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TWIA raises rates ahead of board restructuring

August 13, 2015, 7:00 AM

Now that we’re a good two-and-half months into hurricane season, it would be a good time to check in on the financial situation of the Texas Windstorm Insurance Association, the state-run agency that provides windstorm insurance to residents of designated counties along the Texas coast.

TWIA has a longstanding problem, in that the rates charged by the agency for its policies are not nearly enough to meet expected future claims. The agency has been making progress, however, with a series of rate increases that have reduced TWIA’s underfunding from 40 percent below actuarially sound levels to just 22 percent. And earlier this month, TWIA announced another 5 percent rate increase, further reducing its funding gap.

The Texas Windstorm Insurance Association board voted to approve a rate hike for property owners in coastal communities, despite opposition from legislators.

The 5 percent hike in premiums was approved on a 5-4 vote during the board’s meeting Tuesday in Galveston. It is the fifth consecutive year the board has approved a 5 percent increase.

This current increase is the last time TWIA will have an opportunity to consider rates before a legislatively mandated restructuring goes into effect in September.

As you may recall, one of the key points of contention over TWIA during the last legislative session had to do with the make-up of TWIA’s board. As originally conceived, TWIA’s restructuring would have increased the relative power of coastal residents (who have traditionally been hostile to rate increases). It was widely thought that such a move would have all but foreclosed any further rate increases. Ultimately, the enacted legislation reduced board representation for both the insurance industry and coastal residents, leaving neither side with a clear majority.

Whether the new board continues to move toward rate adequacy will be a key indicator of TWIA’s long-term sustainability. Of course, before we get to that point, we have to make it through another storm season.

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

An EPA-inspired muscle car renaissance

August 13, 2015, 6:00 AM

USA Today recently proclaimed “the golden age of muscle cars is now.” Based upon sales numbers of large-displacement and high-power motors, it’s hard to say they’re wrong.

New automotive “legends,” like the 707 horsepower Dodge Hellcat twins, happily convert rubber into smoke, noise and an aroma only gearheads can love, by way of a 6.2 liter, supercharged motor. New car types are driving the trend toward enhanced muscle.

Consider the Mercedes-Benz CLA AMG. The swooping lines of this Teutonic sedan don’t scream “power!” like the current crop of American offerings, yet it generates 355 horsepower with a 2.0 liter, turbocharged motor, less than one-third of the Hellcats’ displacement.

Got up market and even Ferrari, which intends to make the most driver-focused cars on the road, has succumbed to the trend of forced-induction and used it to squeeze more power (and much more torque) out of a smaller and more efficient engine. Thus, while the 458 Italia had a 4.5 liter naturally-aspirated V8 making 562 horsepower and 398 pound feet of torque, the next iteration of the vehicle out of Maranello, the 488, by contrast, has a 3.9 liter turbocharged V8 making 661 horsepower and 561 pound feet of torque.

Last month, the National Automobile Dealers Association released full-year sales projections showing the industry will sell 17.2 million vehicles in 2015, the first time sales have topped 17 million since 2001. June figures from Autodata Corp. show the Chevy Camaro, Dodge Challenger and Ford Mustang all saw gains, with the Mustang having its best June since 2007.

Growing popularity of new, more powerful cars is not what you’d expect in an era of high gas taxes, federal emissions regulations and so-called “combined fleet average efficiency standards.” In fact, we can thank America’s environmental stewards, the Environmental Protection Agency, for this power revolution and for the attendant interest in driving it has generated.

It may be surprising to some, but the interests of gearheads and the EPA are fundamentally aligned. Both want motors that are more capable. Granted, the EPA wants motors that are capable of doing more with less fuel, while the enthusiast community simply wants motors that are capable of more power. But for automotive engineers, the technical route to each destination runs through a series of the same stops.

For instance, higher engine-compression ratios allow fuel to be burned at higher temperatures which creates more power per-piston stroke. The environmentally conscious get smaller and smaller displacement motors capable of going further and further distances, while driving enthusiasts get more power out of motors of all sizes. The EPA knows this full well and has floated the terrific idea of mandating higher-octane fuel at the pump, because it burns hotter and provides for higher compression.

That’s right, the EPA wants your car filled with something approaching racing fuel for the sake of the environment.

Even the EPA’s mileage requirements have unwittingly saved relatively unsophisticated large displacement motors. The introduction of cylinder deactivation technologies, coupled with ever more efficient transmissions, allow vehicles that truly are “gas guzzlers” to avoid the tariff. As a bonus, those automatic transmissions are capable of transferring an engine’s power to the road with less power lost in translation. The standard for a fast zero-to-60 time has dropped from five seconds a decade ago to just four seconds today.

Performance benefits have accrued from even less likely sources, like hybrid technology. When it isn’t powering a hit-parade of uninspiring vehicles like the Prius, the Volt or the i3, hybrid tech allows performance vehicles to embrace surges of instant torque hitherto unavailable with gasoline powertrains.

The point is that while the EPA can strive to constrict and constrain, it can’t ultimately change consumer preferences and behavior. The underlying American desire to go fast has not been diminished by the regulator’s desire to make us all better. As the EPA continues its push toward a green nirvana, driving enthusiasts will be along for the ride because, paradoxically, green tech is performance tech.

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

Appeals court considers ITC bid to be Internet cop

August 12, 2015, 3:32 PM

The Court of Appeals for the Federal Circuit heard oral arguments this week in what might otherwise be described as an obscure patent case, ClearCorrect v. International Trade Commission. What makes the case noteworthy is the ITC’s unilateral decision – on its own, without guidance from Congress – that it has authority to regulate “electronic transmissions of digital data” over the Internet in the same manner as it does physical goods.

This is a big deal. Until now, the ITC, a relatively minor federal agency, has enforced intellectual property rights largely to block importation of items like knockoff designer handbags and bootleg DVDs. In most instances, these matters are completely actionable in U.S. courts. If it successfully expands its authority to become the new digital cop on the Internet beat, it would subject a broad range of ordinary business activities to new investigations and potentially could resurrect SOPA-style site blocking to censor the Internet.

Indeed, a leaked Motion Picture Association of America memo outlined precisely that strategy, as the ITC offers remedies that are stronger, swifter and more inexpensive than traditional litigation. Rights-holders simply prefer the ITC because it offers them a bigger, blunter cudgel. Which is probably why the MPAA wrote an amicus brief in ClearCorrect arguing how great an idea it was to regulate the Internet at the border.

Fortunately, there has been a good deal of opposition to the ITC’s power grab. In a joint letter with FreedomWorks and the Niskanen Center, R Street argued against expanding ITC authority to include digital transmissions:

Markets for digital goods have thrived for decades without the commission exercising these powers. They represent one of the most vital segments of the U.S. economy. The authority of domestic courts has been more than sufficient to handle disputes over intellectual property rights concerning digital goods. The commission’s entry into this space is a wholly unwelcome and unnecessary government intervention and will only complicate matters concerning digital commerce.

