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OpenMarket: July 2013

  • Court Wrong to Make Dodd-Frank Durbin Price Controls More Draconian

    July 31, 2013
    Today, U.S. District Judge Richard Leon ruled that the Federal Reserve's implementation of the Durbin Amendment of the Dodd-Frank financial overhaul, which sets price controls on what banks and credit unions can charge retailers to process debit card purchases, was not draconian enough. Though I am no fan of either Dodd-Frank or the Durbin Amendment, this is a severely flawed reading of the law based on a false definition of "legislative intent." Should the Fed adopt Leon's interpretation, it will almost certainly result in more bank and credit union fees for consumers. The Fed would also open itself up to even more litigation on the price controls, including constitutional issues involving the property right to seek a return on capital invested guaranteed by Due Process and Takings clauses of the 5th...
  • Detroit Bankruptcy Focuses Attention on Public Pensions

    July 31, 2013
    For people watching it from afar, the bankruptcy of Detroit -- the biggest municipal bankruptcy in American history -- may have brought a sense of relief in the fact that they live somewhere else. But it's also brought needed public attention to the state of city finances around the nation. While Detroit is an egregious case of municipal incompetence, corruption, and mismanagement, its problems are not unique. In fact, one of the drivers of debt that brought the Motor City to its knees is common among states and cities: defined benefit pension plans, which guarantee payments independently of the level of the plan's funding. This week's cover story in The Economist brings some needed attention to the problem:
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  • Regulation of the Day Update: Pulling a Rabbit Out of a Hat

    July 31, 2013
    The USDA is temporarily suspending its magician's rabbit-license regulations "in order that we may undertake a review of their requirements."
  • CEI Podcast for July 31, 2013: REINS Act Hits the House Floor

    July 31, 2013
    Vice President for Policy Wayne Crews talks about the Regulations from the Executive In Need of Scrutiny (REINS) Act, which is expected to pass the House of Representatives tomorrow.
  • Meet the New Boss(es): NLRB Nominees Clear Senate

    July 31, 2013
    Well, it's official: We finally have a fully staffed National Labor Relations Board. On July 30 the Senate, as part of a deal worked out weeks ago, confirmed the entire slate of the Obama Administration's nominees to the NLRB. In return, the Persistent withdrew the two controversial "recess" appointments that were causing the Courts so much constitutional heartburn.
  • REINS Act to Hit House Floor Tomorrow

    July 31, 2013
    The bill would add some oversight to a regulatory process that has far too little of it.
  • House National ID E-Verify Bill: 6 Dangerous Provisions it Includes (And 5 Worker Protections it Excludes)

    July 31, 2013
    The House of Representatives has passed out of committee a bill (H.R. 1772) to mandate E-Verify electronic employment verification for all employers. This bill differs from the E-Verify proposal in the Senate immigration bill, so here’s the breakdown of what it’s in it: 1) Huge fines for employers: The bill cranks up the civil and criminal penalties both for employers who hire “unauthorized” workers and those who fail paperwork or technical requirements, such as E-Verify checks within a 3 day window or correct form filing. For technical errors, the bill increases fines tenfold—increasing the minimum fine to $1,000 per mistake and up to $25,000 per mistake (p. 50). Given the fact that this law can already cost employers up to $1...
  • House National ID E-Verify Bill: 5 Worker Protections it Excludes (And 6 Dangerous Provisions it Includes)

    July 31, 2013
    The House of Representatives has passed out of committee a bill (H.R. 1772) to mandate E-Verify electronic employment verification for all employers. This bill differs from the E-Verify proposal in the Senate immigration bill, so here’s the breakdown of what the bill lacks: 1) No limitation on how the system can be used: The House bill opens the door for E-Verify’s national ID system to be used almost anywhere to demonstrate identity. Once the system is in place and every American is part of it, it will be very easy for a federal or state agency to determine to use the system as a form of identification to get into buildings, to apply for a home loan, to rent an apartment, to...
  • Tracking the Cultural Exception, Part Four: A Double-Edged Sword

    July 31, 2013
    Americans generally think of subsidies to audiovisual industries like film and television as a foreign phenomenon. Yet that is hardly the case. In fact, one common argument for cultural exceptions made in other countries is that they are the best way to counter massive U.S. subsidies. European film producers have a point, but they’re pursuing a wrongheaded approach. Rather, they have much to gain from negotiations, as U.S. subsidies would be on the table as well. As I noted in a previous post, the outdated policies actually harm the industries they’re meant to protect. And efforts to keep them in place help keep other distortionary policies in place. In the case of U.S. film subsidies, they could be said to be protected by the European exception. There’...
  • Not Lovin’ It: Angry Fast Food Workers Strike

    July 30, 2013
    "Hold the burgers, hold the fries, make our wages supersize!" This is one of the many chants shouted by the thousands of fast food workers who began a wave of strikes and walk-outs across seven American cities on Monday July 29. Strikers walked off the job in a protest against restaurant chains, including McDonald’s, Burger King, KFC, and Wendy’s, demanding their right to form a union and that their base wage be doubled from $7.35 to $15 an hour.

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