Out of the Storm News

Syndicate content
Free markets. Real solutions.
Updated: 5 weeks 1 day ago

Secretary King is wrong: ESEA was not a civil-rights law

June 06, 2016, 12:52 PM

As Flypaper readers know all too well, newly arrived Education Secretary John B. King, Jr., is in hot water with Congress, state governors, and various school reformers. The Department of Education is moving forward with rules that would turn the Every Student Succeeds Act’s “supplement not supplant” provision into a cudgel to force states to equalize school spending.

In a statement released last month, King made matters worse by trying to justify the department’s overreach as keeping with the legislation’s history—going back to the Elementary and Secondary Education Act of 1965—as a civil-rights measure:

Six decades after Brown v. Board, we have failed to close opportunity and achievement gaps for our African-American and Latino students at every level of education. And in far too many schools, we continue to offer them less—less access to the best teachers and the most challenging courses; less access to the services and supports that affluent students often take for granted; and less access to what it takes to succeed academically.

So we have urgent work to do as a country to truly provide equitable educational opportunities for all students. But we believe we stand better positioned to move forward, because of the Every Student Succeeds Act (ESSA). As you know, ESSA reauthorized the original Elementary and Secondary Education Act (ESEA) signed by President Johnson in 1965. It was a civil rights law then, as it is now.

Perhaps King was echoing President Obama, who also has contended the original ESEA was a civil-rights law. Regardless, this rhetoric is dirty pool—if you disagree with the new regulations, the logic goes, then you’re against civil rights.

And it is bogus history. ESEA was not a civil-rights law. It was an anti-poverty policy, a key part of Lyndon Johnson’s Great Society.

Seeing this is not difficult; one need only look at the text of ESEA as enacted (it’s only thirty-two pages long—a short read compared to ESSA’s 392 pages). ESEA was a conditional-aid grant. It offered money to state and local education agencies, who could choose to take the money or not. Its purpose was to “strengthen and improve educational quality and educational opportunities in the nation’s elementary and secondary schools.” The law offered resources “in recognition of the special education needs of children of low-income families and the impact that concentrations of low-income families have on the ability of local education agencies to support adequate educational programs.”

Nowhere does the statute use the words “civil rights,” nor does it speak of equalizing spending or creating an individual entitlement to, well, anything. This stands in sharp contrast to the real civil-rights legislation of the 1960s, which explicitly conferred a legally enforceable right or privilege to persons. Title I of the Civil Rights Act of 1964 on “Voting Rights,” for example, sets forth prohibitions to protect individuals’ right to vote.

One can also consult the words of Lyndon Johnson, who labored mightily to get ESEA enacted. When he signed the bill, he declared:

From our very beginnings as a nation, we have felt a fierce commitment to the ideal of education for everyone. It fixed itself into our democratic creed….As a son of a tenant farmer, I know that education is the only valid passport from poverty….Let me urge, as Thomas Jefferson urged his fellow countrymen one time to, and I quote, ‘Preach, my dear sir, a crusade against ignorance; establish and improve the law for educating the common people.’

Johnson held the law’s signing ceremony not at a school serving racial minorities, but at the school he attended in Johnson City, Texas. Additionally, when the act was amended in 1968, LBJ spoke not a word about civil rights. He spoke of the stuff ESEA had purchased.

This law has brought new help to all American schoolchildren—especially the poorest. It has brought special educational and health services to 9 million of our poorest children. It has created 3,600 new school libraries. Almost nine out of ten schoolchildren were helped by new teaching materials purchased during the first year of its library program. It has launched, all over the Nation, more than 2,200 exciting new education projects outside the classroom. Nearly 17 million children are being made richer….The 90th Congress was not as productive as I urged it to be. It left an agenda of unfinished business. But it did not turn back or halt or destroy the progress we have begun—not one single Great Society measure was repealed. The American people have spoken up on behalf of health and education and conservation and social progress. Their voices will not be ignored. Medicare is a fact—and an unchallenged success. The War on Poverty, the Model Cities Act, a whole range of consumer laws, dozens of measures which 3 years ago were only ideas; these programs live, and their promise lives. The greatest of these is education—without which no other progress is possible.