The Cato Institute’s K. William Watson — who earlier wrote a policy paper on ITC’s patent-enforcement powers, arguing that they are altogether “unnecessary, protectionist and inconsistent with U.S. trade obligations” — also weighed in:

[T]he bulk of the ITC’s caseload, including the Align case, involves disputes between parties that can and do sue each other in U.S. courts…Giving the ITC power to bar cross-border data transmissions invites mischievous litigation without serving any legitimate public policy goal.

The ITC’s move has also found strong opposition from other parts of the political spectrum. In April, R Street also joined a letter with more than two dozen organizations and law professors, forming a broad coalition that included the American Civil Liberties Union, Public Knowledge, the Electronic Frontier Foundation, the American Library Association and the Center for Democracy and Technology. In addition, Public Knowledge and the Electronic Frontier Foundation co-authored an amicus brief. And this week, The New York Times editorial board agreed.

So did all of these efforts have an impact in raising alarm bells? Looking to the oral argument, it’s clear the judges are aware of the potential threat. Speaking to the ITC attorney, Chief Judge Sharon Prost said:

In your summary of argument, which is only a page, you make the very salient statement that we shouldn’t lose sight of the fact that this is a case about teeth. Well, Markman was a case about dry cleaning, but no one thinks of Markman as standing for anything about dry cleaning. It stands for an important legal principle, and in my view, so does what the Commission has done here. So I don’t quite understand how you’re trying to cabin what’s going on here.

And just to supplement that, you go on to sort of say, if I’m understanding correctly, that these Internet service providers are all worried, but this isn’t that type of case. And kind of, “Don’t worry, we’ll get that case, and we’ll decide it on the facts and the record before us.” It does seem to me that if we were to affirm the Commission here, we would be saying that the ITC has jurisdiction over electronic transmissions. I don’t see very many limiting principles that would apply to future cases. Do you?

The attorney for ClearCorrect seized the opportunity Prost offered to reiterate the point that the ITC, like other limited-jurisdiction agencies, shouldn’t unilaterally expand their own powers without a mandate from Congress:

Congress has a lot of balls in the air about what we’re going to do about this streaming information. And when it decides these issues…they’re going to have their theories and their evidence and their lobbyists and bills and draft bills, amendments, all that good stuff, to come up with the rule that we can work with, and all live by hopefully.

So the point is well taken that instead of the ITC just unilaterally expanding its own power to try and cope with this brave new world, which I suggest is really no different from the old world, this is a matter that should be left to Congress.

Charles Duan and Foster Dobry have even more analysis of the oral argument over at the Public Knowledge blog.

Meanwhile, the MPAA has characterized the objections as “hyperbole” and “sky is falling” rhetoric. To be fair, they are right that this case “is not about what the remedy should be if unlawful conduct if determined.” Of course it should come as no surprise that they are being disingenuous; as shown by the leaked MPAA memo, getting the ITC to implement site-blocking and undermine the Digital Millennium Copyright Act’s safe-harbor protections has been their plan all along.

For now, we have to wait several months to see what happens. In the event that the court affirms the commission’s position, it will be up to Congress to rein in the ITC’s ill-advised attempt at empire-building.

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

EPA causes environmental disaster in Colorado

August 12, 2015, 12:06 PM

The Environmental Protection Agency often justifies its own existence by noting that corporations – who see profit as their goal, rather than environmental protection – are ill-equipped (or at least, ill-prioritized) to care for America’s natural resources.

It turns out that, perhaps, the EPA might also be ill-equipped to handle toxic waste, when it comes to preventing large-scale pollution of our nation’s waterways. In fact, they may have caused, on their own, one of our nation’s greatest environmental disasters.

EPA crews trying to collect and contain wastewater in the Gold King mine in Durango, Colo., loosed 1.1 million gallons of “acidic, yellowish” discharge, causing the pollution – which includes levels of arsenic, lead, cadmium, aluminum and copper – to flow into the Animas River (an early tributary of the Colorado) at a rate of 1,200 gallons per minute.

From the Denver Post:

EPA chiefs flew in Friday and acknowledged an inappropriate initial response Wednesday in which they downplayed the severity and failed to anticipate the downstream impacts.

Durango identifies itself as the “River City,” and residents’ lives revolve around fishing, swimming, tubing and entertaining tourists along the Animas River.

Most longtime residents know too well the problem of old mines that leak heavy metals into headwaters — an issue around Colorado and the western United States — but never expected a ruinous onslaught like this.

Holly Jobson, 62, walking at noon along banks where yellow sediment was glomming onto rocks, said Silverton ought to push for a proper federal cleanup around mines. Silverton officials in the past have resisted, fearing the stigma of a federal Superfund cleanup designation and the impact on tourism.

By Monday morning, the water flow had decreased to around 580 gallons per minute. Lab testing has not yet begun on-site, and the EPA is apologizing for their slow response rate, particularly considering the magnitude of the incident. Durango gets most of its water from the Aminas River and relies on the river’s beauty to bring tourists to the town. The city has already lost $150,000 in revenue this month. About 1,000 water wells are presumed contaminated.

The EPA has not only claimed responsibility for the spill, but is claiming responsibility for a slow response as well. The EPA says now that the spill was far faster, and far larger than they initially assumed.

The EPA did not have to be on-site, to begin with, it seems. The region has a coalition of local organizations called the Animas River Stakeholders Group who have worked together since 1994 to address pollution coming out of nearby mines. The Gold King mine is widely known to be one of the most polluted, leaking around 50 to 250 gallons of wastewater per minute. While the group had pushed to find the source of the leak and stem it from there, the EPA went ahead with the project apart from the group, and seemingly without local expertise.

Donald Trump isn’t challenging political correctness; he’s just rude

August 12, 2015, 10:55 AM

And frankly, what I say, and oftentimes it’s fun, it’s kidding. We have a good time. What I say is what I say.

Here’s another idea, Mr. Trump—my six-year-old has already learned this one—If you can’t say anything nice, don’t say anything at all.

Let’s get one thing straight: Fighting the stifling impacts of political correctness doesn’t require being rude or offensive.

Donald Trump has definitely shaken up the Republican presidential primary and forced discussion of certain topics like immigration. Even so, Trump’s no freedom fighter; he’s a billion-dollar bully.

Publicly calling women “fat pigs,” “slobs,” “dogs,” and “disgusting animals” is a big deal for a party trying to engage female voters.

Some folks might have chuckled as Mr. Trump said those statements were meant to apply to Rosie O’Donnell, but many women who’ve been the targets of such insults weren’t laughing.

In fact, Trump seems to relish offending people.

What person who has felt the sting of harsh personal insults believes “it’s fun, it’s kidding.” Would your mom, sister or daughter be having a “good time” listening to someone joke about her weight or appearance?

That’s not a politically bold tactic; it’s just wrong.

I’m more than happy for Mr. Trump to tackle the issues and engage voters in a different way, but let’s not act like his abject rudeness is a virtue.

