject to municipal predation  that can potentially drive them out of business, forcing them to ingratiate themselves with city officials.)

    Government pressure on a private institution to terminate a contract with another private entity due to that entity's speech violates the First Amendment rights of that entity.  For example, if a government official pressures a private institution to take action against someone (such as firing an employee) for his speech, that violates the First Amendment, see Korb v. Lehman, 919 F.2d 243 (4th Cir. 1990) (pressure on defense contractor to fire employee for speech); Dossett v. First State Bank, 399 F.3d 940 (8th Cir. 2005); Reuber v. U.S., 750 F.2d 1039 (D.C. Cir. 1985).  Government retaliation for speech does not necessarily need to include explicit threats or pressure to violate the First Amendment.  For example, if the Government merely reprimands a public employee for his speech, or censures a private citizen for his speech, some courts find that to be a violation of the First Amendment.  See Columbus Education Association v. Columbus Board of Education, 623 F.2d 1155 (6th Cir. 1980) (reprimand); Little v. N. Miami, 805 F.2d 962 (11th Cir. 1986) (censure resolution by city council); White v. Lee, 227 F.3d 1214 (9th Cir. 2000) (baseless investigation over speech).

    Quinn's pressure comes in the wake of similar attacks on Chick-fil-A by other politicians.  As I noted in The Washington Examiner,

    [Boston's] mayor said he would block Chick-fil-A from opening a restaurant there because its CEO opposes gay marriage.  [He has since retreated from this position]

    Similarly, an alderman in Chicago has said he will block a zoning permit needed for a Chick-fil-A restaurant in Chicago because of its CEO's views.

    Under the Supreme Court's Umbehr decision, cities cannot punish firms or withhold even discretionary benefits like zoning permits over their speech. The Supreme Court long ago ruled that firms have free speech rights in its rulings in favor of Consolidated Edison and the First National Bank.

    Chick-fil-A has faced unusually few discrimination claims of any kind for a restaurant chain. There is no evidence that Chick-fil-A discriminates against gay patrons, and it has restaurants in many cities than ban anti-gay discrimination.

  • Harassing Newborns And Their Mothers: Mayor Bloomberg's Latest Overreach

    July 30, 2012 1:20 PM

    The New York Post reports, "Mayor Bloomberg is pushing hospitals to hide their baby formula behind locked doors so more new mothers will breast-feed." When my daughter was born, we had planned to breastfeed her, but she never learned how to latch on to a breast to breast-feed.  But she would drink out of a bottle.  So we were infinitely relieved when the hospital had plenty of baby formula we could give our daughter, since we did not yet possess an effective breast milk pump for her to drink out of the bottle.  Lucky for us, our daughter did not get born in a New York hospital.

    As The Daily Caller reports:

    New York’s Mayor Michael Bloomberg is locking up the baby formula, because he wants newborns to drink breast milk instead.

    He’s using his mayoral power to direct maternity-ward nurses to hide baby-milk formula after Sept. 2 so that new moms feel pressured to provide breast milk to their newborns.

    Bloomberg’s mammary-mandate is supported by white-coated public-health officials, who say the scientific data shows that mothers’ milk aids infants’ digestive systems and shields them from some diseases.

    His wishes are law because he controls much of the city’s health network in a city-wide version of Obamacare.

    Since my daughter never learned to latch on, and it took hours a day for my wife to pump breast milk into bottles, we stopped giving our daughter breast milk after 5 months, and gave her formula thereafter.  Although some pediatricians claim you need to breastfeed your kid for a year, my daughter turned out fine, with good health and the ability to read in two languages.  (She will be entering kindergarten in the fall).

  • Miraculous Markets: Water Into Wine

    July 30, 2012 1:11 PM

    Libertarians are often accused of “worshiping” the free market. But the truth is, markets can perform miracles.

    A car growing in Iowa?

    David Friedman (son of Milton and celebrated economist in his own right), likes to say there are two ways to produce a car: you can build it in Detroit, or grow it in Iowa.

    How does one grow a car in Iowa? The recipe is very simple. Plant seeds and wait for them to grow into wheat. Harvest the wheat, and ship it across the Pacific. Wait a few months, and the ships will return loaded with Hondas and Subarus.

    Transforming wheat into automobiles seems pretty miraculous. Still, the Vatican might not buy it.

    So consider this: Soybeans are the eighth largest U.S. export to Spain. Spain is the fifth largest wine exporter to America. American farmers water the soy plant, harvest the beans, and ship them to Spain. The boats come back carrying wine.

    When trade is free, it can turn water into wine.

    That’s a miracle if I’ve ever heard one.

