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Net neutrality rules full of faults, R Street warns

Out of the Storm News - 32 min 20 sec ago

WASHINGTON (April 1, 2015) – The R Street Institute expresses deep concern about this morning’s announcement by the Federal Communications Commission that it would expand its recently proposed net-neutrality rules to tennis, basketball and other sports-related broadcasts.

The proposed changes in net regulation from the FCC’s newly created Office of Mesh Guidelines (OMG) came as a surprise to many observers.

“This overreaching regulation will have profoundly negative effects on competition. The Davis Cup and Wimbledon will never be the same,” said R Street President Eli Lehrer, adding that the new rules likely would also undercut attendance at Washington Wizards games.

“Before the OMG stepped in with still more net-neutrality rules, no one even thought it possible for Wizards attendance to dip any lower,” Lehrer added.

Under the new rules, OMG regulators at tennis matches will regularly pull the nets lower to ensure balls reach the other side of the court. On basketball courts, the expanded rules will require lowering nets to five feet and expanding their diameter to five feet as well, to ensure that dominant players’ natural height or shooting ability doesn’t undermine the game’s fairness.

“This mandatory increase in bandwidth will do no harm to incumbent players, while lowering barriers to entry for new players,” an OMG spokesperson said. “Access to the courts long has been a cherished American tradition and we view it a basic human right.”

Other R Street scholars were similarly critical of the new rules.

“The commission thinks it has come up with a final solution, but in practice, it will trigger total war over the Internet. April 1, 2015 is a date that will live in online infamy,” said Mike Godwin, Director of the institute’s Center for the Study of National Socialism. “This kind of anticompetitive intervention is like something former Labor Secretary Robert Reich might have recommended in his book ‘Beyond Outrage,’ which is the third Reich book I’ve read.”

“These new rules will lead to massive regulatory confusion,” Godwin added. “The whole issue could have been avoided if OMG staff had been more thorough when they looked up the meaning of the word ‘server.'”

 

The New Intolerance

Stuff We Wish We Wrote - Homepage - March 31, 2015, 5:12 PM
In the increasingly bitter battle between religious liberty and the liberal political agenda, religion is losing. Witness the media and political wrath raining…

Can Conservatives, Libertarians Find Common Ground to Forge Political Realignment?

Somewhat Reasonable - March 31, 2015, 3:13 PM

The National Review Institute, founded by William Buckley, Jr. in 1991, and The Heartland Institute joined forces for an event with Charles C. W. Cooke featuring his book, “The Conservatarian Manifesto”, on Wednesday, March 25, in the Crystal Room of the Union League Cub, 645 West Jackson, Chicago.  “The Conservatarian Manifesto” is a call to arms for an underserved movement among conservatives.  The crucial tenets of this movement includes fiscal responsibility, constitutional obedience, and controlled government spending.

Author Charles C.W. Cooke is a writer at “National Review” and a graduate of Oxford University in England, where he studied modern history and politics.  His work has focused especially on Anglo-American history, British liberty, free speech, the Second Amendment, and American exceptionalism.  Cooke is the cohost of the “Mad Dogs and Englishmen” podcast and has appeared on HBO (“Real Time” with Bill Maher), BBC, MSNBC, Fox News, The Blaze, CNBC, CTV, ABC, Sun News, and CBS.  In addition to “National Review”, Mr. Cooke’s writings have also been published by the “National Interest”, “The Washington Times”, and the “New York Post.”

A “Conservatarian” is neither a libertarian or a conservative, as the word itself implies, but members of the right that are fiscally conservative but socially liberal.  The question posed in Mr. Cooke’s book, “The Conservatarian Manifesto”, is whether conservatives and libertarians can find common ground and forge the next American political realignment. Set forth in Cook’s book are issues on which conservatives and libertarians can agree, such a limited government and gun rights, while libertarians often disagree with conservatives on the drug war, foreign policy, abortion and immigration. The blending together of the two is important if the Founders’ vision for liberty is to be preserved for future generations of Americans.

To Charlie Cooke, unlike how conservatives are generally described on the Left, they are the radicals who want the government to leave them alone.  Conservatism is therefore marked by its unorthodoxy and its radicalism, standing for the more eccentric ideas that have surfaced only recently like property rights, separation of powers, a preference for local government over central planning, and a free and dynamic market economy.

History and Conservatism

It was Republican discouragement in the 2008 presidential election which led to Barack Obama capturing the presidency.  Republicans, thinking G.W. Bush was a conservative, became discouraged when Bush changed his tune when in office with his compassionate brand of conservatism by passing the federal takeover of education with One Child Left Behind and other big spending programs that had nothing to do with 9/11.  As such the Bush era was not a time worthy of celebration by most Republicans. For when looking back to the 90’s, the years under Clinton were quite good.

The state of the economy was a big factor in 2012.  Only 1/4 of the American people thought the economy was getting better.  Also, a majority of Americans favored repealing Obamacare. But despite these negatives, Obama won a second term.

Regarding 2016, Cooke believes that despite the disastrous policies imposed upon this nation by President Obama and his administration, they have not yet resulted in forever changing the realignment of the American political scene. In speaking about Republican chances for 2016, Democrats have slim pickings when it comes to presidential candidates.  President Obama may not be on the ticket, but he has effectively wiped out the Democratic Party in many states.

Cooke did give this warning to conservative candidates who so often seek to go back to the presidency of Ronald Reagan in describing what they are all about. As Reagan left office in 1989 and it is now 2015, such a comparison is odd sounding to young people who weren’t even alive when Reagan was president.  Conservatives need all the votes they can get, which means attention must be paid to the existence of a generational divide.  A majority of young people believe in gay marriage, legalization of marijuana and abortion.

Federalism vs. progressivism

Conservatives are warned time and again that they must be more socially liberal, yet there is nothing that connects drugs to gay marriage or abortion. All are separate issues and separate questions that can’t be treated in the same way.  Conservatives must highlight their opponents’ inconsistencies whenever and wherever they can, hammering home that it is best to leave social questions to local localities, to civil society, and to individuals.

In regard to the contraception controversy, this winning line is shared by the author:  “We have no issue with contraception, but we don’t think nuns should be forced to pay for it.” The good news is that young Republicans are becoming more pro-life, even as they remain more in line with Democrats on gay marriage and illicit drugs.

As alluded to in the above two paragraph, with a nation that is moving more and more to a one size fits all policy which brings with it a host of problems, conservatives and libertarians must insist on a return to federalism in contrast to progressivism which is irreconcilable with federalism.  Roughly 10 years ago 2/3’s of Americans offered positive assessment of all three levels of government:  federal, state and local.  Now a favorable rating for federal government has fallen to just 33%; state favorability is at 52%; and local government wins at 61%

Federalism allows Americans at the state level to make laws concerning pot use; marry members of the same sex; drink at 18; drive cars at 75 mph instead of 55; or to carry loaded guns on their hips.  Ton Cruz was noted as consistent in wanting to remove the federal government from solving problems.  For liberals who love power concentrated at the federal level with a single national policy as the best way forward, conservatives must remind liberals how big government hangs over them, even as they insist this is what they want.

The massive number of laws passed at the national level was referenced in accordance to the number of Americans who are exempted from them.  One group of Americans, the  Amish, were described as “the canary in the coal mine.”  They want to be left alone.  They are quite happy in their own communities. With so many laws past at the federal level, it’s impossible to know much of what is really legislated unless laws affect us personally. There are even laws for lumberjacks!

Nations are defined by more government

Often forgotten is that nations are more than just their governments.  From the first days of this nation’s independence, of importance was preserving the national ethos. Hispanics generally have the same expectations and want the same things as white Americans, but when voting Hispanics most often select the Democratic Party, the perception being that the Democratic Party stands for the downtrodden and the poor. But unlike what many Republicans are told to believe, for many Hispanics amnesty is not the main issue. Republicans should start to appeal more effectively to the poor and the middle class.  Simply starting to speak Spanish is not enough.  Also to be recognized is that Republicans don’t really need to win the Hispanic vote. They only need to win more of it than they are winning now, while winning other votes.

