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  • CEOs Confront Anti-Capitalist Rhetoric

    April 14, 2016 1:20 PM

    Another CEO of a big American company has spoken up about the charge that he and his employees are “destroying the moral fabric” of America. Lowell McAdam of Verizon, in a post at LinkedIn, answered the charges (also addressed recently by General Electric CEO Jeff Immelt) that his company doesn’t pay the appropriate amount of tax, doesn’t invest in the U.S., and, specifically in Verizon’s case, is trying to force inappropriate concessions on the unionized portion of its workforce.

    Today – as we have over our long history – Verizon provides good jobs for tens of thousands of Americans. We’re generating the profitable growth that allows us to invest in America and innovate for the future. More than that, we offer our employees the chance to contribute something vitally important to customers, businesses and the society as a whole by building the country’s best networks and delivering great communications services.

    But in return, we’re asking our represented employees to look at the facts and engage in an honest conversation about what needs to be done to ensure these opportunities will be around for future generations. We need our employees to partner with us in creating a sustainable, competitive and, yes, profitable company.

    To me, that’s just the moral thing to do.

  • NLRB Puts Stamp of Approval on Harassment in the Workplace

    April 14, 2016 1:19 PM

    Around 80 years ago, Congress created the National Labor Relations Board to bring stability to labor relations in the private sector. The current iteration of the Board is doing everything in its power to disrupt labor relations and create hostile workplaces.

    A variety of decisions by NLRB has dramatically expanded what is known as “protected concerted activity” to the point employers are unable to manage employees from engaging in defamation, intimation, and harassment.

    Protected concerted activity is defined by the NLRB as giving “employees the right to act together to try to improve their pay and working conditions.” Basically, it amounts to protecting union organizing activity.

    In 2004, the case Lutheran Heritage Village determined what employer policies interfere with employee right to engage in protected concerted activity:

    (1) employees would reasonably construe the language to prohibit Section 7 activity; (2) the rule was promulgated in response to Section 7 activity; or (3) the rule has been applied to restrict Section 7 activity.

    But a recent report by the U.S. Chamber of Commerce, “Theater of the Absurd: The NLRB Takes on the Employee Handbook,” questions whether the NLRB has “adopted a new definition of the word ‘reasonably.’”

    The report goes on, “The NLRB has gone to outlandish lengths to find commonsense workplace policies unlawful for violating Section 7 rights, even scouring employee handbooks to find purported violations in cases where the handbook has nothing to do with the underlying charge.”

  • Pay Gap Myths Spread Around Equal Pay Day

    April 14, 2016 12:40 PM

    In the lead up to Equal Pay Day this month, supporters of more federal pay regulations promoted myths about the pay gap between men and women.

    In "Time to Pass the Paycheck Fairness Act," Kathy Kelley falsely claimed on April 9 that "on average, Virginia women make 80 percent of a man’s wage in the same job." Kelley is the head of the Richmond chapter of the American Association of University Women (AAUW). 

    Her claim was untrue, because the 80 percent figure does not compare people working in the "same job." Instead, it compares all women and men in Virginia with "a full-time job," regardless of the job, as even backers of the proposed Paycheck Fairness Act have noted. Different jobs often have very different pay scales for reasons having nothing to do with sexism. On average, male workers have more years of work experience than female workers, who are more likely to leave the workforce to care for children. Moreover, even among full-time workers, males work longer hours, on average, and are more likely to work overtime.

  • Who Died and Made Dodd-Frank Regulators Gods?

    April 13, 2016 1:08 PM

    Meet the new deities. They apparently sit on the Financial Stability Oversight Council and other regulatory agencies, especially those created by the Dodd-Frank banking “reform” act.

    Obama administration officials and Dodd-Frank cheerleaders have been simply apoplectic in their reactions to U.S. District Judge Rosemary Collyer’s carefully reasoned March 30 decision reversing FSOC’s designation of the MetLife insurance company as “systemically important,” or too-big-to-fail. Expect similar reactions to a bill, H.R. 3340, likely to be voted out of the House this week that makes FSOC more accountable to Congress by placing its budget under the appropriations process. Similarly, the House Financial Services Committee approved a bill today, H.R. 1486, that would put Dodd-Frank’s Consumer Financial Protection Bureau spending on budget as well.

