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Political hacks stand to gain from Florida gerrymander fix

August 06, 2014, 12:14 PM

Looks like Florida lawmakers will have to put their summer campaign activities and fundraising on hold. Last week, Leon County Circuit Court Judge Terry Lewis ordered the Legislature to redraw and ratify by Aug. 15 two congressional district maps that in July he ruled were in violation of the state’s anti-gerrymandering law.

The two districts in question are currently held by U.S. Reps. Dan Webster, a Republican from Winter Garden, and Corrine Brown, a Democrat from Jacksonville. Lawmakers are set to convene in Tallahassee tomorrow, where a committee will be appointed to redraw the maps over the weekend. The rest of the Legislature will reconvene sometime next week to vote on their final passage.

Although state legislative leaders have acquiesced  to redraw the maps per the judge’s order, they intend for the newly drawn districts to take effect in 2016, as it is logistically too late for them to apply before this year’s November election.

Candidates would have to re-qualify, supervisors of election would have to redraw precinct maps and update their databases and voters would need to receive their new cards, all of which would cost state and local agencies—and candidates—a substantial amount of money and resources. Absentee ballots have already been mailed for the primary election in August, and any changes to the maps would undoubtedly affect adjacent districts as well.

In light of the logistical impossibility of applying the new maps in time for the Nov. 4 election, Judge Lewis has indicated that he may order a special election sometime after November for the newly drawn districts. Legislators have vowed to challenge such a ruling.

With her district as one of the two targeted by Judge Lewis, Rep. Brown has emerged as a strange bedfellow ally for the Republican leadership in Tallahassee. She slammed the judge’s ruling as “certainly not in the best interests of Florida voters,” and said it “ignores one of the central principles of redistricting: maintaining communities of interest or minority-access districts.”  Many expect her to challenge the ruling regardless of how the Legislature acts.

Her district stretches from Jacksonville down into Orlando and is made up of predominantly African-American and Democratic voters.

This entire ordeal was a result of a lawsuit filed by a coalition headed by the League of Women Voters and other left-leaning groups that alleged the Republican-controlled Legislature drew maps based on favoring incumbents and other such political considerations in violation of the “Fair Districts” amendment approved by voters in 2010. Brown unsuccessfully sued to invalidate it after its passage.

During the course of the trial, it was revealed through e-mails and other evidence that legislative staff were secretly sharing drafts of maps and other information with Republican political consultants.  At least one of the maps shared by political operatives was submitted under someone else’s name. According to Lewis’ ruling, these “seemed to be in the Central Florida area, which coincidentally, were the areas in the enacted map [he] found to be problematic.”

The judge zeroed-in on this issue of operatives trading information behind the scenes, stating that “it make[s] a mockery of the Legislature’s proclaimed open and transparent process.”

The special session is estimated to cost Florida taxpayers more than $68,000 per day, in addition to the time, resources and expenses that local election supervisors will have to incur to update their databases and voter rolls after new congressional maps are adopted–especially if the courts order a special election.

Will the millionaire political operatives whose shenanigans instigated this ruling be forced to cover any of these costs? Nope. Will they make more money off these changes?  You bet.

Such is politics in the Sunshine State.

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

R Street applauds Virginia agreement on ridesharing services

August 06, 2014, 11:59 AM

WASHINGTON (August 6, 2014) - The R Street Institute welcomed today’s news of an agreement between the Commonwealth of Virginia and transportation networking companies Uber and Lyft. This arrangement will help ensure the safety of passengers, provide transparency into company operations and promote a level playing field for transportation providers.

Under the agreement, Uber and Lyft will be granted transportation broker’s licenses and temporary operating authority, so long as they meet a set of regulations to promote passenger safety, have appropriate insurance and comply with Virginia law.

“Gov. Terry McAuliffe and State Attorney General Mark Herring should be commended for their work to legalize the operations of Uber and Lyft,” said Zach Graves, policy analyst for the R Street Institute. “Through this operating agreement, Virginia residents will reap the benefits of more consumer choice, and increased competition for transportation services.”

However, Graves warned that this is only a first step in government working with businesses in this emerging sector.

“Public interest advocates should be wary that this is only a temporary measure, and the battle over transportation services regulation in Virginia is certain to come up again in the 2015 legislative session. Ultimately, policymakers in Virginia and other states need to advance legislation that offers permanent legalization for all transportation network companies, without imposing additional anti-competitive regulations at the behest of the taxi industry,” he said.

California’s incomplete prescription for reducing climate risk

August 06, 2014, 11:19 AM

The California Natural Resources Agency has just released its Final Safeguarding California Plan for Reducing Climate Risk. The roughly 350-page plan is designed to provide policymakers with recommendations about how best to craft an “integrated strategy” to address climate change. While it is not entirely clear what that means, it is clear the strategy would touch virtually every California industry in a meaningful way.

Are the recommendations worth anything? In at least one area, likely not.

Inevitable and historic instances of climate change and its various manifestations have impacted the world profoundly. Severe weather, sea-level rise and fall and changes in the frequency and severity of wildfires may all be tied to climate change. What is less clear is whether California’s lengthy plan is sufficiently precise in its particulars to be of any use.

For example, one industry to which the plan directs special attention is insurance. Why? Because, the CNRA believes that insurer solvency is directly threatened by climate change. With regard to its insurance recommendations, the plan leads readers into a maze of narratives replete with brief but equivocating solutions.

Not all of the plan without merit, however. There is an instance of clarity where it asserts that

Efforts to reduce climate risks through hazard mitigation activities, including but not limited to fire hazard reduction, minimizing new development in areas most vulnerable to hazards and improved flood management, will be important to managing risks and supporting sustainable insurance and disaster programs.

This translates to “mitigating risks is a good idea,” which it obviously is.

As for the selectively chosen solutions, the plan is under the thrall of a decision made by the California Department of Insurance to mandate that insurers complete a “climate risk disclosure survey.” It also refers approvingly to a 2008 National Association of Insurance Commissioners report in which the survey idea was presented. Boldly, the plan doubles down on the NAIC report and recommends that insurers should be required to provide even more specific, detailed and potentially proprietary information to the CDI for public display.

While the value of such surveys may be negligible, there is a more serious problem with the plan’s recommendation. For some reason, it ignores less ideological and more relevant tools that were presented alongside the NAIC recommendation to undertake surveys. Among the tools referenced in another NAIC report cited by the plan and by the same author, but omitted from the Plan’s recommendations, is risk-based pricing.

Risk-based pricing is not revelatory. It is the pricing of risk based on probabilities of loss. It is the foundation of insurance, but is endlessly inconvenient to ideology. While not revelatory, the practice of risk-based pricing is increasingly subverted by the policy goals of various regulators.

In California, as in many other states, it is necessary for property/casualty insurers to file for approval with the CDI the rates that they plan to charge. The commissioner has the authority to reject rate changes that he/she deems inappropriate. In some states, spurious rejection has led to rate deficiencies which have forced insurers to limit their exposure to under-priced risk.