So, contrary to the secretary’s assertions, ESEA was an anti-poverty, redistributive policy then and it is now. It has delivered money and more to every state and local education agency, for the benefit of poor, non-poor, white, and nonwhite children alike.

Status seen virtually unchanged in Congress’ online sales tax debate

June 06, 2016, 8:48 AM

From Washington Internet Daily:

Parties in the online sales tax debate have largely been engaged in a “waiting game” in recent months, and particularly in the Senate, said R Street Institute Executive Director Andrew Moylan, a critic of HR-2775 and S-698 critic. “Nobody quite knows when a vote might happen.” It’s likeliest to occur during an expected lame-duck session late this year because of the limited time remaining in the legislative calendar before the November elections, Moylan said. “We’re seeing a lot of progress” in educating lawmakers about the online sales tax issue “but there’s obviously still objections out there and until that’s resolved there will be resistance” to moving S-698, said Information Technology and Innovation Foundation Vice President Daniel Castro, a S-698 supporter. Sen. Mike Enzi, R-Wyo., S-698’s lead sponsor, didn’t comment.

Senate leaders “technically have the time” to go through a full regular order process for considering S-698 that would include Senate Finance Committee consideration ahead of Senate floor action, said Moylan. “The real question is whether there’s the will to do those things.” The legislative calendar continues to complicate S-698’s path, in part because the ongoing debate over FY 2017 appropriations likely will be the Senate’s top priority ahead of the election, said Americans for Prosperity Director-Federal Affairs Christine Harbin, a critic of HR-2775 and S-698. The Senate likely also is reluctant to bring S-698 up for a vote ahead of the election for political reasons, she said.

It has largely been a “waiting game” on the online sales tax issue in the House, though Goodlatte’s continued work on his origin sourcing legislation could provide some “fresh thinking” on the issue and a more acceptable alternative to the Remote Transactions Parity Act, Moylan told us. HR-2775 isn’t a direct companion to S-698 but mirrors some of that bill’s elements (see 1506160035). Goodlatte began working on his origin sourcing bill last year ahead of HR-2775’s filing (see 1503120051). It’s “encouraging” that Goodlatte is continuing to pursue his bill given that origin sourcing is a concept “I’ve been a strong proponent of for years,” Moylan said.

Coalition blasts DOE’s funding of Texas Clean Energy Project

June 06, 2016, 7:59 AM

From SNL Energy:

Green Scissors, which includes Friends of the Earth, Taxpayers for Common Sense and The R Street Institute and which describes itself as a coalition of free-market, taxpayer and environmental groups dedicated to eliminating wasteful and environmentally harmful government spending, says they believe the Office of Fossil Energy should terminate its agreement with Summit Power Group LLC and permanently withdraw project funding.

Does the Federal Reserve know what it’s doing?

June 06, 2016, 7:30 AM

The attached policy study was published in Cato Journal,  Vol. 36, No. 2.

The Federal Reserve is the most financially dangerous institution in the world. It represents tremendous systemic risk—more systemic financial and economic risk than anybody else. Fed actions designed to manipulate the world’s dominant fiat currency, based on the debatable theories and guesses of a committee of economists, can create runaway consumer price and asset inflation, force negative real returns on people’s savings, reduce real wages, stoke disastrous financial bubbles that lead to financial collapses, distort markets and resource allocation, and in general create financial instability. The Fed has done or is doing all of these things—ironically enough—in the name of pursuing stability. But whatever its intentions, does the Fed actually know what it is doing? Clearly, it hasn’t in the past, and it is exceptionally dubious in principle that it ever can. Since that is true, how can anybody think the Fed should be an independent power?

Bourbon can be made anywhere — even Ohio

June 06, 2016, 7:00 AM

Sitting on my desk is a tumbler of bourbon. Its deep amber color shines out through the dewy glass. Tom’s Foolery is its whimsical name. It is 90 proof (45 percent alcohol by volume) and tastes of corn, apple, vanilla and barrel char. It is a little fiery, despite being aged three years. A new whiskey from Kentucky, you may wonder? Nope, this bourbon is from Chagrin Falls, Ohio.

