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OpenMarket: August 2012

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

    August 20, 2012 5:00 AM

    65 new rules, from offshore drilling to closed captioning.

  • Is Government Motors Headed For Bankruptcy Again?

    August 17, 2012 4:07 PM

    The tens of billions of dollars in taxpayer money spent on the auto bailouts did not fix the automakers' underlying problems, but rather helped mask and perpetuate them (such as inefficient work rules and high labor costs -- the Obama administration ripped off GM and Chrysler bondholders and the automakers' non-union retirees, as well as taxpayers, to enrich the UAW Union in the bailouts). For a short period, the Japanese earthquake and Thai floods so damaged the Japanese automakers that GM once again became the world's number one automaker, but when the Japanese companies recovered, Toyota once again surpassed GM as the world's biggest automaker.

    At Forbes, Louis Woodhill says "General Motors is headed for bankruptcy -- again." After crunching the numbers and market share trends, and analyzing recent GM models, he says that if President Obama "wins a second term, he is probably going to have to bail GM out again. The company is once again losing market share, and it seems unable to develop products that are truly competitive in the U.S. market."

    The bailouts resulted in new, even more inept and politicized management at GM (which replaced a pre-bailout CEO, Rick Wagoner, who had put in place changes that belatedly resulted in improved product lines coming out shortly after his ouster).  Auto industry experts are horrified by GM's recent mismanagement of its European operations:

    General Motors’ plan to displace the venerable and respected Opel brand in Europe with a new Chevrolet “global” brand really is as insane as it seems, according to Keith Crain of Automotive News. “It will take decades for Chevrolet to establish anywhere near the recognition that Opel has,” Crain argues.

  • Regulation Roundup

    August 17, 2012 3:10 PM

    Fines for inaccurate weather forecasts, illegal chocolate egg smuggling, plus more.

  • West Nile Outbreak Warrants Pest Control -- Pesticide Spraying Included

    August 17, 2012 3:07 PM

    This year, Texas is experiencing its worst outbreak of the mosquito-transmitted West Nile virus ever. Fortunately, most people who get it won't suffer the severe symptoms -- some won't even notice they have been infected, and others will experience a range of flu-like symptoms. But the bad news is, some people will suffer severe, painful and even a debilitating illness with permanent neurological damage, and some will die.

    The Centers for Disease Control and Prevention (CDC) tracks the number of cases reported around the country. Texas appears to be experiencing the worst outbreak, but the problem affects many states and the illnesses and death toll will continue well into the fall. In fact, most cases occur late summer and into late fall, so we have many months to go.

    Some greens suggest that we should not bother to control the disease using pesticides, because most people are not affected. But even a handful of unnecessary deaths and horrible suffering of those who get the illness warrants action. When deciding to spray, Dallas Mayor Mike Rawlings explained: "I cannot have any more deaths on my conscience because we did not take action." Dallas County has begun aerial spraying of pesticides for the first time  in 45 years.

    Greens second guess the expertise of the local public health officials working to control mosquito populations and disease transmission -- suggesting the activists somehow know better. I've presented at several meetings of the American Mosquito Control Association, which represents local mosquito control officials around the nation. The members include highly educated, hard-working people with PhDs in biology, entomology, etc., who work in concert with a host of other experts to protect communities around the nation. I'd rather put my confidence in their decisions over environmental activists who have exhibited a callous disregard for the people who suffer from West Nile.

  • Wishful Thinking About Religious Freedom And Gay Marriage

    August 17, 2012 12:38 PM

    One of the reasons that social conservatives oppose gay marriage is the belief that if it is legalized in a state, private institutions, like religious employers, and religious schools, will be forced to treat gay unions the same as heterosexual marriages. The unstated assumption they have is that if they can just block gay marriage, no bossy government official will be able to force them to treat gay unions like straight marriages.

