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  • Federal Witch Hunt Successfully Bans Trans Fats

    June 16, 2015 2:07 PM

    Ding dong the witch is dead; killed by the federal government…well, that’s if the witch was a recluse people hardly ever saw, probably hasn’t hurt anyone, and was brought into town by the person burning her at the stake. The “witch” I’m referring to is trans fats, which were officially banned today via Food and Drug Administration (FDA) edict. A witch hunt is a good way to describe what the FDA did; revoking the additive’s determination as “generally recognized as safe,” because despite the fact that Americans have almost completely eliminated the substance from our diets voluntarily, the administration believes any amount of trans fats can be harmful. The fact that there is no scientific evidence to prove this didn’t seem to temper calls to “burn it at the stake.”

    Back in 2003 Americans, ate an average of 4.6 grams of trans fats per day, but thanks to the efforts of some public health groups and diligent label-reading consumers, consumption dropped to around 1 gram per day by 2012. Despite this, the FDA announced plans in November 2013 to completely eliminate the additive because they believed completely eliminating the additive will save “10,000-20,000 lives annually.” This number is based on a paper published in the Journal of the American Medical Association. Despite the fact that all of the studies linking trans fats to adverse health effects only looked at very high levels of consumption (accounting for more than 5 percent of daily energy intake, versus the 0.6 percent we currently consume), the researchers assumed any trans fat consumption correlated with risk. Therefore, they only needed to take the risk seen from extremely high levels and calculate how much risk there would be at extremely low levels. According to the tentative determination:

    Extrapolating from this FDA estimate, assuming a linear association with health effects, and no effects of other interventions, and adjusting to current US statistics on coronary events (myocardial infarction or fatal CHD), it is possible that eliminating industrially produced TYFAs from current levels (0.6% of energy) may potentially prevent as many as 10,000 to 20,000 coronary events and 3000 to 7000 CHD deaths annually” (emphasis added).

    This is extremely problematic because it’s simply not known if there is a linear correlation with risk all the way down to zero consumption. Take sodium, for example; it can certainly be detrimental at very high consumption levels, but it is also deadly to consume too little sodium. As Dr. Eric Decker, head of the Department of Food Science at the University of Massachusetts, noted, “It is very common for kinetics to not be linear especially at extremely low or high concentrations of bioactive agents. Therefore, it does not seem scientifically prudent to make a bold statement of how many deaths a food ingredient is causing without any clinical data.” It’s the dose that makes the poison: just about any food or beverage, including water, can become harmful if consumed in great enough quantities.

    Ignoring whether or not there is a need for the FDA to completely eliminate trans fats from the American diet, one must question whether they should and what the consequences of a ban will be. Many forget that it is the dietary meddling of the government that caused the rise of trans fats in our diet in the first place. The American Heart Association, on which government dietary advisors base many of their recommendations, advised Americans beginning in the 1960s to reduce saturated fat and switch to vegetable oil (no big surprise the AHA only rose to national prominence with help from the maker of Crisco oil). As this Wall Street Journal article notes, Americans listened to AHA’s advice, going from nearly zero vegetable oil consumption in 1900 to consuming 7 to 8 percent of all calories from these oils.

    What will the makers of frosting, pastries, and pie crust use instead of partially hydrogenated oils? Well, we don’t know yet.

  • Reasons to Oppose the Ex-Im Bank, Part 2: Its Favors for Some Businesses Hurt Other Businesses

    June 16, 2015 12:23 PM

    Reasons to Oppose the Ex-Im Bank, Part 2: Its Favors for Some Businesses Hurt Other Businesses

    The Export-Import Bank’s charter expires on June 30. Unless Congress votes to reauthorize that charter, Ex-Im will soon cease to exist. This would be a major victory in the fight against corporate welfare. Ex-Im’s beneficiaries often tar their opponents as anti-American, anti-business, and anti-jobs. This series of posts will instead stick to the merits of the issue, which overwhelmingly favor closing Ex-Im, one argument at a time. For more arguments, see my recent paper. For the first installment of this series, see here.

    The Export-Import Bank has given financing to more than 20 foreign airlines, many of them state-owned or state-supported. Ryanair, Air India, Korean Air, and fourteen other airlines have each received more than $1 billion in financing during the period 2000-13. Emirates Airlines saves as much as $20 million per plane purchased with Ex-Im financing, according to Congressional testimony by Delta Airlines CEO Richard Anderson. Air India, with Ex-Im’s help, was able to drive Delta out the Indian market entirely, costing Delta and related businesses up to 1,000 jobs.

