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  • When Regulations Undermine Justice and Due Process

    March 19, 2015 4:10 PM

    Recently, I participated in a March 13 panel discussion at the National Press Club titled “Bringing an End to Second-Class Justice,” discussing how federal micromanagement of college discipline by the Education Department ignores federal court rulings, increases college costs, and stacks the deck against some accused students. Here is the text of my remarks at the event, which was put together by the group Stop Abusive and Violent Environments:

    A Stacked Deck: OCR and Sexual Harassment Liability

    In the attached handouts, I have explained how the Office for Civil Rights, where I used to work, has made punishment of innocent students more likely, and in some cases, inevitable, through its rules on how colleges must handle sexual harassment allegations, which apply both to verbal harassment and sexual assault. 

    For example, in recent investigations, OCR has required that colleges impose “interim measures” against accused students before they ever receive a hearing on the charge against them, measures that can include expulsion from a dorm and classes shared with the accuser. In its April 2011 Dear Colleague letter to the nation’s colleges, OCR instructed to colleges to restrict cross-examination, even though the Supreme Court has declared that cross-examination is the “greatest legal engine ever invented for the discovery of truth.” It also ordered colleges to abolish the clear-and-convincing standard of evidence that was once the norm in college discipline.

    OCR also has recently required some investigated colleges (such as Harvard and SUNY) to conduct “individual complaint reviews” for all allegations in past academic years to see if the college “took steps” against harassment in each case. That creates the risk of students being investigated all over again for an offense the college previously found them not guilty of, much like double jeopardy.

    But a bigger threat to innocent students is the massive financial risk colleges face if they do not swiftly expel accused students. Thanks partly to OCR stacking the deck, it can be much cheaper for a college to expel a possibly innocent student than to find him not guilty. Even before OCR’s recent rules changes, colleges had massive incentives to suspend or expel students who might be guilty of sexual assault or harassment.

  • Data Torturing at the CPSC

    March 19, 2015 1:57 PM

    James Mills of the National Institute of Child Health and Human Development lamented in an article in the New England Journal of Medicine back in 1993: “‘If you torture your data long enough, they will tell you whatever you want to hear’ has become a popular observation in our office. In plain English, this means that study data, if manipulated in enough different ways can prove whatever the investigator wants to prove.”

    Government regulators will resort to such data torture to justify an activist regulatory agendas if they can’t do it with good data and sound science. One approach includes selective use of data—excluding years or datasets that might change the conclusions of a risk assessment. The Consumer Product Safety Commission’s recent Chronic Hazard Advisory Panel (CHAP) report on the chemical class known as phthalates offers one new example of excluding inconvenient data.

    In short, the CHAP report is being used to justify a proposed rule that would essentially ban the use of certain chemicals for toys that children might mouth or chew. These chemicals make plastics soft and pliable, suited for such things as a plastic version of a “rubber duckie.” For background on this issue, see my other blog posts here and here

    In addition, in the absence of any compelling body of data that any individual phthalate is the cause of human health effects, the panel relied on the possibility that the cumulative effects of phthalates as a class pose risks. Accordingly, they needed data on human exposure from all sources.

    The panel developed a “cumulative risk assessment” that they maintained justified regulations. But pharmacologist Christopher J. Borgert, Ph.D., observes in a review of the CHAP report that the panel’s cumulative risk assessment: “failed to recognize obvious inconsistencies with human experience and clinical evidence”; “overstates the accuracy of its cumulative risk methods and conclusions”; and “appears to have grossly overestimated chemical potencies.” In other words, the panel failed to properly apply the available data and research.

    To make matters worse, they used old and irrelevant data for their human exposure assessments even though more accurate and recent data was available. Former and current CPSC commissioners have noted that had the panel used the most recent data, their risk assessment would have produced the opposite result. This issue raises the prospect that the panel members were intentionally “selective” in their use of data because they desired to generate a particular conclusion, as appears to be the case with their selection of studies that they also reviewed. 

