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OpenMarket: Risk and Consumer Freedom

  • Victory for "Caveman" Blogger and Free Speech in North Carolina

    February 19, 2015 6:54 AM

    Many people associate professional licensing with consumer safety. For example, we wouldn’t want any schlub doing surgery. But where occupational licensing laws may have started out with the goal of protecting consumers, they have now become a means by which certain professionals restrict competition. States require licenses for hundreds of occupations including perilous professions like florist, funeral director, hair braider, and fortune teller.

    The case of the “Caveman” blogger who was bullied by the North Carolina Board of Dietetics/Nutrition for providing nutritional advice without a license illustrates how licensing threatens not just our economic freedom, but our other basic freedoms. Luckily for blogger Steve Cooksey, his right to express his opinion and give advice to fellow dieters won out over the need to protect licensed dieticians from competition.

    As the Institute for Justice, which has been fighting on Cooksey behalf, wrote yesterday:

    In December 2011, Steve Cooksey started an advice column on his blog to answer reader questions about his struggle with Type II diabetes. Cooksey had lost 78 pounds, freed himself of drugs and doctors, and normalized his blood sugar after adopting a low-carb “Paleo” diet, modeled on the diet of our Stone Age ancestors. He wanted to use his blog to share his experience with others.

    However, in January 2012, the North Carolina Board of Dietetics/Nutrition informed Cooksey that he could not give readers personalized advice on diet, whether for free or for compensation, because doing so constituted the unlicensed practice of dietetics. The board deemed Cooksey’s advice the unlicensed practice of nutritional counseling, sent him a 19-page print-up of his website indicating in red pen what he was and was not allowed to say, and threatened him with legal action if he did not comply.

  • New U.S. Dietary Recommendations to Correct Misunderstanding about Cholesterol, Not Fat

    February 12, 2015 1:34 PM

    Thomas Jefferson once said, “If people let the government decide what foods they eat and what medicines they take, their bodies will soon be in as sorry a state as are the souls of those who live under tyranny.” On this issue, TJ seems to have hit the nail on the head.

    Since Uncle Sam started telling us what to eat, Americans have steadily grown less healthy in many ways. In the 1970s, we were told to eat less meat and more grains. We listened, but it did little to curtail the oncoming obesity “epidemic” (some claim government recommendations may have actually caused this epidemic). And for decades, we have been told to restrict our consumption of cholesterol in order to reduce our risk of cardiovascular disease. That is, until now. The new dietary guidelines will no longer recommend restrictions on cholesterol consumption. This is a great first step, but the best advice is to stop listening to government nutritional advice.

    For many people, this will seem like an abrupt about-face after 50 years of lectures about cholesterol. But for those in the medical research field, the shift is long overdue. During the last decade, it has become increasingly clear that there is no real evidence linking dietary cholesterol and blood serum cholesterol (which is used as a stand-in for CVD risk). While many physicians are still wedded to the idea that their patients at risk for cardiovascular disease should limit their egg consumption, it sounds like the Dietary Guidelines Advisory Committee—a joint effort of HHS and USDA—has finally come to grips with the evidence. Unfortunately, the real lesson remains unlearned: the U.S. government shouldn’t be the authority on what is or isn’t a healthy diet.

    The DGAC, which consists of “nationally recognized experts,” meets every five years to review medical literature and hash out recommendations for what a healthy diet should look like. Their report to the secretaries ultimately becomes the official Dietary Guidelines for Americans, which is used by policy makers as a guideline in federally administered nutritional programs and assistance. Unfortunately, it sounds like they will still cling to their increasingly suspect beliefs about saturated fat.

  • GOP Divided on Internet Gambling Ban

    February 5, 2015 2:35 PM

    As expected, members of the GOP reintroduced a measure that would create a de facto prohibition on all Internet gambling. The effort, which was written by GOP mega-donor Sheldon Adelson, has Republicans divided. Three states have already legalized online gambling while others are considering legislation to do the same.

    A move by the federal government to overturn or block these state laws is seen by some as an example of “crony capitalism” and as incompatible with traditional Republican values, such as federalism. The measure failed to gain traction in the last session, thanks in part to opposition from prominent free-market, conservative, and grassroots organizations. But with a presidential election looming, it is uncertain if the allure of Adelson’s billions will sway the now Republican-controlled Congress.

    Introduced by Rep. Jason Chaffetz (R-Utah) and Sen. Lindsey Graham (R-S.C.), the Restoration of America’s Wire Act (RAWA) would amend the 1961 Wire Act by removing language that limits the Act to interstate sports betting and adding language that makes it clear the Act applies to all online transactions. Supporters of RAWA assert that it is necessary because: 1) The DOJ unilaterally reinterpreted the Wire Act in 2011 eliminating an online gambling ban, 2) The Internet is inherently “interstate” and states that don’t want online gambling won’t be able to stop it, and 3) A ban will protect consumers.