  • Reasons to Oppose the Ex-Im Bank, Part 1: It's Pro-Business, Not Pro-Market

    June 15, 2015 4:32 PM

    The Export-Import Bank’s charter expires on June 30. Unless Congress votes to reauthorize that charter, Ex-Im will soon cease to exist. This would be a major victory in the fight against corporate welfare. Ex-Im’s beneficiaries often tar their opponents as anti-American, anti-business, and anti-jobs. This series of posts will instead stick to the merits of the issue, which overwhelmingly favor closing Ex-Im, one argument at a time. For more arguments, see my recent paper.

    The upcoming Ex-Im reauthorization vote provides the perfect litmus test for which members of Congress are pro-business, and which are pro-market. The distinction is an important one. Pro-business thinkers are concerned with the fates of particular firms. The General Motors bailout is an example of a pro-business policy aimed at helping a specific business. Pro-market thinkers are less concerned with which firms prosper, focusing instead on maintaining an open and fair competitive market process, under which companies succeed or fail on their merits. Pro-market thinking is neither pro-business nor anti-business.

    Ex-Im is a classic example of pro-business policy. In most years, a ingle business, Boeing, alone accounts for more than 40 percent of the Ex-Im Bank’s business. A literal top-ten list of Ex-Im beneficiaries accounted for 76 percent of its business in 2013.While Ex-Im clearly helps certain businesses, it is harmful to the competitive market process as a whole.

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

    June 15, 2015 7:45 AM

    It was a prolific week for the Federal Register, with more than 1,700 pages covering everything from real estate appraisal to water banks.

    On to the data:

    • Last week, 64 new final regulations were published in the Federal Register, after 65 the previous week.
    • That’s the equivalent of a new regulation every two hours and 38 minutes.
    • So far in 2015, 1,365 final regulations have been published in the Federal Register. At that pace, there will be a total of exactly 3,020 new regulations this year, which would be several hundred fewer rules than the usual total of 3,500-plus.
    • Last week, 1,752 new pages were added to the Federal Register, after 1,344 pages the previous week.
    • Currently at 33,895 pages, the 2015 Federal Register is on pace for 74,989 pages.
    • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Eleven such rules have been published so far this year, two in the past week.
    • The total estimated compliance cost of 2015’s economically significant regulations ranges from $1.39 billion to $1.46 billion for the current year.
    • 114 final rules meeting the broader definition of “significant” have been published so far this year.
    • So far in 2015, 235 new rules affect small businesses; 34 of them are classified as significant. 
  • Abolish Ex-Im Bank, Don't Reform It

    June 12, 2015 3:11 PM

    Over at the American Spectator, University of Chicago lecturer Frank Schell recently published a column arguing that the Export-Import Bank should be reformed, not abolished. Today, I have a piece disagreeing for two reasons:

    First, Congress has no appetite for substantive changes. Second, corruption and favoritism are inevitable consequences of Ex-Im’s very mission. As such, Congress should let the agency’s charter expire…

    America’s entrepreneurs are talented and resourceful enough to compete in global markets without having to spend time influence-peddling in Washington. They deserve the opportunity.

    Read the whole thing here.

  • How Many Significant Regulations Escape Congress' Notice?

    June 11, 2015 1:06 PM

    The Spring 2015 Unified Agenda of Federal Regulatory and Deregulatory Actions was released in late May, presenting recently completed actions and ongoing priorities of the federal bureaucracy. It covered 3,260 rules and regulations in the pipeline.

    Among these, there are 205 “economically significant” rules highlighted; this subset sports economic impacts of $100 million or more annually.

    Shortly after the Agenda appeared, the Environmental Protection Agency’s sweeping new Clean Water Rule on nationwide permitting on private property was released and got a lot of attention in the news. It’s known as the Waters of the United States rule, and promises huge burdens on landowners and farmers who have no “navigable waters” on their property. Congress is looking at ways to respond to one of the most notorious current regulations.

    Yet, when I glanced at the list of economically significant rules in the Unified Agenda, this heavyweight wasn’t listed among them.

    Incredibly, EPA lists the Clean Water Rule as merely “other significant” (a category defined in Executive Order 12866). The agency had received over a million comments on the rule that it apparently played a role itself in soliciting to reinforce this power grab.

