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

    July 27, 2015 8:24 AM

    The Dodd-Frank financial regulation bill turned five years old this week (see CEI analysis herehere, and here). Other than that, it was business as usual, with 44 proposed regulations and more than 60 final regulations covering everything from bigeye tuna to heat pumps.

    On to the data:

    • Last week, 65 new final regulations were published in the Federal Register, after 78 the previous week.
    • That’s the equivalent of a new regulation every two hours and 35 minutes.
    • So far in 2015, 1,801 final regulations have been published in the Federal Register. At that pace, there will be a total of 3,171 new regulations this year, which would be several hundred fewer rules than the usual total of 3,500-plus.
    • Last week, 1,540 new pages were added to the Federal Register, after 2,764 pages the previous week.
    • Currently at 44,209 pages, the 2015 Federal Register is on pace for 77,833 pages.
    • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Sixteen such rules have been published so far this year, none in the past week.
    • The total estimated compliance cost of 2015’s economically significant regulations ranges from $1.32 billion to $1.41 billion for the current year.
    • 150 final rules meeting the broader definition of “significant” have been published so far this year.
    • So far in 2015, 313 new rules affect small businesses; 46 of them are classified as significant. 
  • Where Does Sen. Grassley Stand on Online Gambling?

    July 24, 2015 4:55 PM

    Recent polls show that Iowans aren’t too keen on legalizing online gambling in their state. They’re mistaken, in my view, but that’s their prerogative. And Iowans’ choices don’t affect me, given that I don’t live in the state. But a bill currently in the Senate Judiciary Committee could change that, by centralizing decisions on gambling in Washington.

    The Restoration of America’s Wire Act (RAWA S. 1168) would amend the 1961 Federal Wire Act, a bill passed long before the Internet existed that was intended to target the mafia’s sports betting racket, would impose a national prohibition on states legalizing almost all forms of online gambling—even for those states that have already done so. This Saturday, Sen. Chuck Grassley (R-IA), who has not yet taken a public stance on RAWA, will hold three town hall meetings in southeastern Iowa, giving him an opportunity to make his position clear. Iowan opponents of RAWA should make their positions clear as well.

    Supporters of the bill claim it is necessary to safeguard children, to shield those with gambling addiction, and to prevent crime. But a national prohibition wouldn’t do anything to accomplish these goals. On the contrary, it would nullify the protections instituted in states like New Jersey, Delaware, and Nevada that already legalized online gambling and would push players back into the black market where they have no protections.

    The most audacious claim of RAWA supporters is that it protects states’ rights. Because the Internet knows no state lines, they argue, there is no way to protect those states that don’t want online gambling available to its citizens. But there already exist robust technologies and regulatory schemes to prevent the very things RAWA supporters worry about, and they are already in use in other countries that have some form of legal and regulated online gambling.

  • Democratic Judges Green-Light CEI’s Challenge to Dodd-Frank

    July 24, 2015 3:27 PM

    Just days after President Obama touted the supposed achievements of the Dodd-Frank financial reform law on its fifth birthday, a unanimous judicial panel—including an Obama appointee—dealt the administration a major defeat in its defense of the law. If the co-plaintiffs in the case—the Competitive Enterprise Institute, the 60 Plus Association, and a courageous Texas community bank––ultimately prevail, it will be a huge victory for American consumers and entrepreneurs being strangled by the red tape of Dodd-Frank and its Consumer Financial Protection Bureau (CFPB).

    Today, a three-judge panel of the D.C. Circuit Court ruled unanimously that State National Bank of Big Spring, Texas, had standing to challenge the constitutionality of the Consumer Financial Protection Bureau, the massive bureaucracy created by Dodd-Frank with virtually no accountability to Congress. The decision, written by Judge Brett Kavanaugh, a George W. Bush appointee, was joined by Clinton appointee Judith Rogers and Obama appointee Nina Pillard.

    The Democrat-leaning panel criticized the D.C. federal district court for its bizarre ruling that, despite the fact that State National Bank was directly subject to the CFPB’s edicts, it somehow didn’t suffer injuries serious enough to have standing to challenge the Bureau. (Bank president Jim Purcell testified before Congress that the bank even had to stop issuing new mortgages and wire transfers because of CFPB rules.)

