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OpenMarket: April 2013

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

    April 8, 2013 10:47 AM

    56 new rules, from school lunches to studying landfills.

  • Overcriminalizing Childhood: Maryland Turns Distressing Speech Into A Crime

    April 6, 2013 12:55 PM

    Under the First Amendment, the government has far less power to restrict speech when it acts as a sovereign (such as when it criminally prosecutes people for their speech) than when it uses non-criminal disciplinary tools to regulate speech in its own government offices or (in certain circumstances) the public schools.

    For example, a federal appeals court recently ruled in In re Kendall that the Virgin Islands Supreme Court couldn't constitutionally jail a trial judge for his uppity speech against it, even if his speech was inappropriate for a judge, since "the government’s broader authority to" to control inappropriate judge or lawyer "speech about ongoing proceedings" did not "also permit the government to hold a judge in criminal contempt for" such speech. As the federal appeals court observed, "Criminal contempt is no mere disciplinary tool. It derives, like all crimes, from a government’s power as sovereign. Because the government’s use of the criminal-contempt power is the sine qua non of a sovereign act, the government has no greater authority to hold someone in criminal contempt for their speech about ongoing proceedings than it would to criminally punish any speech."

  • Bitcoin: An Escape From Currency Debasement?

    April 5, 2013 1:14 PM

    Although gold traditionally has been the alternative asset for those wary of fiat currency debasement, there is an emerging newcomer: virtual currency. Bitcoin, created in 2009 by Japanese developer Satoshi Nakamoto, is a self-regulated and anonymous online payment system with a fixed supply of currency.

    The selling point of Bitcoins (BTCs) is their value cannot be artificially debased. Although the supply of BTCs will increase predictably in number though 2017 (the currency is still developing and needs to circulate enough BTCs to support its later ambitions), the limit is fixed at 21 million BTCs. After 2017, the increases are small half-steps towards the 21 million BTC target.

    There is no central bank, operating under the influence of government, to manipulate the currency for political ends.

    That said, Bitcoin still has a long way to go before becoming a real alternative to the fiat currency we use everyday. There are only a handful of merchants that accept BTCs directly, hackers present a real danger to your “virtual wallet” -- and since the Bitcoin is peer-to-peer and completely anonymous (each transaction has a randomly generated, thereby untraceable, key code) -- finding the perpetrators is essentially impossible. Also, volatile trading volumes while the currency is still in its infancy can pose serious exchange rate risk to users.

    The Finns don’t seem to mind the risks though -- they are the highest per capita users of BTCs. Americans and Germans are the largest volume users.

  • Retailing As Liberating

    April 5, 2013 12:10 PM

    I was intrigued with Virginia Postrel’s article today in Bloomberg on a new BBC television show -- “Mr. Selfridge” -- that celebrates retailing and the creation of the modern department store as a place that helped change the role of women. Virginia notes that Émile Zola had much earlier focused on that theme in his late-nineteenth century novel The Ladies’ Paradise, which also is the basis for a new BBC series.

    I was intrigued because I had recently read Zola’s Au Bonheur des Dames on a friend’s recommendation and posted this comment January 19 on my Facebook page:

    Just finished reading a paean to capitalism's creative destruction -- Émile Zola's Au Bonheur des Dames -- or as I read it -- The Ladies Paradise. The owner of a huge department store in Paris uses marvelous displays, advertising, sales commissions, refunds, home delivery to lure women into buying fabrics, clothing, accessories -- while the small shops that haven't changed or adapted go out of business. Yet the main female character points out who benefits from the megastore -- the consumers who get a wider variety of goods available at affordable prices.

    Virginia points out that even Ayn Rand didn’t celebrate retailing as a pioneering social development. As Virginia notes, department stores helped liberate women:

  • Dismal Jobs Figures Don't Increase Official Unemployment Rate, As Job-Seekers Give Up, Or Go On Disability

    April 5, 2013 12:07 PM

    The stock market has fallen this morning in response to the dismal March jobs report released this morning, which showed that a meager 88,000 jobs were added, which didn't even keep up with America's population growth or increases in its working-age population. Ed Morrissey notes at Hot Air, “The jobs added fall far short of the 125K-150K needed just to keep up with population growth.”

