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OpenMarket: May 2014

  • Are My Ten Thousand Command "Mints" to Be Regulated?

    May 30, 2014 11:15 AM

    The Food and Drug Administration FDA wants to regulate serving size of breath mints. That's right.

    Ten Thousand Commandmints Mints Tin

    This rule was issued March 2014:

    “Food Labeling: Serving Sizes of Foods That Can Reasonably Be Consumed At One-Eating Occasion; Dual-Column Labeling; Updating, Modifying, and Establishing Certain Reference Amounts Customarily Consumed; Serving Size for Breath Mints; and Technical Amendments”

    They're extending time for comments, it was announced this week. Things like the definition of a single serving deserve careful attention, and "Each request conveyed concern that the original 90-day comment period does not allow sufficient time to develop a meaningful or thoughtful response to the proposed rule."

    The things America chooses to waste time and resources on always amazes.

    I used to work at FDA for a short time and opposed labeling mandates that were being initiated even then for a number of reasons. But now I reckon I'm an outlaw, as I was reminded by my colleague Ryan Young, who tweets as @RegOfTheDay.

  • CEI Labor and Employment Scorecard: Insourcing Amendment to Intelligence Authorization Act

    May 30, 2014 8:39 AM

    This week, the Competitive Enterprise Institute (CEI) will score a vote in the U.S. House of Representatives in its consideration of the Intelligence Authorization Act for Fiscal Years 2014 and 2015 (H.R. 4681).

    The intelligence authorization is considered annually, though there is some history of the process falling short of annual enactment. The vote below pertains to employment considerations for America’s labor force, both governmental and private. The score will be incorporated into CEI’s Congressional Labor and Employment Scorecard, which can be seen in full on CEI’s labor and employment policy website,

    In the course of government operations, work and employees are transferred between the federal government and private employers through “insourcing,” whereby activity once performed by the private sector is brought under government control, and “outsourcing,” whereby the private sector takes over some functions formerly performed by government employees. When deciding whether to insource or outsource, policy makers should follow a basic principle: Businesses should not be subjected to unfair competition from government entities.

    A good guide is the “Yellow Pages” test, which has been applied by mayors and governors around the nation, both Democrat and Republican. It operates under a simple premise: If you can find a private sector firm providing products or services that the government is also providing, then the service should be provided by the private sector. This would insert market competition into the government procurement process, break up government monopolies, and provide better value for taxpayers.

    The Center for Naval Analyses found benefits of competing work, in its 1996 examination of the issue. The visibility and identification of alternate providers were beneficial aspects of the process identified by the Center. As a bottom line, the Center for Naval Analyses determined a 30 percent average savings resulted from this beneficial focus on competition, with savings persisting over time.

    Government workers cost more per hour worked than private sector employees. As the Congressional Budget Office concluded in 2012,

    On average for workers at all education levels, benefits for federal employees cost about $20 per hour worked, whereas benefits for private-sector employees cost $14, CBO estimates. Thus, benefits for federal workers cost 48 percent more per hour worked, on average, than benefits for private sector workers with similar attributes. Benefits also constituted a larger share of compensation for federal workers, accounting for 39 percent of the cost of total compensation, compared with 30 percent in the private sector.

  • Reihan Salam's Argument for Alcohol "Prohibition Lite" Doesn't Hold Water

    May 29, 2014 3:25 PM

    In Slate recently, Reihan Salam argued that as America eases up on the criminalization of marijuana use it ought to consider ramping up the war against booze ("Alcohol Taxes Should Be Tripled: The war on drugs has been a failure. But the war on booze deserves a second chance")It’s a bold argument to make, but it doesn’t go far enough. Salam states, that “[t]he fact that alcohol is more harmful to society than marijuana is a reason to regulate alcohol more stringently than we regulate marijuana. In other words, let’s ease up on marijuana Prohibition and ramp up good old-fashioned alcohol Prohibition.” But he fails to identify another class of products that is in virtually every home in America and arguably more dangerous than weed and ought to be taxed if not banned altogether: beds, mattresses, and pillows. These inherently dangerous and addictive products sent 742,100 people to the hospital in 2012 alone—far more than marijuana (marijuana use was listed in the notes of 375, 000 ER visits). Following in Reihan’s brave steps, I’m advocating that we institute a nationwide pillow prohibition.

    Of course, that is a ridiculous idea, since we get many benefits from beds, mattresses, and pillows. But it’s no more ridiculous than Salam’s apparent suggestion that alcohol can only be put to harmful uses.

