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  • Terrorist Attack on Charlie Hebdo Reveals the Sorry State of Free Speech in the West

    January 8, 2015 6:03 PM

    My wife Sylvie, who grew up in France, is terribly shocked about yesterday’s terrorist attack on the French satirical weekly Charlie Hebdo, which murdered 12 people, including four prominent French cartoonists.

    Its editor had been on an Al Qaeda hitlist, and this vicious attack was immediately cheered by supporters of the Islamic State and Al Qaeda. According to Vice News, “Minutes before the attack, the Charlie Hebdo account had tweeted out a cartoon mocking the Islamic State's leader, Abu Bakr al-Baghdadi.”

    My wife calls the attack “France's 9/11,” and says Charlie Hebdo was a symbol of free speech for the French people, and much more culturally significant than publications like National Lampoon or The Onion is for Americans. French people across the political spectrum, from left-wing Trotskyites like my father-in-law, to conservative Gaullists, were appalled by the attack.

    The slain cartoonist Cabu was not just a Charlie Hebdo cartoonist, but had also, years earlier, been perhaps the leading cartoonist of Sylvie's childhood. He drew cartoons for children, such as for “the children's TV programme, Récré A2,” making his murder as culturally significant for her as it would be if Charles Schultz, the creator of Peanuts and Charlie Brown, had been assassinated.

    One obvious way to push back against the terrorist attack would be to publish some of the Charlie Hebdo cartoons, such as this onethis onethis onethis one, and this one.

    But most of the media are too cowardly to do so (which they should be doing, because doing otherwise rewards the terrorists who sought to eradicate such depictions). Instead, many are cropping historical photos, or blurring out images, to censor depictions of the prophet Mohammed found in newsworthy photos of Charlie Hebdo and its staff. Some are even effectively blaming Charlie Hebdo for the attack, like Tony Barber of the Financial Times referring to it as “being stupid” and aiming to “provoke Muslims.” 

    By contrast, Charlie Hebdo’s staff showed incredible courage over the years. As Matt Welch of Reason notes, it had the courage to not “just print original satirical cartoons taking the piss out of Islamic-terrorist sensibilities, but do so six days after [it was] firebombed . . .and do so in such a way that's genuinely funny (IMO) and even touching, with the message ‘Love is stronger than hate.’” And not “just print original cartoons of the Prophet Muhammad—a historical figure, lest we forget—but then defending and winning the right to do so after being charged with offensive speech.”

  • Obama Should Help Borrowers by Shedding Dodd-Frank, Not Pumping FHA

    January 8, 2015 12:24 PM

    “If it keeps moving, regulate it. And if it stops moving, subsidize it.” So said Ronald Reagan in 1986.

    Reagan was describing the unintended effects of government policy. But for the Obama administration, this formula seems to be the modus operandi of its policy making.

    Take mortgages, for instance. After the Dodd-Frank financial overhaul was rammed through the Democrat-controlled Congress in 2010, the Consumer Financial Protection Bureau—a bureaucracy created by the Dodd-Frank to be unaccountable almost by design—implemented the law’s “qualified mortgage” (QM) provisions.

    The QM provisions were so costly and complex that community banks and credit unions—as far away as one could get from the causes of financial crises—sharply decreased or even abandoned altogether the creation of new mortgages. The U.S. House of Representative responded last year by passing overwhelmingly bipartisan legislation to scale back Dodd-Frank’s QM, but the bill became one of over 400 that never moved from then-Senate Majority Leader Harry Reid’s desk.

    Yet today, in a much-heralded speech on housing in Phoenix, President Obama is expected not to join the bipartisan effort to take on the Dodd-Frank regulations keeping mortgages from moving, but to create new subsidies that not only may be ineffective at moving the housing market but would be harmful to the nation’s fiscal health, as they bulk up the government-backed housing agencies that fueled the housing crisis.

    According to press reports, the administration’s plan consists of cutting premiums borrowers pay for mortgage insurance for mortgages backed by the Federal Housing Administration (FHA) by 50 basis points. This move comes despite the FHA’s insurance reserves being already below required levels.