  • Regulation Roundup

    April 5, 2013 8:00 AM

    Man avoids jail time for falsely yelling out "Bingo!" during a game, plus more.

  • Taking The Taxpayers Out To Lunch

    April 5, 2013 7:30 AM

    Restaurant Opportunity Centers are sprouting up all over America. These groups bill themselves as training centers for restaurant workers that will turn into cooperative ownership ventures. However, as I and Trey Kovacs point out in our latest article on, this is just not the case:

    “ROC also operates a restaurant that sells a vision of cooperative ownership whereby workers are promised a stake in the business in exchange for their labor, which ROC elegantly calls "sweat equity." But it seems that ROC treats its workers more like indentured servants than restaurant servers.
    ROC's New York restaurant, Colors, has been described by former employees as, "one of the most abusive in the city," profiting from hundreds of hours of free labor. According to one employee, "ROC-NY used us and many others to perform hundreds of hours of unpaid work. They even had us kick back our tips when we worked at parties and events as cooks and waiters."

    Not only do they treat their workers badly, we the taxpayers are subsidizing their activities to the tune of some $2 million dollars in public grants from OSHA and other government organizations. The real kicker though is that OSHA is giving this money to not only an organization that treats its workers no better than serfs, but also racks up a superfluity of health violations, as we detail:

    “ROC's record on sanitation is hardly any better than the treatment of its workers. Its New York restaurant was cited by the city's Department of Health for multiple health violations, including evidence of rodent infestation in food areas, kitchen surfaces not properly washed, and food improperly stored.”

  • CEI Podcast For April 4, 2013: Reining In The CFAA

    April 4, 2013 5:36 PM

    Under the CFAA, it is currently a federal crime to enter an incorrect age on your Facebook profile or an incorrect weight on a dating website profile. Associate Director of Technology Studies Ryan Radia suggests that the CFAA should be reined in.

  • Lessons From Dutch Regulatory Reform: How The U.S. Could Save $450 billion Per Year

    April 4, 2013 11:18 AM

    In 2003, the Dutch improved their regulatory situation through the “Dutch Administrative Burden Reduction Programme.” This program sought to reduce the cost of regulatory burdens on businesses by 25 percent cumulatively in just four years.

    To put this in domestic terms, for the United States to meet such a goal, it would have to cut about $450 billion in business regulation – quite an ambitious goal.

    To meet the 25 percent target, the Dutch established two new organizations: the Interministerial United for Administrative Burdens (IPAL) and the Advisory Board on Administrative Burdens (ACTAL).

    IPAL was created to organize the process between various ministries and to overcome political obstacles. IPAL performs its function in part through the Standard Cost Model, which measures administrative costs and burdens to businesses from regulations. This ensures the regulatory cost measurement process is accurate and consistent across agencies.

    The SCM requires each government ministry to measure the burdens traced to legislation that falls under its purview, according to the SCM handbook. Each ministry hires consultants to identify regulations, survey and hold discussions with business representatives to get feedback and conduct experiments to accurately measure the cost of regulation (such as the stopwatch-method). The consultants are coordinated by the Ministry of Finance to ensure all agencies are consistently measured.

    IPAL measures regulatory costs; ACTAL then advises the Dutch government on regulatory reduction efforts and works to ensure ministries meet their reform goals.

    By 2006, the Netherlands was on track to meet the 25 percent reduction in regulatory costs according to the World Bank. Now, many European countries, including the UK, Germany and Norway, use the SCM.

  • Mercantilism Is An Outdated Concept

    April 3, 2013 2:44 PM

    There’s an excellent Letter to the Editor in the Financial Times today (“Trade is now about participation, not competition”), which points out that the mercantilist approach to trade “exports good, imports bad” is an antiquated view given the globalized supply chain for products and services.

    The letter states:

    Conventionally, nations tend to believe that export is a virtue and import a vice.  This mercantilism has lost its relevancy these days since an increasing number of companies, not states, must import various components to export their final products in the global value chains.  After all, it is not that nations compete against each other in a game of trade, but that private companies participate in a collective project of trade.

    Lots of important points in that one paragraph including  the importance of imports  for inputs in manufacturing and the fact that it is companies that engage in trade, not countries.

    CEI has long pointed out the dangers of promoting trade by promoting mercantilism here, here, and here, for example.


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