October 30, 2015 12:06 PM
If the current federal regulatory state doesn't scare you, then nothing will. So for Halloween, we decided to make our own list of the top 5 most horrifying monsters from Washington, D.C. It just so happens that vampires and federal regulators have many haunting similarities.
October 30, 2015 9:46 AM
More than three years after the JOBS Act was signed into law by President Obama, the Securities and Exchange Commission (SEC) today will finally vote to approve equity crowdfunding rules. The final rule implementing Title III of the Jumpstart Our Business Startup (JOBS) Act of 2012, though late in coming, represent a first step for policymakers in getting public policy in step with America’s crowdfunding heritage.
When a small firm grows by giving a community of funders a share in the profits—rather than just token items such as t-shirts—that’s known as equity crowdfunding. And it’s an idea whose time has come, because it is an idea that has always been here. Henry Ford, as I have written in a paper for CEI, crowdfunded among his friends and neighbors 100 years ago to build what is now Ford Motors. In pre-colonial days, Ben Franklin sold equity stakes in the fire insurance company he founded.
But over the past few decades, the practice of equity crowdfunding has waned because of mounds of red tape from federal securities laws and the SEC. These rules—along with ever-more burdensome laws such as Sarbanes-Oxley and Dodd-Frank—have made it in many instances impossible to raise funds from friends and neighbors, as it could cost $1 million in compliance to raise $50,000. While fraud should of course be punished, showering innocent entrepreneurs and investors with prohibitive paperwork punishes the innocent.
October 29, 2015 2:27 PM
In this clown-car of a GOP primary, it’s inevitable that the discussion will sometimes veer onto more superficial avenues of questioning. After all, news is entertainment and a little light-hearted banter can be the spice that makes the meal more palatable. But, by most accounts, the CNBC moderators in last night’s debate were all fluff and no substance. At one point, in what was one of the strongest moments of the debate, Chris Christie mocked the moderators for their superficial questions. “Are we really talking about getting government involved in fantasy football,” he asked to wild audience applause.
While Christie was correct that the question of whether the government should treat online daily fantasy sports betting as “gambling” wasn’t very substantive, but there was a question they could have asked or followed up with that would have been not only entertaining, but also would have enlightened viewers about the fitness of the candidates to lead the GOP. That question would have been: do you think the federal government should regulate or ban state-based online gambling or should the states be able to make that decision?
Recently, daily fantasy sports (or DFS) has received unwanted attention from lawmakers and state attorneys. While the proprietors of sites like DraftKings and FanDuel insist that their activities violate no federal laws, some observers have become increasingly skeptical about that claim and believe that the line between fantasy sports betting and just plain old sports betting has been blurred. During the debate Quintanilla asked Jeb Bush if daily fantasy sports, which “will award billions in prize money this year,” qualifies as gambling and if the federal government should “treat it as such?”
Bush responded first with humorous comments about how well his fantasy team is performing, but then touched on the current scandal within the industry. It was revealed that an employee of DraftKings recently made $350,000 on their rival site, FanDuel. Bush said that DFS was effectively “day trading without any regulation at all. And when you have insider information, which apparently has been the case, where people use that information and use big data to try to take advantage of it, there has to be some regulation.” Bush questioned whether the federal government would be the appropriate entity to impose such regulations and came to the conclusion that “my instinct is to say, hell no, just about everything about the federal government.”
October 29, 2015 1:45 PM
Yesterday, the Senate confirmed Sarah Feinberg to head the Federal Railroad Administration. Feinberg has been acting administrator since January. She replaced Joseph Szabo, who had spent decades in the railroad industry and was active in the United Transportation Union. Under George W. Bush, FRA was headed by engineer Allan Rutter, now a research scientist at the Texas A&M Transportation Institute, and Joe Boardman, the current CEO of Amtrak who has spent more the 40 years in the transportation and railroad industries.
Feinberg is a career Democratic Party public relations flak and has held a number of political appointments on the Obama administration’s spin team. Feinberg graduated from Washington and Lee University in 1999 with a degree in politics. Beyond her political career, she had briefly worked in the communications shops of Facebook and Bloomberg between gigs in the Obama White House. But her relevant experience in being the nation’s top railroad safety regulator? USDOT has unfortunately long been a dumping ground of political patronage, but has gotten even more ridiculous under the Obama administration. Unless FRA’s safety strategy is solely focused on deflecting blame following the next Amtrak derailment, it seems odd to fill such an important position with someone wholly unqualified.
But it gets worse. Congress in recent weeks has been fighting over a needed positive train control (PTC) mandate deadline extension. PTC, the incredibly expensive and low-value safety technology Congress ordered passenger and large freight railroads to install in 2008, has been championed by Sen. Barbara Boxer (D-Calif.), the ranking member of the Senate Environment and Public Works Committee. If the PTC implementation date wasn’t extended beyond the current December 31 deadline, the railroads (including most commuter railroads) were to begin shutting down many of their operations in December, which would have ruined many Christmases.
October 29, 2015 9:57 AM
People often seek to restrict new means of communication in ways that would never be applied to older forms of communication, sometimes based on fear of new technologies or illogical rationales. A recent example is the demand by 72 left-wing women’s groups and civil-rights groups that the federal government force colleges to block access to the social media app Yik Yak. They claim such measures are required by the federal civil-rights laws Title IX and Title VI. They want colleges to ban a form of social media just because a few users make racist, sexist, or threatening comments on it.