By treating reporting as a panacea without mentioning the role of risk-based pricing, the plan cripples the credibility of what are meant to be a set of objective policy recommendations.

An interesting and ironic juxtaposition to the grave concern articulated by the CNRA is the perception of the risks posed by climate change by those within the international insurance industry. An annual study by the Centre for the Study of Financial Innovation found that professionals within the industry ranked climate change as the number 18 risk facing the industry. What was the number one risk the industry felt it faced? Regulation!!

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

R Street testimony to Houston City Council on ride-sharing

August 05, 2014, 5:59 PM




Remarks by Steven Titch
Associate Fellow, R Street Institute
Re: Legalization of ride-sharing services
Houston City Council meeting

Aug. 5, 2014

Good Afternoon,

I would like to thank the City Council for the opportunity to speak on what may prove to be a defining issue for the city of Houston.

As a resident of Sugar Land, a community well within the Houston metropolitan area, the decision the City Council makes tomorrow will affect my transportation choices. Ride-share services like Uber and Lyft provide an economical, reliable alternative to the paucity of cab services in Houston and the surrounding suburbs. While some compromise may be necessary, I urge the City Council to approve the proposal and allow Uber and Lyft to legally operate without an undue regulatory burden that would undermine their ability to do business.

But this issue is about more than whether a ride-share service deserves legitimacy. I urge council members to consider this in the context of how Houston will treat new businesses that use technology to add greater value and convenience to the routine matters of everyday life.

The City Council, Mayor Annise Parker, the Harris County Independent School District and many other public agencies have voiced strong support for nurturing the environment and skills conducive to the growth of high-tech industry and jobs. We all want to see the creation and improvement of STEM programs in our schools. We do our best to showcase Houston as a city that welcomes 21st century entrepreneurs.

Uber and Lyft are where those policies pay off. They are at the vanguard of companies that use technology to meet market needs that were impossible or impractical to meet before. We tend to think of high tech as Google or Facebook, businesses that employ lots of engineers and software coders. But consider also the value created by those who take their technology skills and connect them to everyday needs, and create something that has immediate benefits for everyone. That’s Uber. That’s AirBnB. That’s Bitcoin. All the good intentions about promoting high tech will mean nothing if the city’s first reaction is to ban anything that threatens to disrupt comfortable enterprises that depend on the status quo.

Right now, there are students our local universities and colleges and our high schools, who are designing the next disruptive service or product. They are watching this vote. It will tell them if Houston is truly a city that will welcome their talents and ideas. What message do you wish to send?

Thank you.

Half a trillion unaccounted for on federal spending transparency website

August 05, 2014, 5:39 PM

The federal government can’t find $619 billion dollars on the website it built six years ago to give a transparent account of its spending activities. USA Today‘s Gregory Korte has the full story:

A government website intended to make federal spending more transparent is missing at least $619 billion from 302 federal programs, a government audit has found. And the data that does exist is wildly inaccurate, according to the Government Accountability Office, which looked at 2012 spending data. Only 2% to 7% of spending data on USASpending.gov is “fully consistent with agencies’ records,” according to the report….OMB spokesman Jamal Brown said the administration is already working to improve the data.

The website is currently maintained by the Office of Management and Budget, and had an initial budget of $15 million.

Hat tip to AEI’s Arthur Brooks for the tweeting the story.

Paying for permissionless innovation

August 05, 2014, 11:49 AM

We’re big fans of permissionless innovation—the concept and Adam Thierer’s excellent book. The biggest, most consequential enemy of permissionless innovation in the United States is undoubtedly the Food and Drug Administration. Its long, expensive approval process delays access to life-saving drugs and other innovations for years, dramatically increases the price of such things once they reach the market, and skews the investment incentives for the health industry. Many economists would like to see the FDA radically reformed, some would like to abolish it entirely. In the spirit of the sort of political compromises that Milton Friedman was famous for proposing, I’d like to suggest an intermediate solution: a permissionless premium.

Here’s how it would work: there would be some specified amount (either an absolute amount per unit or a percentage of the revenue) that patients would have to pay in order to get a given drug or access to a medical device before it was FDA approved. The patient should be made well aware that the risks are at this point unknown (not that they’re thoroughly understood just after FDA approval anyway). The revenue would bolster the FDA’s budget, thus in theory helping to investigate the risks associated with the drug and drugs like it in the future.

Moreover, this would allow pharmaceutical companies to start getting revenue before FDA approval, lowering the burden of their overhead. As things currently stand, they spend billions on drug development and by the time the FDA process is complete, they have a very short window before their patent expires. As Alex Tabarrok documents well, the result is that pharma companies have almost no incentive to develop drugs that treat diseases that are anything other than very broadly experienced. The pharma dream in this scenario is not to find an effective treatment for rare but aggressive cancers, but to find the next Lipitor.

However, if they could develop experimental new drugs for rare diseases that could be bring in revenue immediately, that might just change the cost-benefit analysis sufficiently to see some real progress on that front. The premium will act as a Pigovian tax rather than an outright ban on the consumption of such still largely untested drugs, and will help fund both pharmaceutical companies and the FDA’s efforts to increase our stock of medical knowledge. It seems, from a number of perspectives, to be a win-win.

The sharing economy will thrive only if government doesn’t strangle it

August 04, 2014, 1:02 PM

The so-called sharing economy is many things to many people. To Wall Street and Silicon Valley, firms like Uber and Airbnb offer tantalizing market capitalizations, the likes of which have not been seen since the go-go ’90s. At the same time, political operatives see the emerging debates over regulation of ride-sharing and space-sharing as a potential opening for the libertarian right to assert their world view in urban politics for the first time in a long time.

At the other end of the political spectrum, some on the left see the rise of these services as yet another brick in the wall of income inequality, putting downward pressure on service workers’ already paltry incomes while simultaneously expanding the myriad opportunities the wealthy already have to pay to jump to the front of most any line. Others on the far left disagree, going so far as to hold up “peer to peer” transactions as the model for a new, post-capitalist economic regime.

If ye gaze into the sharing economy, the sharing economy gazes also into ye. It contains multitudes.

It’s easy to dismiss these various takes as just more grist for the hype mill, as pointless navel-gazing over fads that most Americans have never used and for which they might never have need. But there is reason to suspect the sharing economy might, in fact, be more than that. Indeed, the potential economic benefits of putting our vast stores of trapped and dormant capital into the stream of commerce and reducing the costs of productive work on the margin really are quite enormous.

A national survey in the United Kingdom showed that, in 2008, more than one in every three households was “under-occupied,” with more bedrooms than people to sleep in them. Meanwhile, of the world’s roughly 1 billion cars, about 740 million are mostly used only by a single rider. These sorts of statistics help demonstrate the scope of currently fallow resources that new technological platforms are beginning to put to productive use. The McKinsey Global Institute estimates that social technologies could unlock $900 billion to $1.3 trillion of annual consumer surplus in just four key sectors of the economy: consumer packaged goods, consumer financial services, professional services and advanced manufacturing.