We all say offensive things from time to time, but we should also know when we’re wrong and seek forgiveness. Doubling down on an offensive approach may work for standup comics, but it isn’t behavior prized in the aspiring leader of the free world.

There’s only been one president who earned the nickname “The Great Communicator.” He spoke his mind, shook up political conventions and did so with eloquent humility.

“I never thought it was my style or the words I used that made a difference,” said President Ronald Reagan. “It was the content. I wasn’t a great communicator, but I communicated great things and they didn’t spring full bloom from my brow. They came from the heart of a great nation — from our experience, our wisdom and our belief in principles that have guided us for two centuries.”

Reagan engaged the same populism fueling Trump’s campaign by sparking hope in politically jaded Americans across the political spectrum. He gave them a vision bigger than his own leadership capacity. Trump may be “very rich,” but he’s conspicuously poor in the leadership qualities we find in great presidents.

And honestly, Mr. Trump, if you don’t like it, I’m sorry. As you’ve said, “I’ve been very nice to you, although I could probably maybe not be,” based on how you’ve acted.

Is Carly Fiorina Silicon Valley’s friend?

August 11, 2015, 3:56 PM

By all accounts, Carly Fiorina gave a strong performance at the Republican Party presidential debates last week. I initially missed the “undercard” event in which she participated, but after hearing all the media praise and seeing the spike in polls, I finally got around to watching her entire performance and post-debate reflections.

While I concur that Carlymania is real, there were a couple statements the former “tech leader” made that really irked me.

The rise of the cyberwall

During the debate, Carly Fiorina was asked whether she would allow “cyberwalls” to continue to exist. Apparently, the Fox News moderators made up the term “cyberwall” to describe cyber-privacy protections, such as encryption that guard against unwanted snooping by either hackers or government agencies. The question stems from recent discussions led by FBI Director James Comey, who has called on Congress to enable “backdoor access” to encrypted communication.

Fiorina responded to the question by explaining:

We need to tear down cyberwalls not on a mass basis but on a targeted basis….I do not believe we need to wholesale destroy every American’s privacy, but, yes, there is more collaboration required between private sector companies and the public sector.

This answer puts Carly on the outside of the tech community at-large. Mashable detailed how Google, Facebook, Apple, Twitter and other tech companies have written “multiple open letters urging the administration (and Congress) to lay off policies that would weaken encryption.”

Additionally, Sunday Yokubaitis, president of the Internet security firm Golden Frog, expounded on this opposition in a column titled “Encryption is the Second Amendment of the Internet.” Yokubaitis explained how backdoor access will open Americans to spying both by the U.S. government and by hackers, both foreign and domestic. He also refutes the idea that encryption jeopardizes national security, writing that it:

[E]nsures that the data (individuals) send and receive is encrypted and safe from prying eyes. That data belongs to them; it’s their property. It doesn’t belong to us, an Internet access provider, or the government.

Yokubaitis concludes by comparing privacy protections to another fundamental American principle:

In the same way that firearms are synonymous with the Second Amendment and protecting yourself, using encryption to protect your data should be a fundamental right.

Fiorina might be going for a Reagan moment here, but unlike the original, this would bring the opposite of freedom and liberty to those living under totalitarian governments. Instead, it would expose millions of Americans to an overreaching government and thwart essential privacy protections.

Patents and innovation are not the same thing

The day after the debate, Carly Fiorina went on MSNBC’s Morning Joe to continue to plead her case for being the right choice for the Republican nomination. In discussing her time as CEO of Hewlett-Packard she defended her economic credibility, saying that, during her tenure “we tripled innovation to 11 patents a day.”

You might ask yourself what’s wrong with this statement; don’t patents mean more innovation? Regrettably, this assumption is false, as editorial board of The Economist eloquently explained:

Patents are supposed to spread knowledge, by obliging holders to lay out their innovation for all to see; they often fail, because patent-lawyers are masters of obfuscation. Instead, the system has created a parasitic ecology of trolls and defensive patent-holders, who aim to block innovation, or at least to stand in its way unless they can grab a share of the spoils… Innovation fuels the abundance of modern life. From Google’s algorithms to a new treatment for cystic fibrosis, it underpins the knowledge in the ‘knowledge economy.’ The cost of the innovation that never takes place because of the flawed patent system is incalculable.”

Writing in The Washington Post, Vikek Wadhwa – director of research at Duke University’s Center for Entrepreneurship and Research Commercialization – further refutes Fiorina’s logic:

In today’s era of exponentially advancing technologies, however, patents have become the greatest inhibitor to innovation and are holding the United States back. The only way of staying ahead is to out-innovate a competitor; speed to market and constant reinvention are critical. Patents do the reverse; they create disincentives to innovate and slow down innovators by allowing technology laggards and extortionists to sue them.

With these thoughts in mind, I would encourage Carly to rethink her simple equation that patents equal innovation. Seriously, while the guys at JDate might have a patent on it, I doubt they “invented” mutual attraction. Pretty sure that was Cupid… or alcohol.

If Carly truly believes “technology defines our century,” it would benefit her to develop a tech policy platform that is congruent with the community she claims to represent. Thankfully her “Thatcher-esque” performance has most likely catapulted her onto the main stage for the next debate. That will give her an opportunity to hit the reset button and try again on issues important to Silicon Valley.

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

Int’l Trade Commission decision threatens borderless Internet ecosystem

August 11, 2015, 3:52 PM

From Watchdog.org:

A recent letter penned by the R Street Institute and Niskanen Center, and joined by FreedomWorks, criticized the ITC’s decision, arguing that “treating cross-border digital transmission as acts of importation is an injudiciously broad interpretation” of the commission’s statutory purview.

Bernard S. Sharfman

August 11, 2015, 2:36 PM

Bernard S. Sharfman is an adjunct professor of business law at the George Mason University School of Business and an associate fellow of the R Street Institute.

Bernard also is a member of the Journal of Corporation Law‘s editorial advisory board. He previously was visiting assistant professor of law at Case Western Reserve University School of Law.

He has written extensively on the topic of corporate governance. That includes his most recent work, “Activist Hedge Funds in a World of Board Independence: Creators or Destroyers of Long-Term Value?,” forthcoming in the Columbia Business Law Review.

Email: bernardsharfman@gmail.com

Ending the Uber wars: How to solve a special interest nightmare

August 11, 2015, 2:28 PM

From The Fiscal Times:

Unfortunately, the United States is far from immune from this political favoritism, though thankfully the experience is not quite so extreme. The R Street Institute, in an assessment of taxi and car service regulations in 50 U.S. cities, found that every city had laws that hindered equal competition. Shockingly, Washington, D.C., which has a history of taxi corruption, even considered a law that would have required car services like Uber to charge a minimum fare at least five times larger than that charged by taxis. Citing the D.C. Council’s proposal, Mercatus Center Senior Research Fellow Matt Mitchell described it this way: “In a spectacular show of candor, the legislation included language stating that the rationale is to ensure that Uber ‘does not directly compete with or undercut taxicab service.’”

