January 14, 2016 9:38 AM
Growing up lactose intolerant, I was fond of saying that drinking milk post-infanthood was unnatural. Then I found out that humans aren’t the only ones in the animal kingdom to keep and care for another species in order to take its produce. This week, a writer at Jezebel wrote an amusing clickbait article—and an effective one if my Facebook feed is any indicator—echoing my childhood sentiment that adults drinking milk is weird and they shouldn’t do it.
Setting aside her really bad arguments (e.g., adult humans shouldn’t drink milk because no other animals do so), her “best,” or at least most reasonable, argument centers on the nutritional quality of milk. She contends that its high-fat, nutrient-dense nature makes milk perfect for babies in need of rapid weight gain and nutrition, but inappropriate for adults, especially since most of us already eat too much fat and fat consumption causes heart disease. “If you enjoy living, put the milk down,” she says. It’s funny, but based on current scientific evidence, dead wrong.
For decades the theory—or rather dogma—was that saturated fats (SFA) in foods caused cardiovascular disease (CVD). This idea that came from observational studies that linked consumption of foods high in SFA to increased CVD risk. And this is at the heart of the nutrition argument Jezebel and even the most recent USDA Dietary Guidelines make. While there is some research to back up the idea that consumption of foods containing saturated fat might increase heart health risks, emerging research has begun to cast doubt on the old wisdom. You may have seen articles with titles like “The Questionable Link Between Saturated Fat and Heart Disease” and “The Government’s Bad Diet Advice” in major news outlets asserting that the saturated fat myth has been “debunked.” It turns out that it’s not so simple and that not all saturated fats are created equal.
January 13, 2016 4:58 PM
Last night at the State of the Union, the President asked three questions regarding domestic policy (I’ll leave the foreign policy question to others). They were:
First, how do we give everyone a fair shot at opportunity and security in this new economy?
Second, how do we make technology work for us, and not against us – especially when it comes to solving urgent challenges like climate change?
And finally, how can we make our politics reflect what’s best in us, and not what’s worst?
These three questions are best answered by three great economists, Joseph Schumpeter, Ronald Coase, and Friedrich Hayek.
January 13, 2016 12:16 PM
In President Obama’s State of the Union address, he echoed a theme that has been constant throughout his tenure, saying, “how do we give everyone a fair shot at opportunity and security in this new economy?”
One way President Obama could have a productive final year in office and work toward expanding opportunity is by directing the National Labor Relations Board to stop making it more difficult for employers to hire and entrepreneurs to get started. During Obama’s time in office, the NLRB has imposed costly regulations that threaten to disrupt workplaces around the nation and the greater economy.
One example is the NLRB’s recent change to the joint employer standard.
For decades, a franchisor and franchisee were considered two distinct entities. This is commonsense. A franchisee is an independent small business owner that hires and fires employees, creates their schedules, and is responsible for any labor violations against its employees. This business relationship benefited all involved—employers, consumers, and workers. It allowed entrepreneurs an easy way to strike out on their own. They are able to use the franchisor’s brand name, and benefit from the parent company’s marketing efforts and tested business methods. In return, the franchisee is liable for its day-to-day business practices and is their own boss.
The franchise business model thrived under the decades old joint employer standard. Franchises employ millions of workers and account for 10 percent of new jobs in 2013 and 2014. Projections from the International Franchise Association show that the “gross domestic product (GDP) of the franchise sector will increase by $521 billion or 5.2 percent in 2015, an increase over the $496 billion generated in 2014.”
January 13, 2016 9:55 AM
PRESIDENT OBAMA: “Look, if anybody still wants to dispute the science around climate change, have at it. You’ll be pretty lonely, because you’ll be debating our military, most of America’s business leaders, the majority of the American people, almost the entire scientific community, and 200 nations around the world who agree it’s a problem and intend to solve it.”
RESPONSE: President Obama has the politics all wrong. In fact, Obama ran to the right of Romney on energy policy in 2012. That Obama, the one trying to get elected by the American people, was pro-fossil fuel (even coal), and he avoided talking about climate change. Only after he was elected to a second term did Obama make climate change a legacy issue. Now, he’s claiming that the “majority of the American people” want him to implement climate policies. Of course he is being disingenuous. If he believed this was true, he would have run on the issue in 2012. Instead, he ran from it.