  • Benning Road: The Last Refuge of Streetcar Apologists

    March 19, 2015 1:02 PM

    Washington City Paper’s Housing Complex blogger Aaron Wiener has an unintentionally hilarious article on the slow-motion implosion of the D.C. Streetcar. But before I get to Wiener’s piece, let’s recap:

    To Wiener’s post, the streetcar boosters are now conceding what opponents (like your author) have been saying for years: H Street, N.E., does not need a streetcar. But they aren’t giving up yet; rather, it is Benning Road that needs the streetcar more than anything. Wiener closes with this: “But first, the streetcar has to start running. The ball’s in your court, Bowser and Dormsjo. And the future of Benning Road hangs in the balance.”

    Apparently, the D.C. neighborhoods of sleepy Kingman Park and former notorious drug-warzone Trinidad are in dire need of public subsidies to boost property values. I found this hilarious because when I was looking to buy a home a year ago, I looked in both neighborhoods and found myself priced out.

  • Least Transparent Administration Closes Records on Fannie and Freddie

    March 19, 2015 10:30 AM

    This Sunshine Week, the administration that swept into office promising to be the “most transparent” in history was just judged by a major news service as least transparent of modern presidencies.

    An analysis by the Associated Pres found that “the Obama administration set a record again for censoring government files or outright denying access to them last year under the U.S. Freedom of Information Act.” The AP adds that the administration “also acknowledged in nearly 1 in 3 cases that its initial decisions to withhold or censor records were improper under the law - but only when it was challenged.”

    But FOIA requests are just the tip of the iceberg for this administration’s secrecy, much of which has nothing to do with the legitimate exception of national security. In Dodd-Frank, the administration set up the Consumer Financial Protection Bureau and the Financial Stability Oversight Council—the constitutionality of both of which are now subject to a lawsuit from the Competitive Enterprise Institute and other parties—to be exempt from many open meetings and (especially with FSOC) open records requests.

    But probably the most egregious example of this administration’s practicing of secrecy concerns its management of the government-sponsored housing enterprises (GSEs) Fannie Mae and Freddie Mac. In August 2012, then–Treasury Secretary Tim Geithner issued the “Third Amendment” to the GSE conservatorship. The Third Amendment would require all of the GSEs’ profits to be siphoned off to the U.S. Treasury Department in perpetuity—even after the GSEs paid back what they owed to taxpayers.

    This arbitrary action has spawned more than 20 lawsuits from Fannie and Freddie’s private shareholders. The suits charge the administration with everything from violating the Administrative Procedure Act to unconstitutionally taking property without just compensation.

    The Third Amendment has also raised concerns that the profit sweep is leaving Fannie and Freddie with very little capital reserves, furthering the chance for more taxpayer bailouts should something go awry with the housing market again. See this excellent paper by Cato Institute Director of Financial Regulation Studies Mark Calabria and former FDIC General Counsel Michael Krimminger on this point.

  • CPSC's Scientific Shenanigans on Phthalates

    March 18, 2015 2:00 PM

    Many “stakeholders” have complained about the process through which the Consumer Product Safety Commission (CPSC) developed its proposed rule related to a class of chemicals called phthalates—and rightly so. In particular, the agency’s failure to allow public comment and open peer review of its Chronic Hazard Advisory Panel report (CHAP report) underscore the fact that bureaucrats want to avoid scrutiny that might hold them accountable for rash and unscientific decisions. 

    Designed to make plastics soft and pliable, these chemicals have many valuable uses for making a wide range of products from blood bags, to rain boots and swimming pool liners as well as children’s toys, which are the subject of this regulation. Safely used for decades, activists and regulators are poised to essentially throw away these valuable technologies based largely on junk science. 

    While this rule only affects toys that children might place in their mouths or chew, it sets a terrible precedent. I already detailed how this rule might harm consumers in a blog post last week. Now let’s look at the so-called “science” behind it.