It is a common misperception that bourbon “by law” can only be made in Kentucky. As this bottle shows, bourbon can be made anywhere in America. Federal regulations declare: “the word ‘bourbon’ shall not be used to describe any whisky or whisky-based distilled spirits not produced in the United States.” These same regulations require bourbon to be made from a recipe that uses not less than 51 percent corn as fermentables, and that the whiskey be aged in barrels made from new oak. That is all.

Kentucky, for certain, has a good claim as the birthplace of bourbon. As whiskey expert Chuck Cowdery notes in Bourbon Straight: The Uncut and Unfiltered Story of American Whiskey, the state was shipping its whiskeys down the Mississippi River to New Orleans 200 years ago. “Bourbon,” as best we can guess, is a moniker that folks back then used to refer to the hooch coming from the great swath of Kentucky that was then part of Bourbon County.

Today, most bourbon comes from Kentucky. Jim Beam alone is filling a half-million barrels per year. But Indiana long has which produced an ocean of whiskey and new bourbon-makers are popping up everywhere. More than 20 states have bourbon distilleries, according to data from the American Distilling Institute. Ohio alone has a half-dozen small Bourbon-makers.

These new makers of bourbon frequently break from the common mold. Tom’s Foolery is aged first in new oak barrels (per the federal regulations), then finished in casks that formerly held applejack, the potent apple-based booze. Grass Widow (91 proof/45.5 percent ABV) is distilled in Indiana, then spends its last aging days in barrels that once held Madeira, a fortified red wine. The effect is a very unbourbon bourbon. Grass Widow has a corn sweetness, but also is fruity and a bit herbal tasting. Missouri’s Pinkney’s Bend Distillery offers bourbons aged in stout beer and port wine barrels.

All of which means that I should not feel bad that this bottle — and glass — of Tom’s Foolery is nearly empty. There are many more new bourbons to try.

More harassment of gun owners in California

June 03, 2016, 2:34 PM

From Reason:

The latest round of gun-control bills speeding through the California legislature should offer a reality check to those of us who own firearms: Democratic leaders will never be satisfied closing the latest round of “loopholes.” Every year they push new rounds of “reasonable and common sense” gun laws, few of which seem reasonable given they target law-abiding owners. To many legislators, the Second Amendment is the real loophole.

Illinois moving to loosen occupational licensing rules for ex-offenders

June 03, 2016, 11:58 AM

When persons with “backgrounds” in Illinois want to turn their lives around, “we want them to be as productive as possible as quick as possible,” state Rep. Marcus Evans, D-Chicago, told me.

His bill to prohibit the Illinois Department of Financial and Professional Regulation from putting certain jobs and professions out of reach of rehabilitated offenders passed the Illinois House this week and is now on its way to Gov. Bruce Rauner for his signature.

Should the bill become law, which is expected, 30,000 felons a year completing their sentences and returning to private life in the state no longer will be barred from getting state licenses to work in roofing, hair braiding and cosmetology, funeral services, barbering and nail technology. Unless, of course, the crime for which the person was convicted directly relates to the occupation for which the license is required. Both roofing and barbering project higher-than-average growth rates, according to federal labor-market research.

Eliminating barriers to employment for ex-offenders is something on which right- and left-leaning public-policy advocates can agree. If this proposal works as intended, perhaps in the years to come, the Illinois General Assembly will proceed to put a large dent in the 111 state occupational licenses left untouched by this experiment.

Rep. Evans was quick to credit the critical support and work of the Illinois Policy Institute and the Safer Foundation, as well as state Sen. Kwame Raoul, who successfully guided the legislation through the other chamber as lead sponsor.  As a south side of Chicago resident, Evans said his personal experiences made passage of the bill “very important” to him. It was also a recommendation of Gov. Rauner’s Commission on Criminal Justice and Sentencing Reform.