    Not only did the FHA have to get a direct $1.7 billion public bailout from the Treasury last year, it has received—according to a new Politico investigation—an estimated $73 billion in hidden bailouts through budget “reestimates” that don’t require official action.  In the Politico expose of the FHA and other government credit program, reporter Michael Grunwald explains that “reestimates don’t require a public announcement or a congressional appropriation; agencies just use what’s known as their ‘permanent indefinite authority’ to stick the shortfalls on the government’s tab.”

  • Bureaucrats Demand That Harvard Parrot Their Uncodified Views about Sexual Harassment

    January 7, 2015 4:11 PM

    Can agency officials declare you in violation of the law, not for actions that flout the text of a statute, but for failing to parrot the agency’s controversial views about how the statute should be applied in hypothetical situations?

    Recently, the U.S. Department of Education (DOE) did just that to Harvard. DOE’s Office for Civil Rights (OCR), where I used to work, found Harvard Law School in violation of Title IX for its failure to recite at length OCR officials’ views about the optimal handling of Title IX sexual harassment claims—even though those views were expressed in a “guidance” from agency officials that had expressly claimed to “not add requirements to applicable law.”

  • 20 States Raise Minimum Wage: Happy New Year?

    January 6, 2015 3:30 PM

    The minimum wage is one of the most popular policies for fighting poverty, and proposed increases to it usually poll very well. The $7.25 per hour federal minimum wage hasn’t increased since 2009, so now many states are enacting their own minimum wage hikes. Twenty states are inaugurating 2015 with new increases.

    Danielle Paquette’s recent Washington Post opinion piece, “20 states just raised the minimum wage. It wasn’t enough,” rounds up many of those increases, which range from Florida’s 12-cent hourly hike to as much as $1.25 per hour. Already, the New Year increases are “fattening the wallets of about 3.1 million Americans,” Paquette argues. A similar December 31 New York Times opinion piece by Rachel Abrams carries the headline, “States’ Minimum Wages Rise, Helping Millions of Workers.”

    That sounds about right, as far as it goes. Roughly 2 to 3 percent of U.S. workers earn the minimum wage. With a late 2014 labor force of 156 million people, 3.1 million fatter wallets is in the right ballpark. Yet, these minimum wage increases will not help reduce poverty. Why? The reason is tradeoffs.

    Paquette and Abrams only tell half the story. Millions of workers are getting a raise, but those raises come at a cost. Other workers directly pay for those raises through reduced hours, firings, benefit cuts, and other harms. Those workers and would-be workers have few defenders. My colleague Iain Murray and I recently compiled some of the many costs to these neglected souls:

  • Central “Planning” Often Creates Disorder, While the Free Market Provides Consistency

    January 6, 2015 12:23 PM

    Government planning often contains contradictory elements that provide inconsistent signals for regulated entities about how to behave. For example, the New Deal of the 1930s featured prosecution of some businesses under antitrust laws – under the premise that “bigness” in business was evil – and an incredibly complicated, and ultimately failed attempt to cartelize most of the nation’s economy through price-fixing under the National Recovery Act (provisions of which were declared unconstitutional by the Supreme Court in the Schechter Poultry case).  

    Today, the government continues to routinely send out mixed messages, especially through the welfare state. For example, the federal government has funded pro-marriage messages, citing research that “indicates that married adults and children raised by both parents in stable, low-conflict households do better on a host of outcomes," while at the same time financially punishing married couples through massive marriage penalties in the tax code as well as in eligibility requirements for things like Obamacare tax credits.  As Rep. Thomas Petri (R-Wisc.) has noted:

  • CEI's 2015 Unconstitutionality Index: 27 Regulations for Every Law

    January 4, 2015 6:43 PM

    There’s this idea floating around about America’s do-nothing Congress, that laws aren’t being passed.

    The Los Angeles Times called Congress “ineffective,” in 2013 since it passed so few laws. By such standards it was a tad more “effective” at year-end 2014, with 129 laws compared to 2013’s 72.

    Such tallies always include things ranging from naming post offices after politicians and dignitaries. to the likes of Obamacare. 

    Actually, the real story is that there’s a heck of a lot of lawmaking going on behind the scenes, but elected representatives aren’t involved. Bureaucrats are doing it, and you must heed them.

