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OpenMarket: September 2012

  • Fifty Years Later: Rachel Carson Is Still Wrong

    September 28, 2012 3:16 PM

    Back in 1996, the Competitive Enterprise Institute’s Jonathan Tolman authored an article entitled "Rachel Was Wrong,” in which he explained why biologist Rachel Carson mistakenly condemned chemicals -- and pesticides in particular. This month marks the 50th anniversary of her in her 1962 book, Silent Spring, which history shows is, in fact, still wrong.

    Carson did make one reasonable plea for judicious use of pesticides, stating:

    “All this is not to say that there is no insect problem and no need of control. I am saying, rather, that control must be geared to realities, not mythical situations, and that the methods employed must be such that they do not destroy us along with insects.”

    Yet her harsh and unscientific rhetoric, rebuked in Science magazine at the time (“Chemicals and Pests," I. L. Baldwin, September 28, 1962) about chemicals in general took policy in the opposite direction.

    Ironically, while Carson called for policy based on reason over myths, she opened her book up with a “Fable for Tomorrow,” describing a town in which chemicals have destroyed wildlife and people die from chemical exposures. She admitted it doesn’t exist, but somehow we are supposed act on her myth because, “It might easily have a thousand counterparts in America.”

    In her chapter on “Elixirs of Death” she postulates that man-made chemicals affect processes of the human body in “sinister and often deadly ways.” Regarding the pesticide DDT -- which was then used to control malaria-carrying mosquitoes -- she concluded that “the threat of chronic poisoning and degenerative changes of the liver and organs is very real.” Another chapter addresses cancer in which she says one expert “now gives DDT the definite rating of a chemical carcinogen.”

    But her vision of a chemically caused cancer epidemic never came to pass. In fact, people are living longer and healthier lives, cancer rates have declined even as chemical use increased, and chemicals are not among the key causes of cancer.

  • Big Labor's Midwest Offensive

    September 28, 2012 3:05 PM

    Yesterday in the St. Paul, Minnesota, Pioneer Press, my colleague Russ Pohl and I detail the current militant tactics used by Midwest public-sector unions that are paralyzing government. The actions reveal the need to uproot the foundation of government union’s power over taxpayer funds by eliminating collective bargaining in government.

    We explain that in Chicago the power of collective bargaining enabled the teachers union to execute a seven-day illegal strike:

    Illinois state law "prohibits the CTU from striking over non-economic issues, such as layoff and recall policies, teacher evaluations, class sizes and the length of the school day and year." Yet CTU President Karen Lewis has stated that evaluation standards and layoffs policies are the reason the teachers abandoned their 350,000 students.

    Wisconsin public sector union’s collective bargaining advantage affords them absurd legal standing. It enabled the Madison teachers union to file suit and win -- for now -- against Gov. Scott Walker’s collective bargaining reform. On September 14, Wisconsin Dane County Circuit Judge Juan Colas ruled, "[I]t is undisputed that there is no constitutional right to collective bargaining." Yet, he ruled that limiting the conditions over which government unions can negotiate violates workers' rights to freedom of speech and association. In other words, the Judge essentially decided that if public sector union power were restricted, unions would be less attractive for workers to join, therefore limiting employees' speech and freedom of association.

    In addition, Colas found that the reform law's provisions freeing workers from forced union dues payments and holding annual union re-certification elections violate the U.S. Constitution's Equal Protection Clause -- essentially arguing that the law is not being equally applied if firefighter and police unions may legally coerce members to pay dues while other government unions may not.

  • Free Checking Nearly Extinct Thanks To Dodd-Frank; Will Credit Card Rewards Follow?

    September 28, 2012 2:58 PM

    One year ago on October 1, Dodd-Frank's Durbin Amendment price controls went into effect, causing consumers to lose free checking and be soaked with other bank fees so that the country's wealthiest retail chains could become even richer. Now if these same retailers have their way -- and a similar price control scheme is pushed through for credit cards as well as debit cards -- consumers could lose be hit with annual fees on their credit card and fewer credit card rewards as well.