For those who are pushing for amnesty, why would libertarians and many Republican be willing to import an unlimited number of individuals who will most likely vote Democratic, and who will increasingly outnumber those who are friends of liberty. What is more, this nation’s welfare system is going bankrupt. Importing millions of poor immigrants, though no fault of their own, will completely bankrupt the social welfare system at a time when many Americans are out of work.  The interests of our own citizens must be served above the interests of citizens of other countries.

Regarding foreign policy, Charles Cooke makes no bones about it, Obama has no interest in foreign policy.   For libertarians and others who believe in a non-interventionist foreign policy, they must be reminded that if this nation pulls back who will we leave the world to?  Just who will fill the vacuum?

One success story is the gun issue.  Facts have outweighed fiction and liberty has trumped fear to counter the emotional and dishonest anti-gun position which fails to hold up under scrutiny.

Confessing to not being a particularly religious person, Mr. Cooke did convey the importance of fighting tooth and nail for religious freedom.

One comment made by Cooke stands open to questioning:  “As this country becomes more and more divided the pressure for one size government to fit all should evaporate?”   How much more divided can this nation become?”   Doesn’t division usually breed more dissatisfaction and strife?

The road ahead is uncertain 

Conservatives have not drawn their cases well.  This comment by Cooke could have lasting, positive implications:  “If conservatives play their cards right they can begin to establish that those on the Left moderate and censor the culture and serve as the speech police, the arbiters of taste and the purveyors of mandates.”

In the final paragraph of Cooke’s book he presents a positive view of what conservatives have to offer this nation which could bode well for its future.

Conservatives have on their side the most successful, virtuous, and radical political philosophy in the history of the world.  Unlike their opponents, whose ideology is distressing ahistorical and therefore liable to be shaped by the transient and fashionable demands of self-serving interest groups, conservatives have a North Star to guide them and to establish their place in history’s complex sky.  Conservatives have lost their way from time to time:  “Their task is to catch sight of the star once again, to work out what went wrong, and to sail on without loss of enthusiasm or purpose. The future is there for the taking.

The end result, as it involves the future of our nation, will depend on sufficient pressure applied from below at the grass roots level by conservatives and libertarians coming together to return this nation to federalism, under which this nation was conceived, to take back the Republican Party from the establishment which now controls the Party.

Heartland touts its accomplishments

Charles Cooke was introduced by Jim Lakely, Communications Director at The Heartland Institute. Before introducing Mr. Cooke, Jim Lakely shared three ways in which The Heartland Institute is making a difference in its 31 years of operation.

  • Heartland is unique in that it’s the only organization that has a national reach and can likewise get into each state to make a difference.
  • Heartland publishes four newspapers which are sent to every state and federal legislator:  “Environmental & Climate News”; School Reform News”; Health Care News”; and “Budget and Tax Issues.”

 

Categories: On the Blog

Heartland Daily Podcast – Michelle Minton: How Will RAWA Bill Impact Online Gaming/Gambling?

Somewhat Reasonable - March 31, 2015, 3:02 PM

In today’s edition of The Heartland Daily Podcast, Managing Editor of Budget & Tax News Jesse Hathaway speaks with Michelle Minton. Minton is a fellow at the Competitive Enterprise Institute. Minton and Hathaway discuss the recently introduced Restoring America’s Wire Act (RAWA). Minton explains how RAWA would benefit some very entrenched special interests at the expense of everyday Americans.

Ostensibly intended to crack down on Internet fraud, RAWA would actually make online gambling, a legal pastime for many Americans, illegal. According to Minton, RAWA is being supported by owners of physical casinos, who feel online gambling cuts into their business. Also, Minton explains how some of the bill’s supporters may lack the necessary technological information to make informed decisions on the issue, a situation which may lead to fewer entertainment choices for consumers, if the bill passes.

[Subscribe to the Heartland Daily Podcast for free at this link.]

Categories: On the Blog

Letter on Texas Alcoholic Beverage Code reform

Out of the Storm News - March 31, 2015, 2:45 PM

The Honorable Kevin Eltife
Chairman, Texas Senate Business and Commerce Committee
Texas State Capitol
Austin, TX 78711

Dear Chairman Eltife:

My name is Josiah Neeley, and I am Texas director of the R Street Institute, a free-market think tank devoted to developing pragmatic solutions to public-policy challenges. I write today to urge you and other members of the Business and Commerce Committee to support S.B. 609.

It’s been more than 80 years since America ended its ill-fated experiment with Prohibition. Yet the Texas Alcoholic Beverage Code is littered with provisions that serve little purpose other than to constrain competition and favor entrenched interests. Current Texas law prohibits publicly traded corporations (other than hotels) from competing in the retail sale of alcoholic spirits, while allowing private corporations to do so. Texas is the only state in the nation to have such a restriction, which serves no purpose other than as an anti-competitive measure.

Similarly, provisions in current law limit the number of package store permits to sell alcoholic spirits that a given individual or entity may own. Yet loopholes in the law for family members and hotels allow certain types of businesses to hold many times the ostensible limit.

These provisions do not advance any state interest in health, safety or welfare. They serve only to limit competition, harming consumers. The provisions are inconsistent with the mission of the TABC, which includes as a goal to “ensure fair competition within the alcoholic beverage industry.” S.B. 609 takes the necessary step of modernizing Texas’ alcohol regulation by removing these anti-free market restrictions from the code.

Sincerely,

Josiah Neeley
R Street Institute

NAIC rises above ‘No Action Is Contemplated’ on ride-sharing

Out of the Storm News - March 31, 2015, 11:50 AM

Regular attendees of the National Association of Insurance Commissioners’ thrice-yearly meetings are known to joke that NAIC actually stands for “No Action Is Contemplated.”

At the group’s latest meeting in Phoenix, the Sharing Economy Working Group rendered the basis of that humor a little less true.

California Insurance Commissioner Dave Jones, chairman of the working group, oversaw the development, vetting and adoption of a white paper to assist both regulators and legislators as they approach insurance issues related to ride sharing. R Street was pleased to be an early participant in the white paper’s development and to contribute suggestions that were adopted into the paper.

The final and ultimately adopted draft of the white paper was presented to the working group with a supplemental handout that reflected a public policy compromise between insurers and transportation network companies. That compromise, publicly disclosed first by R Street, was presented to the working group by Jeff Sauls, vice president of state legislative affairs for Farmers Insurance and Gus Fuldner of Uber.

Together, they characterized the deal as a victory not only for the burgeoning new ride share industry, but also as a sensible balance of insurance standards.

They’re right. But what’s more, instead of crafting a deal designed to preclude certain market actors, the compromise is fundamentally accommodating to competition and further development of both the TNC industry and innovative new hybrid insurance products.

For his part, Commissioner Jones was vocal in his praise for the deal saying: “Congrats, this is a tremendously positive development.”

Now that a deal has been struck, it is necessary to effectuate it on a state-by-state basis. In some states, that might be easier said than done. Some states have short legislative sessions that are already coming to a close. Other states have already adopted their own TNC legislation and, given how acrimonious the early encounters between insurers and TNCs were, legislators in those states may be unexcited about revisiting the issue.

In the coming months, it will be crucial for TNCs and insurers to continue to work together to make sure their hard work translates into law.

Toward that end, the white paper can be of some assistance. In essence, it highlights the questions for which the compromise has the answers. When presented together, legislators and regulators will be able to see just how well-considered and carefully crafted the deal is. Both documents are borne of negotiation and concession.

It is worthwhile to note that the NAIC Sharing Economy Working Group process, while at times painful, played a crucial part in allowing insurers and TNCs to come together outside of the hitherto exclusively adversarial legislative context. Such a role is where the NAIC can really excel, particularly when it acts quickly to provide a forum and embraces and encourages involvement on as broad a scale as possible.

Commissioner Jones and his staff at the California Department of Insurance should also be lauded for their time and commitment to the issue, as should the staff at the NAIC. Together, their patience and dedication was responsible for the creation of a forum that should, itself, be considered as a model of openness and fairness.

Thus, while “No Action Is Contemplated” will continue to get chuckles, those close to the process know that, at least sometimes, the NAIC really can get stuff done.

This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.