    As I demonstrated in my UNLV paper, the 1961 Wire Act was not originally intended as a prohibition against all online/telephone gambling. It was very clearly meant to be narrow in its scope, limiting online sports betting “over the nation’s wire.”

    The bill was authored and championed by then Attorney General Robert F. Kennedy as a means to target organized crime. As he saw it, the only way to get at the “kingpins” of the mob was to target their means of fundraising. In all of his statements, testimony, and during Congressional hearings on the bill, RFK and his staff noted that the bill was focused on wagers related to horse racing and “such amateur and professional sports events as baseball, basketball, football and boxing.”

    Those who assert the bill was not limited to specific kinds of gambling (despite the fact that aids explicitly told Congress that it was) point to the language of the 53-year-old bill. Because it prohibits wire transmissions of betting on “any sporting event or contest,” they assert that “contest” covers every other form of gambling. Of course, if the bill was intended to prohibit all gambling, it isn’t clear why it would have needed to stipulate that it also prohibited gambling on sports.

  • Tainted Claims about "Agglomerated" Corks

    February 5, 2015 10:41 AM

    A recent article in Wine Industry Insight titled “Micro-Agglomerates: 350 Million Illegal Corks Per Year?” reports: “Agglomerated cork manufacturers and importers are facing scrutiny from two major federal agencies over health concerns about the plastic used to bind bits of cork glued together. The concern is that chemicals in the binding plastic can leach into wine.” 

    But a closer look at the issue indicates that these agencies are not focused on the corks, there’s nothing illegal about them, and safety concerns are unwarranted.

    The two agencies allegedly interested in the issue are the U.S. Environmental Protection Agency (EPA) and the Food and Drug Administration (FDA). The chemical in question, toluene diisocyanate or TDI, Wine Industry Insight notes, is “listed as a potential carcinogen” with the International Agency for Research on Cancer (IARC) and the National Toxicology Program (NTP).

    This sounds scary, but there are many reasons why no one should be alarmed about the closures or the chemical involved. But before going into that, we should be clear as to what the agencies are doing in regard to the corks.

    According to an EPA press release, the agency has proposed a rule that would require manufactures to notify the agency if a consumer product they are making will contain more than 0.1 percent of TDI by weight. The EPA does not mention scrutiny of corks that may contain TDI. It’s very possible that these corks don’t contain that much TDI and would not even be subject to this proposed rule.

    Nor is the FDA really scrutinizing the issue. Instead, the agency received letter from an outside party asking questions about related FDA law. Wine Industry Insight has posted a link to a letter from the FDA responding to that party, but the name of the party asking questions is either blanked out or never included. But Wine Industry Insight points out that it was an association that represents competitors of agglomerated cork producers—a synthetic cork association—who filed the petition. It notes:

    “Competition is fierce for the low-end market which is why a synthetic cork association blew the TDI whistle on agglomerates in a letter to the FDA.”

    Obviously, competitors have an interest in making this an issue, but FDA isn’t taking the bait. FDA has authority to regulate “food additives” that might pose a threat to public health and that includes chemicals that might migrate from packaging into food. In its cryptic, bureaucratically written letter, FDA is basically indicating that they have data showing there is no detectable migration of TDI into the wine for the closures currently on the market. Otherwise, they’d be regulating now, but they’re not.

    So much for “federal scrutiny.” There really isn’t much because there’s no good reason for it.

  • No Sprinkles in Obama's America: Trans Fat, Hyperbole, and the Threat Nobody Is Talking about

    February 5, 2015 7:59 AM

    “Say goodbye to your favorite sprinkled doughnuts,” warned Clayton Morris, guest host on Fox & Friends. “The [FDA] is now regulating Americans intake of trans fat…the amount needed to make something as small as a sprinkle on your doughnut may be banned.” Morris is referring to the decision announced by the Food and Drug Administration in 2013 to reclassify partially hydrogenated oils—revoking its status as “generally recognized as safe” and creating a de facto ban on the artificial trans fat found in the oils. Fox’s overwrought presentation of the issue led many observers to ridicule the segment as well as opposition to the FDA action. The ribbing is warranted; discussion on both sides of the debate has overwhelmingly relied on emotional arguments and hyperbole. As a result, most people aren’t talking about the real threat this FDA action poses.

    “Only Vladimir Putin would deny American children—and adults that need to rethink their dietary life choices—their God-given right to ingest sugar in whatever form they deem fit,” Elliot Hannon at Slate joked. “Your doughnuts are safe from Obama’s grasp” wrote Steve Benen at MSNBC. And Cenk Uygur dedicated almost seven minutes of his show, The Young Turks, to myth-busting/ridiculing the Fox segment. Uygur’s response included all of the primary arguments made by those who support an FDA trans fat ban and demonstrated how useless the Fox & Friends-style argument is.