Today: Court hears ‘zombie SOPA’ case

August 11, 2015, 7:37 AM

From Politico:

But plenty in the tech world are challenging that notion. Public Knowledge has called the case “Zombie SOPA,” saying if the ITC is able to regulate data on IP grounds, it’ll be able to block websites under the guise of trade regulation. FreedomWorks and the R Street Institute wrote to ITC Chairwoman Meredith Broadbent last week (http://bit.ly/1gYrK5g) saying the agency would be overstepping its authority by regulating data and would “pose a serious threat to free access to lawful content on the Internet.” An amicus brief from Public Knowledge and the Electronic Frontier Foundation argues that the change to the ITC’s authority would also allow it to regulate cross-border telecommunications data. Those groups have asked the court to focus on limiting the ITC’s authority at least so it can’t regulate telecom data.

SXSW policy panels you should vote for

August 10, 2015, 5:02 PM

We at R Street have put together what we think are some great policy panels for next year’s SxSW conference in Austin, Texas. But we need your help to get in the final conference program. Please take a moment to vote for us and help bring free-market ideas to Austin’s annual gathering of technologists, activists and entrepreneurs.

Voting is open now through Sept. 4. Check out the panels below, featuring speakers from R Street and some of our friends. Click through the link to give them a thumbs-up!

Panels featuring R Streeters:

  1. Zombie SOPA—A New Threat to the Open Internet
    • Featuring: Charles Duan, Public Knowledge; Mike Godwin, R Street; Abigail Slater, Internet Association; Ellen Schrantz, Office of Rep. Darrell Issa.
  2. Autonomous Vehicles Are Here. But Are We Ready?
    • Featuring: Ian Adams, R Street; former National Highway Traffic Safety Administrator David Strickland; Jim Chen, Tesla; Jennifer Haroon, Google[x].
  3. Disintermediation in Digital Content Markets
    • Featuring: Katie Oyama, Google; Casey Hastings, Pandora; Sasha Moss, R Street; Rep. Jared Polis, D-Colo.
  4. Regulate All the (Internet of) Things!
    • Featuring: R.J. Lehmann, R Street; John Godfrey, Samsung; Eli Dourado, Mercatus Center; Lauren Soltani, Office of Rep. Suzan DelBene.
  5. Disrupt the Grid! The Politics of “Homebrew” Power
    • Featuring: Catrina Rorke, R Street; Lynne Kiesling, Northwestern University; Tom Tanton, Reason Foundation; Doug Lewin, SPEER.
  6. Dear Government: Show Me the Money!
    • Featuring: Rep. Justin Amash, R-Mich.; Nathan Leamer, R Street; Ohio State Treasurer Josh Mandel,; Rebecca Williams, Office of Management and Budget.
  7. Giving Back: Solving Educational Inequality
    • Featuring: Lori Sanders, R Street; Kate Sheerin, Google; Ed Hidalgo, Qualcomm.
  8. How Super PACs Are Disrupting the Election Process
    • Featuring: Zach Graves, R Street; Lee Dunn, Google; Jonathan Mantz, BGR Group; Martin Avila, Terra Eclipse.
  9. Ride the Wave: Data as Movement Builder
    • Featuring: Greg Fischer, City of Louisville; Dewey F. Bartlett, City of Tulsa; Michele Jolin, Results for America; Lori Sanders, R Street Institute.

Panel submissions from our friends:

