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OpenMarket: April 2013

  • Health "Advocates": Tax And Regulate Responsible Drinkers

    April 8, 2013 5:12 PM

    no_alcohol “Don’t just lean in, barge in,” said Rebecca Ramirez of Johns Hopkins University’s Bloomberg School of Public Health at the opening of the Alcohol Policy 16 conference in Arlington,Virginia (April 3-5, 2013). In one short sentence, Ramirez summed up the entire purpose of this 16th annual event: mobilize nanny-state activists to push taxes and regulations that limit access to alcohol, targeting those of us who just might take one too many sips of Merlot.

    A collaboration of numerous health-related groups, the theme of this partially taxpayer-funded event was “Building Blocks for Sound Alcohol Policy.” Surely, there is a role for public health advocacy when it comes to addressing issues related to serious alcohol abuse. But rather than focus on real problems, there was way too much focus on how to control the behavior of people like me.

    My crime stems from the fact that I like to share a bottle of wine with my husband at dinner. My consumption of 2.5 standard-drinks-a-day exceeds the two-drinks a day maximum for women -- placing me in the “excessive” drinker category.

    Mind you, a standard drink really isn’t that much alcohol, especially when consumed with food over many hours. According to the National Institute on Alcohol Abuse and Alcoholism, a standard drink is one that contains 14 grams of alcohol -- one small, 5-ounce glass of wine, a 12-ounce beer, or a 1.5 shot of spirits (40 percent alcohol). Many people can handle several of such drinks over a 24 hour period without getting “drunk” or abusing these products.

  • Protectionist Law Proposed In New York Would Hit Wine Consumers Hardest

    April 8, 2013 4:57 PM

    While most states are desperately trying to figure out ways to encourage business development and reduce the cost of consumer goods, New York is considering a proposal that would benefit one particular group of large businesses at the expense of smaller outfits and consumers. The reason, it appears, that lawmakers are considering the proposal is because those large in-state businesses set to benefit from the law changes donated very large sums of money to those very lawmakers.

    “At-rest” laws, which require alcohol being shipped from out-of-state spend 24 hours in a distributors warehouse in the state where it is to be sold (sometimes for up to three days) are an effect of the mandatory three-tier system that separates alcohol producer from retailers by forcing both to use a middle man. As I have stated in the past, wholesalers can provide and invaluable service for both retailers and alcohol producers, but by making their use mandatory it has given that middle tier an immense amount of control over the market and with it power and money. Over the decades, wholesalers have been able to buy or pressure their way to favorable laws. For example, 33 states have these “at-rest” laws which really serve no greater purpose than to act as a way to protect in-state wholesalers from out-of-state competition and raise costs (and thus the prices) of out-of-state alcohol. Now, New York is reportedly considering adding this provision to its alcohol control laws. Why? As others, like Walter Olson over at Cato have noted, the only explanation seems to be that large in-state wholesalers donated thousands of dollars to lawmakers in order to convince them to get on board — State Sen. Jeff Klein (D-Bronx), who is pushing the proposal, S3849, received no less than $33,000 from Empire Merchants, a distributor that already has warehouses in New York.

    Small and out-of-state wholesalers are up-in-arms about the proposal, claiming that the cost of buying or leasing warehousing space in New York could put them out of business which would reduce the choices for consumers in the New York market. Furthermore, for those that manage to survive the change, the increases in operating costs would necessitate an increase in the prices they charge to consumers. According to wine writer Jesse Nash, the new requirement could add $7 or $8 to bottles.

  • JOBS Act -- What's Been Implemented -- Is Working; Now Implement The Rest!

    April 8, 2013 11:30 AM

    CEI Research Associate Evan Woodham contributed to this post.

    Another round of disappointing jobs numbers released last Friday shows more than ever that massive spending "stimulus" isn't working in getting the U.S. economy going. We must, in the phrase coined by my Competitive Enterprise Institute colleague Iain Murray, "liberate to stimulate."

    But not only is the U.S. government piling on ever-more regulation on all sectors of the economy, it is stalling on implementing even modest bipartisan regulatory relief passed into law.

    On April 5 of last year, President Obama signed the Jumpstart Our Business Startups Act. Risking heat from allies, I praised the president for this action in conservative venues such as National Review, because I believe that good public policy actions should be praised no matter who the actor is.

    But on its first birthday, much of the JOBS Act might as well still be in the womb. That's because except for provisions that went into effect automatically -- and these are working well, as I will get to in a minute -- liberalized rules under the JOBS Act have been inexcusably delayed by the Securities and Exchange Commission (SEC).

  • 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.”


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