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OpenMarket: April 2013

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

    April 15, 2013 9:55 AM

    67 new regulations, from drawbridge schedules to wireless signal boosters.

  • In today's Wall Street Journal

    April 15, 2013 9:42 AM

    Today's Wall Street Journal covers one element of the fee dispute in Citigroup Securities. More discussion at Point of Law, together with links from coverage of last week's fairness hearing.

  • Victory in Bayer

    April 14, 2013 11:08 PM

    As a result of our objection in the Bayer class action settlement, the parties modified the settlement to increase direct payments to the class by over $5.8 million, over 25 times as much as the class would have received in the cy pres-heavy settlement had we not objected. A second objection to one of the cy pres recipients resulted in a beneficiary more aligned with the purpose of the litigation. The district court has not yet finalized its decision on the fees to be awarded to plaintiffs' counsel. We'll be seeking modest attorneys' fees to come out of class counsel's share; if we are awarded more than $50,000 (less than 1% of the additional benefit to class members), we'll cede the rest to the settlement fund.

  • House Of Representatives Rebukes Rogue NLRB

    April 13, 2013 8:32 AM

    Openmarket.org220px-Phil_Roe,_Official_Portrait,_112th_Congress

    On Friday, April 12, the U.S. House of Representatives passed the Preventing Greater Uncertainty in Labor-Management Relations Act, a laudable attempt to rein in President Obama’s unconstitutionally staffed — and therefore illegitimate — National Labor Relations Board (NLRB).

    The Preventing Greater Uncertainty in Labor-Management Relations Act (HR 1120) requires the NLRB to “cease all activity that requires a three member quorum” in an attempt to bring some sense of order to a labor market thrown into chaos by a Board comprised of unconstitutional appointees issuing hundreds of now questionable rulings.

    Before the vote, the Competitive Enterprise Institute had released a statement urging members to support the bill, explaining:

    The U.S. Court of Appeals for the District of Columbia has unanimously held President Obama’s three so-called ‘recess appointments’ to the NLRB were unconstitutional. The legitimacy of every ruling the NLRB has made since January of last year is therefore in question, throwing even more uncertainty on a business community already plagued by high tax and regulatory burdens. H.R 1120 is not only a good idea but absolutely necessary to help bring stability and to preserve the integrity of the U.S. Constitution.

  • Conference Speaker Demonizes Alcohol Industry

    April 12, 2013 5:18 PM

    [caption id="attachment_67522" align="alignleft" width="300"]Robert Denniston Presenting at AP16 Robert Denniston Presenting at AP16[/caption]

    There’s a certain romance associated with being in the wine industry, which is why many people aspire to own a vineyard despite all the back-breaking work associated with farming. That’s why I was pretty shocked by the excessive disdain for the alcohol industry that many participants expressed at the Alcohol Policy 16 (AP16) Conference last week. Although the event is marketed as a public health forum, its participants seemed more interested in demonizing industry and not just the alcohol industry. "Junk food," guns, and even cars took some hits.

    According to one speaker, the “alcohol industry” could be likened to a mosquito carrying a dangerous virus, and we—the consumers are its victims. Well, that's how former U.S. National Institutes of Health (NIH) employee Robert Denniston suggested that others “frame” alcohol issues when lobbying in favor of taxes and laws to restrict access.

    During the last day of the event a the plenary session, Denniston made the following suggestion:

    A concept that is worthy of consideration about how to frame this issue is authored by Jaheil and Babor, who have proposed referring to the alcohol problem as the “industrial epidemic” because alcohol beverages are industrial products. The difference between natural and industrial epidemics is that the former are caused by natural agents that are driven by natural forces acting upon those agents, such as plasmodium falciparum and anopheles mosquitoes in the case of malaria … by contrast industrial disease epidemics are driven at least in part by corporations and their allies who promote a dangerous product such as tobacco or cars or guns. This understanding shifts the policy focus from the agent, alcohol, to the host, the problem drinker, to the disease vector, the alcohol industry and associates.

    What an astoundingly unbalanced view of industry!

  • House Of Representatives Rebukes Rogue NLRB

    April 12, 2013 5:17 PM

    On Friday, April 12, the U.S. House of Representatives passed the Preventing Greater Uncertainty in Labor-Management Relations Act, a laudable attempt to rein in President Obama's unconstitutionally staffed -- and therefore illegitimate -- National Labor Relations Board (NLRB).

    The Preventing Greater Uncertainty in Labor-Management Relations Act (HR 1120) requires the NLRB to "cease all activity that requires a three member quorum" in an attempt to bring some sense of order to a labor market thrown into chaos by a Board comprised of unconstitutional appointees issuing hundreds of now questionable rulings.

    Before the vote, the Competitive Enterprise Institute had released a statement urging members to support the bill, explaining:

    The U.S. Court of Appeals for the District of Columbia has unanimously held President Obama’s three so-called ‘recess appointments’ to the NLRB were unconstitutional. The legitimacy of every ruling the NLRB has made since January of last year is therefore in question, throwing even more uncertainty on a business community already plagued by high tax and regulatory burdens. H.R 1120 is not only a good idea but absolutely necessary to help bring stability and to preserve the integrity of the U.S. Constitution.

    “I am pleased the House passed this important legislation,” said bill sponsor Phil Roe (R-Tenn), chairman of the Subcommittee on Health, Employment, Labor, and Pensions.