Diet, Gain Weight, Diet, Gain Weight

Somewhat Reasonable - March 31, 2015, 11:28 AM

My Mother taught gourmet cooking, haute cuisine, for three decades in the local adult schools, first just to women and later with courses just for men as they too wanted to learn how to make succulent dishes, delicious sauces, and to bake as well. She also wrote a cookbook, “Cooking with Wine and High Spirits”, as well as one filled with dishes that the colonial Americans enjoyed.

Meanwhile, at home, my Father and I dined daily like royalty and neither of us got fat. Why? Because eating well means listening to your body when it is hungry and not eating when it’s not. What we are never told amidst the hourly deluge of print and broadcast advertising and reports is that we are each quite individual in terms of inherited genetic traits and that our bodies have different needs as we age,

Instead we are told over and over again that we must be “thin” and that our bodies are not what the culture says is “beautiful.” Try watching television for an hour without getting this message. It starts early and, currently, the First Lady is dictating what school children should or should not eat. It’s none of her business, but it is most certainly big business when you calculate the billions earned by physicians giving nutrition advice, pharmaceutical companies, diet companies offering pre-prepared dinners, others saying their foods are healthier,  and all  the others that have climbed on the multi-billion dollar gravy train.

An excellent book by Harriet Brown, “Body of Truth”, ($25.99, Da Capo Press) should be must-reading for everyone who has spent their life obsessing about every bite of food they eat. Based on extensive research, over twenty pages of notes citing her sources, she says what virtually any physician, nutritionist, or diet-peddler already knows. “Unfortunately, the evidence suggests that dieting makes people neither thinner, nor healthier. Quite the opposite, actually nearly everyone who diets winds up heavier in the long run, and many people’s health suffers rather than improves, especially over time.”

“Each of us thinks our obsession with weight and body image is ours alone,” says Brown. “We blame ourselves for not being thin enough, sexy enough, shaped just the right way. We believe we’re supposed to fit the standards of the day” and it starts very early in life; by as early as three to five years old.

This is not a personal issue,” says Brown. “This is not about your weakness or my laziness or her lack of self-discipline. This obsession is bigger than all of us. It’s become epidemic, endemic, and pandemic.”

“Weight-loss treatments are cash cows,” says Brown, “in part because they don’t work; there’s always a built-in base of repeat customers.”

In page after page Brown cites facts that too often do not make it into the pages of the newspapers and magazines we read, or on the radio and television we listen to and watch. For example, “The average American is in fact heavier (by about twenty pounds) and taller (by about an inch) than we were in 1960. And dire predictions notwithstanding, the rates of overweight and obesity leveled off around 2000. We’re not actually getting heavier and heavier; our collective weight has pretty much plateaued.”

Moreover, all those psychotropic medications we’re being prescribed to treat anxiety, depression, bipolar disorder, personality disorders, psychoses, and other mental health conditions “are known to cause weight gain, especially when taken over a period of time.”

We are constantly told that being overweight or even obese takes years off one’s life, but Brown’s research found that neither condition increased a person’s risk of dying prematurely and being mildly obese increases it only slightly. As you might already suspect, it is the lack of physical activity that poses a great health risk.

Brown cites studies that found that being physically unfit was as much or more of a risk factor for heart disease and death as diabetes, obesity, and other weight-based risk factors. Researchers argue that “it’s better to be fit and fat than unfit and thin.

If any of this hits home with you, if you find yourself criticizing a child for their size and weight, looking in the mirror and being displeased with your own, obsessing over everything you eat or serve, then Brown’s words should be embraced when she says “We’d do better for ourselves and our children if, instead of pushing diets and surgeries and medications, we look at real-world strategies for eating more fruits and vegetables, getting enough sleep, dancing, playing sports, and other joyful physical activities.”

“Normal eating is going to the table hungry and eating until you are satisfied. It is being able to choose food you like and eat it and truly get enough of it—not just stop eating because you think you should.”

“Normal eating is giving yourself permission to eat something because you are happy, sad, or bored, or just because it feels good.”

Listen to what your body is telling you. The message has been passed down from generation to generation of your ancestors through your genetic code. Eat what you want. Stop dieting. Stay active and fit.

There’s countless, endless messages about your weight and how your body looks. When you decide to feel good about yourself, you will be free to ignore them.

[Originally published at Canada Free Press]

Categories: On the Blog

Discrimination in Indiana – Private or Political?

Somewhat Reasonable - March 31, 2015, 11:05 AM

Discrimination has become a “dirty word.” It has come to carry the “politically incorrect” connotation of prejudice, hatefulness, racism, and cruel intolerance towards others in society. There is only one problem: which one of us does not discriminate? Indeed, everything we do reflects discriminating choices and decisions.

The issue of discrimination has captured the headlines, once again, because of a recent law passed by the Indiana legislature and signed by the state’s governor, which allows people to not associate with those who are “gay” under certain circumstances, if such association were to conflict with their religious beliefs concerning sexual relationships between those of the same gender.

 

 

 

 

 

 

 

 

The Indiana Law and the Response

The law, as I understand it, does not allow the state government of Indiana to discriminate among the citizens on the basis of sexual orientation or any other standard. All Indianans still continue to have equality before the law. None of their civil liberties are abridged or violated by the legislation.

What the law does, as the press has described it, is permit individuals and businesses to choose not to associate with those whose sexual or other orientation crucially comes into conflict with some of their firmly held religious beliefs.

In response, according to the Associated Press, large demonstrations of hundreds of people were held in Indianapolis against the law. The BBC reported that Tim Cook, CEO of Apple, condemned the law, while the American Civil Liberties Union (ACLU) warned that the law threatened to open “the floodgates to discrimination against LGBT people.”  The Indiana Chamber of Commerce said the law “was entirely unnecessary.” Plus, a number of national businesses have suggested that they may limit or stop some of their business activities in Indiana if the law is not overturned or radically modified.

The Fundamental Principle of Freedom of Association

I would like to suggest that a wider principle is at stake here than simply this piece of legislation. It raises, again, the issue of the individual’s right of freedom of association.

First of all, we all discriminate because our time and resources are limited, and our interests, values and tastes are not all the same. If I am a vegetarian and I purchase broccoli instead of beef, I am discriminating against (refusing to commercially associate with) all those connected with the cattle raising industry. I diminish their ability to earn a living due to the forgone revenue they do not earn because I buy a vegetable product, instead.

If I buy economics books instead of romance novels, I discriminate against all those who author such widely read volumes of romantic fantasy and sexual suggestion. I like Frank Sinatra, Ella Fitzgerald, and Duke Ellington. So I have discriminated against Lady Gaga by never purchasing a ticket to go to one of her concerts.

Intentional and Unintentional Discrimination

It is possible that over the years there have been some people whom I have met who had wished that I had taken the time and interest to become their friend, and thus spent time with them over light discussion and serious conversation.

But I did not, because of other interests, other commitments and other people whom I found more interesting or important to me; in addition, time just did not enable me to include those others who I unintentionally discriminated against by not including them in my circle of friends and activities.

Sometimes the discrimination is intentional. Let’s be frank. Very rarely do we like to spend our “free time” with those whose views, values or attitudes differ so much from our own that interaction soon becomes nothing but irritating disagreement, argument, or even heated words of anger.

We enjoy interacting with those who share our same beliefs, values and attitudes about life, art, economics, politics and many other things. We join clubs or associations with those who have similar interests as our self.

I am not interested in joining a Nazi political organization or a “We Love Stalin” fan club. Neither am I interested in becoming a member of either the Republican or Democratic Party. By refusing to do so, I discriminate against all of these people, by intentionally not associating with them.

If you are heterosexual, you have discriminated against all those of the same sex as you who might have wanted to be romantically involved with you. At the same time, if you are homosexual, you have discriminated against all those of the opposite sex who found you attractive and a potential “partner.” And if you are bi-sexual, you have discriminated against all those of either sex who might have been interested in an intimate relationship with you.

There is no getting around human discrimination in every facet of life. Indeed, I would consider you, right now, to be the “discriminating reader” by choosing to take the time to read my article rather than someone else’s, or to do something different than read with your available time!

Anger at Seemingly Unfair Treatment

So why is there the opposition to this Indiana law or any similar piece of legislation? At one level, it can be taken to be an objection to judging a person by their beliefs, or values, or way of living their private life that may have nothing to do with the character or quality of that person.

