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  • House Commerce Committee Approves "Pizza" Bill to Ease Onerous Calorie Labeling Rule

    November 23, 2015 7:02 AM

    While most consumers are blissfully unaware, a provision tucked into the Affordable Care Act could cause food vendors a lot of headaches. Starting on December 1, 2016, the Food and Drug Administration (FDA) is supposed to require all chain food restaurants with 20 or more locations will have to list calorie information for “standard menu items” on all signs and printed menus. This includes pizza shops and grocery store salad or hot food bars which offer dizzying arrays of options and some that change daily. But businesses are fighting back and this week the House Energy and Commerce Committee passed a bill backed by many in the industry.

    The rule, which is intended to help Americans watch their waistlines, would cost shops—many of which are franchises owned by small business people—thousands of dollars to re-design signs and menus and millions of hours in compliance. In fact, the provision was named “third-most-onerous regulation of 2013” by President Obama’s own Office of Management and Budget. As I wrote earlier this month, the costs associated with calorie testing might also force craft beers off the menus of chain restaurants.

    If approved by Congress, the Common Sense Nutrition Disclosure Act of 2015 (H.R. 2017) would amend the FDA’s rules, adding flexibility in how chains comply with the nutritional disclosure requirement. Pizza shops, for example, would be allowed to disclose the nutritional content of their menu items online—a good thing since almost none of their customers ever enter their shops. It also removes criminal penalties for restaurants that accidentally serve customers a larger order than they expected. Seems reasonable enough, right?

  • Anti-Capitalism on Campus

    November 20, 2015 5:35 PM

    Prof. Brad Thompson of Clemson University writes this week in Minding the Campus on the impact of corporate donations to institutions of higher education. In particular, he describes some of the controversy we’ve seen in recent years about donations from unabashedly pro-capitalist sources like BB&T and the Charles Koch Foundation. The allegedly insidious influence of such funding has even inspired the creation of the activist group “UnKoch My Campus.” Of course, as Casey Given of Students for Liberty has recently pointed out, George Soros has been spending far more on higher education programs than Charles and David Koch put together, but that hasn’t kept the campus left from crying foul.

  • The FAQ on COP-21

    November 19, 2015 10:58 AM

    What is COP-21?

    The 21st session of the Conference of Parties (COP-21) in Paris is a United Nations meeting to adopt a plan requiring greenhouse gas emission reductions by some countries which, according to the Durban Platform, must be “a protocol, another legal instrument or an agreed outcome with legal force” to which all participating countries would abide (although with “common but differentiated responsibilities”).  Therefore, inherently, the result of COP-21 will be a treaty.

    It will replace the Kyoto Protocol.  Kyoto had one five-year compliance period; Paris promises a new and updated emission reduction promise, or INDC, every 5 years.  Each new promise is to be “progressive beyond previous commitments” (Paris, Art. 3).

  • NLRB Attack on McDonald's

    November 18, 2015 3:14 PM

    No one accuses the government of being responsive to the public. Whether you are a veteran seeking care or need to renew your license at your local DMV, you can expect to wait. Another area where the public can expect to wait on the government: responses to public records requests. 

    Here, at the Competitive Enterprise Institute, we are all too familiar with waiting on FOIA requests. For example, “EPA has stonewalled CEI repeatedly and continues to slow-walk CEI’s ‘Windsor’ request, insisting it need only process 120,000 records at the glacial pace of 100 records processed per month; that is, it says it will conclude this production in 100 years.”

    On the other hand, the federal government doesn’t like to wait and will use its power to extract information it wants from the public. 

    In Investor’s Business Daily, I summarize the National Labor Relations Board’s attempt to use its vast powers to force McDonalds to handover proprietary data:

    Last year, NLRB General Counsel Richard Griffin consolidated dozens of unfair labor practice charges against McDonald's franchisees and named McDonald's USA LLC as a joint employer responsible for alleged labor-law violations of privately owned franchises all across the country. The case had stalled because the NLRB has asked for multiple continuances.

    The NLRB claimed the case has been held up because of a purported lack of transparency from McDonald's. It complains that McDonald's has heavily redacted information that it needs to make its case.

    In defense, McDonald's contends the blacked-out information is not relevant to the case or concerns business practices that are proprietary information. In September, the NLRB opposed McDonald's request to commence the case, but a trial is tentatively set to start Jan. 11. It's about time.

    McDonald's has produced over 100,000 pages of documents and calls the NLRB's discovery requests excessive. McDonald's has gone out of its way to supply the NLRB with the information it will need to question witnesses, build its case and begin the hearing.

  • Calling All Public Choice Scholars

    November 18, 2015 3:11 PM

    Earlier this month the Cato Institute generously hosted a small roundtable discussion of CEI’s recent study “Virtuous Capitalism: Why there Is Less Corruption in Business than You Think” by Fred Smith and Ryan Young. Our goal was to solicit comments on and criticisms of the paper’s arguments, and to expose more people to the work of CEI’s Center for Advancing Capitalism.

    The questions that arose during that session were helpful, but we are eager to open the discussion to as wide an audience as possible. Thus, we invite scholars (and students) to submit written responses to the arguments presented in the paper. Economists who work in the realm of public choice theory might be especially interested in engaging with Smith and Young. As they write:

    Most—but not all!—businessmen, we argue, have a sense of decency or an implicit code of honor that causes them to refrain from rent-seeking behavior, or at least do less of it than one would expect. This virtue defies quantification, which may be why many economists defy incorporating it into their analysis. We seek to encourage public choice economists and other social scientists to gain a fuller picture of humanity than they do now.