    The president, via unilateral executive actions—the now famous “pen and phone”—is making law, too, no matter what the Constitution says.  

    The new 114th Congress kicks off this week, so let’s look at where we are. The new GOP majority is readying Keystone, jobs bills, regulatory liberalization and tax reform.

    It’s becoming clear, though, that Obama’s emphasis will remain his own executive actions, not the presumed trade deal and tax reform that were acknowledged mutual interests.

    Between now and the January 20 State of the Union Address, the president will be out on a nationwide PR swing touting other kinds of programs like housing and higher education assistance that involve unilateral executive actions—and taxing and spending.

    The November election’s message to Obama to back off notwithstanding, the president knows he can count on a friendly media saying Congress is blocking his “reforms” rather than challenge his not meeting Congress in the middle on their ideas.  

    Note that the defining feature of the 114th Congress’ agenda is not so much things they will do, but reforms to undo. The congressional emphasis, really, is reforming government excess, to reduce government to its proper size.

    This contrasts markedly with Obama’s vision and, say, Rolling Stone’s rallying of millennials to government-guaranteed work for everybody and collective ownership of resources.  

    It’s actually supposed to be hard to pass laws; government isn’t always our friend or acting in the general interest. Usually, to turn the famous phrase on its head, "There ought not be a law," because most aspects of our lives and communities are not public policy issues (let alone federal policy issues) and should not be turned into such.

  • 2014 Ends with a 78,978-Page Federal Register; 3,541 Rules and Regulations

    December 31, 2014 10:47 AM

    At year-end 2014, the Federal Register stands at 78,978 pages, the fifth-highest count ever.

    (The published version contains 79,066 pages, but I net out blank and skipped pages in my roundup.)

    Of the six record-high tallies, five are Obama’s as the chart nearby shows. The pen and phone have been active.

    Among those pages were 3,541 final rules and regulations. Since 1995, rules have never dipped below 3,500 annually and often exceeded 4,000, especially during the 1990s.

    Of the 3,541 final rules, 659 are expected to have an impact on small businesses.

    Another 2,375 proposed rules were issued in 2014 and are under consideration. The new Congress will have an opportunity to consider resolutions of disapproval of controversial ones under the Congressional Review Act; however the needed reports on major rules for Congress to do its job here have not been forthcoming.

    The solution for over-regulation is requiring congressional approval of, not opportunity to disapprove, big rules. Reintroducing the REINS Act (Regulations from the Executive In Need of Scrutiny) and passing it in the Senate would address the matter. When Obama vetoes it, he can be asked why he thinks the unelected should make our law. (REINS is mis-named: the root of the problem is Congress’ over-delegation of power, and its toleration of the resultant abuse.)

  • Democrats vs. Government Unions

    December 29, 2014 2:22 PM

    If late House Speaker Tip O’Neill’s famous saying that all politics is local has a corollary, it may be that politics is at its most substantive at the local level. While the people’s elected representatives in Congress—many from safe districts—trade ideological barbs, state and local elected officials often have to deal in the language of dollars and cents, as they weigh policy decisions that directly affect their constituents.

    That in turn creates different conflicts than those found on Capitol Hill. And nowhere is that more visible than in the growing conflict between state and local Democratic elected officials trying to put their governments’ finances in order. As the Manhattan Institute’s Daniel DiSalvo explains:

    Public sector unions create a genuine political conundrum for Democrats. On the one hand, they are genuinely powerful, and Democrats rely on their money and manpower during elections. Teachers unions, AFSCME, and SEIU are among the biggest donors to Democratic candidates and are organizationally braided into the party apparatus. However, public employee unions drive up government costs and depress productivity, weakening the state’s capacity to assist the poor and middle class.

    There’s the rub. Insofar as public unions secure for their members better pay, more generous benefits, and work rules shielding them from management discretion government doesn’t perform as well—and, consequently, neither do Democrats. Therefore, some Democrats are under pressure to take policy actions their union allies oppose. But taking such action puts them at odds with the most powerful and best-organized segment of their coalition.