    Furthermore, Salam’s argument rests on some serious fallacies and inaccuracies. He seems to believe that the only deciding factor in how much people drink is the price, despite a wealth of evidence that shows increasing taxes on alcohol and restricting availability does not save society from alcohol-related harms and is, in fact, likely to increase the overall cost to society. Not to mention that whole erosion-of-individual-freedom thing.

    Salam’s argument is, indeed, very strange. So, is he pulling our leg? Apparently not. The inspiration for his recent article appears to be a recently released Pew survey that found that an increasing number of Americans favor legalizing marijuana and that 69 percent consider alcohol a greater threat to individuals’ health (though Salam incorrectly reported that 69 percent of respondents thought alcohol was a greater threat to society).

    For Salam, “[t]he fact that alcohol is more harmful to society than marijuana” seems reason enough to increase regulation and taxes on alcohol. Since when does a majority of people believing something make it true or even desirable?

    And as for the harm, what people believe can actually mislead. In another Pew poll, participants between 18-25 years old were asked if they believed people of their generation drink more alcohol than people their age drank 20 years ago. Sixty-nine percent responded that their generation drinks more—and all 69 percent of those respondents were 100 percent wrong. According to a 2013 survey by the National Institute of Alcohol Abuse and Alcoholism, the rate of drinking among young adults (12th graders through college) has significantly and steadily declined since 1980.

    young drinking trend

  • Obama's New Unified Agenda of Federal Regulations Shows Big Rules Are Growing

    May 29, 2014 3:23 PM

    In the just-released Spring 2014 Unified Agenda of Federal Regulations, published twice a year by the Office of Management and Budget, federal departments and agencies have 3,348 rules in the pipeline.

    These are broken up into Active (mostly proposed and final rules in the works), Recently Completed, and Long-Term rules as follows:

    Spring Unified Agenda of Federal Regulations (All Rules)
    Active: 2,389
    Completed: 518
    Long-term: 441
    TOTAL: 3,348

    This is up a tad from the pipeline count in the Fall 2013, which was 3305, as detailed here. The pipeline regularly stood above 4,000 in decades prior; the drop derives substantially from changes in OMB reporting policy, which in my view reduce transparency, as I explained in "Big Sexy Holiday Fun With the Unified Agenda of Federal Regulations."

    Still, the number of economically significant rules in the Unified Agenda pipeline, those projected to impact the economy by at least $100 million annually (usually upward, but occasionally downward) rose from the Fall 2013 report's 191 rules to 197, as follows:

    Spring Unified Agenda of Federal Regulations (Economically Significant Rules)
    Active: 129
    Completed: 38
    Long-term: 30
    TOTAL: 197

  • CEI Podcast for May 29, 2014: Rachel Was Wrong

    May 29, 2014 10:18 AM

    Seeing as Carson's book set malaria prevention back decades, CEI Senior Fellow Angela Logomasini thinks there are other figures more deserving of such tributes.

  • How Policy Makers Should Approach Google's Driverless Shuttles

    May 28, 2014 10:25 AM

    Yesterday, Chris Urmson, director of Google's Self-Driving Car Project, wrote a post for the company blog describing Google's newest prototype: fully automated vehicles that lack manual steering, accelerating, and braking functions:

    It was inspiring to start with a blank sheet of paper and ask, “What should be different about this kind of vehicle?” We started with the most important thing: safety. They have sensors that remove blind spots, and they can detect objects out to a distance of more than two football fields in all directions, which is especially helpful on busy streets with lots of intersections. And we’ve capped the speed of these first vehicles at 25 mph. On the inside, we’ve designed for learning, not luxury, so we’re light on creature comforts, but we’ll have two seats (with seatbelts), a space for passengers’ belongings, buttons to start and stop, and a screen that shows the route—and that’s about it.

    Here's a short video of the prototype in action:

    Google's announcement of a low-speed, non-highway vehicle is not surprising. As Stanford Law's Bryant Walker Smith noted last fall at The Volokh Conspiracy,

  • Red Tapeworm 2014: U.S. Regulation Compared to the World’s Largest Economies

    May 27, 2014 3:51 PM

    This is Part 7 of a series taking a walk through some sections of Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State (2014 Edition).

    The cost of federal regulations amount to the equivalent of around 11 percent of U.S. GDP, as I'd noted in the last installment of this series.