  • Groupon Marketing class action settlement

    July 30, 2012 9:30 AM

    There was a lot of publicity about the "$8.5 million" Groupon will pay to settle a class action over expiration dates; several class members complained about the settlement to me, mostly because they viewed the lawsuit as silly. (So did Groupon, before their lawyers made them take down the original blog post criticizing the first of the many class actions brought against them.) But the settlement is even worse than it looks. Before the settlement, if a Groupon customer had a problem with a Groupon, they contacted customer service, indicated dissatisfaction, and got a full cash refund. After the settlement, if a Groupon customer has a problem with a Groupon that they purchased during the class period, they contact customer service, and customer service refers them to the class action settlement website, where they can fill out a claim form; after several months (and perhaps years), the class action settlement administrator will give the class member a pro rata share of the settlement fund—which, though the publicity says is $8.5 million, less than $6 million of it will be likely available to the class. In other words, the class action attorneys have negotiated a settlement that makes their clients—who had suffered no damages because of the availability of refunds—worse off, and are asking for millions of dollars for their efforts. I discovered this the hard way: I purchased a Groupon Voucher for a restaurant that closed, and tried to get my money back from Groupon. They told me to file a claim form.

  • Today in the News; July 30, 2012

    July 30, 2012 9:23 AM


    MATTHEW YGLESIAS: "How to Ban Chick-Fil-A From Your City"
    "I hope that friends of free speech will note that while the Constitution would almost certainly prevent Chicago from de jure banning Chick-fil-a on these grounds, it's almost trivially easy for jurisdictions to abuse the extremely wide discretion they're granted to de facto do the same thing. For example, there are 1,641 Chick-fil-a outlets in the United States and Chick-fil-a, as part of its owners' socially conservative approach, doesn't open on Sunday. So all a city needs to do is say that if a quick service restaurant with more than 1,500 branches wants to open, it must be open seven days a week. I'm fairly certain that wouldn't restrict any businesses other than Chick-fil-a, and the reason to do it would be the owners' outspoken right-wing politics, but the rule would be 'content neutral' so you're OK."

    RAYMOND BONNER: "FDA's Immoral Stance on Lethal Injection Drugs"
    "When it comes to drugs used in executions, the FDA says it doesn’t check on their 'potency, safety or effectiveness.' [...] The FDA even helped expedite a shipment of sodium thiopental to Arizona because 'it was for the purpose of executions and not for use by the general public,' the deputy director of the Arizona Department of Corrections wrote in an e-mail to his counterpart in California. This caused one death penalty lawyer, Clive Stafford Smith, to say sarcastically that drugs 'can be expedited if they are meant to kill someone, but apparently not if they are meant to save lives.'"

    MERRILL MATHEWS: "EPA's New Mandate: Pump Grass, Not Gas"
    "If you think the government penalizing — or is it taxing? — people for not buying health insurance is bad, at least there are health insurance companies actually selling coverage.  By contrast, the Environmental Protection Agency (EPA) fined oil refiners $6.8 million last year for not incorporating cellulosic ethanol in gasoline — even though the product doesn’t exist."

  • CEI's Battered Business Bureau: The Week In Regulation

    July 30, 2012 5:00 AM

    86 new rules last week, covering everything from Florida tomatoes to tug boat races.

  • Amendment to Cybersecurity Act Would Deter Federal Government Privacy Abuses

    July 29, 2012 7:04 PM

    [caption id="attachment_58589" align="alignright" width="150"] Lord Acton's beard absolutely knows that power corrupts[/caption]

    In the ongoing debate over the Senate’s Cybersecurity Act of 2012 (S. 3414), one major point of contention is whether the bill adequately safeguards individuals’ private data from governmental abuses. While CEI praised recent changes to the bill’s information sharing provisions, we remain seriously concerned about the bill’s implications for privacy competition and trust in cloud computing.

    Next week, the Senate is expected to vote on a flurry of amendments to S. 3414, some of which are available here. One smart proposal, spearheaded by Sen. Daniel Akaka, would amend the Cybersecurity Act and several existing laws to better ensure the federal government doesn’t abuse the information it acquires and maintains about private individuals.

    Among other positive changes, Sen. Akaka’s amendment would deter the federal government from willfully abusing private data and require the government to notify persons whose data is breached.

    Deter Government From Willfully Abusing Private Data – The amendment would amend the Privacy Act of 1974 to ensure that individuals who suffer actual harms due to certain willful or intentional privacy violations by government can obtain meaningful recourse. This statutory change would address a gaping hole in the Privacy Act created by the Supreme Court's recent opinion in FAA v. Cooper, 132 S. Ct. 1441 (2012), which held that victims of certain privacy violations by government cannot recover damages caused by mental and emotional distress—even where victims can prove they suffered severe mental anguish.

    In Cooper, the Social Security Administration violated the Privacy Act by disclosing the HIV-positive status of Stan Cooper to the FAA and Department of Transportation. Even though the trial court concluded the SSA willfully violated Cooper’s privacy, the Supreme Court held that he couldn’t recover proven emotional damages. The Court reasoned that because waivers of sovereign immunity must be made explicitly by Congress, the reference to “actual damages” in the Privacy Act should be construed narrowly and, therefore, only encompasses pecuniary losses.


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