    Uygur takes all of the points made by Morris and shows why it is actually an argument for why trans fat ought to be banned. So what that Americans have almost completely eliminated trans fat from their diets already? “It was the FDA effort to eliminate trans fat in the first place that almost solved the problem and now they’re trying to solve it completely,” he asserts. Almost completely isn’t good enough; according to Uygur and the FDA, trans fat consumption is still responsible for a certain number of deaths so it is completely appropriate for the FDA to act to stop these preventable deaths. “Heart attacks, that’s what the right wing calls freedom,” he jokes. He is similarly unmoved by the argument that most food companies have voluntarily removed trans fat from their products. In fact, he points to this as a refutation of the idea that sprinkles or any other food will be taken off the market if trans fat is reclassified. “Nobody is banning any of these foods. It’s a total lie,” he says.

    Uygur is right. Well, at least partially. FDA action in 2003 requiring manufacturers to list trans fat on nutritional labels did contribute to a reduction in consumption. Of course, it was also pressure from public health advocates and consumers’ demand for healthier products that resulted in the drop: from 4.6 grams a day in 2003 to around 1 gram a day in 2012. It’s worth noting, however, that the public health advocates crying out against trans fat now were the same ones who promoted the use of trans fat by vilifying saturated fat in the 1980s. Uygur is also right that the FDA isn’t banning any particular food: not doughnuts, sprinkles, pie crust; they’ll all survive a “trans fat ban.” They may need to be reformulated, may taste different, and be more susceptible to spoilage, but most products, if not all, will remain on shelves in some form or another.

    Uygur also right when he argues that almost eliminating trans fat from our diet isn’t an argument against a complete ban. For instance, claiming that Americans consume next to zero arsenic isn’t going convince many people that we should let food companies put arsenic in our food. But this is the part of the discussion missing from both sides: trans fat isn’t arsenic and it’s not a poison: it’s a food. As with any other food or beverage, if you consume it in great enough quantities, there will be negative consequences. But trans fat isn’t “harmful”; it is unhealthful, potentially. So, the question is: when is it okay for the FDA to make decisions about what foods or ingredients can or can’t be part of a healthful diet. And is that something we want the FDA deciding at all?

  • Bet on the Big Game? You Probably Broke the Law

    February 2, 2015 1:44 PM

    Industry experts expected yesterday’s Super Bowl game to bring in around $100 million in legal sports wagering in Nevada. That’s a lot of moola, but it pales in comparison to how much Americans bet illegally. While it’s hard to know exact numbers, the American Gaming Association estimated that Americans would spend around $3.8 billion in illegal gambling on the Super Bowl.

    While gambling on a football has probably been around since the first game, many state and federal statutes prohibit even small, friendly wagers among friends.

    The Unlawful Internet Gambling Enforcement Act of 2006: Although UIGEA doesn’t outlaw gambling online, it does prohibit payment transactions related to “unlawful” online gambling. While the law doesn’t specify what it considers “unlawful” gambling, it does specifically exempt fantasy football, qualifying it as a “game of skill.” That said, betting on the real-world outcome of a single game wouldn’t qualify under this exemption. So, if you’re wagering on the Super Bowl online, you are very likely violating this federal law.

    The Interstate Wire Act of 1961This law prohibits cross-state betting on sports. The courts and federal entities have generally interpreted “wire” to apply to both telephone and Internet communications, so this law prohibits all on or offline betting on sports that crosses state lines. Because online data is usually shuttled between servers in various states, it is taken to mean that any online sports betting is interstate sports betting and in violation of this law. Even collecting or paying out money with online processors like PayPal or LeagueSafe could get you into trouble if it is connected to betting on sports.

    The Professional and Amateur Sports Protection Act of 1992: PASPA was passed at the behest of the sports leagues and prohibits wagering “on one or more competitive games in which amateur or professional athletes participate, or are intended to participate, or on one or more performances of such athletes in such games.” The prohibition exempts states that already had legal sports betting within a year of the law’s passage, such as Nevada, Delaware, Montana, and Oregon. New Jersey has attempted, unsuccessfully, to overturn PASPA as unconstitutional.

  • Study Shows Health Benefits of Moderate Alcohol Consumption

    January 27, 2015 1:43 PM

    Alcohol is a favorite target for health nannies and politicians looking to boost revenue. Excessive drinkers, they say, cost society millions or billions of dollars! Because society incurs the costs of the irresponsible minority, they assert, society has the right to try and curtail this voluntary behavior. Of course, whenever campaigners quote figures about the exact dollar-amount alcohol consumption “costs” society, they rarely include estimates of the benefits of alcohol consumption for both individuals and societies. That may have to change in the wake of a new study.