  1. Can Congress Tackle the Internet of Things?
    • Featuring: Rep. Darrell Issa, R-Calif.; Elizabeth Frazee, TwinLogic; Paul Daugherty, Accenture; Nicole Gustafson, National Football League.
  2. YOLO Politics: Bringing C-SPAN to Reddit
    • Featuring: Benny Johnson, IJ Review; Evangeline Johnson, Terra Eclipse; Liz Mair, Mair Strategies LLC; Joshua Lamel, BGR Group.
  3. Decrypting the Cyber Security Debate in Washington
    • Featuring: Rep. Will Hurd, R-Texas; Chani Wiggins, TwinLogic; Sonny Sinha, Department of Homeland Security; Denise Zheng, Center for Strategic and International Studies.
  4. Are We Giving China the Internet? ICANN Explained
    • Featuring: Rep. Suzan DelBene, D-Wash.; Christian Dawson, i2 Coalition; Michele Neylon, Blacknight Internet Solutions; Tiffany Moore, TwinLogic.
  5. Elise’s Data-Plan: Connecting Rural America
    • Featuring: Sen. Jerry Moran, R-Kan.; Rebecca Thompson, Competitive Carriers Association; Kristi Henderson, University of Mississippi Medical Center; Eric Woody, Union Wireless.
  6. Following the Stream: Congress & Music Royalties
    • Featuring: Casey Rae, Future of Music Coalition; Rep. Mimi Walters, R-Calif.; Katie Peters, Pandora; Rachel Wolbers, TwinLogic.
  7. Copyright & Creators: 2026
    • Featuring: Lateef Mtima, Howard University School of Law; Betsy Rosenblatt, Whittier Law School; Alexandra Mogyoros, University of Oxford; Jon Healey, Los Angeles Times.
  8. Winter is Coming: Copyright Chill on Security
    • Featuring: Corynne McSherry, Electronic Frontier Foundation; Laura Moy, New America Foundation; Kyle Wiens, iFixit; Karen Sandler, Software Freedom Conservancy.
  9. Pixelated & Political: The Internet in Washington
    • Featuring: Rep. Blake Farenthold, R-Texas; Rep. Eric Swalwell, D-Calif.; Rep. Renee Ellmers, R-N.C.; Michael Beckerman, Internet Association.
  10. Internet Economy: In the U.S. & Abroad
    • Featuring: Sen. John Thune, R-S.D.; Michael Beckerman, Internet Association.
  11. Embedding Human Rights in the Internet
    • Featuring: Joseph Hall, Center for Democracy & Technology; Karen Reilly, Independent; Eric Sears, MacArthur Foundation; Lindsay Beck, Open Technology Fund.
  12. How to Fight ISIS without Breaking the Internet
    • Featuring: Rebecca MacKinnon, New America Foundation; Judith Lichtenberg, Global Network Initiative; Shahed Amanullah, LaunchPosse; Andrew McLaughlin, Betaworks.
  13. The End of Online Free Expression?
    • Featuring: Gautam Hans, Center for Democracy & Technology; Dorothy Chou, Dropbox.
  14. CDT/Fitbit: Ethics & Privacy in Wearable Research
    • Featuring: Michelle De Mooy, Center for Democracy & Technology; Shelten Yuen, Fitbit.
  15. Everybody Dies: What is your Digital Legacy?
    • Featuring: Alethea Lange, Center for Democracy & Technology; Megan Yip, Law Office of Megan Yip; John Troyer, Centre for Death and Society; Vanessa Callison-Burch, Facebook.
  16. The Singularity and the Question of God
    • Featuring: Julie Germany, White Coat Waste; Luke Kenworthy, Indiana Office of State-Based Initiatives; Taylor Barkley, Mercatus Center; Joe Carter, Action Institute.
  17. Protecting the Digital You
    • Featuring: Nuala O’Connor, Center for Democracy & Technology
  18. Euro vs. American Privacy: Clash of Civilizations?
    • Featuring: Jillian York, EFF; Ulf Buermeyer, Netzpolitik; Raegan MacDonald, Access; Chris Soghoian, American Civil Liberties Union.
  19. Every City is an Internet City
    • Featuring: Nika Nour, Internet Association; Sen. John Thune, R-S.D.; Sen. Jerry Moran, R-Kan.; Rep. Fred Upton, R-Mich.
  20. The Killer Congressional Office
    • Featuring: Seamus Kraft, Open Gov Foundation; Rep. Seth Moulton, D-Mass.; Sen. John Cornyn, R-Texas; Rep. Cathy McMorris Rodgers, R-Wash.; Sen. John Thune, R-S.D.
  21. Marriage Equality: Where do we go from here?
    • Featuring: Seth Guidry; Jerri Ann Henry, Freedom to Marry; Julie Germany, White Coat Waste; Tyler Deaton, American Unity Fund.
  22. Crowdfunding: Possibilities and Policy Challenges
    • Featuring: Ryan Feit, SeedInvest; Sara Hanks, CrowdCheck; Michal Rosenn, Kickstarter; Evan Engstrom, Engine.
  23. Internet of Things: Just Someone Else’s Computer?
    • Featuring: Rep. Blake Farenthold, R-Texas; Sherwin Siy, Public Knowledge; Jen Ellis, Rapid7; Sara Watson, Berkman Center.
  24. Using data to power criminal justice reform
    • Featuring: Emily Shaw, Sunlight Foundation; Wesley Lowery, Washington Post; Tracy Siska, Chicago Justice Project; Clarence Wardell, Presidential Innovation Fellows Program.
  25. The New Battle Over Encryption & How to Survive It
    • Featuring: Kevin Bankston, New America Foundation; Moxie Marlinspike, Open Whisper Systems; Jennifer Valentino-DeVries, Wall Street Journal; Heather West, CloudFlare.
  26. No Encryption Backdoors, Please. Myths Debunked.
    • Featuring: Sunday Yokubaitis, Golden Frog.
  27. Cryptowars 2.0: Silicon Valley vs. Washington
    • Featuring: Sara Sorcher, CS Monitor; Matt Blaze, University of Pennsylvania; Amit Yorak, RSA; Stewart Baker, Steptoe & Johnson LLP.
  28. Smart Cars, Smarter Cities: New Transit Tech
    • Featuring: Michael Petricone, Consumer Electronics Association; Susan Zielinski, SMART; Andrew Collinge, Greater London Authority; Ashwini Chhabra, Uber.
  29. Get your Goods: Unmanned Systems and 3D Printing
    • Featuring: Doug Johnson, Consumer Electronics Association; Gur Kimchi, Amazon; Ping Fu, 3D Systems; Richard Pelletier, Ford Motor Co.
  30. Building better cities with better data
    • Featuring: Chris Gates, Sunlight Foundation; Tony Yarber, City of Jackson; Jennifer Pahlka, Code for America; Daniel X O’Neil, Smart Chicago Collaborative.
  31. Be the Next Tony Stark
    • Featuring: Mike Geersten, TandemNSI; Gary Shapiro, Consumer Electronics Association; Christina Winn, Arlington Economic Development; Brad Tousley, Defense Advanced Research Projects Agency.
  32. 5 Best Startup Ideas in VR / AR
    • Featuring: Robert Scoble, RackSpace; Nonny De La Pena, Emblematic Group; Shawn Dubravac, Consumer Electronics Association.
  33. High Res Audio in Every Earbud
    • Featuring: Jeff Joseph, Consumer Electronics Association; Maureen Droney, The Recording Academy; Aaron Levine, Sony; Pal Bratelund, TIDAL.
  34. Tech at Issue in 2016 Election
    • Featuring: Julie Samuels, Engine; Ron Klain, Revolution LLC; Ted Ullyot, Andreessen Horowitz; Tony Romm, POLITICO.
  35. Online Privacy and the Price of Free
    • Featuring: Sunday Yokubaitis, Golden Frog; Alan Fairless, SpiderOak; Alex Bradshaw, Center for Democracy & Technology.
  36. Making Texas Wine in the Drone Age
    • Featuring: Michael Hendrix, U.S. Chamber of Commerce Foundation; Ryan Baker, Arch Aerial LLC; January Wiese, Texas Hill Country Wineries.
  37. Survive the End
    • James Carafano, Heritage Foundation; Ericka Anderson Sylvester, National Review; Stacy Washington, Emmis Communications; Lindsey Burke, Heritage Foundation.
  38. Fair Use Awakens: Classrooms/Libraries/Communities
    • Featuring: Heidi Tandy, Organization for Transformative Works; Ebony Thomas, University of Pennsylvania; Elizabeth Rosenblatt, Whittier Law School.


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Hillary wants debt-free college (just like Bernie!)

August 10, 2015, 4:15 PM

Bernie Sanders is racking up rallies on the West Coast this week, kicking off his Pacific jaunt with a rally for 20,000 Bernie-maniacs in Portland. Even though Bernie’s speech was ultimately to a very friendly audience of Portland artisanal craftspeople and alternative bookstore owners, it had to be enough to put Hillary Clinton on notice that she’s again being challenged by an upstart young whippersnapper with great grassroots potential.

I kid, obviously. About the whippersnapper part. Bernie tried to nationalize fire when his cave-mate discovered it.

At any rate, today Hillary Clinton is offering everyone a free college education, because desperate times call for desperate measures. She might be able to afford to lose Portland, but she can’t possibly be expected to lose all the youth she’s energizing with her pantsuits and her snapchats and her hip language.

Hillary Clinton is proposing an expansive program aimed at enabling students to attend public colleges and universities without taking on loans for tuition, her attempt to address a source of anxiety for American families while advancing one of the left’s most sweeping new ideas.

The plan—dubbed the “New College Compact” and estimated to cost $350 billion over 10 years—would fundamentally reshape the federal government’s role in higher education by offering new federal money, but with strings attached.

States would have to increase their own spending on higher education, and universities would be required to control spending, though the Democratic presidential front-runner hasn’t yet worked out details. Families still would be required to contribute, but students wouldn’t have to take out loans to attend public schools.

Forgive me for being blunt, but this might be the stupidest plan I’ve seen since the Tigers traded out their entire pitching staff midseason for a dude who lives in a van. I’m not just saying that because Hillary has very little cache on the issue – going up against Bernie Sanders who has waged the “free college” Quixotic crusade for decades – or because it’s blatant pandering. I’m saying it because it fundamentally misunderstands the student debt problem to begin with.