  • Trade Promotion Authority: What it Is and What it Isn't

    June 11, 2015 1:00 PM

    The House of Representatives is poised to vote on Trade Promotion Authority (TPA), the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (H.R. 1314). Unfortunately, there has been some misinformed criticism, in Congress and elsewhere, of so-called “fast track” legislation. Under TPA, the President has the authority to negotiate trade agreements if certain criteria established by Congress are met. Then Congress reviews the agreement and the implementing legislation and has to vote on the bill with no amendments allowed.

    • TPA puts Congress in charge.

    TPA essentially is an accommodation between the Executive and the Legislative branches of government to assure trading partners that what they agreed upon during negotiations won’t be overturned in the voting process.

    Congress gives negotiating authority to the President for trade agreements only if certain congressionally determined criteria are met:

    • That very specific objectives outlined in TPA are accomplished in a trade agreement;
    • That Congress is consulted throughout the negotiating process; and
    • That timetables outlined in TPA for Congressional review of the text and the implementing legislation are followed.

    In return, Congress agrees to consider the legislation without amendments and have an up or down vote on it.

    • TPA is not a new concept.

    Congress has granted the President trade negotiating authority since the time of FDR. As the Cato Institute’s Scott Lincicome shows, every president since then—a total of 12 presidents—has been given such authority, with the Trade Act of 2002 being the last one of that long succession.

  • DOJ vs. Reason.com Commenters: How the Deck Is Stacked Against Anonymous Political Speech

    June 9, 2015 8:42 PM

    Our friends over at the Reason Foundation, a venerable libertarian think tank and publisher of Reason magazine, recently received a grand jury subpoena from a federal prosecutor in New York, reports Ken White at Popehat. The subpoena demands that Reason disclose “all identifying information” it has regarding six pseudonymous users who posted comments about the death and afterlife of a federal judge on Reason’s Hit & Run blog.

    These comments came in response to a May 31 Reason post by Nick Gillespie about the trial and sentencing of Ross Ulbricht, who was convicted in February of running an Internet-based narcotics and money laundering platform known as Silk Road. In late May, Judge Katherine Forrest, who sits on the U.S. District Court for the Southern District of New York, sentenced Ulbricht to life in prison. This sentence was met with mixed reactions, with many commentators criticizing Judge Forrest for handing down what they perceived as an exceedingly harsh sentence.

    A few Reason users, some of whom may have followed Reason’s extensive coverage of the fascinating trial, apparently found Ulbricht’s sentence especially infuriating. One commenter argued that “judges like these … should be taken out back and shot.” Another user, purporting to correct the preceding comment, wrote that “[i]t’s judges like these that will be taken out back and shot.” A follow-up comment suggested the use of a “wood chipper[],” so as not to “waste ammunition.” And a user expressed hope that “there is a special place in hell reserved for that horrible woman.”

    Within hours, the office of Preet Bharara, the U.S. Attorney for the Southern District of New York, sent Reason a subpoena for the commenters’ identifying information “in connection with an official criminal investigation of a suspected felony being conducted by a federal grand jury.” This doesn’t mean a grand jury actually asked about the commenters; instead, in federal criminal investigations, it’s typically up to the U.S. Attorney to decide when to issue a subpoena “on behalf” of a grand jury. See, e.g., United States v. Kleen Laundry & Cleaners, Inc.381 F. Supp. 519, 521 (E.D.N.Y. 1974). The subpoena demands from Reason information about the six users, including their email and Internet Protocol (IP) addresses—which, if disclosed, could enable the government to uncover the true identities of the commenters, perhaps after another round of subpoenas are sent to the users’ respective Internet Service Providers.

    Popehat’s Ken White is quite troubled by the government’s decision to issue this subpoena. Ilya Somin, writing at The Volokh Conspiracy, also objects to the subpoena. So do the Cato Institute’s Tim Lynch and Techdirt’s Mike Masnick, among many others.

    I too find it quite concerning. Even if this subpoena is valid under current law—more on that angle in a bit—the government made a serious mistake in seeking to force Reason to hand over information that could uncover the six commenters’ identities. Unless the Department of Justice is investigating a credible threat to Judge Forrest with some plausible connection to the Reason comments at issue, this subpoena will serve only to chill hyperbolic—but nonetheless protected—political speech by anonymous Internet commenters. And if Reason decides to stand up for its users’ rights, the resulting court battle will amount to a waste of federal law enforcement resources that could instead help bring actual criminals to justice, as Tim Lynch reminds us.

    To be sure, I have no problem with the feds seeking to locate and prosecute people who actually threaten to commit murder—which, if transmitted in interstate commerce, is a federal crime under 18 U.S.C. § 875. Threatening to kill a federal judge is especially problematic; assassinations of federal judges do happen from time to time. As such, it’s only natural that law enforcement takes such threats seriously.