In this way, it’s possible that Lyft and Flightcar, SnapGoods and ShareDesk, TaskRabbit and Etsy and DogVacay – rather than merely being the new digital toys of over-entitled millennial hipsters – are following in the footsteps of other grand innovations and social movements throughout history that have unlocked trapped capital and powered economic growth. These include the public offerings of non-railroad companies in the 1920s and the development of high-yield bonds in the 1980s. But they also include the even larger unlocking of human capital that came in the form of the mass movement of women into the U.S. workforce and the opening of skilled jobs to African-Americans in the second half of the 20th century.

But in order to achieve these benefits, regulators must not strangle the emerging peer production economy in the cradle. In too many cases, when confronted with disruptive business methods, the tendency of public officials is to apply regulatory models developed in an earlier era. This obviously provides clear benefits to incumbent firms, but the benefits for consumers, who lose access to expanded choices and cheaper prices, is not so obvious.

In a new paper, my colleague Andrew Moylan and I suggest regulators tread extremely lightly in this emerging sector, allowing firms and industries to self-regulate to the extent practical. For instance, reputation has shown itself a powerful force in these markets, where most firms offer a system for participants to rate each transaction. Those who receive consistently poor ratings are edged out and sometimes barred from operating, while those who receive good ratings see that translated into better sales.

Which is not to say that there is no room for regulation of any kind. For providers of services such as transportation and lodging, it may be appropriate to require they maintain liability insurance to cover the costs of injuries sustained by consumers. Where this is the case, insurance can also serve something of a self-regulatory function, as insurers tend to make coverage available at attractive rates to those who demonstrate good market conduct, while limiting coverage or raising rates on those who demonstrate a pattern of recklessness. (We also would urge peer production services, the insurance industry and insurance regulators to work together to develop and approve new products in areas where existing offerings are not good fits for the nature of these emerging risks.)

Finally, where lawmakers do find the need to pass new legislation to deal with sharing economy services, they should take this opportunity to significantly scale back, rather than increase, reliance on occupational licensure. Occupational licensing laws, which impact as much as one-third of the U.S. workforce, cost roughly $100 billion annually in lost economic output, despite no evidence that licensing improves the quality of services provided to consumers.

The sharing economy has not, for the most part, birthed many truly novel services. Instead, what it does is harness technology to connect buyers and sellers who otherwise would not have connected. A regulatory approach that is modest and even-handed, and that does not discriminate between new and old providers or new and old business models, is the best way to ensure those connections are not cut prematurely.

What Mississippi can learn from Louisiana

August 04, 2014, 11:56 AM

Good planning efforts can ensure that the coming financial windfall is not wasted.

One month into the 2014 hurricane season, Gulf Coast residents, businesses and governments once again have our eyes on the North Atlantic, Caribbean Sea and Gulf of Mexico. Of course, we all hope this season will be a calm one. But with many of our communities still feeling the effects of Katrina, Ike and Rita, we know how devastating these storms can be.

This summer, Mississippi and the other Gulf states will have a unique chance to make major investments in coastal restoration and improvement. If done correctly, there is a great opportunity for our states to significantly reduce the potential for damage from future hurricanes and floods.

The opportunity comes thanks to the RESTORE Act. Passed by Congress in 2012, the law earmarks to the five Gulf Coast states 80 percent of the civil fines stemming from the 2010 Deepwater Horizon oil spill. The RESTORE Act directs the states to spend on projects that benefit both our economies and our natural environments.

If done right, our coastlines will become stronger, our communities better protected and our economies strengthened. But if done poorly, taxpayers could be left on the hook for big costs later on, and we will be no better protected against natural disasters than we are today.

In this regard, Mississippi could take a page from its neighbor to the west. Since 2007, Louisiana has undertaken a planning process to address the decades-long problem of coastal land loss that has taken a toll on our state’s economy and effectively moved the southern half of the state closer to the Gulf of Mexico and into harm’s way.

The result of this process is Louisiana’s “Comprehensive Master Plan for a Sustainable Coast,” a document most recently revised in 2012 and unanimously approved by the Legislature. The plan is ambitious, with a $50 billion price tag over the next half-century. But it’s also the first such plan in any state that would address coastal risks in a comprehensive, sustainable and cost-effective way.

Louisiana’s plan is held up as a model for a number of reasons. It is comprehensive and systematic, looking at the economic and ecological health of the coast and how different projects interact. It is budget-conscious and does not pretend that resources are unlimited. Because it has the support of the Legislature, the governor and stakeholders ranging from oil and gas companies to environmental groups, it represents a shared vision. This gives the plan a combination of popular legitimacy and political viability.

Finally, Louisiana lawmakers have passed legislation requiring that RESTORE Act funds go to master plan projects, making it unlikely that money will be wasted on projects that have not been thoroughly vetted or that don’t support coastal restoration.

The coastline is deeply important to both Louisiana and Mississippi for a number of reasons, not the least of which its importance to our economic growth. Across Mississippi’s three coastal counties, 26,000 jobs and $2 billion in annual spending are supported by nature-based tourism, such as hunting and recreational fishing. In fact, nearly one in five jobs along Mississippi’s coast is tourism-related, while the state’s commercial fishing industry tallies up some $250 million in sales annually.

With that in mind, the RESTORE Act will provide Mississippi an opportunity to make critical investments in its coastline, from restoring coastal habitats and barrier islands to enhancing flood control to better protect against future natural disasters. With sufficient and effective planning, Mississippians will reap the benefits of this investment for decades to come, but planning must be both transparent and participatory.

Just as a building is only as good as the blueprints that underlie it, the strengths of the coastal investments that Mississippi and other states make with RESTORE Act funds will only be as good as the plans that go into them. As unlikely as it may sound, Louisiana’s state government has done some first-class planning work, and we invite our neighbors to follow our lead.

Uber, Lyft and Houston’s policy leadership

August 01, 2014, 4:58 PM

Under the guise of needing to review a list of new amendments, the Houston City Council this week once again delayed a vote on granting legal status to vehicle-for-hire services like Uber, Lyft and Sidecar.

At least the Bayou City is making an effort to come to terms with services like Uber, Lyft and Sidecar. New York, Los Angeles, Chicago and dozens of other U.S. cities are trying to ban them, mostly in response to pressure from local taxi lobbies. Houston has the opportunity to buck this trend and burnish its reputation as a city that’s friendly to entrepreneurs and willing to embrace technology models that benefit consumers and increases their quality of life.

Local political winds are favorable to the new entrants. A few City Council members have noted that the success Uber and Lyft have had since entering the Houston market in February indicates that there is sizeable unmet demand for ride services, despite what the city’s taxi companies claim.