Yes, lots of people have borrowed lots of money, myself included. Occasionally, that money becomes difficult to pay back. And the cost of college is fundamentally out of whack with the economy, of course: as the supply of schools increases for students and demand for higher education decreases for colleges, it follows that higher education costs should go down and not up, even if the majority of the students attending those schools are getting useless degrees in midcentury French film.

But that’s not what’s happening – as the years go on, college gets more expensive and less necessary, and students are paying back scads of money to the federal government without an end in sight.

This is the fault of unrestricted student lending from the federal government, the kind Hillary wants to expand. Colleges know they can get any amount of money from students, and so, regularly raise their rates, thus asking for more money the government will undoubtedly approve. Students see no reason not to pay the higher prices, since those are akin to the going rates, and so take more and more money from the federal government and its licensed private lending corporations to pay colleges. As the federal government improves its lending program, colleges charge more, making the whole thing a vicious cycle, with students caught in the middle. The more the government lends, the more colleges charge, the more debt students are saddled with.

And to make matters worse, this is actually beneficial to the government. Student loan repayments are a more lucrative revenue stream for the federal government than income taxes. So the more they lend, the more the students pay back, the better the government does on its investment.

Hillary’s plan merely gives the money to the colleges directly. Thus, I suppose, it eliminates the middleman, but doesn’t make it any easier for college students to repay their massive loans or to get a quality education.

Appeals court to hear US agency’s decision to block digital imports

August 10, 2015, 7:30 AM

From IDG News:

There is “absolutely no need to manufacture new agency powers over digital data,” free-market groups the Niskanen Center, the R Street Institute and FreedomWorks wrote in a letter to the USITC this month. “Markets for digital goods have thrived for decades without the commission exercising these powers.”

A Bush/Rubio ticket would be complicated, not impossible

August 09, 2015, 1:52 PM

They would, in some senses, appear to be the dream ticket. One is the more moderate elder statesman; one is the brash young firebrand. One is the darling of the establishment and a fundraising juggernaut; one has already come from behind to beat the establishment at least once and still has legitimate Tea Party cred. They are personal friends and have worked well together at the state level.

The potential 2016 ticket of Jeb Bush and Marco Rubio also would seem well-positioned to respond to what was an obvious weakness diagnosed in the Republican National Committee’s post-mortem on the party’s 2012 loss – its dismal performance among Latinos.

Both Bush and Rubio are Catholics. Both are fluent Spanish speakers. One is the child of Cuban immigrants; one is married to a native of Mexico. Both have indicated support for the party’s priority of increased border security, but they also have talked about expanded visas and offering some pathway to citizenship for those already here illegally (though the details of their specific plans differ).

None of these qualities are likely to endear them to the base, but they could matter significantly in a general election, particularly given that the party’s Latino support has continued to slide from a recent 2004 peak, even as Latinos’ share of the electorate continues to rise.

In 2000, George W. Bush won 35 percent of the Latino vote, which then constituted just 5.68 percent of the electorate. In 2004, he won 44 percent of the Latino vote, which had grown to 7.02 percent of the electorate. In 2008, John McCain, who has supported immigration reform, took 31 percent of the Latino vote, which by then was 8.22 percent of the electorate. In 2012, Mitt Romney took just 27 percent of the Latino vote, which was then 9.21 percent of the electorate.

In 2016, the Latino share of the electorate is expected to be even larger. Partly, this is because the community continues to grow as a share of the population. But analysts also project relative strengthening due to expectations that the African-American community’s share of the electorate will shrink from the record turnout seen in 2008 and 2012 for the election and reelection of Barack Obama.

For a Republican to win in 2016, he (and it will be a he, barring a very longshot candidacy from Carly Fiorina) likely will have to at least come close to winning 40 percent of the Latino vote. As polling by the group Latino Decisions shows, even Bush and Rubio aren’t quite there yet, but they are in better shape than much of the field (including Ted Cruz, who also is of Cuban extraction) and they at least are outpolling Romney’s final numbers, which is a big first step:

There’s also the fact that both Bush and Rubio have won statewide election and remain popular in the most crucial swing state – Florida. While the GOP has won Florida a couple times in years when they didn’t win the big enchilada (in 1960 and 1992), the last time the Republican Party won the presidential election without winning Florida was in 1924, when the much-smaller state had only six electoral votes.

Aye, but there’s the rub.

Article II of the U.S. Constitution, which both creates the executive branch and lays out the process for selecting the leaders of that branch (the president and vice president), states clearly that:

The electors shall meet in their respective states, and vote by ballot for two persons, of whom one at least shall not be an inhabitant of the same state with themselves.

This requirement is generally summarized as: “the president and vice president can’t be from the same state.” That’s not quite true.

In the original setup, the Electoral College would simply cast two votes, and the candidate with the most votes would be named president, while the one with the second-most votes would be named vice president. John Adams was named vice president after finishing second to George Washington (who received unanimous Electoral College support) in 1788. In 1792, Washington was the nominee of both major parties, effectively making the ballot a vice presidential race between Adams and New York Gov. George Clinton. In the election of 1796, there were seven Federalists candidates (including Adams, who became president) and four Democratic-Republican candidates (including Thomas Jefferson, who became vice president).

The election of 1800, in which the Democratic-Republican “ticket” of Jefferson and Aaron Burr completely defeated the Federalist ticket of Adams and Charles Pinckney, was the first to resemble our modern elections. And in 1804, the 12th Amendment was passed, making the presidential and vice presidential selections two separate races.

But the amendment kept intact the original language preserving the requirement that binds electors to “meet in their respective states, and vote by ballot for president and vice president, one of whom, at least, shall not be an inhabitant of the same state with themselves.”

What this means in practice is that, should Jeb Bush and Marco Rubio run as a ticket, electors from the State of Florida would be prohibited from casting a ballot for both of them. Cue sad trombone:

Of course, in most years, this wouldn’t actually matter. Of all the presidential elections since 1900, only the 2000 and 2004 races were sufficiently close that the winning candidate wouldn’t still have prevailed if he had lost his home state. (The 1916 election between Woodrow Wilson and Charles Hughes was awfully close, separated by just 23 electors. But in that case, Wilson did actually lose his nominal home state of New Jersey. Had he also lost his birth state of Virginia, on the other hand, that would have swung the election to Hughes.)

Even in a very close 2016 race, provided the margin of victory is at least 29 electoral votes, the Florida delegation could go “faithless” and select some other candidate for vice president. So long as it wasn’t the Democratic vice presidential nominee, it wouldn’t matter. But it seems pretty clear Republicans wouldn’t want to take the risk that they might need Florida’s 29 electoral votes – accounting for more than 5 percent of the total – to go to both Bush AND Rubio if they are to have any hope of seating both.