The fact that a few users make bigoted or even threatening comments is not sufficient reason to shut down an entire medium of communication. No one would advocate banning demonstrations just because a few demonstrators uttered racist or inappropriate comments. New modes of communication like Yik Yak should not be treated any differently or worse. As I explain at this link, if the federal government granted their demand to crack down on Yik Yak, it would flagrantly violate the First Amendment.
The Supreme Court’s 1997 decision striking down an Internet decency law likened such sweeping censorship to “burning the house to roast the pig.” In The Washington Post, law professor Eugene Volokh correctly described these women’s groups as a “national coalition in favor of campus censorship.”
October 28, 2015 6:22 PM
The House has passed Rep. Stephen Fincher’s Ex-Im revival bill, by the margin of 313-118. Senate Majority Leader Mitch McConnell has publicly said the Senate will not act on the bill, so last night’s vote was more of a public statement than anything else. While the statement might be unpleasant, the public now has a much better idea of which Congressmen are pro-business, as opposed to pro-market—an important distinction. So at the very least, voters now have a better idea of who to hold accountable, and who they might support in primary elections.
With no stand-alone vote, Ex-Im reauthorization will instead be folded into an upcoming must-pass transportation bill. A Senate vote on that could happen as soon as next week.
Both parties share blame for Ex-Im’s possible revival. Nearly all Democrats voted in favor of reviving Ex-Im—a curious reversal of decades-long opposition. Rep. Alan Grayson (D-Fla.) is the only one to stay consistent. Progressives have been Ex-Im’s traditional opponents, not just on corporate welfare grounds, but on human rights grounds—Ex-Im subsidizes many governments with checkered human rights records, and helps to keep them in power. See for example, this Mother Jones article from 1981, this one from 1992, and another from as recently as 2011, which is based on environmental grounds.
The GOP’s small pro-market wing began actively opposing Ex-Im in 2012, so Mother Jones therefore changed its stance around that time; see here and here. See also a thoughtful piece at Salon on this curious role reversal.
October 28, 2015 2:50 PM
Today, the House Committee on Education and the Workforce passed H.R. 3459, the Protecting Local Business Opportunity Act, a bill that would restore the traditional joint-employer standard, which fostered the creation of thousands of beneficial business relationships including franchise businesses, contractors, and temporary staffing agencies. Now the bill is referred to the floor of the House of Representatives.
In August, the National Labor Relations Board unilaterally changed what it means to be an employer by redefining the concept of joint employment. Under its new definition, companies may be held liable for labor violations committed by other employers with whom they contract—even if they do not exercise direct control over that company or its employees.
By making employers liable for the practices of contractors, franchises, and temporary staffing agencies, companies will likely bring many functions in-house, take greater control of operations, or eliminate jobs. In defining companies that merely contract with each other as joint employers, the NLRB threatens entrepreneurship and the ability of American businesses to grow and create jobs. It would jeopardize the future of franchise businesses, which have created jobs faster than other businesses in the last seven years, and endanger the jobs of the three million people who work for temporary staffing agencies.
October 27, 2015 4:35 PM
I’m here on the Las Vegas Strip at Money20/20, a trade show and forum in the area of FinTech—a term used to describe a cross-section of alternative lending, cryptocurrencies, and new payment technology—that is a pretty big shindig. At around 10,000 attendees, Money20/20 is fast becoming the Consumer Electronics Show (CES) of FinTech. Or as the show’s boosters might say, CEA is becoming the Money20/20 of tech.
Anyways, some big news breaking here, such as JPMorgan Chase’s announcement of a mobile payments system to rival Apple Pay, and MasterCard’s “internet of things” initiative to enable mobile payments through keys, jewelry, and even clothing.
But the real story are the thousands of entrepreneurs here looking demonstrate their products and spread the word through networking. The Exhibit Hall here is really a walk through the future.
And I have had the privilege of a dialogue with these on how Washington red tape is hindering their beneficial innovations. This has been both in individual conversations and in an October 25 panel I was privileged to be a part of.
October 27, 2015 12:53 PM
Last night the House of Representatives voted on a rare discharge petition, under which a controversial bill can skip the usual committee process and go straight to a floor vote. In this case, the discharged bill is Rep. Stephen Fincher’s Export-Import Bank revival bill. It passed, 246-177, with 62 Republicans joining nearly all Democrats. It was the first successful discharge petition since the McCain-Feingold campaign finance regulation bill. For more on discharge petitions, see my earlier post.
So what happens now? On Tuesday, the House will hold further procedural votes on the Ex-Im bill, which will almost certainly pass. Then it’s off to the Senate, which is unlikely to act on the bill.
October 27, 2015 12:10 PM
Lots of people object to markets in certain commodities. Kidneys, archeological relics, adoption rights, and a host of more prosaic items have been deemed by critics to be the sorts of things that should not be bought and sold. Markets in these items have their defenders, of course, and generally speaking, there are relatively few things that are otherwise legal to possess that the federal government has deemed illegal to sell. Except onions. At least, future onions.