    But this assumption is just wishful thinking: blocking gay marriage solves nothing, because bossy civil-rights bureaucrats and liberal judges (most state judiciaries, and virtually all civil-rights bureaucrats, are liberal) will force them to treat gay couples as if they were married couples, even if gay couples cannot formally get married in the state.  Multiple court rulings and administrative rulings show that this is so, by effectively ordering religious businesses and schools to treat unmarried gay couples as if they were married, under existing state laws and municipal ordinances banning private-sector discrimination against gays.

    I have been one of the most outspoken critics of these rulings restricting religious freedom; and I have repeatedly defended the First Amendment rights of social conservatives to express their views about homosexuality (for example, I have criticized politicians' harassment of Chick-fil-A over its CEO's opposition to same-sex marriage, which was constitutionally protected speech, see here, here, here, and here). And I can tell you that banning gay marriage does not solve this problem, it just causes other problems, such as creating perverse incentives for gays (and occasionally harming heterosexuals).

    Blocking gay marriage (unfairly) prevents committed monogamous gay couples in long-term relationships from accessing useful government benefits limited to legal spouses (while also shielding them, ironically enough, from "marriage penalties" in the tax code and welfare system). It also sometimes results in gay couples in short-term relationships unfairly obtaining certain government benefits available only to those heterosexuals who are married (and thus not in short-term, non-legally-binding relationships), and increases the risk that private institutions will be forced to treat gay couples the same as married heterosexuals even if they are not in a long-term relationship akin to marriage. Banning gay marriage thus reduces incentives for long-term monogamy among gays, even though monogamy is as desirable among gays as among heterosexuals (since it can reduce the incidence of AIDS, and promote family stability, such as households in which gay couples are raising children).

  • Struggle Over Union-Owned Bank Is A Sign Of Union Weakness

    August 17, 2012 11:01 AM

    Shifting deposits to the union-owned Amalgamated Bank has become a leftist cause celebre, as several Democratic and progressive  groups try to be seen as dissociating themselves from the politically incorrect Bank of America. However, as I outline in the Daily Caller,  Amalgamated Bank's recent history, which includes a bitter struggle over its control, muddies the left's portrayal of Amalgamated as an oasis of virtue in the otherwise corrupt world of finance.

    Amalgamated Bank is controlled by a subsidiary of the powerful Service Employees International Union's (SEIU),  which won control over the bank as a result of a protracted union civil war. Stern, a political heavy hitter during his tenure at the helm of SEIU, was the most frequent visitor to the White House for most of the first year of the Obama presidency.

    The struggle over the control of Amalgamated is itself indicative of private sector union's weakness and of the extent to which they are willing to go to preserve their influence.

    The SEIU subsidiary, Workers United, itself broke away from UNITE-HERE, which was itself the result of the 2004 merger of two unions representing workers in two unrelated industries, hospitality and textile manufacturing: the Hotel Employees and Restaurant Employees (HERE) and UNITE (formerly the Union of Needletrades, Industrial and Textile Employees, itself the product of a series of textile union mergers).

  • Lastest Junk Science On BPA And Heart Disease

    August 17, 2012 10:18 AM

    Earlier this week, we learned from the wonderful world of junk science that eating egg yolks is as dangerous as smoking. Now we learn that eating canned vegetables will harden your arteries! These stories are hard to believe for good reasons, but they sure do make catchy headlines for news sites and green bloggers.

    Consider just a few. "BPA Now, Heart Disease Later:  The scary new connection between bisphenol A and heart disease," reads a headline on Prevention Magazine's website.  "BPA may boost artery disease risk" reads another headline on But the award for the most amusing "hype-line" on the topic goes to Treehugger: "Link Between BPA and Heart Disease Seen in Urine, New Study Reports." That's a new spin on fortune telling!

    Trace residues of BPA enters the body when we consume food packaged in containers made using the chemical. For example, aluminum/steel cans are lined with BPA-based resins to control development of dangerous pathogens and extend shelf-life. BPA does not accumulate in the body, but instead passes out in urine.