If the GOP were to roll the dice and move forward with a Bush-Rubio ticket anyway, any number of wacky scenarios could theoretically ensue. You could see the Electoral College decline to vote for vice president, which would throw that election to the U.S. Senate, or decline to vote for president, which would throw that race to the U.S. House. In an extreme scenario, the Florida Republican Party could technically only nominate electors who live outside of the state and who would not face the same limitation in casting ballots for both Bush and Rubio.

But none of these fanciful suggestions are likely to transpire. Instead, the easiest path would be for either Bush or Rubio to change his official state of residence. Indeed, that’s precisely what happened in 2000, when Dick Cheney changed his state of residence from Texas to his home state of Wyoming.

Of the two, it probably makes more sense for Bush to change his state of residence. He appears to be thoroughly done with his Florida political career, whereas Rubio could still be ripe for future office should the whole presidential/vice presidential thing not pan out. Moreover, Bush is already a transplant. He was born in Houston to a political dynasty with origins in Connecticut and New Jersey.

In fact, it so happens that Bush just spent $600,000 to build his own 3,000-square-foot, four-bedroom “cottage” on the family’s compound in Kennebunkport, Maine.  Proximity to New Hampshire probably plays some role in that decision. But one can’t help but notice that it sure does also offer a convenient contingency plan, should he want to bring Marco aboard as a running mate.

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Letter to the Editor: Carbon pricing’s time has come

August 08, 2015, 9:57 AM

From the New Haven Register:

Just consider all the conservatives who have already called for carbon pricing: George Shultz, Greg Mankiw, Bob Inglis, Eli Lehrer and others at R Street, Irving Stelzer, Jerry Taylor, David Brooks, Holman Jenkins Jr., Arthur Laffer, the Republican governors who created Regional Greenhouse Gas Initiative (a cap and trade system), Susan Collins (sponsored a cap and dividend plan), and EPA directors appointed by Republican presidents (William Ruckelshaus, Lee Thomas, William Reilly and Christine Todd Whitman).

Drought or no drought, Texas must prepare for water future

August 07, 2015, 7:00 AM

After years of enduring one of the fiercest droughts on record, Texas officially became completely drought free in July.

Texas’ no drought status didn’t last long; on Aug. 3 a small portion of east Texas was classified as again being in moderate drought. But overall, it’s hard to deny that this spring’s heavy rains have provided much needed relief to farmers, ranchers, and the rest of us throughout the state.

If history is any guide, the return of the rains means that water will fade from the political consciousness, and people will go back to taking water for granted. But that would be a mistake. For if history is any guide, droughts will return. And as hard as it may be to believe, next time it could be even worse.

Texas is growing. Population is expected to grow by 20 million over the next 50 years. All of those folks are going to use water. Texas has also maintained a vibrant industrial base. That’s great for our economy, but it will require a lot of water to keep going.

To meet Texas’ long term water challenges, the state has developed a state water plan, that includes 50-year projections about Texas’ future water needs by region, and collects proposals for water projects that can meet those needs. The state has also set up a number of loan programs (most prominently the State Water Infrastructure Fund of Texas, or SWIFT) to help localities and others fund projects, which recently announced nearly $4 billion in projects it would fund over the next decade. Texas has also launched a PACE program, which makes it easier for industrial and commercial facilities to get financing for energy and water efficiency improvement projects.

While important, these measures alone are not enough. Many communities are reluctant to commit themselves to major expenditures based on projections of future growth and rainfall patterns that may or may not materialize. Even where developers are willing to undertake the risk, they can be stymied by local restrictions or threats of environmental lawsuits.

Conservation is a key part of the solution, but the way our water systems are currently funded often works against conservation. Having water utilities promote conservation is a little like having Coca-Cola try to get people to drink less Coke; there is an inherent conflict of interest involved. And to the extent that utilities use volume based water charges to cover fixed infrastructure costs, people who do use less water can paradoxically see their bills go up.

Still, the best way to encourage conservation is to set the price of water at a level that fully accounts for its costs. Attempting to limit water use through mandates and restrictions will inevitably lead to unfairness. Industries with political clout will lobby for fewer restrictions, while the burden of shortages will be shifted to others. We can see that playing out now in California (which unlike Texas is still battling drought). In April, Gov. Jerry Brown issued an executive order decreeing a 25 percent reduction in urban water use. Yet comparable reductions were not mandated for the state’s water intensive agriculture sector.

By contrast, increased water prices would encourage conservation across the board and would incentivize development of new water supply. No one wants to pay more for water. I certainly don’t. But if we don’t prepare for the next drought, we may find that our procrastination has proved even more costly.

Tech industry recommends FTC take laissez-faire approach to regulating sharing economy

August 06, 2015, 6:30 PM

From Communications Daily:

R Street Institute Senior Fellow Ian Adams suggested in comments that “consumer-protection mechanisms must be narrowly tailored, both as to their depth and breadth.”

Has the Clean Power Plan abandoned energy efficiency?

August 06, 2015, 2:08 PM

The Environmental Protection Agency on Monday released the final version of the Clean Power Plan (CPP), which mandates a 32 percent reduction in carbon-dioxide emissions from the U.S. power sector by 2030.

The final rule is broadly similar to the original proposal from June 2014. However, there are some key differences. Among the most striking is the EPA’s retreat from using energy efficiency in calculating its reduction targets.

Let’s unpack this a little. The EPA set its reduction targets based on a process known as the Best System of Emissions Reduction (BSER). In layman’s terms, the EPA looked at the different ways you feasibly could reduce emissions, and combined them to get an overall standard. A power plant in a given state isn’t obligated to use the specific methods EPA lays out, so long as it meets the emissions standard somehow.

As originally proposed, the CPP relied on four “building blocks” to calculate the BSER standard. The first involved traditional means to increasing efficiency at power plants. Building blocks 2 and 3 focused on ways states could give preference to lower-carbon forms of power, like natural gas, nuclear and renewable energy. Finally, building block 4 involved ways a state might reduce use of high-carbon electricity by reducing consumers’ overall demand for power.

Building blocks 2, 3 and 4 raised more questions than building block 1, as they involved action “outside the fence” of regulated power plants. Building block 4 was especially contentious, as it seemed to depend on states passing laws that establish various energy-efficiency mandates. Since the legal basis for the Clean Power Plan was the EPA’s authority over emissions from power plants, it wasn’t clear how the agency could mandate reductions in emissions that could only be achieved by entities it doesn’t regulate.

When the final rule was released this week, building block 4 was gone. Which just might have something to do with a recent federal appeals court decision invalidating a Federal Energy Regulatory Commission rule that, similarly, was designed to encourage energy efficiency by providing incentives to reduce power consumption.

According to the D.C. Circuit, FERC lacked authority to issue rules on the subject. Since FERC’s legal authority over electricity far exceeds the EPA’s, the decision would appear to bring into question the viability of building block 4. FERC has since appealed the decision, which is set to be heard by the Supreme Court this fall. While there’s no proven link, it certainly seems the EPA decided it was better not to proceed with such a legally questionable portion of the rule.

