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  • Court Rules against Government in TSA Body Scanner Case

    October 23, 2015 2:05 PM

    Earlier today, the U.S. Court of Appeals for the D.C. Circuit ruled against the government in CEI’s challenge to the Transportation Security Administration’s (TSA) illegal body scanner policy. CEI, joined by the National Center for Transgender Equality and the Rutherford Institute, filed a mandamus petition in July asking the court to compel the TSA to produce its final rule on body scanners within 90 days.

    When the TSA began deploying body scanners as the primary screening method back in 2009, it failed to conduct a notice-and-comment rulemaking as required by the Administrative Procedure Act (APA). In 2010, the Electronic Privacy Information Center (EPIC) filed a lawsuit alleging, among other things, that the TSA was in violation of the APA. In July 2011, this same panel on the D.C. Circuit ruled in favor of EPIC and ordered the TSA to “promptly” complete the required rulemaking it should have completed before deploying the machines. Unfortunately, the TSA has still yet to produce the required final rule, which is what motivated this latest legal action.

    After years of TSA thumbing its collective nose at the court order, the D.C. Circuit today ordered the TSA to produce a final rule schedule within 30 days. We believe that the agency has finally been brought to heel and greatly appreciate the court’s decision.

  • Pennsylvania Attorney General Suspended from the Bar, Still Refuses to Quit

    October 23, 2015 9:39 AM

    Pennsylvania Attorney General Kathleen Kane was suspended from the bar on October 22 for apparent violations of the law by the Pennsylvania Supreme Court. A newspaper chain’s website says this makes her “the first attorney general without a license to practice law.”

    As it notes, “The first-term Democrat's license was put on indefinite, temporary suspension by the state Supreme Court on Sept. 21, weeks after she was charged with perjury and other crimes for allegedly leaking secret grand jury material to a reporter and lying about it. The court delayed the suspension for 30 days, so her first full day without a license” was October 22.

    As we described in “The Nation’s Worst State Attorneys General,” Kane has frequently shown contempt for the law and her ethical obligations while in office. (We rated her the nation’s worst attorney general.)

    But still, she is refusing to step down, even though the lack of a law license legally keeps her from performing many of her duties, and most of the state’s major newspapers have called for her resignation: “Embattled Pennsylvania Attorney General Kathleen Kane told senior staffers Wednesday that she still intends to run the office, even with a law license that has been placed on an emergency suspension. Kane, in a staff meeting, said that in her view about 98 percent of her work can go on as before,” with only two percent being farmed out to state Justice Department lawyers. After years of depicting herself as the state’s chief lawyer, she now implies that her role is largely bureaucratic.

    Given how political and partisan Kane has been in office (like dropping an investigation into corrupt Philadelphia lawmakers caught red-handed accepting bribes—an act which would have let them off scot-free had an outraged local prosecutor not indicted and convicted four of them), I can see why she is trying depict her role as primarily non-legal. But her politicizing legal matters doesn’t make them non-legal, and she plainly intends to continue meddling in legal matters.

  • 33 Groups Call on Congress to Defund Portfolio Attack by Labor Department

    October 22, 2015 9:56 AM

    Today, a coalition letter signed by leaders of 33 leaders of free-market and conservative public policy organizations urges Congress to defund the Department of Labor’s (DOL) “fiduciary rule” takeover of 401(k)s and individual retirement accounts (IRAs). The letter, coordinated by the Competitive Enterprise Institute, states that Congress “must exercise its power of the purse” to stop this “action by the administration that has attracted bipartisan opposition owing to the massive negative effects it would have on Americans’ retirement savings.”

    Stretching to the bone its narrow authority over pensions from the 40-year-old Employee Retirement Income Security Act, the DOL has proposed a rule that would cause great harm to middle-class savers. This rule would severely restrict investment choices in savings plans such as 401(k)s and individual retirement accounts (IRAs), especially by poor and middle class investors, by forcing investment professionals to adhere to a one-size-fits-all definition of “best interest” for assets and investing strategies in these savings plans

    Stating right off the bat in the rule that Americans “can’t prudently manage retirement assets on their own” and that improved disclosure won’t help, the DOL would massively increase liability and fines for financial professionals who handle 401(k)s and IRAs, unless they choose assets and an investing strategies the DOL deems to be in investors’ “best interest.”

    As the coalition letter notes, such a paternalistic approach has attracted opposition virtually all congressional Republicans, as well as over half of House Democrats. Ninety-six House Democrats, led by progressive Rep. Gwen Moore (D-Wisc.), voiced concern in a recent letter to the DOL that the fiduciary rule could limit access to guidance on retirement saving for poor and middle-class Americans

  • Wayne Crews's Essay Recognized as Part of 2015 Fisher Award

    October 21, 2015 12:01 PM

    A collection of essays on the economic challenges facing the United States, as well as paths for recovery, were published by The Fraser Institute in the book What America’s Decline in Economic Freedom Means for Entrepreneurship and Prosperity in April of this year.