    The FSOC, a secretive council of federal and some state regulators, was created by Dodd-Frank to designate firms as “systemically important financial institutions” or SIFIs. With the SIFI designation the comes the benefit of being officially tagged by the government as too-big-to-fail and having creditors more likely to be bailed out, which can be a competitive advantage and lower borrowing costs. But it can also mean much more red tape and bank-centric regulations that are inappropriate for non-bank firms.

    MetLife decided the burdens outweighed the benefits of being a SIFI. It sued in court, and Collyer agreed in her ruling that the government’s actions in designating the company a SIFI were “arbitrary and capricious.”

  • Union Bosses Order Verizon Workers to Strike

    April 13, 2016 12:04 PM

    Today, union bosses ordered 36,000 Verizon workers on the east coast to strike. Nearly all of these employees, 99 percent, service the Verizon wireline networks, whether as customer service agents or technicians.

    The Communications Workers of America and the International Brotherhood of Electrical Workers represent the workers. For the past 10 months, the unions and Verizon have bargained over a contract and have failed to reach a new agreement.

    Unions want greater job security, more high-paying jobs, and better pension benefits. The problem with union demands is that more and more Americans are giving up their landlines and abandoning TV set-top boxes in favor of streaming video. So it is understandable that Verizon requires fewer workers to take customer calls and service wireline networks.

    Even still, Verizon is offering a pretty good deal for workers that are employed in a dying landline industry. Verizon proposed:

    • 6.5 percent wage increase over the term of the contract;
    • Access to quality and affordable healthcare benefits, which the company’s other 130,000 receive; and
    • Retirement benefits that include a 401(k) with a company match.

    This is a pretty good deal when the work that these 36,000 employees perform only amounts to 7 percent of Verizon’s operating income. Further, on average, the wireline employees already receive competitive compensation of $130,000 a year in wages and benefits.

  • Congress Should Strip the FCC of the Power to Regulate Broadband Prices

    April 13, 2016 10:53 AM

    The U.S. House of Representatives will soon vote on a bill known as the “No Rate Regulation of Broadband Internet Access Act.” Just as the title suggests, the legislation would deny the Federal Communications Commission (FCC) of the power to dictate to Internet service providers how they price broadband access. Critics of the bill say it would strip the FCC of powerful tools it needs to “protect” consumers. To the extent this is accurate, however, it’s a feature, not a bug. The House should approve the bill and, hopefully, the Senate will follow suit.

    By way of background, when the FCC voted on party lines to begin regulating Internet providers like public utilities in February 2015 in the name of “net neutrality,” the agency gained wide-ranging authority to make rules governing ISPs. Although FCC Chairman Tom Wheeler has told several Congressional committees that the agency does not, on his watch, plan to use this new power to dictate broadband prices, he cannot bind the agency to this promise. And, of course, Mr. Wheeler might change his mind in the future.

  • If You Build It, They Won't Come: The Failure of Field of Dreams Transit Planning

    April 13, 2016 10:47 AM

    Following decades of excessive local government fare regulation that led to a terminal decline in the private mass transit industry, government began taking over the responsibilities performed by now-bankrupt private mass transit companies following the Urban Mass Transportation Act of 1964. Over the span of a decade, the mostly-private mass transit industry was largely replaced by government transit monopolies.

    Since then, politicians at the federal, state, and local levels have poured trillions of dollars of taxpayer funds into mass transit systems. By 2014, 28 percent of total surface transportation funds were spent on mass transit, with the majority of those dollars coming from fuel taxes paid by drivers. Yet, despite receiving more than one-fourth of the funding, mass transit still represents less than 2 percent of trips taken nationwide. Even when one looks only at commuting, where trains and buses do best, mass transit’s national mode share is less than 5 percent—down from more than 6 percent in 1980.