    What issues must be resolved if this perspective is to be more widely accepted? Why do you think the cronyist story seems so much more plausible, even to pro-market thinkers? What data or surveys might be useful in clarifying the conditions under which individuals see rent-seeking as moral or, at least, morally neutral?

  • Unconstitutional Sexual-Orientation Set-Asides in Massachusetts

    November 17, 2015 4:06 PM

    Government contracts should go to the lowest bidder, not be set aside for a particular group. So it is unfortunate that Massachusetts’s governor is now imposing set-asides in state contracts for LGBT businesses that appear to be unconstitutional. 

    Set-asides are unfair, discriminatory, and costly to taxpayers. They are also generally unconstitutional when they are not being used to remedy the present effects of the government’s own past discrimination. 

    These set-asides were apparently imposed in the name of “diversity.” But that is not a valid justification here. A federal appeals court struck down sexual set-asides in broadcast licenses in Lamprecht v. FCC , 958 F.2d 382 (D.C. Cir. 1992). It ruled that outside the educational setting, “diversity” is not a reason for preferences or discrimination under the Constitution’s “intermediate scrutiny” standard. Accordingly, it declared unconstitutional governmental “diversity” preferences based on sex. (For a later court ruling confirming this principle, see Lutheran Church—Missouri Synod v. FCC, 141 F.3d 344 (D.C. Cir. 1998).)

  • Less than 1 Percent of Federal Regulations Get Cost-Benefit Analysis

    November 17, 2015 2:46 PM

    The Obama administration likes to assert that all the rules and regulations pouring out of Washington have positive net-benefits.

    Billions of dollars in postulated net benefits is common, sometimes even for individual rules.

    But there is no way to make such a claim for the regulatory enterprise overall. Less than one percent of federal regulations get cost-benefit analysis. Let’s look at it.

    In fiscal year 2014, for example, the White House Office of Management and Budget 54 major rules and a few hundred significant ones. Only 16 had cost estimates OMB reviewed, and only 13 had both cost and benefit assessments.

    But, during the calendar year, there were 3,554 rules finalized by over 60 federal departments, agencies and commissions. Sure, regulators like to claim that the “major” rules reviewed account for the bulk of regulatory costs; but they themselves get to decide what counts as major.

  • Virtuous Capitalism in Theory and Practice

    November 17, 2015 12:56 PM

    Government is responsible for billions and billions of dollars of corruption and corporate welfare. Considering the potential returns on investment compared to honest entrepreneurship, it is a minor miracle the vice-to-virtue ratio in the economy isn’t even worse than it already is. Why is that? CEI founder Fred Smith and I wrote a recent paper, “Virtuous Capitalism,” which explores several possible answers to the question.

    If you don’t have time to read the whole thing, Fred summarizes it in his most recent Forbes column, to which I contributed:

    Capitalism has a bad reputation. Many people see it as corrupt, uncaring, and in bed with politicians. And popular wisdom isn’t always wrong. For example, take the Export-Import Bank’s pending renewal. How dare large, healthy businesses such as Boeing and General Electric receive billions of dollars-worth of special privileges?

    Has Big Business thought through the political and social costs of such self-aggrandizement? Is sacrificing long-term moral standing for short-term dollars really wise?

    Read the whole column here. The paper is here.

  • Should a Billionaire Decide Where Pennsylvanians Can Gamble?

    November 16, 2015 5:39 PM

    The casino industry has been good for my home state of Pennsylvania. For whatever ills one might claim goes along with gambling, the gaming industry has brought Pennsylvania $1.7 billion in total labor income, supports almost 34,000 jobs, and generates more than $2.4 billion in total tax revenues. Tomorrow, Pennsylvania state representatives will likely have a chance to vote on whether or not to take that industry online by allowing the state to license Internet gambling. Of course, wherever there is big money there is politics. While the move would make Pennsylvania more competitive with neighboring states like New Jersey and Delaware and generate even more tax revenue, special interests are rearing their ugly heads and opening their very large wallets… for the children, of course.

    According to the American Gaming Association, around 10 million Americans gamble online each year and we spent approximately $30 billion between 2003 and 2010. That was before New Jersey, Delaware, and Nevada passed legislation making the activity legal.

    There is no doubt that Pennsylvania is losing potential tax revenue to black market Internet gambling. Even worse is the fact that Pennsylvanians have to gamble on black market websites based overseas instead of placing their wagers on sites operated from and licensed by the state as neighboring Delawareans and New Jerseyans can.

    One lawmaker, Rep John D. Payne (R-Dauphin), chairman of the House Gaming Oversight Committee, has introduced legislation to legalize and regulate online gambling within the state. His House Bill 649 would allow existing Pennsylvania casinos within the state apply for “operator licenses,” requiring sites to verify age and location and giving the state the power to crack down on unauthorized sites.

  • Net Neutrality Questions FCC Commissioners Need to Answer

    November 16, 2015 4:56 PM

    In a House Energy & Commerce Committee oversight hearing on Tuesday, November 17, all five Federal Communications Commissioners will testify. Net neutrality, the FCC’s broad push to control both the infrastructure and content of tomorrow’s Internet, with full support of America’s left-wing, will be a lead topic.

    The debate over net neutrality has been done to death and elements are subject to legal challenge. Yet even Republicans can’t let go of wanting to regulate boogeymen like so-called “throttling” and “discrimination,” so in that respect they have themselves improperly conceded a moral victory and undermined the advance of free, competitive enterprise and consumer welfare in infrastructure wealth.

    All this mess and distraction at a time when Congress needs to dismantle the FCC altogether.

    I think the best approach for the members is to frame all questions from the right perspective: that FCC’s entire purpose is outdated and its intervention destabilizing, anti-technology, anti-infrastructure—and just plain anti-Internet, and anti-neutral, for that matter.


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