  • U.S. Agrees To Japan's Entry Into Trans-Pacific Partnership Agreement

    April 12, 2013 1:19 PM

    international_trade57131757Today, the Acting U.S. Trade Representative announced that the U.S. has agreed to let Japan enter negotiations on the Trans-Pacific Partnership Agreement, subject to consensus agreement by the other 10 members of the TPP. U.S. Ambassador Demetrios Marantis noted that this agreement results  from lengthy consultations with Japan that were aimed at resolving specific issues between the U.S. and Japan:

    Since November 2011, the United States has been engaged in consultations with Japan focused on Japan’s readiness to meet the TPP's high standards for liberalizing trade and investment, and to address specific bilateral issues of concern in the automotive and insurance sectors, as well as other Japanese non-tariff measures.

    With Japan’s entry into the TPP, the 12 countries would account for nearly 40 percent of global GDP and about one-third of all world trade, according to the USTR.

    The sticky issues have been and probably will continue to involve the automotive and insurance industries and other non-tariff measures.

    In a statement, the USTR said that Japan agreed to double the number of U.S. motor vehicles allowed into Japan under its Preferential Handling Procedure (PHP), which provides U.S. manufacturers with a less complex certification method.

    In return the U.S. would phase out its tariffs on Japanese automotive imports.  But that’s not going to happen quickly. Their agreement says that the phase-out will equal the longest staging period for any product in the TPP, and the phase-outs would occur at the end of that period. Since the TPP negotiations haven’t been completed for all products, the exact time frame isn’t yet known.

  • CEI Lauds, Will Keyvote Members on NLRB Reform Measure

    April 12, 2013 12:10 PM

    Competitive Enterprise InstituteNLRB

    Today the House of Representatives is expected to vote on legislation that would require the National Labor Relations Board to cease all activity that requires a three-member quorum and to prohibit NLRB from “enforcing any action taken after January 2012 that required a quorum.”

    The Competitive Enterprise Institute commends supporters of the Preventing Greater Uncertainty in Labor-Management Relations Act (H.R. 1120) – sponsored by Rep. Phil Roe, R-Tenn., chairman of the Subcommittee on Health, Employment, Labor, and Pensions – and plans to update its Congressional Labor Scorecard to reflect how members of Congress vote on H.R 1120.

    CEI Labor Project Director Matt Patterson said, "The U.S. Court of Appeals for the District of Columbia has unanimously held President Obama’s three so-called ‘recess appointments’ to the NLRB were unconstitutional.  The legitimacy of every ruling the NLRB has made since January of last year is therefore in question, throwing even more uncertainty on a business community already plagued by high tax and regulatory burdens.H.R 1120 is not only a good idea but absolutely necessary to help bring stability and to preserve the integrity of the U.S. Constitution.”

    Labor Policy Analyst Trey Kovacs added: "Rep. Phil Roe’s bill The Preventing Greater Uncertainty in Labor-Management Relations Act is a commonsense measure that will help rein in overreaching bureaucrats and bring certainty back to workplace law.”

  • Railroading The Railroads

    April 12, 2013 10:46 AM

    In recent years, members of Congress have worked with various interest groups for the purpose of imposing new economic regulations on the freight rail industry. This action has been partly led by concerns over the scale of consolidation that has occurred in recent years.

    The consolidation of this industry is the end result of gains in efficiency and productivity that have come about from railroads having greater freedom to adjust their behavior to cater to the needs of their shippers. Prior to deregulation, a regulatory board called the Interstate Commerce Commission (ICC) had veto authority over most major decisions of freight carriers. The ICC forced firms to maintain service in unprofitable regions, imposed rate ceilings, and bizarrely also required railroads to keep their shipping rates artificially high    Needless to say, railroads under this regulatory regime lacked the revenue or the incentives necessary to maintain healthy railway networks.

    With the freedom that came with deregulation, carriers cut waste by discontinuing unprofitable lines and poured cash—more than $500 billion since the enactment of 1980’s Staggers Rail Act—into upgrading and expanding infrastructure in order to cater to the greatest number of shippers at the highest level of quality. According to the Association of American Railroads, as of June 2012, inflation-adjusted rates charged to shippers have dropped by 45 percent since the Staggers Act. Larger carriers that could exploit their economies of scale were able to use their size to charge the lowest rates.

    Many are now calling for new regulations to mitigate the perceived harm that post-deregulation railroad consolidation has imposed on shippers. Unlike most sectors, railroads currently retain limited exemptions from antitrust law. Some shippers only have access to only a single carrier with which to transport their products. Critics of the status-quo are now accusing large railroads of abusing their market power to charge excessively higher rates to shippers that do not have any viable alternative to doing business with them. Their proof is in the slight increase in shipping rates that has come about since 2004. In addition, the three large Class I publicly traded carriers (BNSF is wholly owned by Warren Buffett’s Berkshire Hathaway) recently reported profit margins exceeding 15 percent.

  • Dodd-Frank's Burden On Credit Unions Highlighted At Hearing

    April 12, 2013 8:46 AM

    At a recent speech before a convention of the Credit Union National Association (CUNA), new Sen. Elizabeth Warren (D-Mass.) made the pitch that the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 was achieving its goal of reining in Wall Street while "level[ing] the playing field" for credit unions.

    On the law's creation of the Consumer Financial Protection Bureau (CFPB), which Warren first proposed and then organized as an adviser to President Obama, Warren proclaimed: "The agency works for consumers. It also works for the lenders and small financial institutions, like credit unions."

    Yet at a Wednesday congressional hearing, those who manage credit unions begged to differ with Warren's assessment. They maintained that credit unions were struggling against a sea of red tape from both the CFPB and from other provisions of Dodd-Frank sold as going after "big banks," such as the Durbin Amendment's price controls on debit card interchange fees.

    "Although I recognize the need for appropriate regulation, too often credit unions end up paying the price for abusive practices perpetrated by non-credit union entities," testified Mitch Reiver, general counsel for Melrose Credit Union in Queens, New York, at the hearing before the House Financial Services Committee's Subcommittee on Financial Institutions and Consumer Credit.

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