Ultimately, the impact of EPA striking building block 4 will be minimal. While the EPA isn’t using the building block to determine emissions standards, the final rule still allows states to use energy-efficiency measures to comply with those standards.

One would think that abandoning energy-efficiency calculations when setting the standard would lower the bar for how much emissions reduction each state would be asked to meet. But in fact, the total reductions required by the final rule are higher than in the proposed rule. Essentially, that means that whatever leniency states received has been more than offset by expansions to the other building blocks.

Republican presidential candidates: Show us you can #FixGov

August 06, 2015, 11:55 AM

Presidential debates inevitably send the Beltway a-dither. Who will win? Which aspirant will deliver the best zinger? Who will look like a lost puppy or have an ugly or obtuse moment? And who will viewers and the media find likable?

Thursday’s Republican debate is inciting extra anticipation. Not least is the Trump factor. The Donald is sure to bluster and talk trash, and some observers hope to see him crater the same way Ross Perot did when he squared off against Al Gore on Larry King. Maybe Ted Cruz will turn his fierce debate skills toward Trump. Polling at 6 percent and not much loved in the Senate, Sen. Cruz has little to lose.

Who will be in Cleveland, Ohio is another question fueling chatter. We know there will be a second amateur on stage—Ben Carson. Will he move beyond his talking points? Will he say anything that might hurt his odds at being considered for vice president? Additionally, only the 10 top-polling candidates are invited to Quicken Loans Arena to show their stuff, which may prove a deathblow to the excluded candidates. Bye-bye Lindsay Graham, George Pataki, Rick Santorum, Bobby Jindal, Carly Fiorina, Rick Perry and Jim Gilmore?

In such an overcrowded field, the candidates will be under pressure to make their voice heard. There will be plenty of the usual Pablum: repeal Obamacare, no gun control, cut taxes, protect religious freedom and so forth. With everyone hitting most of the same notes (and trying to out-shout Trump), there is a real opportunity for a candidate to distinguish himself by explaining in detail how to fix government.

This is a decidedly juicy topic for conservatives. Public trust in government is very low, according to Pew Trust polling, and John Q. Public has told Gallup pollsters that government is a bigger problem than either unemployment or the economy. This popular discontent cannot be chalked up to mere crankiness. Media stories about government gaffes are pretty regular fare. The hack of the Office of Personnel Management’s database is only the latest high-profile malfunction.

Government failure is real and the empirical evidence is overwhelming. Whether one consults Paul Light’s compendium of government cock-ups, Peter Schuck’s 400-page “Why Government Fails So Often,” John Dilulio’s “Bring Back the Bureaucrats” or Steven Teles’ pithy article, “Kludgeocracy in America,” the takeaway is roughly the same: the federal government has taken on too many responsibilities, some of which it is ill-suited to address.

Additionally, the layering of policies and rules atop agencies have left them mission-torn and triaging their various responsibilities. Policies have become grotesquely complex and often are administered through baroque webs of state, local and private-sector proxies that would make Rube Goldberg chortle. As the National Commission on Public Service put it more than a decade ago:

There are too many decision-makers, too much central clearance, too many bases to touch, and too many overseers with conflicting agendas… accountability is hard to discern and harder still to enforce.

Conservative complaints about big, pernicious government are age-old. To stand out in Thursday’s debate, a candidate will need to do more than denounce big government and bash bureaucrats. He will need to demonstrate that he has a grasp of the $3.4 trillion, complex beast that is the government. He also ought to give clear evidence that he has considered which things the federal government can do well, which activities it can do better and which policy areas it should exit. And, critically, he must demonstrate that he has the temperament to work with Congress, whose laws are the source for much of what ails the government.

Finding a General Fund budget out of Alabama’s shell game

August 06, 2015, 11:04 AM

If you’re getting the feeling that Alabama’s General Fund budget is more and more like a carnival shell game, you’re not alone.

Just keep your eye on the ball as the shells start moving at a frantic pace.

First, there’s always the option of cutting the General Fund to match expected revenues. For most conservatives, that’s the answer. At the same time, across-the-board cuts aren’t helpful. Nobody rolls back their housing budget the same as their vacation budget if they need to save money; they prioritize. Relying on precision cuts has support in the Legislature and is popular with many voters across Alabama.

That said, let’s assume that Gov. Robert Bentley and a potential legislative majority have some common priorities that start with the presumption that they want to spend more money in the General Fund than they’re expecting. That consensus amount now seems to be somewhere in the $150-250 million range.

Most also realize the importance of growth revenues in the General Fund. Unless we want to play this annoying budget game every couple of years, we need revenues that have even a remote chance to keep up with the fiscal drivers of Medicaid and corrections.

Almost all legislators want to create economic certainty by ending the revenue guessing game; it’s simply bad for Alabama. Our anemic economy grew around 0.7 percent last year. That’s about half the national average. With every tax imaginable percolating in Montgomery, it’s reasonable for businesses to wait and see how this is going to play out.

So what’s the politically viable path that puts more money in the General Fund, moves growth revenues and creates economic stability?

The first move is to put the state’s use tax revenues into the General Fund instead of the Education Trust Fund (ETF). And, no, I’m not talking about moving the revenues and non-education spending lodged in the ETF.

Yes, I know that sounds like World War III with Alabama’s education establishment, but hang with me.

The move accomplishes the objective of moving growth revenues into the General Fund and increasing the amount of dollars available by around $200-$275 million. With a little massaging, that should be enough to fund government at a constant level, cover prison-reform spending and give a head nod toward priorities like Dianne Bentley’s domestic-violence program.

At the same time, it would leave a financial hole in the ETF. The first option is to clear the deficit by tackling education-spending reform. We’re probably not funding the K-12 classrooms at optimal levels, but we’re spending in several areas that need extra fiscal scrutiny. There’s not a lot of interest in trying to cut back education spending, so let’s table that option for the moment.

The second alternative, thought it might be wishful thinking, is that the economy grows and fills the lost revenues without additional legislative action. No new taxes, no gaming and a vanishing budget problem. That would be great, but our economy is going to need a serious boost for that to be viable.

The third option actually reflects State Superintendent Tommy Bice’s concern that moving money from the ETF could cause proration. It might, but the ETF proration-prevention account should have more than enough resources to stop that from happening. We wouldn’t see immediate cuts to education, and legislators would have a little short-term breathing room to “backfill” the ETF.

That move has a couple of political advantages.

Right now, they’re fighting the losing battle of raising revenue for what amounts to prisons and Medicaid. If they’re filling an Education Trust Fund hole, they can argue that it’s “for the children.” Even though tax hikes are still unpopular in Alabama, the political optics of relating them to education are far better. As for gaming, funding education is consistent with the methods used to enact lotteries around the nation.

Gaming and taxes won’t be any more popular in the next regular session than they are right now, but creative legislation now might make them more palatable. If they still don’t muster enough support, it’s either living on the prayer of better economic growth or breaking out scalpels and surgical masks to slice into Alabama’s budgets.