    Yet, while the comments identified in the subpoena are undeniably vile, they’re also protected by the First Amendment, and rightly so. Hyperbolic political statements have a long history in the United States; for instance, Ken Shultz notes that Martin Luther King, Jr., once said that “[t]he hottest place in Hell is reserved for those who remain neutral in times of great moral conflict.” Sound familiar?

  • DOJ vs. Reason.com Commenters: When Everything Is Deemed a "Threat"

    June 9, 2015 3:20 PM

    The Supreme Court has said that true threats can be banned without violating the First Amendment, but that doesn’t mean that hyperbolic rants are unprotected just because they express a yearning for someone’s demise. That doesn’t make them a true threat. For example, the Supreme Court ruled on the issue in Watts v. United States (1969). Robert Watts, a young black man, stated during a protest in Washington, D.C.:

    I have already received my draft classification as 1-A and I have got to report for my physical this Monday morning. I am not going. If they ever make me carry a rifle the first man I want to get in my sights is L.B.J. They are not going to make me kill my black brothers.

    The Supreme Court reversed his conviction for making threats, ruling that Watts’ statement was political hyperbole rather than a true threat. “We agree with [Watts] that his only offense here was ‘a kind of very crude offensive method of stating a political opposition to the President.’”

    But prosecutors sometimes confuse hyperbolic dissent with true threats. School officials are even worse. They equate even mild academic references to violent protests in the distant past with unprotected threats.

    For example, Oakton Community College (OCC) concluded that a one-sentence “May Day” email referencing the Haymarket Riot sent by a faculty member to several colleagues constituted a “true threat” to the college president. On May 1, Chester Kulis sent an email to OCC colleagues that read, “Have a happy MAY DAY when workers across the world celebrate their struggle for union rights and remember the Haymarket riot in Chicago.” Lawyers for the Chicago-area college argue that the email, which commemorated the riot, thus threatened violence.

    Similarly, federal prosecutors in the Southern District of New York are using a subpoena to identify anonymous commenters on a Silk Road post at Reason.com, notes First Amendment lawyer Ken White:

    The United States Department of Justice is using federal grand jury subpoenas to identify anonymous commenters engaged in typical internet bluster and hyperbole in connection with the Silk Road prosecution.  . . .Why is the government using its vast power to identify these obnoxious asshats, and not the other tens of thousands who plague the internet? Because these twerps mouthed off about a judge. . .. The subpoena commands Reason to provide the grand jury "any and all identifying information" Reason has about participants in what the subpoena calls a "chat."

    The "chat" in question is a comment thread on Nick Gillespie's May 31, 2015 article about Ross "Dread Pirate Roberts" Ulbricht's plea for leniency to the judge who would sentence him in the Silk Road prosecution. That plea, we know now, failed, as Ulbricht received a life sentence, with no possibility of parole.

    Several commenters on the post found the sentence unjust, and vented their feelings in a rough manner. The grand jury subpoena specifies their comments and demands that Reason.com produce any identifying information on them.

  • Bad Tradeoff: Ex-Im vs. a Weak Dollar

    June 9, 2015 7:10 AM

    At this point, it looks like Congress will let the Export-Import Bank’s charter expire on June 30. This is not a big deal in grand scheme of things. Ex-Im would continue to service its existing loan guarantees and other financial products, and Ex-Im employees would also review applications for new loans and loan guarantees, though they would not be able to act on them. But suppose Ex-Im does have to shut down operations for good. What other options do export-oriented policymakers have?

    Tyler Cowen brings up one option: mess with the price system.

    Even a slight depreciation likely would offset the effects of Ex-Im expiration by more than a factor of one hundred, perhaps by more than a factor of one thousand.  Ex-Im is a relatively small program and it has nothing to do with more than 98 percent of American exports.  Many of its foreign beneficiaries, such as Pemex and Chinese state-owned enterprises, don’t need the subsidy to fund their imports.  Boeing is still reporting a robust demand for its planes.

    If the goal is to increase exports, a weak dollar is far more effective than any Ex-Im project could ever hope to be. As Cowen says, Ex-Im is involved with less than 2 percent of U.S. exports. Altering the price system itself would affect 100 percent of transactions, exports or not.

    Renewing Ex-Im’s charter is a bad idea. Weakening the dollar is a worse idea by at least a factor of 50, even ignoring imports and purely domestic transactions. Every export made cheaper equals an import made more expensive. Every business helped means another one hurt. There is no net benefit.

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