    This study measures the levels of BPA found in urine to assess whether high levels are associated with coronary artery disease. The authors divided 591 patients into three groups based on each individual's degree of coronary artery disease: severe, intermediate, or normal. The researchers found: "BPA exposure was higher in those with severe coronary artery stenoses compared to those with no vessel disease."

  • Today's Links: August 17, 2012

    August 17, 2012 9:49 AM


    ROB COX and RICHARD BEALES: "Since When Does a Huge Hedge Fund Need Subsidies?"
    "Since when does a huge hedge fund need subsidies? Ray Dalio’s Bridgewater Associates, the biggest in the world with $130 billion under management, may get up to $115 million in help from the U.S. state of Connecticut to build a new headquarters. Dalio’s firm, which made him nearly $4 billion last year according to Absolute Return, hardly seems a needy recipient of aid. And on the surface Governor Dannel Malloy has far more pressing priorities. Connecticut recently needed a budget that cut healthcare spending for the poor and tapped funds that had been set aside for other purposes in order to help close a $200 million deficit."

    AMITY SHLAES: "Maine Lobster Tastes Best With Dash of Supply Side"
    "This year’s lobster crop has been enormous, probably because of warmer water temperatures this past winter and spring. For New England lobstermen, supply is now outstripping demand. As a result, lobster processors, most of which are in Canada, are paying very low prices to fishermen -- $2.50 or $3 a pound, compared with the $4 a pound the lobstermen want. That’s hitting Canadian lobstermen hard. Because of regulations that aim to sustain lobster supply -- which seem pretty unnecessary now -- the Canadians are permitted to harvest lobsters for only part of the summer, unlike their U.S. counterparts. They thus need to earn more per pound."

    JACQUI CHENG: "Three Years Later, Deleting Your Photos on Facebook Now Actually Works"
    "We first began investigating Facebook, MySpace, Flickr, and Twitter in 2009 to see how fast our drunken-escapades-slash-cat-photos disappeared from the Internet after we deleted them from each of the social networks. [...] Though it took mere seconds for Twitter and Flickr to remove the photos from their content delivery networks (CDNs) after deletion from the site, MySpace and Facebook weren't so quick. MySpace got around to deleting the photos from its CDN several months later, but Facebook ended up being the embarrassing holdout."

  • On Robert Pattinson, Cosmopolis, And The Folly of National Film Agencies

    August 16, 2012 4:34 PM

    Today in Slate, Aisha Harris explains why the cast of David Cronenberg’s new film Cosmopolis features only one American actor:

    Back in May, David Cronenberg told the French magazine Le Monde that one of the reasons he cast Robert Pattinson as the American lead in his new film Cosmopolis is because the actor is British. If that sounds strange to you, welcome to the world of government-financed films.

    As Cronenberg explained in his interview, Cosmopolis “is a co-production between France and Canada,” and so he was only allowed one American actor (Paul Giamatti, in another role). […]

    Telefilm Canada and its French equivalent, the CNC, typically collaborate on four or five film projects every year. And when they do, such hiring practices are standard. Each film can hire one “lead performer” and one “cameo performer” from a third country.

    So why does Robert Pattinson not count as a "lead performer" from a "third country"?

    Because any actor with an E.U. passport qualifies as a contribution from France. So while any number of European stars were eligible, no Americans—save ones that happen to have an E.U. passport—were.

    It seems that government film agencies are like most government bureaucracies: They insist on regulating activity for the sake of perceived feel-good benefits that don’t pass a smell test.

  • CEI Podcast For August 16, 2012: Drought, Food Prices, And Ethanol

    August 16, 2012 2:19 PM

    Severe drought in the Midwest has driven corn prices to record levels. Policy Analyst Brian McGraw argues that ending the federal government's ethanol mandate could help families who are struggling to pay their heightened grocery bills. Under the mandate, nearly 40 percent of this year's corn crop will be used for fuel instead of food.


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