    At the behest of lobbying by some of the nation's biggest retail chains -- including Wal-Mart, Home Depot, 7-Eleven, and Walgreens -- banks and credit unions were allowed to charge retailers no more than 21-26 cents per debit card transaction. This represents an ongoing $8 billion annual transfer from banks' to retailers' coffers, but new data confirm that consumers, community banks, and credit unions are the ones who suffer the most.

    Around this time last year, Bank of America caused a furor when it announced a $5 per-month debit card fee to cover the lost revenue from the near halving of fees that banks had charged retailers. After an outcry from consumers -- as well as hypocritical politicians such as Sen. Dick Durbin (D-Ill.), who sponsored the measure and were eager to find a party onto which to shift blame -- BofA and other banks dropped this specific fee.

    But as I wrote on OpenMarket at the time, "There’s no such thing as a government-imposed free lunch." And now as Durbin approaches its first anniversary, it's clear the consumer is paying the retailer's tab in many other ways.

  • Unions Outgunning Opposition In Michigan

    September 28, 2012 12:06 PM

    Organized labor is driving hard to enshrine collective bargaining right in Michigan State constitution. If Proposal 2 passes this November, they will have done just that, taking Michigan closer to a Mediterranean-style rigid and disastrous labor market.

    So far, it looks like they are succeeding and no wonder, based on how much money is being spent by Unions and their allies. The Michigan Campaign Finance Network (MCFN), a nonprofit, nonpartisan organization supported by the Joyce Foundation (that strives for improving public policies in the Great Lakes region), published precise figures on the financial activity of the committees involved in the November ballot. As far as the collective bargaining issue (Proposal 2) is concerned, three committees are involved. The proponent committee, “Protect our Jobs,” lobbies for enshrining collective bargaining in the state constitution, while two committees, “Michigan Chamber PAC II” and “Citizens Protecting Michigan's Constitution,” oppose all the ballot questions.

    By the time the MCFN release was issued, July 27, POJA has raised $8,143,307 from a long list of Michigan unions and spent $1,153,619 by that time, mainly for personnel. A partial list of unions and their expenditures include:

    • UAW: $1,250,000
    • UAW Solidarity House: $1,028,480
    • Michigan Education Association: $585,681
    • American Federation of State, County and Municipal Employees (AFSCME): $500,000
    • American Federation of Teachers-Michigan: $460,000
    • International Brotherhood of Teamsters: $333,334
    • MEA Professional Staff Association: $300,000
    • International Brotherhood of Electrical Workers: $252,574
    • Michigan Regional Council of Carpenters: $250,000
  • TRUST Act Is An Important Stand Against Federal Immigration Policy

    September 28, 2012 11:40 AM

    In a CNN column today, Jose Antonio Vargas calls California’s TRUST Act “the most important piece of legislation for immigrant communities this year.” Vargas is an award-winning journalist who revealed his own undocumented status last year.

    Vargas acknowledges the TRUST Act has supporters on both sides of the political aisle—including CEI. He writes:

    Undocumented people and their allies -- their relatives and friends, their neighbors and co-workers -- have created a new political climate in which the passage of the TRUST Act is not simply the right thing to do, but the politically strategic thing to do, with supporters from across the political spectrum, from Nancy Pelosi to right-leaning think tanks such as the Cato Institute and Competitive Enterprise Institute.

    The TRUST Act is a state attempt to avoid compliance with the controversial federal Secure Communities program (S-Comm), which asks local law enforcement officials to detain suspected illegal immigrants. CEI’s David Bier explained his support of the bill in a Huffington Post op-ed a couple of weeks ago:

    When the Bush administration first introduced S-Comm in 2008, it was clear that participation was voluntary. Localities had to sign up to participate, and ICE recruited just eleven jurisdictions. But the Obama administration has attempted to convince police departments that involvement is mandatory. […]

  • Massive Payoff To City For Dropping Challenge To Tool Used To Impose Racial Quotas In Lending

    September 28, 2012 11:21 AM

    The Obama administration declined to pursue a fraud claim worth up to $180 million against a city to get it to drop its pending Supreme Court challenge to a dubious interpretation of the Fair Housing Act that the Obama administration has used as a tool to get banks to adopt racial quotas in lending. In doing so, it ignored the objections of career Justice Department lawyers, and likely cost taxpayers tens of millions of dollars in a case of "particularly egregious" fraud.