    But transit is expensive, say the transit advocates, and the problem is much of the funding has been wasted on bells-and-whistles and not extending access to new potential customers. This is to say, the problem is that transit networks just aren’t extensive enough. Therefore, we need to build more capacity in order to tap into this alleged latent demand. If you build it, they will come.

  • CEI Will Surmount Crimethink Persecution

    April 13, 2016 4:44 AM

    Feisty, aggressive, unwavering, and sometimes unconventional—all terms I heard prior to joining CEI last week as president. The descriptions were spot-on. But before the first conversations ended, CEI had a new opportunity to showcase why it is the leading organization making the uncompromising case for individual and economic freedom.

    Last week, an intimidation campaign led by New York Attorney General Eric Schneiderman and former Vice President Al Gore reached CEI’s doors. We received a subpoena from U.S. Virgin Islands Attorney General Claude Walker demanding CEI, a nonprofit and private organization, turn over a massive amount of documents on climate change policy work from 1997-2007, nearly 20 years ago. Needless to say, we will fight the subpoena.

    It is not and cannot become a crime to disagree with a government official. Somewhere along the line, dissent from orthodoxy has transformed from a uniquely American virtue to a crime. This subpoena is a blatant attack on CEI’s First Amendment rights of free speech and association. It threatens the rights of anyone who holds opinions different from those with the power of the federal or state governments behind them.

    What other issues are next on the taboo list? If the attorneys general succeed, we can be assured this list will vary from election to election—something for all people of good conscience to dread.

  • PBGC's Perverse Incentives Undermine Multiemployer Pensions

    April 12, 2016 3:48 PM

    For years, the Pension Benefit Guaranty Corporation (PBGC), the federal agency that insures private sector defined benefit (DB) pension plans, has been severely underfunded below what it needs to cover its payout obligations to retirees, especially for multiemployer pensions. Closing this funding gap is urgent. Yet despite greater attention to the problem by lawmakers, the media, and the public, the problem persists.

    A major reason for that is the perverse incentives built into the very workings of the PBGC. And it’s even worse for its multiemployer pension program.

    First, PBGC premiums are set by Congress—a sure way to politicize the process and end up with premiums that don’t reflect actual funding risks.

    Second is the “last man standing” rule, under which all participants in a multiemployer pension plan are responsible for the pension obligations of every other company in the plan. That means if one company goes bankrupt, its pension obligations are taken on by the other plan’s member companies.

    Add to that federal pension insurance with too-low premiums and you’ve got a recipe for disaster. Indeed, the PBGC’s multiemployer insurance program is now a slow-moving disaster that threatens to undermine the PBGC’s very viability.

  • Our Take: The Climate-Related Subpoena

    April 12, 2016 3:38 PM

    Since CEI was subpoenaed on April 8 for a decade’s worth of work from 20 years ago, many have asked “Why?” and “How?” Here is CEI’s take on what’s really going on with this subpoena from the U.S. Virgin Island’s attorney general.

    The investigation is harassment.

    • The breadth of the ‘inquiry’—encompassing all documents and communications during 1997 through January 1, 2007, concerning any potential impacts of climate policy on affordable energy (or, as the AG puts it, on “ExxonMobil’s sales, revenues, or business”)—includes most documents and communications of CEI’s energy and environment team during the period of interest.
    • Our energy and climate team has three full-time staff. Even if we work on the subpoena full time, after hours, and weekends we could not comply with the AG’s document production deadline of April 30.
    • The subpoena is clearly designed to prevent us from doing our work.

    The investigation is an attack on freedom of speech.

    • Democracy is an adversarial process. Interests that disagree on policy will inevitably challenge the certitude or accuracy of claims made by their opponents. But those of authoritarian bent easily lose patience with a competitive marketplace of ideas, which does not guarantee them victory in advance.
    • So they cheat. They reimagine a narrow provision of the Clean Air Act to demand far-reaching climate policies that would be dead on arrival in Congress. They deny that the “most ambitious climate change agreement in history” is a treaty to bypass Senate review. They peddle flimflam and sophistry and call it science.
    • When all that fails to work, they try to use the prosecutorial powers of the state to chill speech, silence dissent, and extort payoffs via settlement agreements.

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