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  • West Virginia Set to Enact Major Labor Reform with Prevailing Wage Repeal

    February 3, 2016 8:51 AM

    West Virginia, which appears poised to become the nation’s 26th right to work state, may soon enact another major labor law reform. The state Senate is set to vote on a bill repealing the state’s prevailing wage laws. The legislation, HB 4005, was voted out of the Senate Government Organization Committee on Monday, February 1, and now moves to the full Senate.

    Prevailing wage laws set price floors for contractors working on government-funded projects. This often turns out to be the union wage, which hampers nonunion contractors’ ability to bid for such projects.

    Prevailing wage laws—along with project labor agreements, which impose prevailing wage and other requirements that favor union contractors on a per-project basis—disproportionately affect minority contractors, many of whom are not unionized. That impact may be unintended today, but it wasn’t always so. The federal prevailing wage law, the Davis-Bacon Act, was intended to disadvantage African American workers on federal construction projects. Davis-Bacon’s shameful history should make other laws like it similarly suspect.

  • Bill Aims to Stop Operation Choke Point Happening Again

    February 2, 2016 5:10 PM

    Operation Choke Point is a major abuse of executive authority. As we have detailed over the last couple of years, Choke Point is an attempt to use federal supervisory powers to intimidate providers of financial services to businesses that are deemed unacceptable by bureaucrats, even though they are perfectly legal (and in some cases constitutionally protected).

    After CEI and others, notably Rep. Blaine Leutkemeyer (R-Mo.), raised concerns about the practice, the Federal Deposit Insurance Corporation revised its guidance and stepped back from the Operation.

    Although the activities of Operation Choke Point now seem to have been taken over by the secretive Consumer Financial Protection Bureau (CFPB), concern remains that other Federal agencies could use its tactics again. Consequently, Rep. Leutkemeyer has introduced a bill to prevent federal banking agencies from using the tactics involved.

    The Financial Institution Consumer Protection Act would do two main things:

  • CEI Joins Coalition Supporting Bill to Curb Abusive Lawsuits Targeting Free Speech

    February 2, 2016 2:39 PM

    Today, the Competitive Enterprise Institute joined seven other free market organizations in a coalition letter expressing our strong support for the SPEAK FREE Act, which would curtail frivolous lawsuits brought to chill protected speech and stifle criticism about matters of public concern. These lawsuits, known as “strategic lawsuits against public participation”—or SLAPPs—are brought by plaintiffs to punish speakers they dislike, even though the speech is protected by the First Amendment. Even though defendants in such cases usually prevail in court, they must still spend lots of time and money defending themselves through the litigation process.

    To combat SLAPPs, the SPEAK FREE Act would let defendants move to dismiss lawsuits targeting speech about matters of public concern unless the plaintiff can show the court that the suit is likely to succeed on its merits. The bill, which resembles anti-SLAPP laws that have been enacted by 28 states, would also empower defendants sued in state court to remove SLAPP lawsuits to federal court.

    You can read the coalition letter here.

  • Interchange Fee Warnings Coming True in EU

    February 2, 2016 10:02 AM

    We have often warned about the negative effects of interchange fee regulation and specifically a cap on interchange fees. Last year we warned the European Parliament that a proposed EU-wide cap on interchange fees would cause many banks to raise fees and interest rates on all their customers, not just those who use debit or credit cards. We said:

    Capping interchange fees has been tried in some countries around the world.  Despite claims that these efforts were for the benefit of consumers, the real world results have shown the opposite to be true. In every instance, consumers faced higher fees for banking services, a reduction in benefits and services and saw no return in the form of lower prices from merchants despite promises by merchants and policy makers to pass savings to consumers.

    We also noted in April that banks were already cutting back on card reward schemes.

  • West Virginia: Prospect for a Right to Work Majority

    February 1, 2016 3:54 PM

    West Virginia may soon become the nation’s 26th right to work state—making the number of right to work states a majority for the first time. The West Virginia Senate passed the right to work legislationSenate Bill 1, on Thursday, January 21. The state’s House of Delegates, where Republicans hold a 64-36 majority, held a public hearing on the bill last Friday, January 29.

    Republican lawmakers made passing right to work a priority after gaining control of both chambers of the legislature in 2014, in an effort to revive the state’s economy. “We’re the only state in the nation to have lost population,” said Senate Majority Leader Mitch Carmichael (R-Jackson). “If this bill providing workers the freedom to join a union or not join a union, if it gives one person a job, it’s worth doing.”

    Carmichael’s characterization may be an exaggeration, but it isn’t far off the mark. West Virginia is only one of six states to lose population from 2013 to 2014, and second only to much larger Illinois in total numerical population decline. And as Ohio University economist Richard Vedder and researcher Jonathan Robe find in a CEI study, approximately 4.9 million people moved from non-right to work states to right to work ones during 2000-2009 (p. 11). Vedder and Robe also found that while real total personal income grew by an average of 123 percent during 1977-2012, it grew by 165 percent in right to work states and by only 99 percent in non-right to work ones.