    As four congressmen noted,

    On February 10, 2012, the City of St. Paul abruptly abandoned a case before the U.S. Supreme Court that observers said it was poised to win.  Slumlords had sued the city to prevent it from enforcing its housing code on the grounds that it disproportionately decreased the amount of housing available to minorities.  The City argued that the Fair Housing Act of 1968 (FHA) prohibits only intentional discrimination, not neutral practices like code enforcement that happen to impact particular groups disproportionately.

    [Assistant Attorney General for Civil Rights Thomas] Perez fretted that a decision in the City’s favor would dry up the massive mortgage lending settlements his Division was obtaining by suing banks for housing discrimination based on disparate effects rather than any proof of intent to discriminate.  Accordingly, as documents reviewed by Committee staff show, he orchestrated a deal to induce the City to drop its Supreme Court challenge.  In exchange for St. Paul dropping its case before the high court, the Justice Department declined to intervene in an unrelated False Claims Act (FCA) case that had the potential to return over $180 million in damages to the U.S. treasury.

    Many observers thought the Supreme Court was poised to hold that the FHA does not permit claims based on disparate impact when it agreed, in late 2011, to hear Magner v. Gallagher.[6]  However, on the eve of oral argument, St. Paul dropped the case.  News accounts attributed the reversal to calls from the Administration and former Senator Walter Mondale who called the decision “courageous.”  However, material reviewed by the Committees reveals the decision was in fact the result of a dubious bargain brokered by Mr. Perez in which the Department agreed, over the objections of career attorneys, not to join an unrelated fraud lawsuit against the City in exchange for the City’s dropping its Magner appeal.

  • Today's Links: September 28, 2012

    September 28, 2012 9:38 AM


    KATE HAVARD: "It’s Not Really a Farm Bill"
    "This week, Congress is under pressure to pass the 2012 farm bill before the current legislation expires on September 30. About every five years, Congress pushes through a farm bill, ostensibly a big bundle of agriculture subsidies that also funds food stamps. But the name is misleading. Nearly 80 percent of the $1 trillion the 2012 bill would spend over the next 10 years would go to the food stamp program."

    ALEXIS C. MADRIGAL: "Driverless Cars Would Reshape Automobiles *and* the Transit System"
    "When I've thought about driverless cars, which if you believe Sergey Brin, will be available within 'several years,' I've tended to think of them as a drop-in replacement for our current automobiles. So, you'd buy a VW Automaton and it would sit in your driveway until you wanted to go somewhere. Then, you'd hop in, say, 'Take me to Lake Merritt,' and then just sit back and pop in the latest Animal Collective while the computer drove. But maybe that's not what would happen at all. Changes in transportation technology have tended to be accompanied by changes to transportation systems, too."

    ORANGE COUNTY REGISTER EDITORIAL: "Prop. 33 (Car Insurance Premiums): Yes"
    "In a perfect world, insurers would be able to create whatever rating models they wished and would be free to compete for customers. California's Insurance Commission, however, allows insurers to write policies based solely on 18 criteria. Prop. 33 would add another criteria – continuous driver history – and that would likely go a long way to lowering car insurance rates, as has been found in the 48 other states that allow continuous-driver discounts."

  • Scapegoating Free Speech

    September 27, 2012 3:25 PM

    In the aftermath of a terrorist attack in Libya that killed our ambassador and three other Americans, the Obama administration was quick to scapegoat a film called "The Innocence of Muslims" for the attack, claiming that the film caused the attack. But in reality, the attack was pre-planned, and within 24 hours, the administration knew it was a terrorist attack, not a "spontaneous" eruption of outrage over the film, as it later repeatedly claimed on TV:

    U.S. intelligence officials knew within 24 hours of the assault on the U.S. Consulate in Libya that it was a terrorist attack and suspected Al Qaeda-tied elements were involved, sources told Fox News — though it took the administration a week to acknowledge it.