    Teetotalers like those over at Alcohol Justice (formerly the Marin Institute) promote the idea of “charging for harm.” That is, they think we should increase the taxes on alcohol—charging all drinkers to pay for the “harms” of the few. The estimates for the exact dollar cost of alcohol consumption to society vary significantly, depending on the region and year. As Christopher Snowdon put it in his Wages of Sin Taxes study:

    The studies that produce these figures are dominated by “costs” which are neither financial nor borne by the taxpayer. They include hypothetical estimates of the value of a life year lost, earnings forgone due to premature mortality, and expenditure by the consumer on the product itself. These figures are usually inflated, but even when they are plausible they cannot be used to justify sin taxes because these “costs” affect only the individual; they are not paid by the taxpayer.

    This month the European Heart Journal published a study on the effects of alcohol consumption on the heart. As the American Council on Science and Health wrote, 

    After analyzing the data, Dr. Gonçalves and colleagues reported that, compared to alcohol abstainers, men who consumed up to 7 drinks per week had a significant 20 percent reduced risk of HF. Women in that category of drinkers also had a reduced risk of HF, but only by about 5 percent.

    This study provides even more evidence to the growing heap that light and moderate alcohol consumption is not only harmless for most adults, but may be beneficial to health. It is still true that excessive consumption of alcohol can have negative consequences, which is true of almost everything. But it is irresponsible for researchers to continue to ignore the benefits of responsible alcohol consumption or to suggest that total abstinence would be best for individuals or societies. Whether or not a person drinks and how much they drink should be a decision he or she makes on their own, perhaps with the advice of a physician. Certainly, it should not be up to professors, social engineers, or politicians looking to raise revenue.

  • European Food Safety Authority Confirms BPA Safety—Again

    January 21, 2015 4:21 PM

    The debate over the chemical Bisphenol A (BPA) has raged for years, with environmental activists continually hyping the risks associated with it. Used to make hard-clear plastics and resins that line food containers such as soda cans or canned fruits and veggies, humans have been exposed to trace levels of the chemical for decades without evidence of any ill effects. And a recent review of the science by the European Food Safety Authority (EFSA) confirms this reality. It concludes:

    EFSA’s comprehensive re-evaluation of bisphenol A (BPA) exposure and toxicity concludes that BPA poses no health risk to consumers of any age group (including unborn children, infants and adolescents) at current exposure levels. Exposure from the diet or from a combination of sources (diet, dust, cosmetics and thermal paper) is considerably under the safe level (the “tolerable daily intake” or TDI).

    That’s a pretty strong assurance of safety coming from a government agency that is usually extremely cautious. 

  • Free to Prosper: Top Priorities for the 114th Congress

    January 14, 2015 9:29 AM

    With the start of the 114th Congress comes a fresh opportunity to address the challenges created by a broken government. To kick off this new congressional session, the Competitive Enterprise Institute (CEI) recommends numerous reform proposals to strengthen the U.S. economy, increase transparency, and foster fair and open competition instead of favoring special interests.

    CEI’s top policy proposals center on substantive regulatory reforms needed to improve America’s economic health. In 2014 alone, 3,541 new regulations hit the books, and the burden is constantly growing. If federal regulations were a country, their cost would amount to the world’s 10th largest economy.  

    In addition to reining in burdensome regulations, CEI recommends that Congress continue to conduct fundamental oversight to protect Americans from executive overreach. Over the last six years, federal agencies have sought to usurp power from the legislative branch. Congress has a responsibility to demand honesty and accountability from our leaders and defend the rule of law.

  • Could the FDA's New Calorie-Count Mandate Harm Winemakers?

    January 13, 2015 6:39 AM

    The trade association, WineAmerica, which represents 600 wineries in the U.S., seems to think so. The group has hired a lobbyists to push the FDA to allow them to provide a range of calories in each variety of wine rather than precise counts for each particular wine.

    That would mean, for example, wineries could disclose that a 5-ounce glass of wine with 13 percent alcohol has between 130 and 140 calories, as opposed to testing to find the exact calorie count for every specific wine.

    The new rule is part of the same section—4205—of the Affordable Care Act that mandates calorie labeling for restaurants with 20 or more locations. The provision has caused a lot of controversy for some smaller chain food outlets, such as grocery stores and pizza shops. According to the Food Marketing Institute, a trade group representing retail grocery chains, the menu-labeling regulation would cost that industry $1 billion in the first year of implementation.

    WineAmerica estimates that it will cost about $500 per wine to conduct calorie testing. That might seem like small change, but for small wineries the cost and time it would take to test each wine just adds to the burden of getting their products to the market, according to trade group.

    According to current regulations, which are implemented by the Alcohol and Tobacco Tax and Trade Bureau, listing calorie content on wine is voluntary. However, if the new ACA rule may mean that wines hoping to get onto the menu of chain restaurants or grocery stores will have to provide calorie content information.

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