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  • 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. 
  • The Government Makes a Terrible Boyfriend

    August 14, 2015 8:51 AM

    He’s from the government, and he’s here to help. That’s the comic premise of this summer’s best YouTube video series, “Love Gov,” from the Independent Institute. In this case, though, the protagonist is the government, personified. The story begins when Scott “Gov” Govinsky meets sweet college student Alexis, and quickly takes an interest…in every aspect of her life.




    The series has already racked up over 1.5 million views, with positive reviews from fine folks like San Francisco Chronicle columnist Debra Saunders and the Hayek Institute’s Barbara Kolm, who declared the videos “brilliant.”

    Episode 1 of the five-part series sees Gov giving Alexis some questionable advice about her rapidly accumulating student loan debt. Her best friend Libby tries to steer her back to the sensible path, but Gov’s pushy know-it-all attitude threatens to nudge Alexis in a foolish direction.

    Gov goes on to dig his fingers into Alexis’ small business, butt into her healthcare decisions, mishandle her home-buying plans, and spy on her phone calls and emails. Where will it all end? You’ll have to watch the full series to find out. 

  • Thorny Issues in Trans-Pacific Partnership Negotiations

    August 13, 2015 1:16 PM

    Trade negotiators from 12 countries left Maui at the end of July 2015 without reaching a final agreement on the Trans-Pacific Partnership (TPP), a massive trade pact among countries that represent about 40 percent of the world economy. The 12 countries negotiating TPP are the United States, Japan, Mexico, Canada, Australia, Malaysia, Chile, Singapore, Peru, Vietnam, New Zealand, and Brunei Darussalam.

    Stymying further progress on the agreement are several tough issues that won’t be easy to reconcile as several countries dig in to protect certain sectors of their economies. Further complicating negotiations are up-coming October elections in Canada and the desire on the part of the U.S. to finalize the deal before 2016 presidential election campaigns go into high gear.

    It’s ironic that this deal—portrayed as an agreement to open important Pacific Rim markets—is being held up by traditional protectionist tactics as countries seek to protect key industries.

    One of the thorny issues for the U.S. and New Zealand is Canada’s supply management program for dairy products, poultry and eggs. Besides trying to balance domestic production with domestic demand and providing price supports, Canada’s program imposes quotas on dairy imports and stiff tariffs over those quotas. For example, tariffs on butter can be as high as 299 percent.

    New Zealand and the U.S. would like TPP to provide better access to that Canadian dairy market. As a small country, New Zealand is nonetheless a major dairy exporter, and dairy products account for about 30 percent of New Zealand’s merchandise trade exports. But with Canada’s Prime Minister Stephen Harper facing what could be a tight reelection, Canadian negotiators might be reluctant to alienate the domestic dairy industry. On the other hand, Harper does want the trade deal and may have to compromise to reach that goal, as New Zealand had been adamant in holding to its position.

  • Mount Vernon Cheers: A Song to Commemorate "I, Whiskey"

    August 13, 2015 1:15 PM

    Our Indiegogo campaign for CEI’s new documentary “I Whiskey” is closing soon. So far, we have raised almost $75,000, but it’s not over yet. Please donate now if you haven’t, and if you have, you can always do so again.

    You can get some great souvenir t-shirts from this rewards-based crowdfunding campaign. And CEI is also fighting to legalize equity crowdfunding , so that future entrepreneurs can legally offer profit-sharing from their projects, as well as souvenirs like t-shirts, if they choose to do so. So, this crowdfunding campaign is not just about whiskey, but the future of crowdfunding itself, as well as the future of freedom.

    Subtitled “The Spirit of the Market,” “I, Whiskey” will show the creative process involved in distilling whiskey and tell the stories of American entrepreneurs and risk-takers in the whiskey biz. And one of those entrepreneurs is none other than the father of our country, George Washington.

    After Washington left office as first president in the 1790s, he commissioned James Anderson, an immigrant from Scotland, to build a whiskey distillery on the grounds of Washington’s Mount Vernon estate. It soon became one of the largest distilleries in the country. I have written previously about Washington’s whiskey making and his other entrepreneurial feats that are often overlooked. The great news is that Mount Vernon Estate and Gardens, with support from the Distilled Spirits Council of the United States, recently rebuilt the whiskey distillery on its original foundation for visitors to see and is even marketing a new whiskey based on Washington’s recipe

  • The Administration Is about to Upend American Business Practices

    August 13, 2015 7:45 AM

    It is probably the biggest change in American employment law since the National Labor Relations Act and its reform in the 1930s and ‘40s, but it could happen without the general public realizing it. The National Labor Relations Board (NLRB, a product of that 1930s legislation) is expected to rule any day now in a case that will affect thousands of businesses. Firms are bracing themselves for the fall-out.

    The case in point relates to Browning-Ferris Industries (BFI), which owns a recycling plant that hires employees from a staffing agency. The local Teamsters Union petitioned the NLRB to designate BFI as a “joint employer” of the workers alongside the staffing agency. Designation as a joint employer would mean that BFI would be liable for the employees’ working conditions alongside the staffing agency. That means they could be sued over contractual matters and working conditions.

    If the NLRB rules in favor of the Teamsters, it would have far-ranging effects for companies of all shapes and sizes. The start-up that employs a receptionist from a staffing agency would find it now “jointly employed” that receptionist. Your office that has cleaning staff come in from a different firm at night could easily find it jointly employing those cleaners.

    The whole American business model of contracting out non-essential services would be overturned overnight. Firms that have spent decades flattening their structures would be forced to vertically integrate. One employment owner told The Hill, “Every company will have to reexamine their business relationships… I’d rather be responsible for my own company than someone else’s.”

  • Party Bias in EPA's Power Plant Rule?

    August 12, 2015 10:17 AM

    What’s the main difference between EPA’s final rule to regulate carbon dioxide (CO2) emissions from state electric-power sectors—the so-called Clean Power Plan (CPP), released August 3—and the draft rule, published in June 2014?

    “The media have focused on modest tweaks to non-binding national goals—emissions are now expected to drop 32 percent by 2030, versus 30 percent in the draft, and coal is expected to provide 27 percent of our power instead of 31 percent—but those aren’t the changes that matter,” argues Politico reporter Michael Grunwald.

    What does matter? The changes to states’ legally-binding emission-reduction targets, which have “serious political implications.” The final rule is more aggressively anti-coal than the draft rule:

    The original draft took it easiest on states with the heaviest reliance on dirty fossil fuels – states that nevertheless complained the most about Obama’s supposedly draconian plan. The final rule cracks down much harder on those states, while taking it much easier on states that are already moving toward cleaner sources of electricity.

    Check out this excellent chart compiled by my colleague Alex Guillen. North Dakota would have been required to cut emissions just 10.6 percent to comply with the draft rule, the least of any state; it will have to cut emissions 44.9 percent to comply with the final rule, the most of any state except for similarly fossil-fueled Montana and South Dakota. Coal-rich Wyoming, Kentucky, West Virginia and Indiana were also among the biggest losers in the revised plan. Meanwhile, the states that are already greening their grid – led by Washington, Oregon and New York – were the biggest winners in the final rule.

    Is there also a partisan thrust to this pattern? The title of Grunwald’s article calls the CPP a “whack at red states.” The article itself, however, does not use the terms “Red State” and “Blue State.”

    So let’s look at how the draft and final rule targets compare in states won by Mitt Romney (“Red”) and those won by President Obama (“Blue”) in the 2012 presidential election.


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