Merely finding people of the same sex attractive does not mean you’re a “bad person,” or not someone of worth in terms of your skills, creativity, or knowledge and knowhow. And why should who you may or may not find romantically attractive have anything to do with someone refusing to rent you a house, or sell you a car, or take pictures at your wedding, for instance?

In “this day and age” it seems atavistic, crude and simply narrow-minded and mean. And so it may very well be. The world is full of people – sometimes right next door – who hold views, express beliefs, and act in ways that we consider wrong, misguided, and insensitive to others.

 

Compulsory “Anti-Discrimination”

But what is the proposed solution? Clearly it is to compel people with these “out-of-step” ideas to conform to “right acting” and “right thinking” through forced association imposed by the government.

In other words, disapproval of private non-coercive discrimination in matters concerning views about sexual orientation are to be remedied through compulsory “anti-discrimination” legislation by forcing some to associate with others who they do not want to associate with.

Furthermore, those who have said they may end all or some of their business activities in the state of Indiana as long as this law remains on the books are, themselves, practicing discriminatory collective guilt. They are marking all in the State of Indiana for “punishment,” even those who may not agree with this law or who are indifferent about the legislation and who never think about sexual orientation issues.

So the “innocent” are to be punished along with the “guilty” through a form of “guilt by association.” What is being said is, “We will refuse to have any business dealings with any of you until you get all of those in your state to accept our views on the social acceptability of sexual orientations.”

Now, in the free society anyone should be able to refuse to do business with anyone with whom they choose not to associate. So, these enterprises are in their right to choose not to do some or all of their business in the State of Indiana for whatever reason.

But what those threatening such a boycott want is for the State of Indiana to force citizens in that state to be coerced into associative relationships into which they do not want to enter. In other words, this is a threatened economic boycott for purposes of gaining legal privileges for some at the expense of others – the compelling of commercial interactions that not all possible participants want to be a part of.

The Broader Issue of Freedom of Association

This broader issue has nothing to do, per se, with whether or not those with strong anti-homosexual religious views and values are right or wrong. One can strongly believe that such views and values are misplaced or out-of-date in these “modern times.”

The more fundamental issue is one of whether or not an individual may or may not be compelled into associations and relationships with those who they do not want to do business, or indeed to have any interaction?

Should a black photographer be required to take photos at a neo-Nazi wedding with banners saying “Death to All N_ _ _ _ _s”? Should a devote Muslim running a catering business be required to prepare and serve pork, if insisted upon at a Christian family gathering? Should an atheist running a printing business be compelling to publish religious works calling for the silencing of all non-believers as agents of the Devil?

And if not, then on what reasonable or objective basis is it to be determined whose beliefs and values are to be protected as “freedom of association” and whose are not – other than social and ideological fads and fashions of the particular time and place, and those who can succeed in gaining the ear of and influence over those who can pass the relevant legislation?

A free society does not come without a price. Part of that price is the realization and acceptance that there are and always will be people in society who hold views very different from one’s own, and live their lives accordingly.

 

Government Coercion Should Not be the Answer

Bringing government into these matters merely brings coercion to the table, and therefore makes politics even more than it already is a war for power and control to impose one set of beliefs and values over another on the members of society.

The benefit from leaving discrimination issues out of the political arena is that it remains part of the private sphere. And in the private sphere everyone must weigh the costs and benefits from their own actions and interactions with other private individuals.

A racist or a homophobe is free to discriminate on that basis in the society, and if he runs a business he can refuse to hire those he considers racially inferior or sexually unacceptable. But there is a cost. He misses the opportunity to employ those of useful and profitable skills, abilities and talents, who end up finding jobs with his competitors who place more importance on a financial “bottom line” than personal prejudice.

He equally forgoes the business that could have been his from turning down customers that he chooses not to sell to and deal with, and his rivals gain those sales and larger revenues, instead.

Such an individual may still decide that given his beliefs and values the cost is worth bearing for the benefit of not participating in such commercial associations.

However, the advantage of leaving such matters to the marketplace and out of the legislative halls of power is that his prejudices do not control the decisions of other businessmen or anyone else in society. He can be as anti-homosexual as he wants in his hiring practices and customer dealings. But he cannot prevent any existing or potential competitors from having a different “orientation” – will hiring this individual or accepting this person’s business make me more money and give me an enlarged market share compared to my racist or homophobic rival?

In the eyes of the friend of freedom this is the ethically superior and socially more sustainable manner of breaking down and finally eliminating many misplaced and even irrational prejudices, superstitions, and atavistic attitudes and actions.

The path of using political power to try to bring about changes in social attitudes and actions is both morally wrong and often far too counter-productive.

The road to liberty, equality, and tolerance runs through a respect for and defense of individual rights of freedom of association, not by way of collective punishment and group privilege.

 

[Originally published at Epic Times]

 

Categories: On the Blog

Texas’ Welfare Rolls Shrink, Rick Perry Deserves Praise

Somewhat Reasonable - March 31, 2015, 10:07 AM
 Editor’s Note: This Op-Ed was written and submitted to Breitbart Texas by Logan Pike and Justin Haskins with The Heartland Institute.

They say “everything is bigger in Texas,” but Texas’ welfare rolls are shrinking, and presidential hopeful and former Gov. Rick Perry (R) deserves a lot of the credit.

When Perry first became governor of Texas in 2000, the number of people enrolled in the state’s Temporary Assistance for Needy Families (TANF) program was well over 300,000. Since then, the number has declined to below 80,000, and a new study says key policy changes help explain why.

On March 19, The Heartland Institute, a free-market think tank in Chicago, released its updated welfare reform report card, an analysis of every state’s welfare policies since the passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) in 1996.

Passed by the Republican-led Congress and signed into law by President Bill Clinton, PRWORA presented states with a significant opportunity to reform welfare systems. Since it became law, welfare rolls in the United States have been reduced by more than 9 million, a decrease of 73 percent.

This incredible turnaround occurred to some extent in every state, but data clearly show some state governments took advantage of the changes offered by the federal government better than other states.

In Texas, greater flexibility offered by PRWORA allowed Republican Governors George W. Bush and Perry to implement sweeping reforms to stagnant programs that were providing little, if any, success at moving people out of poverty.

Authors of the Heartland study, titled “2015 Welfare Reform Report Card,” say although academic research conducted to determine which policies are more successful than others have produced varying results, some agreement exists on which strategies lead to overall positive outcomes.

For instance, integrating welfare and other social services so that individual case managers have all the necessary tools at their disposal to assist recipients who walk through their doors is an essential part of improving welfare reform. Requiring work in order to receive benefits, mandated job training, and establishing firm limits for how long recipients can receive government aid are also important reforms that have proved to be successful for states who utilize these strategies.

Another reform, one that many pundits spend little time talking about but has produced many positive outcomes, is cash diversion. Cash diversion policies allow social services case managers to offer lump sums of money for recipients to use when there is an immediate financial need, such as when a recipient’s car breaks down. In return for the money, the recipient agrees not to receive TANF funding for an agreed-upon period. These policies help people get through tough economic trials without becoming dependent on government services.

Of the five major categories of welfare reform policies presented in Heartland’s study, Texas received exceptional scores in work requirements and cash diversion; a respectable grade of “B” in service integration; a “C” in sanctions, and a poor grade of “D” for failing to establish significant time limits for recipients. Overall, Texas’ policies were ranked 10th among all states and earned a grade of “B+.”

The study also revealed Texas’ outcomes were exceptional. Texas scored in the top 10 in unemployment, overall poverty rates, and TANF recipient decline, improving in each of those categories from Heartland’s previous report card released in 2008. Overall, Texas’ welfare reform outcomes ranked third in the United States.

Although Perry has yet to officially announce his candidacy for the Republican presidential primary, all indications are he’ll be one of the bigger names in the race once things heat up at the end of the summer. At the moment, it’s unclear what Perry’s chances are in the 2016 race, but expect the former governor to tout his record on welfare reform, and rightfully so.

[Published on Breitbart]

Categories: On the Blog

Aren’t We All Looking Forward to ‘Internet at the Speed of Government?’