  • RealClear Radio Hour: Greek Goodbye & Cuban Revolutionary

    February 1, 2016 10:53 AM

    This week on RealClear Radio Hour we discuss Greece and Cuba, two countries whose vastly different governments have inflicted similar human suffering and struggle.

    My first guest is Elena Panaritis, founder of Thought for Action, former World Bank economist and special advisor to the Greek PASOK government. Elena faults cronyist political systems and the special interests that thrive under them as the major obstacles to reform. Panaritis argues Greece is the canary in the coal mine for dysfunctional states throughout the European Union, and expects new austerity plans and devaluation in the coming years.

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

    February 1, 2016 6:58 AM

    The big Snowzilla storm came and went, but still made its presence known in the Federal Register. For many documents, there is a lag of a few days between submission and publication. So while the first three days of the week it was business as usual despite a government slowdown, Thursday’s edition was only 69 pages, and Friday’s was 92 pages. A normal day is around 300 pages. Despite the temporary slowdown, regulators still issued rules covering everything from spray valves to alien medical exams.

    On to the data:

    • Last week, 56 new final regulations were published in the Federal Register, after 59 the previous week.
    • That’s the equivalent of a new regulation precisely every three hours.
    • With 217 final regulations published so far in 2016, the federal government is on pace to issue 2,855 regulations in 2016. Last year’s total was 3,406 regulations.
    • Last week, 1,096 new pages were added to the Federal Register, after 1,213 pages the previous week.
    • Currently at 5,029 pages, the 2016 Federal Register is on pace for 66,172 pages. To give some context, the 2015 Federal Register had an adjusted page count of 81,611.
    • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Three such rules have been published so far in 2016, one in the last week.
    • The running compliance cost tally for 2016’s economically significant regulations ranges from $402 million to $1.24 billion.
    • 27 final rules meeting the broader definition of “significant” have been published this year.
    • So far in 2016, 55 new rules affect small businesses; 13 of them are classified as significant. 
  • Revisiting Gore’s Katrina Innuendo

    January 29, 2016 5:53 PM

    In An Inconvenient Truth (pp. 94-95), Al Gore blamed global warming for Hurricane Katrina and the devastation of New Orleans. Not in so many words but through heavy-handed insinuation no movie goer could miss.

    It seemed plausible because Gore invoked an “emerging consensus linking global warming to the increasing destructive power of hurricanes . . . based in part on research showing a significant increase in the number of category 4 and 5 hurricanes.”

    The research to which Gore alluded was Webster et al. (2005), a study which found a significant increase in the number and percentage of category 4 and 5 hurricanes during 1970-2004. The study was hotly debated at the time. For example, on the same day Science magazine published the Webster study, climatologist Patrick Michaels published a critique. Michaels showed that, in the Atlantic basin—the hurricane formation area with the best data over the longest period—the “trends” observed by Webster et al. disappeared once data going back to 1940 were included. Roughly the same number and percentage of intense hurricanes occurred during 1940-1970 as occurred during 1970-2004.

    This week’s edition of CO2Science.Org reviews “Extremely Intense Hurricanes: Revisiting Webster et al. (2005) after 10 Years,” a study by Phil Klotzbach of Colorado State University and Christopher Landsea of NOAA/NWS/National Hurricane Center.

  • Twenty-Six States Appeal to Supreme Court To Stay EPA’s Greenhouse Gas Rule for New Power Plants

    January 29, 2016 5:51 PM

    West Virginia Attorney General Patrick Morrisey and Texas Attorney General Ken Paxton on 26th January filed on behalf of twenty-six States an appeal of the DC Circuit Court’s refusal to grant an immediate stay of the EPA’s final greenhouse gas rule for new power plants. The U. S. Chamber, National Association of Manufacturers, American Fuel and Petrochemical Manufacturers, National Federation of Independent Business, and twelve other industry associations filed a similar appeal on 27th January. Murray Energy announced last week that they would also file an appeal.

    The AGs’ 63-page petition makes an impressive case that the so-called “Clean Power” Plan is so legally flawed that it will eventually be overturned in court, but that so much economic damage will be done before the litigation is completed that the rule must be suspended as soon as possible.

    The States’ petition begins by reminding the Justices what happened with the Utility Mercury Air Toxics Standards rule:

  • Lyft Drivers Remain Independent Contractors

    January 28, 2016 3:25 PM

    A California class-action lawsuit against ridesharing company Lyft has been settled without trial. In the settlement, Lyft agreed to pay its drivers, their lawyers, and government a total of $12.25 million, and to adjust some of its terms and conditions as well as adding some features to its app (such as a “favorite driver” feature to enable repeat reservations). The settlement also means that Lyft drivers will remain classified as independent contractors rather than employees.

    This was an important test case for the sharing economy. Platform apps create two-sided markets whereby independent contractors can find customers more easily. They also provide a trust system for contractors and customers, and a payment conduit. I discuss these roles in more detail here.

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