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OpenMarket: April 2013

  • Will EU "Cultural Diversity" Exception Undermine U.S.-EU Trade Talks?

    April 25, 2013 1:31 PM

    A possible bump in the road  toward  a U.S.-EU trade agreement emerged  today as a parliamentary committee of the European Commission voted to begin trade talks with the U.S. but to allow a “cultural exception” for film and audio-visual subsidies. That means that the EU would be carving out this exception early on, possibly creating an obstacle to real progress on eliminating non-tariff trade barriers between the two parties.

    The amendment to allow this exception was pushed by France, which wants to continue to receive substantial subsidies for its film industry and to limit the amount of foreign programs shown in France. German film subsidy bodies also endorsed the need for EU countries -- in the name of “cultural diversity” -- to subsidize their domestic film industries. The European Commission  in its assessment of state aid to the industry endorses the cultural significance of the industry:

    Audiovisual works, particularly films, play an important role in shaping European identities. They reflect the cultural diversity of the different traditions and histories of the EU Member States and regions. Audiovisual works are both economic goods, offering important opportunities for the creation of wealth and employment, and cultural goods which mirror and shape our societies.

  • Why BPA (And Other Chemicals) Don't Belong On Proposition 65

    April 25, 2013 1:25 PM

    If you want to have fun in California's Disneyland, avoid reading the warning signs saying that products used in the park may give you cancer and reproductive problems! They're not just a buzz kill, they are plain dumb and misinformed. But it's state law that they be there. You can find them in Starbucks and many other places throughout the state too.

    California's nonsensical Proposition 65 law directs regulators to place chemicals on a "toxic" substances list, and then forces companies to issue warning labels when they use these substances to make consumer products and food. But regulators list chemicals for myriad stupid reasons. For example, they may list a chemical simply because high doses give cancer to rats, which is also true of broccoli. It's the dose that makes the poison, which is one reason that such rodent tests have little relevance to health impacts in humans.

    If the logic behind is law were correct, you might worry about keeping a nickle in your pocket since California lists nickel as a toxic substance. It's not clear why the federal government does not have to post warning labels on nickles. I guess the feds are exempt from state-level idiocy?

    As I noted on the Independent Women’s Forum Inkwell blog yesterday, one chemical, bisphenol A (BPA), has recently gained a temporary -- hopefully soon-to-be-permanent -- stay from listing on the Proposition 65 list. This case raises questions about the thousands of other chemicals found on this list. Had industry fought as hard as the American Chemistry Council is currently doing for BPA, would fewer chemicals be on this list? Maybe so. After all, at existing exposures, none of these chemicals pose much of any risks.

  • Obama's Controversial Nominee For Labor Secretary To Be Voted On

    April 25, 2013 11:34 AM

    Cato Institute attorney Ilya Shapiro wrote Tuesday about “Thomas Perez, the assistant attorney general for civil rights who personifies . . . this administration’s flouting of the rule of law.” As he notes, Perez “is due this week for a vote in the Senate Health, Education, Labor, and Pensions Committee on his nomination to be Labor Secretary.”

    Shapiro provides this “recap of Perez’s nefarious dealings” (drawing on the work of Quin Hillyer, who provides more detail at this link):

  • Lawsuits Over "Customary International Law": A Menace To Free Speech, Our Liberties, Our Companies, And Our Economy

    April 24, 2013 1:52 PM

    Earlier, I wrote about how it was a good thing that the Supreme Court blocked foreigners from suing in the U.S. over putative violations of "customary international law" by corporations and other defendants with deep pockets. My conviction has grown stronger, since I learned that the U.N. Committee on the Elimination of Racial Discrimination has ruled that Germany violated international law by not prosecuting a former German legislator for an interview with a cultural journal in which he said negative things about immigration and the alleged dependence on welfare of Turkish immigrants to his country. That ruling illustrates that international-law norms can be inimical to American civil-liberties such as freedom of speech, making it inappropriate for U.S. courts to enforce such foreign norms.