    How does it happen that citizens of modest means suffer as public sector unions gain? A big part of the problem is that many states and cities have been providing more public services and promising to pay for them later by back-loading public employee compensation into retirement. And as the share of state and local budgets devoted to public employee pension and health benefits increases, the latter “crowds out” government spending on parks, education, public safety, and other services on which the poor and middle class rely. Democrats find themselves in the difficult position of defending governments that spend more but do less.

    This conflict has been brewing for some time, as my colleague Trey Kovacs and I outlined three years ago, and the rift between government unions and pragmatically-minded Democrats only keeps growing wider, as pension underfunding has grown worse.

    For more on pension reform, see “Best Practices for Reforming State Employee Pensions.”

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

    December 29, 2014 8:24 AM

    The federal government took Thursday and Friday off to celebrate the holidays. Despite the rare three-day work week, agencies still published 25 proposed regulations, more than 40 final regulations, and an average of more than 500 Federal Register pages per day—much of which consisted of the overdue Unified Agenda, an important transparency document collection compiling upcoming regulations from every agency at various stages of the rulemaking process. If past years are a guide, the Unified Agenda’s holiday timing, precisely geared to when even many of us watchdogs are on vacation, is not a coincidence. CEI scholars will soon have much to say about this repeated transparency failure.

    On to the data:

    • Last week, 41 new final regulations were published in the Federal Register. There were 69 new final rules the previous week.
    • That’s the equivalent of a new regulation every four hours and 6 minutes.
    • So far in 2014, 3,487 final regulations have been published in the Federal Register. At that pace, there will be a total of 3,529 new regulations this year.
    • Last week, 1,605 new pages were added to the Federal Register.
    • Currently at 77,810 pages, the 2014 Federal Register is on pace for 78,756 pages. This would be the 6th-largest page count since the Federal Register began publication in 1936.
    • Rules are called “economically significant” if they have costs of $100 million or more in a given year. 44 such rules have been published so far this year, none in the past week.
    • The total estimated compliance costs of 2014’s economically significant regulations currently ranges from $6.48 billion to $9.95 billion. They also affect several billion dollars of government spending.
    • 281 final rules meeting the broader definition of “significant” have been published so far this year.
    • So far in 2014, 655 new rules affect small businesses; 98 of them are classified as significant. 
  • NLRB Advances against McDonald’s

    December 23, 2014 12:21 PM

    By issuing complaints against McDonald’s on December 19, 2014, the National Labor Relations Board gave unions a boost and further riled business groups. On July 29, 2014, the National Labor Relations Board’s (NLRB’s) Office of the General Counsel had set the labor and employment world on fire by authorizing these complaints, which needed Friday’s Board approval to move forward.

    In essence, the Board itself has now preliminarily determined that the franchisor McDonald’s is a joint employer with McDonald’s franchisees and thus is liable for the actions of the franchisees, beyond just the opinion of the NLRB General Counsel.

    In a press call, the International Franchise Association joined the U.S. Chamber of Commerce, National Restaurant Association, and National Retail Federation to address last Friday’s issuance of complaints against McDonald’s.                      

    Robert Cresanti, Executive Vice President of Government Relations and Public Policy for the International Franchise Association explained that holding franchisors liable for the actions of their franchisees, as the NLRB General Counsel has proposed in an amicus brief, would move the franchise system toward large, corporate-owned outlets and away from independently owned operations.

    On the call, Cresanti pointed out two important, real-world impacts such a decision would entail: 1) Minorities would be disproportionately disadvantaged as minority ownership is notably higher among franchise businesses than non-franchise businesses, and 2) Job growth would be constrained as business resources are sapped and franchise expansion curtailed.

    Glenn Spencer, Vice President of the Workforce Freedom Initiative at the U.S. Chamber of Commerce, discussed how the direction of the NLRB leaves businesses with an uncertain standard for compliance.

    Angelo Amador, Vice President & Regulatory Counsel with National Restaurant Association, noted the breadth of the issue goes far beyond McDonald’s and even far beyond restaurants.

    David French, Senior Vice President of Government Relations for the National Retail Federation talked of the retail industry’s concern about the NLRB’s action today.

    Indeed, the NLRB General Counsel’s brief in the BFI case speaks directly to franchising, staffing/temp agencies, and contracting/subcontracting. All of these industries must be concerned with the NLRB’s march against McDonald’s.


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