January 11, 2016 12:59 PM
With the announcement today of the death of David Bowie, tributes from fellow artists and his millions of fans are pouring in. While it may be impossible to ever estimate his impact on rock music and pop culture generally, we can get a handle on his contribution to the field of business and finance. As many outlets are reminding us today, Bowie was a savvy and innovative investor, in particular when it came to his own intellectual property.
In 1997 he sold $55m of "Bowie Bonds", asset-backed securities that were backed by the current and future revenues of the 25 albums he recorded before 1990.
Rather than getting steady income from the revenues of his back catalogue — including records such as The Rise and Fall of Ziggy Stardust and the Spiders from Mars and Let's Dance — the bonds allowed Bowie to borrow more money up front.
January 11, 2016 12:45 PM
On Tuesday evening, President Obama will give his final State of the Union address. In evaluating the state of the U.S., it’s useful to look at the state of economic freedom, including the ability for ordinary Americans to start and invest in a new business without undue government interference.
By several measures, economic freedom has declined rapidly since 2009. Though some harmful policies were enacted in during the Bush administration, such as the Sarbanes-Oxley accounting mandates that made it so much more difficult smaller companies to go public, the Obama administration has not reversed those policies and pushed through many new detriments to economic freedom. These include Obamacare, which makes it difficult for small and midsize firm to hire new employees to due to the expensive and prescriptive insurance coverage mandates, and the Dodd-Frank “financial reform,” which has crippled the ability of community banks and credit unions to lend to Main Street consumers and businesses.
According to the Kauffman Foundation, new business formation has plunged 30 percent since 2008, and business deaths now outpace business births for the first time since the 1970s. In the most recent Index of Economic Freedom, produced annually by the Heritage Foundation and Wall Street Journal, the U.S. ranked 12th among countries, falling from a rank of 6th when President Obama took office. In the Canadian Fraser Institute’s 2015 “Economic Freedom of the World” survey, the U.S. slipped to 16th. As Per Bylund, Records-Johnson Professor of Free Enterprise at Oklahoma State University’s School of Entrepreneurship, writes, “As recently as 2000, we held the No. 2 slot and now we've fallen below countries like Canada and the United Kingdom.”
January 11, 2016 11:01 AM
This week on RealClear Radio Hour: common sense reforms, the cost of government policy mistakes, and an entrepreneurial mother taking on the Department of Labor.
My first guest this week is Salim Furth, research fellow at the Heritage Foundation’s Center for Data Analysis. Salim looks at the cost of government policy mistakes on the average American family, including burdensome land use regulations, licensing requirements, and energy mandates. Common sense reforms, he calculates, could save the average American household over four thousand dollars every year.
In the second half of the show, I’m joined by mom, entrepreneur, and founder of Children’s Consignment Events, Rhea Lana Riner. Rhea tells the story of how she grew her business from a living room sale to a nationwide franchise. Riner is now being forced to defend her business model in a lawsuit against the Department of Labor, which claims her local volunteer consignors should be categorized as employees owed back wages, even though no volunteers complained or even responded to government solicitations to file suit.
January 11, 2016 8:21 AM
After a record-setting 2015, 2016 got off to a slow start, with new rules covering everything from vending machines to Nebraskan sludge. Even so, it may be a busy few months until May 17 or so, when a soft deadline for Congressional Review Act enforcement comes into effect. Congress could potentially block most rules issued after that date, so agencies are likely to hurry as many of this year’s rules as possible. Think of it as an early midnight rush.
On to the data:
- Last week, 32 new final regulations were published in the Federal Register, after 67 the previous week.
- That’s the equivalent of a new regulation every five hours and 3 minutes.
- With 32 final regulations published so far in 2016, the federal government is on pace to issue 1,600 regulations in 2016.
- Last week, 1,113 new pages were added to the Federal Register, after 1,401 pages the previous week.
- Currently at 1,113 pages, the 2016 Federal Register is on pace for 27,825 pages.