Sensing that the city council is willing to introduce more competition to the Bayou City, the taxi industry has been trying to subvert reform by piling on as many regulations it can so as to make it as difficult as possible for Uber and Lyft to operate.

The amendment requiring that at least two-percent of vehicles be wheelchair accessible has been getting the most press, as it is the most emotionally resonant. No one wants to see a disabled person denied a ride. Uber says that many of its drivers can accommodate vision and hearing-impaired passengers, but wheelchair accommodation would require more expensive upgrades. There’s no reason this can’t be phased in over time. The proposal is not clear whether the two-percent requirement is must be met before launch, only that there should be regular compliance audits.

Other amendments are much more brash in terms of protecting taxi interests. Uber and Lyft drivers would be prohibited from parking or cruising near hotels and cab stands, or using their cell phones to take ride requests—only requests via the Uber site could be answered. The new proposal also requires all drivers to have $1 million in insurance, and vehicle-for-hire companies must perform background checks through a company designated by the city. Lyft performs driver background checks, but claims the company it uses is more thorough.

Any limits on cruising and parking and cell phone use should be struck down as anti-competitive. As long as cab companies can meet the same criteria for background checks, they should be allowed to choose the company they want.

These might be necessary compromises to grant Uber and Lyft the legitimacy they deserve. Still, much of this regulatory process seems to be about jamming the square peg of Uber into a round hole of legacy regulation. We’re seeing the same reaction to other on-line services like AirBnB (vacation rentals) and Parking Panda (parking spots) that are stimulating what Forbes magazine has dubbed the “share economy.”

Uber and Lyft call the entire taxi regulatory structure into question. Among the anti-consumer rules that have come to light from this debate are that the city requires limousine customers to wait at least 30 minutes from the time they call for a car and pick-up.

But rather than force start-ups like Uber and Lyft to adapt to a decades-old regulatory set-up that have built-in advantages for entrenched taxi companies, why not force the city’s cab companies to adapt to the way consumers want to hail cabs in 2014?

Houston consumers have spoken. More than 15,000 people in the Houston area have signed two online petitions supporting changing rules to accommodate Uber and Lyft. Meanwhile Uber and Lyft drivers continue to operate—and find plenty of riders—without regulatory approval, despite the risk of being caught in a Houston Police Department sting.

These vote delays only postpone the inevitable. Houston has a chance to buck the trend of hostility toward ride-share services. The city council should streamline the current regulations and let Uber, Lyft, Sidecar compete.

The tide is turning: More scientific support for e-cigarettes

August 01, 2014, 3:12 PM

E-cigarettes get a positive health review in the new issue of the journal Addiction. Quoting from the abstract:

[Electronic cigarettes, EC] aerosol can contain some of the toxicants present in tobacco smoke, but at levels which are much lower. Long-term health effects of EC use are unknown but compared with cigarettes, EC are likely to be much less, if at all, harmful to users or bystanders. EC are increasingly popular among smokers, but to date there is no evidence of regular use by never-smokers or by non-smoking children. EC enable some users to reduce or quit smoking.

Conclusions: Allowing EC to compete with cigarettes in the marketplace might decrease smoking-related morbidity and mortality. Regulating EC as strictly as cigarettes, or even more strictly as some regulators propose, is not warranted on current evidence. Health professionals may consider advising smokers unable or unwilling to quit through other routes to switch to EC as a safer alternative to smoking and a possible pathway to complete cessation of nicotine use.

The study confirms what I and others have documented about bogus claims regarding toxicants, poison episodes and gateway. Here are excerpts:

Claim: Chemicals in EC cause excess morbidity and mortality.

Evidence: Long-term use of EC, compared to smoking, is likely to be much less, if at all, harmful to users or bystanders.

Claim: Smokers who would otherwise quit combine EC and cigarettes instead of quitting and maintain a similar smoking rate.

Evidence: EC use is associated with smoking reduction and there is little evidence that it deters smokers interested in stopping smoking tobacco cigarettes from doing so.

Claim: Young people who would not try cigarettes otherwise start using EC and then move on to become smokers.

Evidence: Regular use of EC by non-smokers is rare and no migration from EC to smoking has been documented…The advent of EC has been accompanied by a decrease rather than increase in smoking uptake by children.

Claim: EC use will increase smoking prevalence indirectly, e.g. by making smoking acceptable again in the eyes of people who cannot tell the difference between EC and cigarettes, via machinations of the tobacco industry, or by weakening tobacco control activism.

Evidence: There are no signs that the advance of EC is increasing the popularity of smoking or sales of cigarettes.

In other words, the far-fetched claims by anti-tobacco zealots are derived from thin air, not vapor.

The article is authored by established tobacco harm-reduction advocates Peter Hajek, Jean-Francois Etter and Hayden McRobbie; and two Americans – Tom Eissenberg, a member of the FDA advisory panel on tobacco with a moderate record on e-cigarettes and tobacco harm reduction, and Neal Benowitz. The latter is a surprise, as Benowitz has previously opposed tobacco harm reduction (here and here) and last year endorsed gateway speculation about smokeless tobacco. It is welcome news that he has aligned his view on e-cig vapor with his position on marijuana vapor.

Drs. Benowitz and Eissenberg acknowledge research support from the National Institutes of Health and the FDA and note that the review “does not necessarily represent the official views of the National Institutes of Health or the Food and Drug Administration.”

But it should.

R Street applauds bipartisan bill increasing government preparedness for extreme weather

August 01, 2014, 12:42 PM
WASHINGTON (August 1, 2014) - The R Street Institute is encouraged by today’s introduction of H.R. 5314, the bipartisan Preparedness and Risk Management for Extreme Weather Patterns Assuring Resilience (PREPARE) Act, by Reps. Matt Cartwright, D-Pa. and Tom Cole, R-Okla. The legislation will ensure the federal government proactively plans and prepares for the grave risks associated with extreme weather with no additional costs to taxpayers. “The PREPARE Act is a simple, no cost, no regrets strategy for dealing with severe weather,” said Eli Lehrer, president of R Street. “It’s well worth strong consideration by both houses of Congress.” The PREPARE Act establishes a federal inter-agency council to ensure federal agencies are planning and coordinating preparedness plans for extreme weather events. The bill also provides state and local governments with the best information and practices available to help them adopt their own emergency preparedness plans.

Letter to Houston City Council on transportation network companies

August 01, 2014, 11:02 AM



Houston City Council
City Hall Annex
900 Bagby Street
First Floor
Houston, TX 77002

July 31, 2014

Dear Honorable Council Members,

By approving the proposal to allow vehicle-for-hire companies like Uber and Lyft to operate, Houston has an opportunity to demonstrate its leadership as a city that’s friendly to entrepreneurs and willing to embrace technology models that benefit consumers and improves their quality of life.