    “The Supreme Court has stated that ‘there is ordinarily little question” that a regulated individual or entity has standing to challenge an allegedly illegal statute or rule under which it is regulated,” states the D.C. Circuit’s opinion. “So it is in this case”

  • Uber: The Best Option for Workers and Consumers

    July 24, 2015 12:35 PM

    Hollywood star Ashton Kutcher’s recent Facebook post defending Uber from New York Mayor Bill de Blasio’s recent attempts to regulate the company went viral this week, and for good reason. De Blasio, who has received numerous campaign donations from taxi companies, claimed that Uber cars were congesting New York streets and causing more pollution, although he failed to produce evidence for either claim. Yet, a public backlash forced de Blasio to back off, at least for now.

    Kutcher is not alone. Uber users number over 8 million. And Uber is attracting over 160,000 drivers in the United States, including 25,000 in New York City.

    The reason that Uber has grown 400 percent from 2013 to 2014 is not just because it provides consumers with cheaper and easier alternate to the traditional taxicab, but it also offers drivers a flexible and easy way to earn some extra income. Indeed, most Uber drivers use the ride share service as a part-time job for supplemental income; only 19 percent of Uber drivers spend more than 35 hours on the road.

  • New York State Mulling Minimum Wage Increase

    July 23, 2015 3:47 PM

    A few weeks ago, the New York Times ran an article asking, “It’s Summer, but Where Are the Teenage Workers?” It’s a good question:

    Since 2000, the share of 16- to 19-year-olds who are working has plummeted by 40 percent, with fewer than a third of American teenagers in a job last summer. Their share of the overall work force has never been this low, and about 1.1 million of them would like a job but can’t find one, according to the Bureau of Labor Statistics.

    The next paragraph begins, “Experts are struggling to figure out exactly why.” Over the course of more than 1,300 words, the article doesn’t once mention a major culprit: the minimum wage.

    The article even features a chart showing a pronounced decrease in teen employment closely tracking the most recent federal minimum wage increase, which phased in from $5.15 to $7.25 from 2007 to 2009. The start of the increase and its impact on teen employment began before the financial crisis made job-hunting more difficult for everyone else, too. In recent years, some cities and states have begun raising their local minimum wages above the federal minimum, helping to keep teen employment at historically low levels.

    The Times should look into commissioning a follow-up story for next summer, because the paper is now reporting that New York State is considering implementing a $15 hourly minimum wage for fast food restaurant chains, which heavily employ teens. Increasingly, they are also “employing” automated kiosks.

  • Dodd-Frank’s Conflict-Minerals Rule Increases Violence in the Congo

    July 23, 2015 3:45 PM

    The 2010 Dodd-Frank Act increased violence in the Congo by 143 percent (and looting by 291 percent) through its “conflict minerals” rule, which has backfired on its intended beneficiaries. So concludes a new study by Dominic Parker of the University of Wisconsin and Bryan Vadheim of the London School of Economics.

    As we noted earlier, Dodd-Frank conflict minerals regulations have also caused starvation in the Congo, harmed U.S. businesses, and resulted in increased smuggling—even as they punish peaceful neighboring countries in Africa just for being near the Congo, whose civil wars have killed millions over the last 20 years. They have inflicted great harm on a country that was just beginning to recover from years of mass killing and had the world’s lowest per capita income. The new study is consistent with a 2013 paper by St. Thomas University law professor Marcia Narine that criticized the conflict minerals rule for its dire consequences for the Congolese people.

    As David Aronson noted in The New York Times,

  • New York's Minimum Wage Increase: Severe Trade-Offs

    July 23, 2015 3:09 PM

    New York’s vote to implement a $15 per hour minimum wage isn’t as much a victory for the “99 percent” as Governor Cuomo’s panel thinks it could be.

    CEI Fellow Ryan Young describes the unintended consequences of a minimum wage hike:

    “…[T]he minimum wage has a reverse-Robin Hood effect. Some workers lose their entire income, which gets transferred instead to other workers fortunate enough to keep their jobs, and get raises besides. Income redistribution programs are supposed to flow from better-off people to worse-off people—not the other way around.