Somewhat Reasonable - March 31, 2015, 9:58 AM

We were on February 26 subjected to the hugest of Barack Obama Administration Internet power grabs.  Where the Administration unilaterally decided to start applying 1934 landline telephone law to the 21st-Century-Web.

This government grab was made under the guise of Network Neutrality – but this flashback-to-New-Deal phone law is oh-so-much-worse.  The Administration has appointed itself the overlord of just about every private sector decision, transaction and innovation.

This is Mother-May-I-Do-Anything-At-All uber-regulation.  It will eviscerate the free-speech-free-market-Xanadu Web we all know and dearly love.

Texas Republican Senator Ted Cruz has been an outspoken opponent of all of this.  And has been criticized by the Left and the Media (please pardon the redundancy) for the ways he has phrased his opposition.

Ted Cruz Says Net Neutrality Is ‘ObamaCare For The Internet’

Admittedly, we too have long disagreed with this assessment.  Sort of.  And not in the way the Democrat-Media-Complex has.

Net Neutrality Power Grab Is Worse than ObamaCare

And in fact…

What’s Even Worse than Net Neutrality? Government Internet Reclassification to Do It

It’s worse for several reasons.  Not the least of which is – at least ObamaCare passed the People’s elected Congress (well, sort of).

Net Neutrality was unilaterally imposed by three unelected Democrat bureaucrats at President Obama’s Federal Communications Commission (FCC).  An overwhelming majority of the People’s elected Congress have long been opposed to the entire mess.

When Senator Cruz made the ObamaCare-Net Neutrality comparison – out quickly came the knives.

‘ObamaCare for the Internet’? Net Neutrality, Ted Cruz, and the Danger of Bad Analogies

They REALLY didn’t like the comparison.

The ‘Net Neutrality is ObamaCare for the Internet’ Guy is Running for President

Which is bizarre.  They like ObamaCare.  They like Net Neutrality.  Why the lurching defensiveness?

ObamaCare Is More Unpopular Than Ever

Senator Cruz also rightly described an inexorable result of Net Neutrality.

“Internet should not operate at the speed of government.”

And what does that look like?

Government violates the Wallet Rule:

If you go out on a Friday night with your wallet, and you go out the following Friday night with my wallet – on which Friday night will you have more fun?

 

Another ObamaCare Delay

Doctor Wait Times Rise As ObamaCare Rolls Out

A Fatal Wait: Veterans Languish and Die on a Veterans Administration (VA) Hospital’s Secret List

FEMA’s Wasteful, Slow Response to Sandy: ‘Disaster Socialism’?

Ebola Crisis: Government Response ‘Far Too Slow’

Why People in The Government Sector Work Slow

Slow Government: Why is Government So Darn Slow?

 

DMVs, anyone?  And how is the government at handling technology?

Healthcare.gov Technical Problems

ObamaCare Vendor Blames U.S. Agency for Website Delays

Another Delay: Open Enrollment ObamaCare Deadline to (Again) Be Moved

Why US Government IT Fails So Hard, So Often

Federal Managers Love Technology but Fear Government is Slow at Adopting It

Agencies Waited Nearly a Month and a Half to Fix High-Threat Vulnerabilities

Why Is the Government Slow to Adopt Cloud Computing?

Government Tech Problems: Blame The People Or The Process?

Why quibble?  It’s both.  Because government violates the Wallet Rule.

If you go out on a Friday night with your wallet, and you go out the following Friday night with my wallet – on which Friday night will you have more fun?

Government is ALWAYS on someone else’s wallet.  It will thus never spend money as wisely or well as we who earned it.

How does the FCC – that just commandeered control of the Internet – do with tech?

Government Agency That Wants To Commandeer The Internet Just Had Their Website Crash – Twice

Vice Claims FCC Website ‘Hacked,’ FCC Doesn’t Appear Sure

Vice was right – the FCC was clueless.

The FCC Was Hacked

And how’s this for additionally reassuring?

FCC Says It Wasn’t Hacked, Its Commenting System is Just Old

How quick is the FCC to expedite their decision-making process – now that they have oh-so-many-more decisions to make?  Remember – just every Internet provider now has to wait to do just about anything unless and until the FCC approves.  The private sector is frozen in amber until the Commission gives the thumbs-up.

FCC Delays Net Neutrality Decision

FCC Delays Decision On Wireless Broadband

(For Second Time) FCC Delays Decision On NBC-Comcast Merger

FCC Delays Review of Comcast-Time Warner Cable and AT&T-DirecTV Mergers

FCC Asks Federal Court to Delay Decision on Challenge to Its New USF Plan

FCC Delays Decision on TV Nudity, Profanity

And perhaps the quintessential example of the delay-damage government will do?  Behold this story from March 23, 2015:

FCC Fines TV Station for Nudity

When did the offense occur?

A Roanoke, Virginia, station accidentally aired a brief pornographic video clip during its evening newscast on July 12, 2012….

Nearly three years it took the government – to make a decision the private sector would make in about three seconds.

Won’t Internet-at-the-speed-of-government be great?

Categories: On the Blog

Grasping For Pause-ible Deniability On Climate Change

Stuff We Wish We Wrote - Homepage - March 30, 2015, 4:33 PM
Climate change has a major problem on its hands: the Earth’s average surface temperature has failed to significantly increase in nearly two decades, and all…

Heartland Weekly: What Grade Did Your State Earn on Welfare Reform?

Blog - Education - March 30, 2015, 2:59 PM

If you don’t visit Somewhat Reasonable and the Heartlander digital magazine every day, you’re missing out on some of the best news and commentary on liberty and free markets you can find. But worry not, freedom lovers! The Heartland Weekly Email is here for you everyFridaywith a highlight show.

Subscribe to the email today, and read this week’s edition below.

Greenpeace Co-founder: Why I Am a Climate Change Skeptic
Patrick Moore, the Heartlander
“The IPCC’s followers have given us a vision of a world dying because of carbon-dioxide emissions. I say the Earth would be a lot deader with no carbon dioxide, and more of it will be a very positive factor in feeding the world. Let’s celebrate carbon dioxide.” READ MORE

  Why Republicans Need to Repeal Obamacare One More Time
Ben Domenech, the Heartlander
Republicans need to take the important step of actually sending the Obamacare repeal to the president’s desk in their budget – simply to prove to the media and the populace that the law can be repealed via that method. It will clarify the matter for voters and turn 2016 into a clear-cut election that will decide whether the law stands or falls. READ MORE

Heartland’s 2015 Welfare Reform Report Card
Which states got straight As for their welfare reform policies? Which states are at the bottom of the class? Find out by using Heartland’s new interactive map for the 2015 Welfare Reform Report Card. The result of two years of research, this new report examines who is implementing the best policies for pulling people out of poverty and into a productive life of work and responsibility. READ MORE

  INTERVIEW: Patrick Moore Makes the Case for Climate Skepticism, Biotech Foods
Host Sterling Burnett talks to Patrick Moore, chairman of Allow Golden Rice, about why he helped found and ultimately left Greenpeace because it became “anti-human.” That tendency is exemplified by how the environmental left is against vitamin-enriched Golden Rice, which would save millions of children in the world’s poorest countries. READ MORE

 

Heartland Is Hiring!
Do you believe in smaller government and more individual liberty? Do you believe free markets solve social and economic problems better than government planning? The Heartland Institute might have just the job for you! We’re looking for eager self-starters to manage several important projects that will have a real impact on policy in this country. READ MORE

Seven States that Deserve an ‘F’ for their Welfare Programs
Gary MacDougal and Justin Haskins in The Hill
Despite the many improvements in the welfare system since the 1996 overhaul, many states’ welfare programs continue to lag behind the rest of the nation because they fail to implement simple, common-sense reforms. Heartland’s 2015 Welfare Reform Report Card identifies the worst of the worst. READ MORE

  Education Trend: Number of Homeschooling Black Families Skyrockets
Heather Kays, the Heartlander
“I think parents just got tired of asking for the educational system to understand their children, so they became the educational institution that they wanted to see. We have participated in a field trip to Biltmore Estates to learn about the farm-to-table movement, studied 1800s life in historic Roswell, walked the path of the Birmingham Civil Rights marches, visited a wildlife rescue, and toured the historic home of Laura Ingalls Wilder. These are all trips that we could have taken on a weekend, but it would have felt rushed. The fact that we were able to complete these trips as part of our homeschool curriculum made it more enjoyable.” READ MORE