While Uber and Lyft face opposition in New York, Los Angeles, Washington and Chicago, it is gratifying to see that most council members wish to introduce more taxi competition. Sensing this, the city’s taxi industry has been trying to subvert reform by seeking delay after delay while piling on amendments that make it difficult for Uber and Lyft to operate.

The amendment requiring that at least 2 percent of vehicles be wheelchair accessible has been getting the most press, as it is the most emotionally resonant. No one wants to see a disabled person denied a ride. Uber says that many of its drivers can accommodate vision and hearing-impaired passengers, but wheelchair accommodation would require more expensive upgrades. There’s no reason this can’t be phased in over time. The proposal is not clear whether the 2 percent requirement must be met before launch, only that there should be regular compliance audits.

Other amendments are much brasher in protecting taxi interests. Uber and Lyft drivers would be prohibited from parking or cruising near hotels and cab stands, or using their cell phones to take ride requests—only requests via company websites could be answered. The new proposal also requires all drivers to have $1 million in insurance and vehicle-for-hire companies must perform background checks through a company designated by the city. Lyft performs driver background checks, but claims the company it uses is more thorough.

Any limits on cruising and parking and cell phone use should be struck down as anti-competitive. As long as screening companies can meet the same criteria for background checks, rise-sharing services should be allowed to choose the company they want.

Houston consumers have spoken. More than 15,000 people in the Houston area have signed two online petitions supporting changing rules to accommodate Uber and Lyft.

These vote delays only postpone the inevitable. Houston has a chance to buck the trend of hostility toward ride-sharing services. I urge the City Council to streamline the current taxi regulations and vote to allow Uber, Lyft and Sidecar to compete.

Sincerely yours,


Steven Titch
Associate Fellow
R Street Institute


Letter to Gov. Nixon on veto of tobacco harm-reduction bill

July 31, 2014, 5:13 PM

July 31, 2014


Gov. Jeremiah Nixon
P.O. Box 720
Jefferson City MO 65102
Re: Veto of Missouri Senate Substitute for S.B. 841

Dear Gov. Nixon,

As a public health physician, with decades of experience in tobacco control, I write to express deep disappointment with your veto of S.B. 841. I respectfully urge your reconsideration.

This bill would prohibit sale of all non-pharmaceutical nicotine delivery products to minors and provide separate legal categories for alternative and vapor devices. Since nicotine is potentially harmful to the adolescent brain, and more addictive to adolescents than adults, this bill, as proposed, would enhance Missouri’s public health.

The separation of alternative (i.e., non-combustible) tobacco products from combustible tobacco products is appropriate for the protection of public health. The risk of potentially fatal tobacco-attributable illness presented by non-combustible products – chewing tobacco, snuff, snus and dissolvable sticks, strips and orbs – is less than 1 percent of the risk posed by cigarettes. These products have also been shown to be less addictive.

Creating a separate category for vapor products would be appropriate because vapor products contain no tobacco. Their active ingredient, tobacco-derived nicotine, is the same nicotine used in the pharmaceutical patches, gums, lozenges and inhalers. As such, we have reason to believe they present a level of risk similar to the risk posed by these commonly used pharmaceuticals, all of which are endorsed by the health related organizations you reference in your veto message.

Your veto message is laced with technical errors that conflict with the scientific evidence base developed over this past decade. All of the often quoted 480,000 tobacco-attributable deaths in the United States, each year, are due to a single tobacco product, the combustible cigarette. The numbers of deaths from all other tobacco and nicotine products, combined, are so small and so hard to distinguish from background mortality that such deaths are not tracked by federal authorities.

The technical and factual errors in your veto message suggests that few in the public health organizations that encouraged this veto are sufficiently up to date on tobacco-related research to be aware of the differences in risk and addictiveness of the alternative products and the patterns of use of e-cigarettes. Their encouragement of this veto seems based on this lack of current knowledge and a possible commercial bias on their part. In demeaning e-cigarettes, they fail to acknowledge that each of their national parent organizations enjoy generous support from drug companies that make the pharmaceutical nicotine products. These companies have much to lose as people learn that they can secure more than 99 percent of the benefits at less cost and with real nicotine- satisfaction from e-cigarettes.

Vapor contaminants are so low that exhaled e-cigarette vapor does not measurably increase the quantity of chemical contaminants in most indoor air environments. Despite hype, almost all vapor products are used by current smokers to cut down or quit. Teens may experiment with such vapor products, but they rarely continue such use and almost never transition from e-cigarettes to tobacco cigarettes.

Finally, waiting for FDA regulation of these products will be an exercise in futility. Due to circumstances partially out of the control of the FDA, it will be four to 10 years before FDA implements any such regulations.

In June, I published paper dealing with all these issues, with extensive bibliographic references. Copies of this paper can be secured at http://www.rstreet.org/wp-content/uploads/2014/07/20140630FDLI-EcigForum.pdf. This paper also includes a description of who I am, my background, and the nature of my affiliation with the R Street Institute.

I would welcome the opportunity to meet with governmental and health authorities in Missouri for the purpose of bringing them up to date on all these issues, discussing, and otherwise addressing their concerns.

The bottom line is that advising smokers of the difference in risk comparing cigarettes to alternative products and e-cigarettes could secure personal and public health benefits not otherwise obtainable. If skillfully done by public health authorities, this could further reduce teen smoking and teen addiction to other nicotine delivery products.

This veto does not protect the public. It helps ensure continuing high levels of tobacco-attributable illness and death and protects the profits of big drug companies.


Joel L. Nitzkin, MD
Senior Fellow for Tobacco Policy
R Street Institute

New York Times’ call for marijuana legalization advances harm reduction

July 31, 2014, 1:56 PM

A milestone in the fight for harm reduction was reached on July 28, when the New York Times formally endorsed the legalization of marijuana. A Times editorial, “Repeal Prohibition, Again,” called for reversal of the government’s 40-year ban on the popular weed. Legalization is overdue, as use of this psychoactive substance that is less dangerous than alcohol has led to the senseless prosecution of hundreds of thousands of Americans.

In 1994, as I was developing my tobacco harm-reduction strategy, I read a brilliant article on drug policy reform in the prestigious scientific journal Science. Entitled “Drug prohibition in the United States: costs, consequences, and alternatives,” the article was written by Ethan Nadelmann, a pioneer in drug harm reduction. Later that year, I described my strategy in a letter to Whitney Taylor of the Drug Policy Foundation (now the Drug Policy Alliance):

Thanks for taking my recent phone call. First, the proposal: that smokers unable or unwilling to quit consider switching to smokeless tobacco, which is far safer than smoking. Smoking-related cancers, heart diseases and lung disorders are responsible for 419,000 deaths every year in the U.S.A. In contrast, if all 46 million American smokers instead used smokeless tobacco, annual tobacco-related deaths (from a small risk of oral cancer) would number only 6000 [references here and here]. In fact, smokers who switch to smokeless tobacco reduce their risk for all smoking-related illnesses, including oral cancer. Newer smokeless tobacco products deliver the nicotine kick smokers crave and they can be used almost invisibly; spitting, once the stigma of smokeless tobacco use, is minimal or nonexistent with these products. Smokeless tobacco is already working for many Americans. Statistics from the Centers for Disease Control and Prevention (CDC) show that 1.5 to 2 million former smokers have chosen this option on their own [reference here].