    The account conflicts with claims on the Sunday after the attack by U.S. Ambassador to the United Nations Susan Rice that the administration believed the strike was a “spontaneous” event triggered by protests in Egypt over an anti-Islam film.

    Two senior U.S. officials said the Obama administration internally labeled the attack terrorism from the first day in order to unlock and mobilize certain resources to respond, and that officials were looking for one specific suspect.

    Yet, "four days later, the White House sent U.N. Ambassador Susan Rice to five different Sunday talk shows to claim that the sacking and assassination sprang from a 'spontaneous' demonstration. That no longer can be explained as initial confusion over conflicting reports; it is now clearly a lie told by the White House." (The fact that terrorists, rather than demonstrators, overran the "poorly-secured" American consulate may have helped make it a "catastrophic intelligence loss.")

    This false claim resulted in a vast number of people calling for censorship or prosecution of the filmmaker. Former California Democratic Party Chairman Bill Press said "we also ought to be identifying the people who made this video and go after them with the full force of the law and lock their ass up" because of the allegedly violent reaction to their film. Echoing the U.S. Embassy in Egypt, which called anti-Muslim speech in America an "abuse of free speech," he said that the film was "an abuse of the First Amendment." (“Abuse of free speech” is a phrase used by lawyers and diplomats to mean speech that can be banned as unprotected. For example, many state constitutions, drafted in a less speech-protective era, contain an “abuse” exception in their free-speech clause.) Letters calling for censorship outnumber defenses of free speech in some newspapers located in liberal regions, like The Washington Post, where readers argue that speech criticizing Islam and "jihad" should be banned from the subway lest it "provoke violence" by angry Muslims.  NPR contributor Sarah Chayes argued in the Los Angeles Times that the film was "not protected" because it supposedly led to "the death of U.S. Ambassador J. Christopher Stevens," even though she admitted it was critics of the film -- not the film -- that "urge[d] people to commit violence." Left-leaning academics and journalists called for the prosecution of the film's producers.

  • Old Hat

    September 27, 2012 2:47 PM

    Is the Chevy Volt really new technology? General Motors justifies its profit losses on the automobile by claiming it's a long-term investment in a brand new technology.  But CEI's Chris Horner says that while Volt's 21st century styling may be new, the idea of a car that runs on electricity dates to the mid-19th century. Horner argues that’s just one more reason to abandon this heavily discounted, government-subsidized car.

    As he told Chris Woodward of OneNewsNow:

    "This is akin to subsidizing horses to create a market for the brand-new technology, the buggywhip. I suggest that electric car promoters, windmill touts and others hyping 19th-century failures as newly invented miracles opt for decidedly more careful language to avoid embarrassment, or even to fend off legal challenge."

    Watch for Horner’s new book, The Liberal War on Transparency, due out in early October.

  • Google Fiber Project: A Product Of The Free Market Or Government Interference?

    September 27, 2012 2:35 PM

    Google will soon launch Google Fiber service to select residents in Kansas City. Fred Campbell, Director of CEI's Communications Liberty and Innovation Project, lauded the project after it was announced in late July. Today in Ars Technica, Campbell responds to critics who claim Kansas City's concessions to Google to attract the project qualify as taxpayer-funded "corporate welfare."

    Campbell writes:

    In response to my analysis of Google FiberTimothy B. Lee at Ars Technica says the Google Fiber deployment is “hardly an example of the free market in action.” Lee notes that Google received subsidized access to local government resources in the Kansas City area to support its fiber deployment. As I disclosed in my initial analysis, however, I agree that Google’s deployment did not occur in an unfettered free market. Our analyses don’t differ on the publicly available facts surrounding the Google Fiber deployment—they differ on the inferences and policy lessons that can be reasonably drawn from those facts.


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