    The justification for the proposed regulations are found within the CHAP report, which is a review and risk assessment that the agency released in July 2014. A key problem stems from the fact that the CHAP report relies on a selective review of limited studies that offer scant evidence that individual phthalates or cumulative exposure pose any significant risk to humans at current exposure levels. 

    Most of the CHAP-report-identified “evidence” that these chemicals pose health risks comes from lab tests that over-dose rodents to trigger health effects. Such tests are not particularly relevant to humans that better metabolize the substance and who are exposed to traces that are multitudes lower.

    The human research highlighted in the CHAP report is not particularly compelling either. Many of these human studies are noted to be “small,” which limits their value for drawing any conclusions. And many of them report associations between potential health effects in babies whose mothers’ phthalate exposure levels were measured in single “spot” urine samples during pregnancy. Given that humans metabolize phthalates relatively quickly, one time spot measurements may be misleading about actual exposures, raising important questions about the utility of such studies.

  • The Republican Budget and Middle Class Economics

    March 18, 2015 12:35 PM

    Yesterday the House Republicans released their “Balanced Budget for a Stronger America” and the Senate Republicans will release their budget proposal today.

    House Republicans would cut $5 trillion over 10 years and get rid of Obamacare. Their main goal is to balance the budget without raising taxes over that 10-year period. I wrote about this in Forbes yesterday.

    Republicans are more likely however to dissipate energy fighting amongst themselves over increased defense spending.

    Obama, by contrast, will respond to the House and Senate Republicans by giving a speech reiterating his “Middle-Class economics” pitch, which, in short means more spending and more government. Democrats will unite behind this.

    Obama’s fiscal year 2016 budget proposal called for $3.999 trillion, just shy of the four-trillion-dollar heights we were in during the downturn. On our current path, the deficit would be $1 trillion in 10 years. The Republicans would spend $3.8 trillion in 2016, so their future cuts would need to be aggressive to really attain a balance at the end of the decade.

    The president seeks seven percent spending increases in both domestic and military. He wants taxpayers to provide free community college for C-students.

    He wants big new infrastructure spending projects including an “infrastructure bank” at the level of some half a trillion over six years. Stimulus anyone? Why not, since it worked so well before.

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

    March 16, 2015 12:41 PM

    An otherwise slow week ended with a bang on Friday, with 27 new regulations, or nearly half the week’s total, covering everything from calorie counts to gas vapors.

    On to the data:

    • Last week, 60 new final regulations were published in the Federal Register, after 72 new regulations the previous week.
    • That’s the equivalent of a new regulation every two hours and 48 minutes.
    • So far in 2015, 548 final regulations have been published in the Federal Register. At that pace, there will be a total of 2,796 new regulations this year, which would be nearly 1,000 fewer rules than the usual total.
    • Last week, 1,157 new pages were added to the Federal Register, after 1,242 pages the previous week.
    • Currently at 13,467 pages, the 2015 Federal Register is on pace for 68,710 pages.
    • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Five 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 $647 million to $700 million for the current year.
    • Fifty-five final rules meeting the broader definition of “significant” have been published so far this year.
    • So far in 2015, 111 new rules affect small businesses; 19 of them are classified as significant. 
  • CPSC Proposal on Phthalates Likely to Do More Harm than Good

    March 13, 2015 8:58 AM

    On Monday, the Consumer Product Safety Commission will close the comment period for a proposed rule related to chemicals used to make soft and pliable plastics. While they claim to do this in the name of children’s health, it’s not clear that the rule will do more good than harm.

    The process and the “scientific” review that brings us to this proposed rule has been controversial, to say the least. I detail some of those issues in comments that I will submit on Monday and will post some of that here on Monday as well.

    Unfortunately, not enough attention has focused on the fact that the agency-commissioned study—referred to as the Chronic Hazard Advisory Panel (CHAP) report—failed to fully consider the potential implications of substitute products that will replace those they ban. 