Illinois appears should be commended for making at least these modest reforms, but we still recommend states go much further. Several years back, the North Carolina Justice Center advised the state Legislature that nearly 30 percent of all jobs available in the state required some sort of license. Under reforms the state enacted in 2013, licensing boards were prohibited from automatically disqualifying job applicants based on their criminal records unless a specific statute required it.

Instead of picking particular professions, the North Carolina law mandates that licensing boards consider eight factors before a hiring decision is made. Whether subsequent crimes were committed, how long ago and at what age the infractions were committed, the seriousness of the crime and the circumstances surrounding it all are considered, as well as character references and prison records.

This seems a good approach, and one hopes it will influence other states looking to extend the opportunity for a fresh start to those have done their done.

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

Ohio’s attempt at power-plant bailouts should alarm conservatives

June 03, 2016, 11:15 AM

This piece was co-authored by Dick Munson, Midwest clean energy director for the Environmental Defense Fund.

In a recent victory for consumers, federal regulators blocked bailout plans by two of the nation’s largest power companies, who hoped to subsidize their unprofitable power plants on the backs of Ohio ratepayers.

The deals, brought forth by American Electric Power (AEP) and FirstEnergy Corp., would have resulted in higher bills, environmental damage, stifled innovation, diminished value for customer choice and less competitive markets for Ohio. Unfortunately, the rationale behind the Ohio decision still threatens to turn this kind of irresponsible, anti-competitive plan into a broader movement. This should outrage conservatives.

Over the past decade, cheap natural gas drove some of AEP and FirstEnergy’s coal and nuclear power plants into the red. The companies sensed an opportunity to seek subsidies for these plants through mandatory ratepayer charges, chanting the motto of “rate stability” and appealing to keep in-state power plants online. The companies received their bailouts in an alarmingly unanimous vote by the Public Utilities Commission of Ohio.

Safeguarding in-state jobs is undoubtedly a worthwhile concern, but mandating subsidies to do so is not the solution. It inhibits companies from creating the kinds of modern jobs that have a place in the efficient energy future. Allowing unprofitable enterprises to shut down creates room for new, profitable ones to innovate and thrive in competitive markets. Cheap natural gas is currently the primary catalyst of this transition in the electricity industry. But clean, renewable energy is also becoming highly competitive. Markets, if left to their own devices, will harness these forces to maximize economic growth.

Market signals, not political favoritism, should drive investment decisions.

Competitive retail electricity markets empower people to choose energy providers that suit them best and deliver savings. These electricity providers offer rates at different levels of price and rate stability. People can also choose suppliers that offer more electricity from cleaner sources like wind and solar. Competitive retail markets prove that customers want to and should be in control of their power supply choices. AEP and FirstEnergy’s proposals would have replaced individual choice with a government mandate.

While the Ohio plans would have unfairly required ratepayers to pay more for electricity from older facilities, they would have also increased risk for the companies’ competitors and stifled innovation. Keeping unprofitable plants online distorts the regional power market, and guaranteeing profits to existing technologies reduces the financial motive to innovate in new technologies.

Bailouts reward poor investments and create perverse incentives in market and political behavior. Moreover, every in-kind political intervention increases the likelihood of subsequent interventions. Other losers of the new energy era have already sought political interventions to save their unprofitable assets, as evidenced by actions in Illinois, the Northeast and whispers in Texas.

This should give us all pause that the efforts in Ohio may be duplicated in other competitive electricity markets. Cheap gas has saved customers billions and will continue to do so. As Ohio’s misguided political interventions threaten to be attempted elsewhere, regulators and policymakers must remain disciplined in allowing market signals to adjust to this transition.

If they don’t, this kind of market disruption will damage investor confidence. Investors have already signaled subsidies undermine the decisions that drive new power-plant development. A contagion of eroded investor confidence would drive up the cost of capital by making private investments artificially risky, severely undermining the health of competitive markets.

The federal decision is a temporary win for electricity competition. AEP and FirstEnergy are seeking and will continue to seek alternative subsidy paths, the worst of which would be to “re-regulate” their assets. This would return Ohio to the flawed model of monopoly utility regulation and obliterate competition and customer choice.

