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  • Feds Double Down on Failed Affordable Housing Mandates

    August 21, 2015 12:44 PM

    Federal affordable housing mandates do little to increase homeownership rates, but they did help cause a devastating financial crisis in 2008 by encouraging risky lending.

    Yet the Federal Housing Finance Agency is doubling down on failure by ratcheting up those mandates. Its head, Mel Watt, was appointed by the President in 2013, even though the policies he promoted in Congress helped cause the financial crisis.

  • The FTC Targets Apple Music: Part III

    August 21, 2015 11:08 AM

    This is the third in a series of essays on the FTC’s investigation of Apple Music. In Part II of this series, we demonstrated that, even if Apple were to ban rival music services from offering iOS apps, competition in the smartphone market would significantly mitigate any threat to competition in the music streaming market. This section will ignore this effect and look instead at how Apple’s actual actions, unhindered by consumers’ ability to switch phones, would affect competition in the music streaming market.

    Recall from Part I that although Apple imposes several restrictions on rival music streaming services, these restrictions are largely illusory because they apply only to sales made through these services’ iOS apps. Any consumer can bypass them by simply purchasing their subscription through a service’s web site—or, for that matter, any channel other than its iOS app.

    As a result, these restrictions should affect only a small subset of music streamers—those who (1) discovered music streaming through a service’s iOS app, (2) rely exclusively on iOS for streaming, and (3) haven’t learned that they can bypass Apple’s restrictions through some other means. In other words, the only consumers who would pay a higher price or be “unfairly” pushed towards Apple Music are those whose sole exposure to music streaming has come through Apple devices. The question, then, is whether Apple should have an advantage among consumers whose sole exposure to music streaming has come through the ecosystem it developed.

  • Back to School Lunch Scares

    August 19, 2015 3:15 PM

    It’s back to school season, which for many parents means spending money on new clothes, shuttling young people from sports games to ballet, and increasingly, worrying about the kind of nutrition their kids are getting when they’re away from the home.

    This is understandable since they are inundated with hyperbolic headlines like “sugary drinks kill,” “death by salt,” and “processed meat causes cancer”. It’s enough to add a few gray hairs to any parent’s head. While it’s important to teach kids about proper nutrition and make sure they’re eating a balanced diet in and outside of the home, this kind of inflammatory rhetoric doesn’t help parents make healthy and realistic choices for their children.

    So, here are a few tips to help you relax as you send your kids off into the great wide nutritional unknown.

    Soda won’t kill your kids. There is no doubt that excessive consumption of sugary drinks through soda or fruit juice can easily lead to a calorie surplus and weight gain. However, the occasional can of sports drink after a soccer game isn’t likely to cause any damage.

    You may have seen the headline announcing that a study says “Sugary Drinks May Kill 184,000 People Each Year.” It’s pretty scary, but it’s also pretty speculative and its methodology is questionable. The researchers used data from 62 self-reported surveys from only 51 countries between 1980 and 2010. They used “sugar availability,” to calculate consumption, presumably to account for the counties without adequate data. Rebecca Goldin, a Professor of Mathematical Sciences at George Mason University and Director of (a group of researchers who work to evaluate and interpret statistical research for accurate reporting in the media) pointed out the many reasons people should be skeptical of this study, including a lack of transparency about how the researchers accounted for missing data such as sugar sources in the diet other than sugary drinks.

    They also failed to say how addressed the uncertainty in the proportion of diabetes/cardiovascular disease caused by sugary drink consumption, and the uncertainty of the proportion of deaths caused by these diseases. When someone goes into the hospital with a heart attack and dies, it’s very difficult to say if it was his five decades of smoking, sedentary lifestyle, or the liter of coke he drank every week.

    As Harry Cheadle over at Vice put it “X behavior causes Y deaths” headlines are always popular because people like numbers, and statements like that at least appear to quantify bad behaviors. Never mind if the numbers don't really make any sense.”

  • NLRB Denies Petition to Form College Athlete Union, for Now

    August 18, 2015 12:37 PM

    The National Labor Relations Board (NLRB) yesterday denied a petition by Northwestern University football players to form a union. While this is a rare show of restraint by a labor board that, under the Obama administration, has often acted like a pro-union advocate, the ruling is on such narrow grounds that it’s difficult to draw any broader conclusions from it.