    The book has just been named the winner of Atlas Network’s 2015 Sir Antony Fisher International Memorial Award, which, according to the Atlas website, “recognizes the organization that published a book, magazine, report, monograph, or study that, in the opinion of a panel of external judges, has had demonstrable impact and made the greatest contribution to public understanding of the free society.”

    CEI’s Clyde Wayne Crews, Jr., provided his essay entitled “One Nation, Ungovernable? Confronting the Modern Regulatory State” as one of five chapters in the award-winning book.  In his chapter, Crews provides a roadmap for how to assess and corral federal regulation by highlighting the tools at the disposal of policy makers to bring about much needed regulatory reform as well as explaining the consequences of too much executive branch power. Capturing both data and analysis to provide a snapshot of the ever-growing regulatory state, Crews inspires those who long for a return to constitutional limited government with practical steps that can be taken to dial back the regulatory burden in the United States.

    Donald Boudreaux of George Mason University edited the Fraser Institute book, which also contains essays by Liya Palagashvili of New York University and George Mason University; Russell Sobel of The Citidel; Robert Lawson of Southern Methodist University; and Robert Meiners of the University of Texas at Arlington (with Andrew P. Morriss).

    Atlas awards the winning organization a $10,000 prize and recognition at a Liberty Forum & Freedom Dinner in New York City.

    Read more about the award here

  • Back to the Future in Payments Technology

    October 20, 2015 1:38 PM

    One of the things Back to the Future Part II almost got right about 2015 was how Biff paid for his cab ride—with a thumbprint.

    A lot of us can basically do this already, by signing into a smartphone with a ride app (Uber, Lyft, or even an app for traditional taxis like Curb) using our thumbprint. The difference is, we do it at the start of the ride and the payment is taken care of automatically by our pre-authorization.

    We can do this for other things too—a coffee at Starbucks or goods at the grocery store using Apple or Samsung Pay. All can be authorized by our thumbprint (even my little credit union allows my to authorize seeing my account balances with Apple’s Touch ID).

    All this is actually more futuristic than BTTF’s cab ride. The cab doesn’t need to have an expensive customer interface installed where they can authorize payment at the end of the ride. It’s all handled somewhere else. The cloud handles the process and feedback services letting the driver know we’re trustworthy—and letting us know the driver isn’t a maniac – handles the trust issue, allowing us to leave the car without handing over anything to the driver, not even a thumbprint, and assuring the driver that he (or increasingly she) will get a tip as well.

    So we don’t even need the thumbprint. Sorry, Mr. Zemeckis.

  • Virtuous Capitalism, or, Why So Little Rent-Seeking?

    October 20, 2015 8:21 AM

    The venerable Fred Smith and I have a new paper out today. Click here to read it. In the paper, we try to solve the Tullock Paradox, named for the late, great economist Gordon Tullock (my remembrance of him is here).

    What is the Tullock Paradox? It involves rent-seeking, or seeking special favors from the government. Bailouts, subsidies, and regulations that prevent competition are all examples of rent-seeking. To provide some context, lobbying is roughly a $3.5 billion industry, and the federal government doles out more than $100 billion in corporate welfare—meaning rent-seeking is potentially a 30-fold investment. Not 30 percent, 30-fold. Meanwhile, the Dow Jones averages an 8 percent return. With such outlandish returns on investment, the Tullock Paradox is: why so little rent-seeking?

    Tullock had his answers, rooted in economic reasoning, which we summarize in the paper. But while Tullock’s theories are valid, they’re missing something: ethics, virtue, and a full picture of humanity. Most economists stick to analyzing a Homo economicus character who is unfailingly rational and utility-maximizing. This is a useful and interesting species to study, but Fred’s and my goal is to encourage economists to study Homo sapiens as well. We are capable of pride and shame, we want to love and be loved, we aren’t always 100 percent consistent, and we make mistakes all the time.

  • Is a Drone Registration Mandate Illegal?

    October 19, 2015 2:22 PM

    Today, the Department of Transportation announced the creation of a task force to develop recommendations for a national drone registration mandate. Transportation Secretary Anthony Foxx stated that he wants the task force to develop their recommendations by mid-November, with the mandate coming into force sometime in mid-December. Secretary Foxx also said that the mandate will apply to all unmanned aircraft systems. Drone lawyer Jonathan Rupprecht has a post on the practical and legal issues of creating and enforcing a registration regime. I’d like to highlight two problems raised by Rupprecht.