I realize that your organization is only concerned with illicit drugs. However, the current tirade against tobacco use(rs) demonstrates alarming parallels to the long-term crusade against other drugs. First, as tobacco use is increasingly characterized as not just unhealthy but immoral and criminal, users are now experiencing an alienation process similar to that of narcotics users in the first three decades of the century. Health professionals with ideas on the medical management of nicotine addiction are being ignored or attacked. A cadre of prohibition-minded anti-tobacco activists has insisted on increased federal regulation (FDA, OSHA, EPA etc.) of tobacco use, which is endorsed without a hint of dissent by all major medical organizations. In fact, tobacco use is the only major medical issue in which there is no debate whatsoever. Prohibition may not be imminent, but smuggling from low to high tax states and the disastrous effects and ultimate reversal of the recent Canadian tax increase offer a great preview of where the crusade is headed and what the consequences will be.

This proposal has much in common with harm reduction models proposed for illicit drug use with one important exception: smokeless tobacco is legal. No new regulatory or legislative measures will be required. Only interested and informed smokers.

Mr. Nadelmann invited me to share my observations at drug policy reform conferences in 1999 and 2001. Tobacco harm reduction has been explored at various other drug policy meetings over the last decade.

The Times editorial board echoed the principals of harm reduction in its marijuana statement, as it weighed the relative risks of using various substances:

We believe that the evidence is overwhelming that addiction and dependence are relatively minor problems, especially compared with alcohol and tobacco. Moderate use of marijuana does not appear to pose a risk for otherwise healthy adults. Claims that marijuana is a gateway to more dangerous drugs are as fanciful as the ‘Reefer Madness’ images of murder, rape and suicide. There are legitimate concerns about marijuana on the development of adolescent brains. For that reason, we advocate the prohibition of sales to people under 21.

Advocates of tobacco harm reduction will recognize several themes in this passage. First, there are no apparent health risks for moderate marijuana use (and even fewer health risks for smoke-free forms versus combusted), just as there are no significant risks related to the use of smoke-free nicotine/tobacco products. Second, the “fanciful” gateway claim is as illegitimate for smoke-free tobacco as it is for marijuana. Finally, while it is appropriate to protect children from substance use, there is no credible reason to deny adults access to alcohol, tobacco or marijuana.

The Times has effectively advanced the cause of harm reduction, perhaps to the ultimate benefit of tobacco users and of public health generally.

Surveillance Costs: The NSA’s impact on the economy, Internet freedom & cybersecurity

July 31, 2014, 12:14 PM

From the Open Technology Institute:

R Street Institute’s January 2014 policy study concluded that in the next few years, new products and services that rely on cloud computing will become increasingly pervasive. “Cloud computing is also the root of development for the emerging generation of Web-based applications—home security, out-patient care, mobile payment, distance learning, efficient energy use and driverless cars,” writes R Street’s Steven Titch in the study. “And it is a research area where the United States is an undisputed leader.” This trajectory may be dramatically altered, however, as a consequence of the NSA’s surveillance programs…

…As the R Street Policy Study highlights, “Ironically, the NSA turned the competitive edge U.S. companies have in cloud computing into a liability, especially in Europe.”

…According to the R Street Institute study, “It appears the NSA’s aggressive surveillance has created an overall fear among U.S. companies that there is ‘guilt by association’ from which they need to proactively distance themselves.”

R Street joins groups in support of USA FREEDOM Act

July 31, 2014, 8:37 AM
WASHINGTON (July 30, 2014) - The R Street Institute today joined a coalition of groups expressing support for the USA FREEDOM Act, which was reintroduced in the Senate this week by Sen. Patrick Leahy, D-Vt.

In a letter to Congress, coalition members said the Leahy bill is a substantial improvement over a version passed by the U.S. House and addresses many of the earlier bill’s shortcomings. The Senate bill includes more effective prohibitions on bulk record collection, strengthened transparency reporting provisions and reforms to make the FISA Court process more accountable.

“While the bill does not include all of the reforms we’d like to see to the government’s surveillance powers, it is a vast improvement over the House bill and a good first step toward reining in the government’s out-of-control spying apparatus,” said R Street Senior Policy Analyst Zach Graves. “Chairman Leahy and his staff should be commended for their efforts.”

Other members of the coalition include such groups as the Electronic Frontier Foundation, the Center for Democracy and Technology, the Open Technology Institute, Generation Opportunity, the American Civil Liberties Union and Access.


Click here to read the letter and its support of key provisions of the bill.

Coalition urges Congress to support updated USA FREEDOM Act (S. 2685)

July 31, 2014, 8:30 AM

Majority Leader Harry Reid Minority Leader Mitch McConnell United States Senate

Chairman Patrick J. Leahy
Ranking Member Charles E. Grassley U.S. Senate Committee on the Judiciary

Chairman Dianne Feinstein
Vice Chairman Saxby Chambliss U.S. Senate Select Committee on Intelligence

Speaker John Boehner
Minority Leady Nancy Pelosi
United States House of Representatives

Chairman Robert W. Goodlatte
Ranking Member John Conyers, Jr.
U.S. House of Representatives Committee on the Judiciary

Chairman Mike Rogers
Ranking Member C.A. “Dutch” Ruppersberger
U.S. House Permanent Select Committee on Intelligence

July 30, 2014

Dear Majority Leader Reid, Minority Leader McConnell, Chairmen Leahy and Feinstein, Ranking Member Grassley, Vice Chairman Chambliss, Speaker Boehner, Minority Leader Pelosi, Chairmen Goodlatte and Rogers, and Ranking Members Conyers and Ruppersberger:

The undersigned civil liberties, human rights, and other public interest organizations write in support of the USA FREEDOM Act (S. 2685), which Senator Leahy reintroduced on July 29. We urge both the Senate and the House to pass it swiftly and without any dilution of its protections.