    If the goal is to lift as many people as possible out of poverty, minimum wage increases are simply not up to the task. The tradeoffs are too severe.”

    Breaking out of the cycle of poverty is difficult for many people, and the evidence shows that a minimum wage hike adds to the difficulty. In addition to losing non-wage benefits, many of the poorest face the bleak prospect of also losing their jobs.

    Vice President for Strategy Iain Murray explains why the effects of a minimum wage increase damage the most vulnerable in the job market:

    “The minimum wage transfers resources not from the rich to the poor, but among the poor. Some of America’s least well-off workers would get a raise, but many more others would see theirs hours cut, or lose their jobs entirely… There are other workers, particularly inexperienced young ones, who will not be hired in the first place because the cost of their wages is too high.”

  • The good, bad, and ugly of the latest Energy & Commerce bill

    July 22, 2015 4:03 PM

    Today the House Energy and Commerce Committee set to work doing markup on a yet-to-be-named energy bill. CEI’s William Yeatman breaks down the good, the bad, and the ugly of the proposed bill. See the proposed bill here.

    The good: The bill includes some positive regulatory reform in language that would streamline the permitting process for natural gas pipelines. By far the best part of the legislation is §1102, which would give the Federal Energy Regulatory Commission enhanced flexibility if EPA’s war on coal threatens electric reliability.

    The bad: Title III, concerning energy security and diplomacy, would waste government resources on an North American “energy security” plan, as if participating in a global market is inherently bad. And a section within Title I would allow the Energy Secretary to pick winners and losers in the cyber security industry, something the government does poorly.

    The ugly: Title II, concerning the 21st century workforce, would create a vocational program for energy jobs in the Energy Department, even though the 2009 stimulus demonstrated the futility of such programs. Worst of all, §1105 would create a boondoggle in the form of a “strategic reserve” for large electric transformers in a quixotic effort at mitigating risk.

    Overall, this energy bill is nothing to write home about. Only a minority of legislation’s provisions are welcome reforms.

  • Obama’s 2015 Report to Congress on Federal Regulations Is MIA

    July 22, 2015 1:57 PM

    The federal government’s only report that discloses overall costs and benefits of federal regulations is overdue. This is 2015, and it’s almost August. Where is the 2015 Draft Report to Congress on the Benefits and Costs of Federal Regulations in this “most transparent administration in history”?

    Like prior annual reports, it would give us a 10-year look back, in this instance covering October 1, 2004 to September 30 2014, and detail on the fiscal year ending September 30, 2014. On June 15, we did get the final 2014 Report, which covered rules from October 1, 2012 to September 30, 2013 (the period ending nearly two years ago).

    This is the third latest the Draft Report has ever been. It is MIA as of July 21. The chart below shows the month, and day of the month if available, when the Draft Report to Congress has appeared since 2002. The report has appeared most frequently in March, and usually by April at the latest.








  • Utah’s Contact Lens Law Flouts Constitution’s Commerce Clause

    July 22, 2015 11:41 AM

    If you regularly buy contact lenses in the United States, you might have noticed that the price of your preferred contacts is the same wherever you look. This is because several top contact lens manufacturers recently decided to set a minimum price for their contacts. If a retailer undercuts this price, it could lose out on the ability to buy popular contact lens brands on the wholesale market.

    It’s hardly unusual for a company to set a price below which retailers may not sell its products. If you try to buy a new iPhone, odds are you’ll find most stores selling it for the same price—and that’s exactly what Apple wants. The same goes for many other goods, such as golf clubs and many luxury fashion items.

    And while this price floor may sound like bad news for consumers, many people pay less today for contacts than before the major manufacturers announced their “unilateral” pricing policy. Getting the best deal on contacts once involved navigating through complicated rebate schemes. But now, the price for a particular type of contact lens is generally transparent and consistent across the country. The downside: Some savvy consumers pay more for contacts than they used to.

    In general, it’s not against the law for companies to decide to do business only with retailers who don’t undercut a specified price. Although many manufacturers don’t care how much retailers mark up their goods, some companies think they’re better off with their products selling for a uniform price. And businesses that sell popular items aren’t the only ones who like unilateral pricing policies; consumers stand to benefit as well.


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