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OpenMarket: April 2016

  • State Department Tells 28 Senators To Go Pound Sand

    April 29, 2016
    The U. S. State Department replied this week to the 18th April letter to Secretary John Kerry from 28 Senators that pointed out that Palestine was recognized as a full member of the UN Framework Convention on Climate Change as of 17th March and therefore the United States must stop all funding of the UNFCCC as required by laws enacted in 1994 and 1990.  State’s snotty response to the Senators can be summarized thus: Go pound sand. Assistant Secretary of State for Legislative Affairs Julia Frifield wrote to Senator John Barrasso (R-Wyo.):

    “It is our view that neither the restriction referenced in your letter, section 410 of Public Law 103-236, nor the restriction contained in section 414 of Public Law 101-246, have been triggered by the Palestinians’ purported accession to the UNFCCC.  The UNFCCC is a treaty, and the Palestinians’ purported accession to it...

  • Power Plant Rule: EPA Defies Stay to Develop Legally Dubious Incentive Program

    April 28, 2016

    The EPA yesterday took another step to advance the Obama administration’s flagship domestic climate policy, the so-called Clean Power Plan (CPP).

    As Politico reported:

    The EPA is moving forward with a component of the Clean Power Plan, sending proposed details and language for the optional Clean Energy Incentive Program to the White House Office of Management and Budget today, according to an EPA statement set to be released today. The CEIP would provide credit for power generated by new wind and solar projects in 2020 and 2021, as well as double credit for energy efficiency measures in low-income communities over that same period.

    “But,” ...

  • Why Is Employee Involvement an Unfair Labor Practice?

    April 28, 2016

    U.S. labor law is largely based on the false narrative of an inequality of bargaining power between employees and employers. The theory goes that an employer will extort an employee down to their reservation wage, or lowest acceptable wage that is better than being unemployed.

    Tyler Cowen and Alex Tabarrok, both professors at George Mason University, dispel this myth. As they explain, “[B]uyers compete against other buyers (and sellers compete against other sellers). Firms buy labor and they are competing primarily not against workers but against other firms. Firms versus Firms! Now that is a real battle!”

    Meaning when companies are trying to determine what compensation to pay an employee, they are not thinking about shaking down an employee, but how much another company may pay the...

  • CEI Supports Vote to Block Labor Department's Fiduciary Rule

    April 28, 2016

    Today, the U.S. House of Representatives is expected to vote on H.J. Res 88, the resolution pursuant to the Congressional Review Act to disapprove the Department of Labor fiduciary rule, which was introduced by Reps. Phil Roe (R-Tenn.), Charles Boustany (R-La.), and Ann Wagner (R-Mo.).

    The Competitive Enterprise Institute strongly supports this legislation. Congress must disapprove this regulation for many reasons, the first being the Obama administration’s blatant disregard of the statute that Congress wrote. The Employee Retirement Income Security Act of 1974 gives the Department of Labor very limited authority over employment-based pensions. It in a way authorizes the Labor Department to redefine the term “fiduciary”—much less in a way that differs from decades-old interpretations of the...

  • CEI Challenges Illegal "Vapes on a Plane" Regulation

    April 28, 2016

    Today, CEI, the Consumer Advocates for Smoke-free Alternatives Association (CASAA), and CEI employee Gordon Cummings, as a private individual, filed a lawsuit challenging the Department of Transportation’s (USDOT) recent regulation extending the existing statute prohibiting smoking aboard aircraft to cover electronic cigarettes. The reason is simple: Congress never gave regulators the power to prohibit e-cigarette use aboard aircraft.

    The agency is inventing authority it clearly does not have. Congress granted USDOT power to implement its law under ...

  • Congress Must Pass Email Privacy Act

    April 27, 2016

    This week, the U.S. House of Representatives will vote on the Email Privacy Act (H.R. 699) sponsored by Rep. Kevin Yoder (R-Kan.). The Competitive Enterprise Institute strongly supports this legislation, which would amend the 1986 Electronic Communications Privacy Act (ECPA) to require that the government obtain a warrant, based on a showing of probable cause, to compel a cloud computing provider to divulge the contents of a user’s private electronic communications. The Email Privacy Act enjoys strong bipartisan support, with well over 300 House cosponsors—a majority of House Republicans and Democrats.

    Yesterday, CEI joined dozens of public interest groups, companies, and activists in a...

  • Wind Energy Industry Suffers Fuel Shortage in 2015

    April 27, 2016

    Wind energy can’t compete. Instead, it exists only by the grace of favorable politics. On the supply side, the industry enjoys the federal production tax credit, which awards tax equity to owners of wind power for each megawatt hour of generated electricity. On the demand side, the industry enjoys Soviet-style production quotas in 30 states that force ratepayers to use increasing amounts of wind power.

    Yet even with all this political “wind” at its back, sometimes the industry nonetheless falls short—because nature won’t cooperate. According to James Osborne at Fuel Fix

    Last year might have been a banner year for wind turbine construction, but not for the wind itself.

    ...

  • FSOC Misunderstands Leverage, Threatens Risk Management

    April 27, 2016

    The Financial Stability Oversight Council recently released its “Update on Review of Asset Management Products and Activities,” in which it questions “how certain asset management products and activities could pose potential risks to U.S. financial stability.”

    One aspect of the report focuses on hedge funds’ use of leverage, and the purported increase in risk associated with an increase in leverage:

    The relationship between a hedge fund’s level of leverage and risk, and whether that risk may have financial stability implications, is highly complex. Leverage is not a perfect proxy for risk, but there is ample evidence that the use of leverage, in combination with other factors, can...

  • The Proliferation of Federal Agency Guidance Documents

    April 27, 2016

    Recently we looked at some prominent recent examples of federal agency guidance—costly to-dos for the private sector. Today I wanted to say just a quick a word about the proliferation of guidance overall.

    Recall that agencies use guidance documents and other regulatory dark matter to get around the rule-making process. The Mercatus Center’s Hester Peirce described how “agencies opt for short-cuts”:

    Rather than bothering with the burdensome rule-making process, they use faster and more flexible means of imposing mandates. To avoid running afoul of the...

  • The Chilling Effect of Dark Matter

    April 26, 2016

    Here at CEI, we know all about the chilling effect of executive power. We also know quite a bit about the extent to which the executive uses what we call “regulatory dark matter” to go beyond the normal legislative and rulemaking processes to impose more burdens on citizens and businesses. Today we have an example of both happening in the same issue, the Department of Labor’s final Fiduciary Rule.

    The rule will place huge burdens on the insurance industry, and will likely lead to middle class Americans losing access to personal investment advice (and all of this is supposed to be...

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