    Before initiating a rulemaking that may remove chemical technologies from the marketplace that have been safely used for decades, CPSC should consider whether replacement products pose greater risks. The CHAP allegedly addresses replacement products by reviewing data on the potential environmental health effects of other chemical substitutes. But the CHAP did not address whether or not the substitutes that might actually win a place in the market would affect product performance in ways that help or harm public health and safety.  

    The rule should ensure net safety, considering all factors. It is incumbent that regulators don’t inadvertently increase risks with short-sighted decisions. Based on the CHAP, we lack reasonable assurance that regulatory action will increase net safety and, in fact, such actions might accidentally introduce new hazards and even greater public health and safety risks.

  • Civil Rights Commissioners Oppose Budget Increase for Education Department’s Office for Civil Rights

    March 12, 2015 2:36 PM

    On February 26, two members of the U.S. Commission on Civil Rights, Gail Heriot and Peter Kirsanow, wrote to the chairmen of the congressional appropriations committees, to warn “against” a “provision of the proposed Obama budget that would increase funding for the Department of Education’s Office for Civil Rights (‘OCR’) by 31%.”  

    As the Commissioners observed in their letter, there has been “a disturbing pattern of disregard for the rule of law at OCR. That office has all-too-often been willing to define perfectly legal conduct as unlawful. Though OCR may claim to be under-funded, its resources are stretched thin largely because it has so often chosen to address violations it has made up out of thin air. Increasing OCR’s budget would in effect reward the agency for frequently over-stepping the law. It also would provide OCR with additional resources to undertake more ill-considered initiatives for which it lacks authority. We strongly encourage Congress to take into account this troubling pattern of overreach in deciding whether to support the President’s proposed increases to OCR’s budget.”

    The Commissioners’ letter focuses on OCR’s attacks on free speech. For example, it discusses OCR’s 2013 attempt to redefine constitutionally protected speech about sexual issues in college classrooms as sexual harassment in a case involving the University of Montana, an act of overreaching criticized not just by free-speech groups like the Foundation for Individual Rights in Education, but also by law professors like Eugene Volokh and even by liberal commentators in the Washington Post and Chronicle of Higher Education, as well as by moderate Republican Senator John McCain. As the Washington Times and The College Fix note, it also criticized OCR’s 2011 attempt to federalize school bullying, and its related guidance redefining some speech protected by the First Amendment among K-12 students as illegal racial or sexual harassment. (See my discussion of that guidance here and here.)

  • Chaffetz Tells States and Lotteries: If You Don’t Want an Online Gambling Ban, Introduce Your Own

    March 11, 2015 4:04 PM

    According to a Gambling Compliance story (paywall) posted today, Rep. Jason Chaffetz (R-Utah) participated in a conference call last week with about 20 state and lottery officials to discuss his proposal to create a nationwide ban on Internet gambling. Chaffetz’s bill rewrites the 1961 Wire Act, which he claims was “reinterpreted” by Obama’s DOJ in 2011—which opened the door for states to legalize online gambling. When the participants voiced their concerns that Chaffetz’s bill would also criminalize lottery activities that were legal prior to 2011, Chaffetz responded by brazenly suggesting that when his bill passes, they can try to pass their own federal bill. “You can come back and re-start if you want,” Chaffetz concluded.

    The call was organized by the Commerce Committee of the National Governors Association (NGA), which has voiced opposition to Chaffetz’s bill in the past. But some on the call noted surprise at his aggressiveness. Mark Hichar, a gaming attorney on the call, found Chaffetz’s statement “surprisingly aggressive.”  According to Hichar, the bill would eliminate currently legal lottery offerings, such as online lotter ticket sales and subscriptions (currently available in 8 states), online real-time games like pull-tabs (legal in five states when Kentucky launches this year), and of course, online casino-style games legal in New Jersey, Nevada, and Delaware for almost two years now.  

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