On June 18, many of the undersigned groups sent a letter to Senate leadership raising serious concerns about the version of the USA FREEDOM Act (H.R. 3661) that passed the House of Representatives in May, and recommending six specific areas for improvement in the Senate bill.1 The version of the USA FREEDOM Act introduced Tuesday is a substantial improvement upon the House-passed bill, and addresses many of our most significant concerns. While this bill does not include all of the necessary reforms to the government’s surveillance authorities, it is a good first step. Specifically, this version of the USA FREEDOM Act will:

1. Prohibit “bulk” collection. As drafted, S. 2685 will prohibit indiscriminate collection of records under USA PATRIOT Act Section 215 (Section 215) and help curtail other forms of broad or bulky collection as well. It significantly narrows the definition of “specific selection term” as applied to Section 215 orders for call detail records (CDR) and other items, as well as for FISA pen register and trap and trace device orders and National Security Letters (NSLs). Additionally, S. 2685 prohibits large-scale data collections under certain authorities based solely on terms that identify broad geographical regions or name particular Internet or telephone

1 Letter from coalition to Senator Reid, et. al, concerning USA FREEDOM Act (H.R. 3361) (June 18, 2014) (on file with author), available at http://www.newamerica.net/sites/newamerica.net/files/program_pages/attachments/CoalitionLetterOnUS AFreedom.pdf.

services, and more generally requires the government to narrowly limit its data collection. We understand the intent of these provisions is to put an end to bulk or bulky collection programs, whether the NSA’s phone records program or others. The bill also strengthens minimization requirements that would provide additional post-collection privacy protections in instances where a Section 215 order is likely to return records on more than one individual. While it does not include minimization procedures for pen register and trap and trace device authorities, it does clarify the Foreign Intelligence Surveillance Court’s (FISC) authority to impose stronger privacy procedures and review compliance. These reforms are all significant improvements over H.R. 3361. If faithfully implemented, they should ensure the end of bulk collection of Americans’ personal information under domestic national security surveillance collection authorities, thus achieving the USA FREEDOM Act’s primary stated purpose.

2. Strengthen transparency reporting provisions. This bill makes significant improvements to the level of detail that private companies can include in their transparency reports. It locks in the deal made earlier last year between the Department of Justice and Internet companies that gave the companies two different options for publishing information about the FISA and NSL demands they receive, but improves on it by narrowing the range of numbers in which the companies can report, and by shortening the waiting period to report on surveillance orders directed at new technologies from 2 years to 18 months. The bill also provides two additional options for reporting that were not in the original deal: one option that allows companies to report annually on the national security requests they receive in ranges of 100, the narrowest numerical range of all the different reporting options, and another option that allows companies to be more granular in their reporting about specific surveillance authorities including FISA Amendments Act Section 702 (FISA Section 702), which authorizes the PRISM and “upstream” collection programs that are of particular concern to customers and tech companies alike. Additional improvements are still needed, such as authorizing companies to report on the number of accounts actually affected by the government demands they receive rather than just those accounts that are targeted. However, the company reporting provisions in S. 2685 are a strong improvement over the House bill, and will help to start informing the public on the impact that these authorities have on American industry and consumers.

S. 2685 also strongly enhances reporting by the government. Whereas H.R. 3661, as passed, merely requires the Director of National Intelligence to report annually the number of “targets” and “orders” for each relevant authority, S. 2685 also requires disclosure of the number of individuals whose communications are collected, including an estimate of the number of U.S. persons. This is a much more meaningful set of numbers. More transparency is needed, as the bill exempts the FBI from key reporting requirements and allows the Director of National Intelligence to use a certification process to avoid the requirement of estimating how many U.S. persons are affected by FISA Section 702. Nonetheless, the bill materially improves the usefulness of government reporting.

3. Strengthen reforms to the FISA Court (FISC) process to provide more accountability.

S. 2685 expands advocacy within the FISC by creating Special Advocates who may serve as amici. While not all our concerns with this measure were resolved, S. 2685 clarifies that the Special Advocates’ duty is to advocate for privacy and civil liberties, and includes provisions to facilitate access to all relevant materials and precedent. It also increases access to technical and subject matter experts. Additionally, although some loopholes remain, the bill seeks to limit secret law by requiring the Director of National Intelligence to publicly release either a redacted copy or a summary of any significant FISC decision.

In addition to addressing some of our most pressing concerns as explained above, we are pleased that S. 2685 limits the use of CDRs to counterterrorism purposes, and resolves the threat of implicitly codifying controversial “about” searches under FISA Section 702 by removing that section from the bill. We are also encouraged that this bill does not include any form of a mandatory data retention regime. As we mentioned in our June 18 letter, we strongly oppose any such requirement, as it would threaten privacy and civil liberties, impose unnecessary economic burdens on companies, and create risks to data security.

S. 2685 is a substantial improvement over the House bill. It would meaningfully amend the laws that authorize some of the most deeply concerning domestic records collection programs. We must caution, however, that many of the positive steps included in the bill could be undermined through insufficiently targeted cybersecurity information sharing legislation. We also note that S. 2685 does not address the NSA’s cyber operations or its largest surveillance programs: those taking place under Executive Order 12333 and FISA Section 702. After passing S. 2685, Congress should immediately conduct public oversight and work to reform these authorities, which pose grave threats to privacy, civil liberties, and Internet security.

We support S. 2685 as an important first step toward necessary comprehensive surveillance reform. We urge the Senate and the House to pass it quickly, and without making any amendments that would weaken the important changes described above.


Advocacy for Principled Action in Government American Association of Law Libraries
American Civil Liberties Union
American Library Association
Arab American Institute
Association of Academic Health Sciences Libraries Association of Research Libraries
Bill of Rights Defense Committee
Brennan Center for Justice
Campaign for Digital Fourth Amendment Rights Center for Democracy & Technology
Center for Media and Democracy/The Progressive Charity & Security Network
Citizen Outreach
Competitive Enterprise Institute
Constitution Alliance
The Constitution Project
Council on American-Islamic Relations Cyber Privacy Project
Defending Dissent Foundation DownsizeDC.org, Inc.
Electronic Frontier Foundation Free Press Action Fund
Freedom of the Press Foundation FreedomWorks
Government Accountability Project Human Rights Watch
Liberty Coalition
Media Alliance
Medical Library Association
National Coalition Against Censorship National Security Counselors
New America’s Open Technology Institute OpenMedia.org
PEN American Center
Public Knowledge
Republican Liberty Caucus
R Street
Rutherford Institute

Portable persistency and the Prop 103 roadblock

July 30, 2014, 11:17 AM

The emerging need to develop new insurance products to cover California’s Transportation Network Company operators has spurred a reexamination of the nature of Proposition 103′s quasi-constitutional status. In the name of populism, 1988′s Prop. 103 inserted unwieldy, naïve and vague underwriting rules into California insurance law. As the TNC industry is discovering to its regret, even a cursory inspection reveals that Prop. 103 has a stultifying impact on market flexibility and innovation.

The trouble is that, even with a two-thirds vote of the Legislature, legislation that does not “further the purposes” of Prop. 103 is likely to be held invalid. Thus, before considering any legislative fix, it is necessary to grasp what furthering the purposes of Prop. 103 must entail.

Should existing industries, or disruptive start-ups like the TNCs, be inclined to seek guidance about how best to change Prop. 103 while furthering its purpose, they should start by examining the history of California’s “portable persistency” automobile insurance discount battles.