    A ruling in favor of the Northwestern union petitioners would have affected all private schools in the National Collegiate Athletic Association’s (NCAA) top division, a mere 17 schools of 125. That raises the question: Would the Board have ruled differently if its decision were to apply across the board, or at least to the overwhelming majority of athletic programs?

    For more on the NLRB decision, see here.

  • The NLRB Declines Jurisdiction in College Athlete Unionization Case

    August 18, 2015 12:36 PM

    The National Labor Relations Board has declined the opportunity to rule on whether or not college athletes are employees and can therefore be unionized. The petition was brought by the College Athletes Players Association which desired election as the union for Northwestern University college athletes.

    CEI submitted an amicus brief in the case. In the brief, we pointed out the likely true motivation behind the push to unionize student athletes, and the problems it would cause for those students:

    [T]he United Steelworkers union is driving this whole initiative. The Steelworkers, one of the largest industrial unions in North America, are underwriting and financing the effort and have been trying to unionize students for a decade. The goal? Access to some of the millions of dollars associated with college sports. And Stanford, with its long and storied athletic history, is a prime target for the Steelworkers, with nearly 10 local union chapters in the area.

  • New York Times Editorial Board Clueless on Smart Car Safety and Security

    August 18, 2015 11:07 AM

    On Sunday, August 9, The New York Times ran an editorial, “Protecting Cars from Hackers,” discussing the recent publicized hacking incidents of Fiat Chrysler and Tesla vehicles, with Fiat Chrysler voluntarily recalling 1.4 million vehicles to fix the bug.

    As our cars get smarter, we can expect more of these types of incidents. To be sure, there are new risks presented by the rise of smart cars—particularly when automated systems take over driving task responsibilities previously held by drivers—but the Times’ editorial board’s recommendations will not make us safer. In fact, if we listen to them, we will end up with more highway fatalities and injuries.

    The Times recommends:

    The National Highway Traffic Safety Administration, which regulates auto safety, insists that it is closely monitoring these new technologies, and is running tests on car software. The agency has also encouraged the industry to create an information-sharing center through which companies can exchange information on security threats.

    That’s good news. But N.H.T.S.A. should also start writing basic security standards that require automakers to test the software and make sure a car’s wireless system cannot be used to control the engine and brakes. The agency’s regulations on airbags, seatbelts and crash testing have helped save countless lives. New rules for software that operate cars could prove just as important.

    There’s a lot wrong here, so let’s unpack a few points. The Times wants NHTSA to start issuing a flurry of rulemakings on automotive cybersecurity and to “make sure a car’s wireless system cannot be used to control the engine and brakes.” My engineer friends will have already winced at the mangled and incoherent terminology deployed by the editorial writers, but what would prohibiting “a car’s wireless system” from “control[ling] the engine and brakes” mean in terms of, say, self-driving taxis that may be on the horizon? Based on any reasonable reading of the Times’ misguided call to action, it would outlaw them. Not only will automated vehicles likely be far safer, automated taxis would allow more people to live car-free lifestyles, something I thought was supported by the progressive Manhattan elites that populate the editorial board.

  • "Flypocalypse" Shows Air Traffic Control Too Important to Be Left to FAA

    August 18, 2015 8:59 AM

    This past Saturday, hundreds of flights were delayed or canceled due to an air traffic control software glitch in the Washington, D.C. area. Naturally, #flypocalypse began trending on Twitter. Initially, the Federal Aviation Administration denied reports that their brand-new En Route Automation Modernization (ERAM) system was responsible. Yesterday, FAA officials admitted ERAM was the culprit.

    ERAM is a critical component of the FAA’s NextGen air traffic control modernization program. In theory, it offers greatly improved communications, flight tracking, and controller display functionality, replacing a legacy system designed in the 1980s. But the FAA’s deployment of ERAM, like many NextGen components, has been plagued by serious problems.