  Climate Witch Hunt Is Bad for Science, Bad for Witch Hunters
H. Sterling Burnett in the Daily Caller
“Desperate times breed desperate measures, and for climate alarmists these are desperate times. … Perhaps this explains their desperate attempts to smear the reputations of climate researchers who scientifically reject any aspect of the ‘human-catastrophic-climate-change-connection.’” READ MORE

  Featured Podcast: Adam C. Smith: Lyft and Uber Ridesharing
Budget & Tax News Managing Editor Jesse Hathaway is joined by Heartland Institute policy advisor and Johnson & Wales University associate economics professor Adam C. Smith. They discuss Virginia’s recent legalization of sharing-economy transportation companies Lyft and Uber. LISTEN TO MORE

John Stossel Tackles Chicago Corruption
Fox Business Channel’s John Stossel aired an hour-long special about political corruption in Chicago. Right. We had the same reaction: Only one hour? Heartland friend Adam Andrzejewski of OpenTheBooks.com was a guest of Stossel and described The Chicago Way – how a city came to pioneer corrupt practices. READ MORE

Millennials’ Dangerous Growing Addiction to Government
Justin Haskins in The Blaze
“When a friend and recent college graduate informed me he was receiving food stamps, I was floored. He is a healthy, educated, intelligent individual, but, like many of the millennials I know, entitled. Completely and utterly entitled. … Somewhere in Fairfax County, Virginia, George Washington is rolling over in his grave.” READ MORE

 

Overhaul Public Pensions Now
Jesse Hathaway in the Riverside (CA) Press-Enterprise
Unless local and state governments act now, a tsunami of underfunded public pension plan obligations will soon rush ashore and drown taxpayers with tax hikes and crippling debt.READ MORE

The FCC Delivers the Latest Dose of Obama Cronyism
Seton Motley, Somewhat Reasonable
“The Obama administration rewarding its friends and punishing its enemies – the Crony Socialist twofer. It’s way past time for Huge Government to stop trying to micro-manipulate the private sector. The ends never justify the means – and the intended ends are never met.” READ MORE

Invest in the Future of Freedom!
Are you considering 2015 gifts to your favorite charities? We hope The Heartland Institute is on your list. Preserving and expanding individual freedom is the surest way to advance many good and noble objectives, from feeding and clothing the poor to encouraging excellence and great achievement. Making charitable gifts to nonprofit organizations dedicated to individual freedom is the most highly leveraged investment a philanthropist can make.

Click here to make a contribution online, or mail your gift to The Heartland Institute, One South Wacker Drive, Suite 2740, Chicago, IL 60606. To request a FREE wills guide or to get more information to plan your future please visit My Gift Legacy http://legacy.heartland.org/ or contact Gwen Carver at 312/377-4000 or by email at gcarver@heartland.org.

Heartland Weekly: What Grade Did Your State Earn on Welfare Reform?

Somewhat Reasonable - March 30, 2015, 2:59 PM

If you don’t visit Somewhat Reasonable and the Heartlander digital magazine every day, you’re missing out on some of the best news and commentary on liberty and free markets you can find. But worry not, freedom lovers! The Heartland Weekly Email is here for you everyFridaywith a highlight show.

Subscribe to the email today, and read this week’s edition below.

Greenpeace Co-founder: Why I Am a Climate Change Skeptic
Patrick Moore, the Heartlander
“The IPCC’s followers have given us a vision of a world dying because of carbon-dioxide emissions. I say the Earth would be a lot deader with no carbon dioxide, and more of it will be a very positive factor in feeding the world. Let’s celebrate carbon dioxide.” READ MORE

  Why Republicans Need to Repeal Obamacare One More Time
Ben Domenech, the Heartlander
Republicans need to take the important step of actually sending the Obamacare repeal to the president’s desk in their budget – simply to prove to the media and the populace that the law can be repealed via that method. It will clarify the matter for voters and turn 2016 into a clear-cut election that will decide whether the law stands or falls. READ MORE

Heartland’s 2015 Welfare Reform Report Card
Which states got straight As for their welfare reform policies? Which states are at the bottom of the class? Find out by using Heartland’s new interactive map for the 2015 Welfare Reform Report Card. The result of two years of research, this new report examines who is implementing the best policies for pulling people out of poverty and into a productive life of work and responsibility. READ MORE

  INTERVIEW: Patrick Moore Makes the Case for Climate Skepticism, Biotech Foods
Host Sterling Burnett talks to Patrick Moore, chairman of Allow Golden Rice, about why he helped found and ultimately left Greenpeace because it became “anti-human.” That tendency is exemplified by how the environmental left is against vitamin-enriched Golden Rice, which would save millions of children in the world’s poorest countries. READ MORE

 

Heartland Is Hiring!
Do you believe in smaller government and more individual liberty? Do you believe free markets solve social and economic problems better than government planning? The Heartland Institute might have just the job for you! We’re looking for eager self-starters to manage several important projects that will have a real impact on policy in this country. READ MORE

Seven States that Deserve an ‘F’ for their Welfare Programs
Gary MacDougal and Justin Haskins in The Hill
Despite the many improvements in the welfare system since the 1996 overhaul, many states’ welfare programs continue to lag behind the rest of the nation because they fail to implement simple, common-sense reforms. Heartland’s 2015 Welfare Reform Report Card identifies the worst of the worst. READ MORE

  Education Trend: Number of Homeschooling Black Families Skyrockets
Heather Kays, the Heartlander
“I think parents just got tired of asking for the educational system to understand their children, so they became the educational institution that they wanted to see. We have participated in a field trip to Biltmore Estates to learn about the farm-to-table movement, studied 1800s life in historic Roswell, walked the path of the Birmingham Civil Rights marches, visited a wildlife rescue, and toured the historic home of Laura Ingalls Wilder. These are all trips that we could have taken on a weekend, but it would have felt rushed. The fact that we were able to complete these trips as part of our homeschool curriculum made it more enjoyable.” READ MORE

  Climate Witch Hunt Is Bad for Science, Bad for Witch Hunters
H. Sterling Burnett in the Daily Caller
“Desperate times breed desperate measures, and for climate alarmists these are desperate times. … Perhaps this explains their desperate attempts to smear the reputations of climate researchers who scientifically reject any aspect of the ‘human-catastrophic-climate-change-connection.’” READ MORE

  Featured Podcast: Adam C. Smith: Lyft and Uber Ridesharing
Budget & Tax News Managing Editor Jesse Hathaway is joined by Heartland Institute policy advisor and Johnson & Wales University associate economics professor Adam C. Smith. They discuss Virginia’s recent legalization of sharing-economy transportation companies Lyft and Uber. LISTEN TO MORE

John Stossel Tackles Chicago Corruption
Fox Business Channel’s John Stossel aired an hour-long special about political corruption in Chicago. Right. We had the same reaction: Only one hour? Heartland friend Adam Andrzejewski of OpenTheBooks.com was a guest of Stossel and described The Chicago Way – how a city came to pioneer corrupt practices. READ MORE

Millennials’ Dangerous Growing Addiction to Government
Justin Haskins in The Blaze
“When a friend and recent college graduate informed me he was receiving food stamps, I was floored. He is a healthy, educated, intelligent individual, but, like many of the millennials I know, entitled. Completely and utterly entitled. … Somewhere in Fairfax County, Virginia, George Washington is rolling over in his grave.” READ MORE

 

Overhaul Public Pensions Now
Jesse Hathaway in the Riverside (CA) Press-Enterprise
Unless local and state governments act now, a tsunami of underfunded public pension plan obligations will soon rush ashore and drown taxpayers with tax hikes and crippling debt.READ MORE

The FCC Delivers the Latest Dose of Obama Cronyism
Seton Motley, Somewhat Reasonable
“The Obama administration rewarding its friends and punishing its enemies – the Crony Socialist twofer. It’s way past time for Huge Government to stop trying to micro-manipulate the private sector. The ends never justify the means – and the intended ends are never met.” READ MORE

Invest in the Future of Freedom!
Are you considering 2015 gifts to your favorite charities? We hope The Heartland Institute is on your list. Preserving and expanding individual freedom is the surest way to advance many good and noble objectives, from feeding and clothing the poor to encouraging excellence and great achievement. Making charitable gifts to nonprofit organizations dedicated to individual freedom is the most highly leveraged investment a philanthropist can make.