    If Foxx is accurate, the Federal Aviation Administration will likely be in violation of two different federal laws: the FAA Modernization and Reform Act of 2012 and the Administrative Procedure Act.

    First, in the 2012 FAA reauthorization, Congress included a provision (Section 336) that reads, in part:

    Notwithstanding any other provision of law relating to the incorporation of unmanned aircraft systems into Federal Aviation Administration plans and policies, including this subtitle, the Administrator of the Federal Aviation Administration may not promulgate any rule or regulation regarding a model aircraft, or an aircraft being developed as a model aircraft

    Congress clearly intended to protect unmanned aircraft system hobbyists whose model aircraft meet the criteria contained in Section 336, as even the FAA appears to note in its interpretation of Section 336. FAA Administrator Michael Huerta claimed the FAA has existing safety authority to mandate drone registration, but it remains to be seen how the agency can evade Congress’s clear intentions.

  • The Many Bad Reasons to Support TSCA "Reform"

    October 19, 2015 9:54 AM

    With reform to nation’s chemical law—the Toxic Substances Control Act (TSCA)—basically around the corner, groups from both left and right are commenting on why we need reform and for some, why the current proposals should pass quickly. But the reasons they offer aren’t very compelling.

    The Consumer Electronics Association (CEA) exclaims in a press release:

    Our nation’s chemical safety laws are outdated. Without reform, we’ll likely see a continued proliferation of costly and ineffective state-based chemical regulatory programs that confuse consumers and manufacturers alike. Congress must restore the public’s confidence in EPA’s chemical control laws, and one way of doing so is by passing S. 697.

    TSCA may be old, but it has the best risk standard on the books, as I note here. And passing a major bureaucratic regulatory initiative to “restore public confidence” is, well, just plain dumb.

    I do understand CEA’s position on using reform to halt bad state-level laws. But it’s not clear this reform will accomplish that task. Sure, it would be great if we could pass a law that would curb a growing patchwork of ill-conceived and dangerous state-level chemical regulations that impede interstate commerce, raise consumer prices, reduce choice, and force product reformulations resulting in inferior consumer products. And current proposals include some language to preempt such laws under certain circumstances, but overall these provisions may be too weak to make a difference. 

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

    October 19, 2015 9:45 AM

    It was a short work week for the federal government due to the Columbus Day holiday. But agencies still found the time to publish new regulations ranging from livestock herding to washing machines.

    On to the data:

    • Last week, 63 new final regulations were published in the Federal Register, after 68 the previous week.
    • That’s the equivalent of a new regulation every two hours and 40 minutes.
    • So far in 2015, 2,674 final regulations have been published in the Federal Register. At that pace, there will be a total of 3,343 new regulations this year, far fewer than the usual total of 3,500-plus.
    • Last week, 1,796 new pages were added to the Federal Register, after 1,245 pages the previous week.
    • Currently at 62,981 pages, the 2015 Federal Register is on pace for 78,043 pages.
    • Rules are called “economically significant” if they have costs of $100 million or more in a given year. 22 such rules have been published so far this year, one in the past week.
    • The total estimated compliance cost of 2015’s economically significant regulations ranges from $1.73 billion to $1.88 billion for the current year.
    • 223 final rules meeting the broader definition of “significant” have been published so far this year.
    • So far in 2015, 435 new rules affect small businesses; 61 of them are classified as significant. 
  • India Wants More Aid and Easier Commitments in Paris Climate Treaty

    October 16, 2015 5:49 PM

    India’s Business Standard reported that the Indian government is not happy with the new “first draft” negotiating text of the Paris climate treaty that was released on 6th October.  Nitin Sethi’s 14th October story says that India’s negotiators have concluded that, “It ignores many submissions by developing countries, breaches India's non-negotiable red lines and is inimical to the country's interests at the talks.”

    India’s main complaint is the latest re-iteration of the line in the sand drawn by the G-77, the group of 135 developing countries that often negotiate as a bloc.  The G-77 insists that the “architecture” of the UN Framework Convention on Climate Change cannot be changed, by which they mean that the treaty’s list of developed countries (Annex I in UNFCCC-talk) and developing countries (non-Annex I) cannot be adjusted to take account of the fact that some developing countries in 1992 have become developed countries in 2015.

    The UNFCCC assigns “common but differentiated responsibilities” to Annex I and non-Annex I countries.  Developed countries are expected to undertake mandatory emissions reductions, while developing countries (non-Annex I) are not obligated to reduce emissions, but are instead meant to receive financial aid for reducing emissions and dealing with the impacts of climate change.  U. S. negotiators have insisted that all countries must undertake commitments to reduce emissions according to their abilities, thereby destroying the distinction between Annex I and non-Annex I.


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