    German prosecutors had concluded that the former legislator's remarks were protected by Germany's (limited) free-speech guarantees because, while offensive, they were part of a "discussion" of "problems of economic and social nature," and did not rise to the level of hate speech. (Germany generally bans hate speech; by contrast in the U.S., the Supreme Court voided a hate-speech ordinance in 1992 on First Amendment grounds. A federal appeals court has also ruled that a professor's racially-charged anti-immigration diatribes were protected speech in the Rodriguez case.) Law professor Eugene Volokh reprints the speech that, "according to the Committee, must lead to a criminal prosecution in countries that have ratified the International Convention on the Elimination of All Forms of Racial Discrimination." (The U.S. has ratified that convention, but, as Professor Volokh notes, "I am pleased to say that the U.S. has not recognized the competence of the Committee to enforce the Convention, though most European countries have; the U.S. has also ratified subject to a specific reservation in favor of the freedom of speech.")

  • Costs Rise In Obama's New 2013 Draft Report To Congress On The Benefits And Costs Of Federal Regulations

    April 23, 2013 3:45 PM

    Last year, the Obama Office of Management and Budget's 2012 Draft Report to Congress on the Benefits and Costs of Federal Regulations surveyed 10 years of regulatory costs and benefits and pegged the cumulative costs of 106 selected major regulations during 2001-2011 at between $43 billion and $67 billion. Meanwhile, the estimated range for benefits spanned from $141 billion to $701 billion.

    OMB just released the new 2013 Draft Report to Congress on the Benefits and Costs of Federal Regulations, and the burdens are increasing.

    Consider just the past two years:

    2012 Report: 12 rules were issued with benefits of between $34.3 billion to $89.5 billion annually, and costs of between $5.0 billion to $10.1 billion
    2013 Report: 14 rules were issued with benefits of $53.2 billion to $114.6 billion annually, and costs of between $14.8 billion to $19.5 billion.

    Observe the high cost estimates for each year; the Obama administration's acknowledged new regulatory costs nearly doubled from $10.1 billion in 2012 to $19.5 billion annually in 2013.

    This is significant; Recall the 2012 State of the Union Address when Obama wisecracked that he got rid of a regulation that classified spilled milk as an "oil."

    He further boasted:

  • Another victory for CCAF: Pecover v. EA Sports triples class payouts

    April 23, 2013 1:23 PM

    You will recall that we objected to a class action settlement over EA Sports's Madden games: as in our successful Baby Products objection, the settlement did little to ensure that class members got paid, while the attorneys would get millions regardless whether any class members received any cash. We argued that class members should get first dibs on the settlement fund before money went to unrelated third-party charities. The court agreed in part, and the parties consented to modifying the settlement to permit both a tripling of the money available to consumers, and another thirty days for consumers to make claims. Coverage of the new notice (though not the litigation that led to that tripling) at Kotaku and Consumerist. Would it be too needy to ask for some blog love?

    Already, the number of claims has doubled: combined with the tripling of claim amounts, we're looking at over a 500% increase in the amount of money going to consumers. In a just world, we'd get five sixths of the gigantic attorney fee (after all, class counsel ridiculed our objection and defended the degree to which their own clients were going to be shafted), but we'll settle for making a more modest request, to be paid from the $9.2 million class counsel has argued they are due to receive, with any amounts over our lodestar to be donated to the class or the Federal Judicial Center.

  • CEI Study: Cost Of Keeping One Unauthorized Immigrant From Getting A Job -- $13,000

    April 23, 2013 1:03 PM

    If Americans truly want to ensure no unauthorized immigrants work in the United States, they better get ready to pay top dollar. E-Verify, the electronic national identification system contained in the Gang of Eight’s immigration bill, will cost government, businesses and workers at least $8.5 billion per year, according to my new study on E-Verify released yesterday. That's $13,000 per unauthorized immigrant denied a job.

    E-Verify requires employers to submit Form I-9 information for comparison with information in databases held by the Social Security Administration and the Department of Homeland Security. People who advocate E-Verify as a cheap solution to illegal immigration need to understand this requirement is the most extensive regulation possible—it imposes requirements not just on every single business in America, but every single American citizen. Even small expenses distributed among such a large population will produce major costs.

    This study basically accepted all federal data about E-Verify at face value and attempted to estimate its impact on the entire economy using the government’s own assumptions. First, as for government, the Congressional Budget Office estimated a national E-Verify mandate would cost, on average, $1.22 billion annually, not including DHS personnel costs. Add $227 million for the 5,000 new DHS enforcement agents called for in this bill, and the cost jumps to $1.45 billion.