Click here to make a contribution online, or mail your gift to The Heartland Institute, One South Wacker Drive, Suite 2740, Chicago, IL 60606. To request a FREE wills guide or to get more information to plan your future please visit My Gift Legacy http://legacy.heartland.org/ or contact Gwen Carver at 312/377-4000 or by email at gcarver@heartland.org.

Categories: On the Blog

Heartland Daily Podcast: Bette Grande – Hydraulic Fracturing on Federal and Indian Lands

Somewhat Reasonable - March 30, 2015, 2:37 PM

The federal government has issued its first rules designed to regulate the use of hydraulic fracturing on federal and Indian lands. These regulations will require the disclosure of the chemical additives used in the fracking process, specify construction standards for well casings and require drillers to test these casings prior to fracking, require drillers to submit geological information to the federal government, and regulate how wastewater from oil and natural gas production is stored.

Heartland Institute Research Fellows Isaac Orr and Bette Grande discuss the pro’s and con’s of the new regulations and discuss the projected costs of the new rules. One of the larger concerns of these new rules is an increase in the amount of time it takes to get the wells permitted, which can lead it increased costs to producers as they may have higher labor expenses if permits are not approved in a timely manner.

Categories: On the Blog

The Geopolitics of Oil Go Round and Round

Somewhat Reasonable - March 30, 2015, 11:26 AM

Many complicated factors contribute to the global price of a barrel of oil, but two of the leading components are supply and risk—and both have the potential to escalate in the days ahead. The current region-wide sectarian war could easily bump oil prices up dramatically. And, the expected nuclear deal with Iran could drop them—dramatically.

Oil price predictions today play like a game of roulette, or a carnival barker of days gone by, round and round it goes, where she stops, nobody knows.

A few weeks ago, addressing the need to open up access to mid-Atlantic oil resources, I wrote:

“With the current oil abundance, it may seem like an odd time to be going after more. However, the legal wheels that could allow limited access to the vast, untapped oil resources move very slowly. Today’s market conditions will fluctuate between now and 2035 when the global demand for energy is expected to spike. Not to mention the increasingly volatile situation in the Middle East, where new coalitions are already being formed: Iran and Iraq, Saudi Arabia and South Korea—just to name two. If one more beheading takes place or a bomb hits the right (or wrong) target, the region could erupt, and the entire energy dynamic would change. Considering the variables, American energy security is always something worth pursuing.”

Well, now the “entire energy dynamic” has changed.

First, the obvious: war in the Middle East.

Middle East unrest has historically sent oil prices soaring. With the recent regional conflicts involving ISIS, however, prices have continued to drop due to OPEC’s increased supplies, led by Saudi Arabia, in response to the new American energy abundance that changed the entire energy dynamic.

That dynamic has just changed again.

Referencing ISIS and the growing terrorism throughout the region, Jordan’s King Abdullah said in December, “this is our world war three.” At the time, pundits reacted with something akin to “well, maybe.” But that was then. Now, Saudi Arabia, backed by King Abdullah—who has declared “Jordan is fully committed to the Arab military effort in Yemen”—and an Arab coalition including the United Arab Emirates, Qatar, Bahrain, Egypt, and Kuwait, plus Morocco and Pakistan, who’ve expressed interest in joining, with intelligence and logistics support from the U.S., is bombing Yemen’s Houthi rebels, who have received training, weapons, and advisors from rival Iran.

As a result of the offensive, CNN Money reported: “Oil prices bounced higher on Thursday as Saudi Arabia launched airstrikes in Yemen, raising concerns that a regional conflict could disrupt supplies.” It added, “Saudi Arabia is the world’s largest oil producer, and investors fear its involvement in the unrest could have a negative impact on production.”

In one story, the Financial Times (FT), pointed to Yemen’s limited oil production and stated: “The attack is not expected to cause any major disruption to supplies.” And, in different coverage: “even as some observers raised concerns, others were more muted due to the size of Yemen’s oil output.”

Obviously, no one knows where “she’ll stop.” But the factor of “risk” which according to Richard Mallinson, geopolitical analyst at the London-based consultancy Energy Aspects, the markets had “since last year turned away from paying attention to,” is back. The FT quotes him as saying: “The reality is that geopolitical risk is as high as it has been in a long time.” Increased risk means higher prices.

It gets more complicated.

The Obama administration continues to negotiate with Iran with the intent of crafting a nuclear deal that will, ultimately, lift the sanctions against the oil-producing county—which would allow it to increase oil exports. Because of the sanctions, Iran’s oil exports have been cut in half—resulting in a “severely strained economy.” Iran has large amounts of oil already in storage and, according to the FT, “will fight for its market share.”

Iran wants the sanctions lifted immediately. If that happens, the FT reports there will be “an injection of hundreds of thousands of barrels a day into the oil market already struggling with a crude overhang”—which “could depress prices further.” Increased supply means lower prices.

Energy economist Tim Snyder explains it this way: “The Iranians will be free to put another 1 million barrels of crude oil production on the world market. The Iranian production will represent a doubling of the current oversupply vs. world demand and will put additional downward pressure on the world crude oil price.”

Frequently calling us “the great Satan,” Iran continues to hate the U.S. Falling oil prices could serve as a death knell to America’s oil abundance (not to mention countries, such as Venezuela, that depend on oil revenues). However the low prices would, overall, be good for western economies—but bad for Iran and its friend, Russia.

The way to better benefit the Iranian economy, once sanctions are lifted, is to raise oil prices—which Iran can do through the war in Yemen.

Perhaps Saudi Arabia jumped the gun in its attacks in Yemen. Perhaps, Iran thought it would have the deal with the P5 +1 group (U.S., U.K., France, Russia, China, and Germany) signed before the unrest pushed up the prices.

With Iran calling the shots in Yemen, it (not the friendly-to-the-west president) could control the Bab el-Mandeb strait and the million barrels of crude oil that pass through the strait each day, not to mention, the goods that transit the strait coming from the Far East. CNN Money notes: “Adding to the uncertainty is Yemen’s strategic location on a shipping route linking the Mediterranean and the Indian Ocean.” Each day, upwards of 3.8 million barrels of oil and refined petroleum products flow through the Bab el-Mandeb strait to the Red Sea—making it one of the world’s key oil chokepoints. Blocking the strait could cause a major disruption in global crude oil prices.

But there is more.

Iran can impede the flow of traffic through the Strait of Hormuz, which is the world’s most important oil chokepoint with 17 million barrels of oil a day (representing more than 30 percent of the world’s seaborne-traded oil) flowing through it.

With the ability to disrupt both straits, Iran would have the ability, if the sanctions are lifted due to the Obama administrations’ eagerness for a deal, to potentially escalate the price of oil to $200 a barrel—which would, not only change the geopolitics, but world economies as well. (Remember, Iran didn’t support OPEC’s November decision to keep production high and prices low.) Iran would be controlling a large part of the worldwide flow of oil and the high prices would boost, not only its economy, but Russia’s as well—while the limited access punishes Saudi Arabia and the high prices could badly damage Western economies. And, neither Iran nor Russia has to increase production to benefit—but if they do, their economic return becomes even greater.

Will Iran sign the deal and have its sanctions removed, allowing it to inject millions of barrels of oil into an already glutted global market? Whether or not it signs the deal, Iran can still penalize the U.S. and Saudi Arabia, and as a result the rest of the world—making Yemen a spot on the map we should all care about.

Round and round she goes, where she stops nobody knows. “Considering the variables, American energy security is always something worth pursuing.”

Categories: On the Blog

Moylan on the Heartland Daily Podcast

Out of the Storm News - March 30, 2015, 11:21 AM

R Street Executive Director Andrew Moylan recently joined Jesse Hathaway, managing editor of the Heartland Institute’s Budget & Tax News, for a discussion of recently reintroduced proposals to grant states the authority to collect taxes on remote sales from businesses not located within their borders. You can hear full podcast here.