- Rules are called “economically significant” if they have costs of $100 million or more in a given year. No such rules have been published so far in 2016.
- That means this year’s running compliance cost tally stands at zero. 2015’s estimated tally ranges from $6.18 billion to $8.69 billion.
- 3 final rules meeting the broader definition of “significant” have been published this year.
- So far in 2016, 6 new rules affect small businesses; 1 of them is classified as significant.
January 8, 2016 11:12 AM
Yesterday the House passed the Sunshine for Regulatory Decrees and Settlements Act (H.R. 712) by a slightly bipartisan 244-173 vote. The bill targets “sue and settle” litigation, which ranks among the most harmful, yet least understood issues in contemporary energy and environmental policy.
At heart, sue and settle is an affront to federalism. Virtually all of the Environmental Protection Agency’s (EPA) regulatory programs are “cooperative federalism” regimes, meaning that Congress split the responsibility for environmental protection between state and federal governments. With sue and settle, the EPA and environmental and advocacy groups shut out the states from the policy making process. This is outrageous because states are co-sovereign governments with a congressional delegation to work with EPA on environmental protection, whereas environmental groups like Sierra Club and the Natural Resources Defense Council are ideological special interests that spend untold resources on manipulating both the legal process and electoral politics.
In practice, sue and settle is a function of two interrelated legislative devices: statutory deadlines and citizen suits.
It starts with a surfeit of statutory deadlines. During the early 1970s, when Congress passed most of the EPA’s enabling statutes, lawmakers tried to micromanage the agency by including thousands of date-certain duties in these laws. Unfortunately, the agency has a woeful record achieving these deadlines. For example, in a recent study, I found that the EPA missed 98 percent of its 200 most important Clean Air Act deadlines since 1994. On average, the agency was more than five years late on these deadlines, so it’s not like the agency was even coming close.*
January 7, 2016 4:09 PM
As expected, the nutritional guidelines for 2015-2020 thankfully excised the long-standing warning against cholesterol-laden food in the wake of several decades of research demonstrating that the original warning was neither based on scientific evidence. However, the updated guidelines still advise Americans limit saturated fat and, in attempt to push Americans toward a plant-based diet, limit meat consumption. The consequences of such advice might not only fail to improve Americans’ diets, but may exacerbate the obesity problem in America.
While stopping short of recommending that Americans eat a plant-based diet for the health of our bodies and the environment (a proposed recommendation that set off a bit of a firestorm), the recommendations only implicitly advise people to eat less meat (using the euphemism of “saturated fat” and protein) and explicitly advise we eat more vegetables and other “under-consumed food groups.” While the recommendations aren’t as strong as some would like, there’s definite message within them: animal products and processed foods are bad, vegetables and fruits are good.
That message isn’t terrible. Americans could definitely stand to add more vegetables into their diet. But there’s a fundamental calculus that the dietary guidelines, and in fact most government nutritional advice, seem to not understand. There are only three fundamental macronutrients: fat, protein, and carbohydrate. To reduce one, you must increase one or both of the others. Vegetables are awesome (I’m a pescatarian myself), but they are also expensive and time-consuming compared to other kinds of meals. If HHS and USDA are sending the message that animal products (fat and protein) should be reduced what are Americans most likely to replace those calories with? The hope, of course, is that plant-based foods will replace meat calories, but it is easier and cheaper for families to replace them with carbohydrates.
While many assume that Americans eat more meat today than ever before and that this is a driving factor in obesity, this is incorrect. Our ancestors in the 19th century ate almost twice as much meat as we do today. In 1851, Americans ate between 150 and 200 pounds of meat per person per year (even slaves were allocated an average of 150 pounds of meat a year). Compare that to the 100 pounds of meat the average American adult eats now. The dietary recommendations advise that when we do eat dairy, it should be reduced fat and when we eat meat we should eat “lean,” meaning poultry or meat with fat trimmed off. However, Americans in 1851 almost never ate chicken or turkey, which were seen as “luxury” meats eaten only on special occasions. On the other hand, of the 100 pounds the average American eats today, about half is poultry. So, Americans now are eating half (or less) the amount of red meat as Americans in the 19th century and yet we are obese.