Prop. 103 lays out with great specificity a list of rating factors that insurers are to use as they develop auto insurance rates. The list of rating factors is divided between mandatory and optional factors. Currently, there are three mandatory factors and 16 optional factors. Additional rating factors may be adopted via regulation by the insurance commissioner, so long as those factors have a “substantial relationship to the risk of loss” (See CIC 1861.02(e)).

Insurers know for a fact that customer “persistency” – that is, how long a customer has maintained insurance without interruption – is predictive. Ignoring this reality, as originally drafted, Prop. 103 proscribed the use of some rating factors. For instance, subsection (c) of Section 1861.02 is a provision that prevents insurers from charging increased rates on the basis of a lack of prior coverage. The rationale for the prohibition is founded on the notion that reducing the number of uninsured drivers depends on preventing insurers from underwriting in a manner that reflects the scientifically determined risk.

In an effort to allow insurers to reap the benefits of underwriting certainty, Insurance Commissioner Chuck Quackenbush promulgated a regulation to increase rating flexibility, in spite of the prohibition articulated in 1861.02. The new regulation allowed insurers to use persistency as an optional rating factor, though only in an affirmative manner. Through this lens, persistency pertains to the amount of time an insured has continuously had coverage. Applied in this way, insurers did not “punish” customers for not having insurance. Rather, insurers rewarded those that did have insurance.

The regulation did not explicitly define persistency and, as a result, different insurers interpreted the optional factor differently. While some insurers chose to interpret persistency as the number of years of continuous coverage the insured enjoyed with a single insurer, others interpreted persistency to entail continuous coverage with any insurer. Subsequently, in 2002, Insurance Commissioner Harry Low sought to clarify what was meant by persistency by promulgating a regulation to make clear that only the length of time that a driver had been with a single company (or an affiliate) counted toward the discount. This meant that persistency was not “portable” for the customer and thus retarded company-to-company movement of insurance buyers. It made it difficult for companies to lure customers from other insurers.

Insurers were unhappy about the elimination of “portable persistency” discounts, so they went to the Legislature seeking a remedy. S.B. 841 of 2003, which ensconced portable persistency discounts in statute, was drafted and passed based on Section 1862.02′s prohibition against making rates on the basis of a lack of previous coverage. The bill’s sponsors ensured that it included intent language making clear that the bill “furthers the purpose of Proposition 103 to encourage competition among carriers so that coverage overall will be priced competitively.”

Upon the predictable challenge, the California Court of Appeal struck down the bill.

The court ruled that the thinking behind 1861.02(c) was that, between rating factors, cost distribution is a zero-sum game. For example, previously uninsured drivers will face higher rates if insured drivers are offered portable persistency discounts, because one factor will need to be adjusted to cover the cost of the other (for an interesting discussion on how rating factors are weighed, i.e.: “pumping” and “tempering,” see Spanish Speaking Citizens’ Found. v. Low 85 Cal.App.4th 1179). By adjusting the rate, the previously uninsured will be made to subsidize the persistently insured. For this reason, S.B. 841 was found not to “further” Prop. 103′s purpose which, ultimately, the court decided is to expand access to auto insurance.

Suffering additional beatings on the matter, since the elimination of portable persistency discounts, two attempts have been made by insurers outside of the Legislature to reinstate their use. Two initiatives, Prop. 17 and Prop. 33, failed.

While there is another persistency discount skirmish in the offing with the appearance of a Trojan horse, in the form of Prop. 45, will there ever be a way around the courts’ unfortunate readings of what furthers the purposes of the resiliently malignant Prop. 103?

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Today in Liberty: Treasury Department halts Ex-Im deals with Russia, federal court grants D.C. a stay on gun rights ruling

July 30, 2014, 9:23 AM

From UnitedLiberty:

“Peer production” could be huge for the economy if left alone by bureaucrats: A new study from the R Street Institute explains that the emerging “peer production” economy — think Lyft and Airbnb — could “add trillions of dollars to the economy of the next several decades,” making it important for policymakers to back off. “[T]he development of these new modes of doing business has been threatened by legislators and regulators – particularly on the state and local level – who in too many cases attempt to apply regulatory models developed in an earlier era to the individuals and small firms that are innovating through peer production,” write Andrew Moylan and R.J. Lehmann in the study, Five Principles for Regulating the Peer Production Economy. “These actions do little to protect consumers, but rather they prevent innovative ideas from coming to market and keep potential service providers sidelined.” Moylan and Lehmann say that policymakers “should consider the risk of ‘government failure’” and regulate with a “light hand” to prevent suppressing this emerging part of the economy.

NAF report quantifies cost of NSA snooping

July 29, 2014, 3:42 PM

In the year since Edward Snowden began disclosing the scope of National Security Agency’s programs to use cell phone networks, the Internet and various commercial websites to spy on both American citizens and foreign nationals, there has been considerable speculation about the cost of these programs to the U.S. information technology industry in terms of money and trust.

The New America Foundation has released a report that attempts to quantify these costs, concluding that over the past 12 months the NSA’s actions “have already begun to, and will continue to, cause significant damage to the interests of the United States and the global Internet community.”

In the executive summary, authors Danielle Kehl, Kevin Bankston, Robyn Greene and Robert Morgus discuss detrimental effects on four specific areas:

  • Direct economic costs to U.S. businesses: American companies have reported declining sales overseas and lost business opportunities, especially as foreign companies turn claims of products that can protect users from NSA spying into a competitive advantage. The cloud computing industry is particularly vulnerable and could lose billions of dollars in the next three to five years as a result of NSA surveillance.
  • Potential costs to U.S. businesses and to the openness of the Internet from the rise of data localization and data protection proposals: New proposals from foreign governments looking to implement data localization requirements or much stronger data protection laws could compound economic losses in the long term. These proposals could also force changes to the architecture of the global network itself, threatening free expression and privacy if they are implemented.
  • Costs to U.S. foreign policy: Loss of credibility for the U.S. Internet freedom agenda, as well as damage to broader bilateral and multilateral relations, threaten U.S. foreign policy interests. Revelations about the extent of NSA surveillance have already colored a number of critical interactions with nations such as Germany and Brazil in the past year.
  • Costs to cybersecurity: The NSA has done serious damage to Internet security through its weakening of key encryption standards, insertion of surveillance backdoors into widely-used hardware and software products, stockpiling rather than responsibly disclosing information about software security vulnerabilities and a variety of offensive hacking operations undermining the overall security of the global Internet.

Among the recommendations the authors make are strengthening privacy protections for both Americans and non-Americans, within and outside the U.S. borders; increased transparency around government surveillance, both from the government and companies; renewed commitment to the Internet freedom agenda in a way that directly addresses issues raised by NSA surveillance, including moving toward international human rights-based standards on surveillance; and development of clear policies about whether, when and under what legal standards it is permissible for the government to secretly install malware on a computer or in a network.

The entire 64-page report can be downloaded here. A summary version is here. Also check out my own R Street white paper on the potential cost of NSA computer spying here.

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