 

This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.

How Texas Can Take the Lead on School Choice

Stuff We Wish We Wrote - Homepage - March 30, 2015, 11:15 AM
Austin, Texas When the founding fathers of Texas gathered at Washington-on-the-Brazos nearly two centuries ago and set forth their reasons for separation from…

How Gov. Bentley stopped being a conservative on taxes

Out of the Storm News - March 30, 2015, 10:47 AM

First came his signing of the Taxpayer Protection Pledge in 2010, which reads: “I, Robert Bentley, pledge to the taxpayers of the state of Alabama, that I will oppose and veto any and all efforts to increase taxes.”

That sounds pretty clear to most Alabama voters, and signing it made plenty of political sense for Bentley’s gubernatorial aspirations. The last time voters directly faced a sizable tax increase, one supported by the Business Council of Alabama and a powerful Alabama Education Association, 68 percent of them soundly defeated it.

Not surprisingly, as a popular governor highlighting his “right-sizing” of government and honoring his pledge not to raise taxes, Gov. Bentley cruised to re-election in 2014. Never did Gov. Bentley suggest during his re-election bid that he would push tax hikes if he found his streamlining efforts to be insufficient to keep state budgets in the black.

The governor did not find out about the General Fund budget issues after the 2014 election. He knew the budget challenges facing the state’s General Fund as early as 2011. In 2012, Alabama approved a constitutional amendment moving $437 million to the state’s General Fund from the Alabama Trust Fund over three years. If the General Fund was fine, why did it need the infusion of cash?

Then came the waffle.

Bentley explained his evolving stance by saying, “I did sign a no-tax pledge my first four years. I did not sign it the last four years.”

“What we did the first four years, we streamlined, we cut, we consolidated, we did everything that was necessary to make our state more efficient and we’ve done that,” he said. “Now, it’s halftime, little bit past halftime in fact, but we don’t have enough money to fund the general fund.”

Apparently nobody mentioned to Bentley that a conservative governor is not supposed to increase taxes after halftime.

The governor initially couched his tax plan as an ugly necessity but seemed resigned to letting the Legislature develop its own response. After all, he encountered so much resistance seeking Republican sponsors for his tax measures that Democrats introduced bills for him.

Alabama’s governor is no longer reluctantly resigned to simply proposing tax increase; he is leveraging state highway funds against legislators and touring the state to garner support for his tax hikes. He even has a tax-exempt organization promoting the tax increases on his behalf.

“Please give your legislators some cover,” he said to a meeting of the Birmingham Business Alliance. “It’s hard to vote for a tax, especially if you ran on a no-tax pledge.”

In fact, it is hard to be credible at all if you make a pledge to your constituents, earn their vote and then violate that critical promise. The Bentley many Alabamians voted for is a straight-shooting doctor who loves Alabama and told them he would not raise their taxes.

If that were not enough, one of the governor’s chief jobs is to convince businesses that Alabama is a better place to invest than neighboring states. While those states are exploring ideas like reducing their income tax or eliminating it entirely, Alabama’s governor is pounding pavement asking for a net tax increase. Which sounds like a better economic sales pitch to you?

Now things are just getting plain strange. Gov. Bentley is trying to persuade Alabamians that his tax increases are conservative. “There is nothing more conservative than paying your debts and getting your financial house in order,” he says.

Paying off debts and financial stewardship are conservative ideals, but a several hundred million dollar tax increase is not. Period.

Unfortunately for Gov. Bentley, most state legislators know that the political costs of reducing state government and eliminating services is far less than voting to increase taxes and grow government. If the people of Alabama want a tax increase, they will elect politicians to do just that.

They have not, and I am willing to bet that reality does not change the next time Alabama’s legislators are on the ballot and Gov. Bentley is not.

The U.S. Postal Service’s existential problem

Out of the Storm News - March 30, 2015, 10:38 AM

The U.S. Postal Service has an existential problem. For five years, the agency has flirted with insolvency. It has $15 billion in debt, its statutory maximum. According to its most recent financial statement, the USPS:

[C]ontinues to suffer from a lack of liquidity. Cash balances remain insufficient to support an organization with approximately $73 billion in annual operating expenses. The Postal Service’s average daily cash and cash equivalents balances during the three months ended December 31, 2014 were $5.7 billion, which represents only 21 days of operating cash.

To conserve cash, the agency has put off many capital investments. The service’s 140,000-vehicle fleet is more than two decades old and needs to be replaced. The Postal Service has not made any payments into its Retiree Health Benefits Fund since 2008, meaning its $50 billion in unfunded health-care obligations are not getting any smaller. The agency has tried to shave overhead costs by not replacing hundreds of thousands of retiring employees, and closing post offices or reducing their operating hours. (Most post offices lose money.) The agency also plans to go forward with closing roughly 80 of its mail-sorting plants. If Congress allowed it, the Postal Service would end Saturday mail delivery (except for parcels).

How the agency will escape its debt and return to financial sustainability is anything but certain. The service’s existential crisis, however, goes far deeper than finances. Its very raison d’etre has disintegrated. The act that birthed the modern, reorganized USPS declares:

The Postal Service shall have as its basic function the obligation to provide postal services to bind the Nation together through the personal, educational, literary, and business correspondence of the people.

That was drafted in 1970. Back then, long-distance telephone calls were fantastically expensive for most consumers, and facsimiles were few. Pop songs of the time, like Rod Stewarts’ 1972 hit, “You Wear It Well,” spoke of lovers writing precious letters to one another. When letter carriers went on strike in 1970, President Richard Nixon took to television to announce that he would contend with the threat. National Guardsmen were sent in to replace the wildcatters. Mail was king and the Postal Service could expect to reap profits as a monopolist.

Those days are long, long gone. As Elaine Kamarck previously pointed out on FixGov: “To understand this crisis of obsolescence, all you really need to do is ask yourself when was the last time you got an actual letter, addressed to you in the mail with a stamp on it. Even Christmas cards and wedding invitations are going electronic.” At most, 5 percent of all mail sent is personal correspondence. Magazines of all stripes (The Economist, the now sadly defunct Cat Fancy, etc.) are a mere 3.5 percent of what USPS delivers. More than half of all sent mail is advertising.

Mail is what the Postal Service does and it no longer “binds the nation…. through correspondence.” Mail today is not a communications medium; it is a broadcast medium for businesses.

Indeed, from a 21st century perspective, the USPS looks like a hopelessly retrograde enterprise. We cut down trees, mill them into paper, print words on the paper, then transport the paper all over America in pollution-belching trucks, and have people deliver them (often on foot) to 150 million addresses. Then people throw most of it away unopened. (That junk mail-thwarting companies like Catalog Choice exist testifies to the love lost for mail.)

Meanwhile, I can e-mail my sister in Ohio, text my nephew in New Jersey, Facebook message my friend in Russia and video chat with my mother for little to no cost, and without environmental damage. So why do we need a Postal Service?

To be clear, the Postal Service cannot be abolished; at least, not immediately. Many institutions’ operations remain tied to it. Local governments send jury summons, vehicle registration renewals and other important documents by mail. Voting by mail is widespread in the United States, and Colorado, Oregon and Washington hold all their elections by mail. Package delivery in America also is deeply dependent upon the Postal Service. FedEx and UPS have postal carriers deliver many small packages to sparsely populated rural areas. (It makes no financial sense for them to do it themselves, and USPS carriers are on the route anyway.) The Postal Service also is tasked by executive order to deliver medicines in the event of a terrorist biohazard attack.

Many of the legislative reforms proposed in recent years dodge the existential question, and instead take for granted that the government should lug paper mail all over America’s 3.8 million square miles. Finding any significant reform that suits the two biggest interest groups (USPS unions and high-volume mailers) is very difficult. Senators from low-population and far-flung states tend to be especially averse to reforms that reduce the massively subsidized service their constituents receive.

But eventually, a day of reckoning must come. A government operation that goes bankrupt is unlikely to be bailed out by a public who sees it as a pointless, environmentally harmful anachronism.

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