    But the U.S. economy is the world's largest, approaching $17 trillion. So it's interesting to compare the estimated cost of regulation to the size or national incomes of other countries around the world.

    For starters, estimated U.S. regulatory costs of $1.863 trillion surpass the 2012 gross domestic product of our nearest neighbors. Canada's GDP stood at $1.821 trillion, and Mexico's GDP at $1.178 trillion.

    Regs compared to global GDPs

    More broadly, as can be seen nearby in a ranking of the 15 largest global economies, there are nine countries whose GDP exceeds the estimated cost of regulation in the United States (which is highlighted in yellow).

  • Dodd-Frank's Durbin Amendment Drives Up Costs on Memorial Day and Every Day

    May 27, 2014 9:46 AM

    Over the Memorial Day weekend, the Big Retail lobby created a dubious driving distraction.

    The Merchants Payments Coalition, whose members include retail giants like Walmart and 7-Eleven, took out a Business Wire press release warning motorists to "Get Ready to Be Side-Swiped by Your Bank’s Exorbitant Credit-Card Fees." In reality, it's rent-seeking retailers and allied politicians who are rear-ending American consumers on Memorial Day and every day through the price controls they pushed for in Dodd-Frank's Durbin Amendment. Now, they are lobbying Washington to ram ordinary folks even more with policies that will make security breaches like that of Target more likely to happen.

    At issue are "interchange fees," fees charged to merchants by credit and debit-card issuing banks and credit unions to process consumer transactions. Together with consumer payments, these fees finance the electronic payment infrastructure and technologies to fend of security threats. But ever since the Dodd-Frank financial "reform" was signed by President Obama in 2010, the retailers have begun a massive cost-shift that hits consumers in the wallet.

    At the behest of big retailers such as Walmart and Illinois-based Walgreens, Senate Majority Whip Dick Durbin (D-Ill.) inserted into the Dodd-Frank financial "reform" of 2010 a measure that mandates that the debit card interchange fees charged to retailers must be “reasonable and proportional to the cost incurred by the issuer [bank or credit union issuing the card] with respect to the transaction.” Then, again at Big Retail's behest, the Federal Reserve barred banks and credit unions from profiting on the fees charged to retailers, only a very limited portion of costs could actually be recovered in the fee.

    The result has been both a humongous cost-shifting for debit card processing from retailers to consumers — a sharp reduction of free checking for low-balance account and the virtual end of debit card rewards — as well as much less resources from retailers to fight hacking and cyber attacks. George Mason University law professor Todd Zywicki, now a member of the Competitive Enterprise Institute's board of directors, has found that the Durbin Amendment also bears much of the blame for more than 1 million consumers becoming unbanked over the past few years.

  • Senate Leaders Kill Patent Reform, Once again Thwarting Democracy to Protect Special Interests

    May 27, 2014 7:28 AM

    Hundreds of moderate and conservative bills have passed the House of Representatives, often overwhelmingly, only to die in the Senate without even being voted on there. Senate Majority Leader Harry Reid (D-Nev.) doesn't want these bills to pass, because they contain provisions opposed by left-leaning special interest groups, like the trial lawyers. Letting them come to a vote would enable many of these bills to pass, given popular support for them.

    Reid just did it again with patent reform, which passed the House, only to die in the Senate. Thanks to Reid, the trial lawyers and "patent trolls won in Congress," laments a tech policy expert at Ars Technica. Without Reid's approval, Senate Judiciary Committee Chairman Pat Leahy (D-Vt.) won't even hold a vote on the bill, knowing it would likely pass the committee if he did. Nor will he consider a compromise replacement designed to attract Democratic support hammered out by Senators Schumer (D-N.Y.) and Cornyn (R-Texas), which added sweeteners to the bill to attract Democrat-leaning constituencies like universities.

    Even the liberal New York Times editorial board, which has not endorsed a Republican for president since Dwight Eisenhower, supports the bill. But trial lawyers, a powerful special interest group who are a major force in the Democratic party, opposed the patent reform bill. Many House bills that supporters say would create jobs have never been allowed to come to a vote in the Senate.

    Ironically, news of the death of patent reform came at the same time that President Obama, speaking at a partisan fundraiser, claimed that "the problem” in Washington, and the reason for legislative gridlock, "is not that the Democrats are overly ideological — because the truth of the matter is, is that the Democrats in Congress have consistently been willing to compromise and reach out to the other side."

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

    May 26, 2014 8:08 AM

    66 new regulations, from Panama to refrigerants.


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