    But the big costs come from the impact on employers. Based on the estimates in the DHS’s Regulatory Impact Analysis for its 2008 E-Verify mandate for federal contractors, employers nationwide would spend $4.1 billion setting up, training and implementing the new system. That's nearly $2.4 billion more than the estimated cost to businesses under the White House draft legislation, which exempted small businesses. Annually, employers will spend $2.55 billion operating system checks, based on DHS assumptions alone. This estimate is close to a 2011 Bloomberg Government report that found a national E-Verify mandate would cost businesses $2.6 billion annually (a number that actually ignored costs to 76 percent of businesses).

  • Why FAA's Child Seat Campaign Is Deadly

    April 22, 2013 3:14 PM

    Federal law allows airline passengers with children under the age of two to travel with their children on their laps. This option, which has existed since the 1950s, has been under attack for quite some time by various agencies and consumer protection advocacy groups. These opponents claim that a lap-seated child is not afforded the same safety as other passengers, and may risk injuring or killing himself or other passengers in the event of strong turbulence or a crash. There are a very small number of plane crashes in which a lap-seated child died and in which the evidence suggests that he might have survived in a Child Restraint Seat (CRS). Nonetheless, requiring all children to be strapped in on an airplane is not a particularly good idea. As it turns out, CRS in airplanes would raise the cost of air travel for families with toddlers, making some of them travel in ways that pose a much larger threat.

    Back in the 1990s, when FAA proposed mandating the use of CRS in airplanes, several researchers showed that this could result in another 13 to 42 added fatalities over 10 years in highway accidents. Since the CRS requirement would force families traveling with a child to purchase a ticket for an extra seat, the increased cost would make some travelers drive their cars instead. This, however, would make them subject to the risks of accidents on America’s highways. Because air travel is generally much safer than car travel, FAA withdrew its proposed regulation in 2005.

    These findings where confirmed by FAA in 2011, when it concluded that requiring the use of CRS would increase total transportation deaths by 72 deaths over 10 years and by 115over 15 years.

    Allowing toddlers to fly on their parent’s lap is therefore quite a good idea.

    The National Transportation Safety Board (NTSB) opposes giving parents this option, and it criticized FAA in a not-very-persuasive 2004 study. The option is also opposed by the Association of Flight Attendants. Lap babies, however, are probably not the flight attendant’s favorite passengers. My guess is that they’d like to see babies on planes not only in a seat of their own, but bound and gagged.

  • Separate Security Cameras and State

    April 22, 2013 2:32 PM

    In his column today, The Wall Street Journal's Gordon Crovitz notes the significant help that video footage played in helping police identify the Boston Marathon bombers. However, he seems to miss what the Boston police's success actually implies -- that government-run security cameras are unnecessary for protecting public safety.

    Boston is one of the less-wired large cities when it comes to surveillance cameras, so authorities relied largely on footage from private parties, such as the Lord & Taylor department store near the scene. The most recent estimate, from 2010, is that Boston and surrounding towns have some 150 police surveillance cameras, plus 400 in the subway. This compares with more than 3,000 government and networked private cameras in New York City's financial district alone, and some 400,000 cameras in London.

    While Crovitz doesn't explicitly say so, the seeming implication that  Boston being "one of the less-wired large cities" may be a shortcoming is troubling and misses the real lesson of the search for the bombers -- the value of the public's engagement in helping to protect their own city. The Washington Examiner's Tim Carney, on the other hand, gets it right.

    So it turns out we already have plenty of cameras on the street. They're not government cameras, but rather cameras owned and operated by private individuals and businesses. In a bout of public spiritedness, these pedestrians and businesses willingly shared their videos with law enforcement. Even if the crime had not been so notorious, the police could expect public cooperation -- what merchant wouldn't share his surveillance tapes to aid in a murder investigation?

  • Earth Day: The Greener Side Of Growth

    April 22, 2013 2:17 PM

    Over at, my colleague Geoffrey McLatchey and I argue that the biggest factor for improving environmental quality is wealth creation.


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