    Back in May, I noted that the FAA had just completed ERAM deployment—five years late and hundreds of millions of dollars over budget. Around the same time, the National Research Council issued a damning report of the FAA’s ongoing NextGen deployment failures. The Washington Post’s Ashley Halsey highlighted some choice quotes from the NRC report:

    • “The original vision for NextGen is not what is being implemented today.”
    • “This shift in focus has not been clear to all stakeholders.”
    • “Airlines are not motivated to spend money on equipment and training for NextGen.”
    • “Not all parts of the original vision will be achieved in the foreseeable future.”
    • “NextGen, as currently executed, is not broadly transformational.”
    • “‘NextGen’ has become a misnomer.”

    The latest ERAM failure and resulting flight disruptions once again shows that the FAA cannot be trusted to deliver on NextGen. But air traffic modernization problems extend beyond the bungled NextGen rollout.

  • Is President Obama's Energy Wish Coming True?

    August 18, 2015 8:19 AM

    In a January 17, 2008, interview with the San Francisco Chronicle, then-Senator Obama said that “electricity rates would necessarily skyrocket” under his plan to fight global warming. He also said that under his plan, “if somebody wants to build a coal-powered plant, they can; it’s just that it will bankrupt them.” 

    His latter wish seems to becoming a reality. Bristol-based coal producer Alpha Natural filed for Chapter 11 bankruptcy protection earlier this month. It follows many other coal companies, such as Walter Energy Inc., Patriot Coal Corp., and James River Coal Co., in filing for bankruptcy.

    For fossil fuels, this may be just the beginning. The Obama administration’s Clean Power Plan is said to “accomplish little in the way of making any significant change in global emissions while simultaneously crippling the oil and gas industry and floating more ‘green energy’ plans which weren’t pulling their own weight.”  

  • Dodd-Frank Act Strangles Small Banks

    August 17, 2015 1:11 PM

    The 2010 Dodd-Frank Act was enacted partly to end “too-big-to-fail” banks, but it has done quite the opposite. It has curbed competition with big banks by eliminating competing small banks whose failure would not endanger the financial system. It used to be that 100 new banks were created every year; now, not one is created in a typical year.

    As the Cato Institute’s Walter Olson notes, the “Dodd-Frank law is strangling community banks. More on community banks here, from Scott Beyer, and in several past posts.” He “previously noted this Wall Street Journal account from March on one of the most dramatic aspects of the trend, the throttling of de novo bank formation: ‘Based in a rural village in the heart of Amish country, Bank of Bird-in-Hand is the only new bank to open in the U.S. since 2010, when the Dodd-Frank law was passed and enacted. An average of more than 100 new banks a year opened in the three decades before Dodd-Frank.’”

    This completely contradicts the law’s sponsors, whose “statute itself declared that it would ‘end too-big-to-fail.’” Consumers have suffered: “Before Dodd-Frank, 75% of banks offered free checking. Two years after it passed, only 39% did so.” As CEI’s Iain Murray has noted, “rules issued under Dodd-Frank have harmed some of the poorest Americans, who have seen their insurance made more expensive, their banking choices reduced, and their bank fees increased. Many have been forced out of the banking system altogether” potentially leading to the return of “loan sharks.”

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

    August 17, 2015 8:59 AM

    The number of this year’s new regulations zoomed past the 2,000 mark, though the pace is still slower than usual. This week’s new rules cover everything from mailboxes to macadamia tree insurance.

    On to the data:

    • Last week, 83 new final regulations were published in the Federal Register, after 71 the previous week.
    • That’s the equivalent of a new regulation every two hours and two minutes.
    • So far in 2015, 2,029 final regulations have been published in the Federal Register. At that pace, there will be a total of 3,231 new regulations this year, which would be several hundred fewer rules than the usual total of 3,500-plus.
    • Last week, 1,285 new pages were added to the Federal Register, after 1,586 pages the previous week.
    • Currently at 47,080 pages, the 2015 Federal Register is on pace for 74,969 pages.
    • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Nineteen 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.
    • 169 final rules meeting the broader definition of “significant” have been published so far this year.
    • So far in 2015, 337 new rules affect small businesses; 51 of them are classified as significant. 


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