Healthy, competitive electricity markets are imperative to our economic and environmental future. They force electricity providers to reduce costs and pollution quickly, deploy innovative technology and attract customers. Simply put, competitive markets make society wealthier.

Conservatives must uphold their core principles and stand in opposition to “re-regulation” and subsidies for unprofitable power plants. Open, competitive markets are the most prosperous and fair path forward, especially during times of industry transition.

SLAPPED AROUND: LEGAL THREATS TO ONLINE FREE SPEECH

June 03, 2016, 9:46 AM
06/16/2016 - 6:30 pm - 8:00 pm
Dock 5 at Union Market
1309 5th St., NE
Washington

Dock 5 at Union Market

June 03, 2016, 9:46 AM
Loading Map.... Dock 5 at Union Market
1309 5th St., NE - Washington
Events 38.9086077 -76.99737950000002

Address
1309 5th St., NE
Washington
DC

20002
United States


Upcoming Events

  • No events in this location
  • Dock 5 at Union Market

    June 03, 2016, 9:46 AM
    Loading Map.... Dock 5 at Union Market
    1309 5th St., NE - Washington
    Events 38.9086077 -76.99737950000002

    Address
    1309 5th St., NE
    Washington
    DC

    20002
    United States


    Upcoming Events

  • No events in this location
  • How high are real house prices?

    June 03, 2016, 8:27 AM

    “Home prices are back to near-record highs across the U.S.” declared the Wall Street Journal in a June 1 front-page story. They are, indeed, when measured in nominal terms.

    The Case-Shiller National House Price Index for the first quarter of 2016 is as high as it was in September 2005, in the late-phase frenzy of the bubble. That was only nine months before the 2006 bubble-market top, which as we know only too well, was followed by collapse. In addition to reaching its 2005 level, the National House Price Index has gone back to well over its trend line—more than 11 percent over. All this is shown in Graph 1.

    So the Federal Reserve has gotten its wish for re-inflated house prices (although not its wish for robust economic growth).

    Are high house prices good or bad?  That depends on whether you are selling or buying. If you are the Fed, it depends on how much you believe that creating asset-price inflation leads to “wealth effects” that improve economic growth.

    Of course, besides asset-price inflation, the Fed truly believes in regular old inflation. It has often announced its intent to create perpetual increases in consumer prices. Since the bubble top in 2006, the Consumer Price Index has increased by an aggregate of 17 percent.

    This means that house prices – measured in real, inflation-adjusted terms – look different from Graph 1. Real house prices are shown in Graph 2, expressed in constant 2000 dollars. They have still gone up a lot in the last few years, but not as much as in nominal terms. They have matched their level from October 2003, rather than September 2005.

    In October 2003, house prices were clearly inflating: they were half way, but only half way, up their memorable bubble run from 1999 to 2006. Do we remember how happy so many people were with those high house prices?  Do we remember that the Fed Funds Rate had then been reduced to 1 percent?  That the Fed was thinking of wealth effects?  At the time (in January 2004), the Wall Street Journal published an article entitled, “Housing Prices Continue to Rise.” It reported that “the decline in interest rates has made housing more affordable,” that forecasts were for “the house party to rage on in 2004”—a good forecast— and that “few housing pundits see much risk of a national plunge in house prices”—a terrible forecast.

    In 2003, was it time to pay attention? It was. Going forward from here, can we imagine what house prices would be with genuinely normalized interest rates? In mid-2016, can the pundits see much risk of anything going wrong?

    When it comes to solar, average isn’t everything

    June 03, 2016, 7:00 AM

    This summer, the U.S. Department of Energy’s SunShot Initiative will reach its halfway point. Established in 2011 as a ten-year project, the program aims to make solar “fully cost-competitive with traditional energy sources before the end of this decade.”

    Toward that end, it has set a goal of reducing the average installed cost of a solar system to $0.06 per kilowatt-hour (kWh) by 2020. SunShot considers this to be parity level with conventional power sources like coal and natural gas. By this measure, solar has made fantastic progress, with costs falling 65 percent since 2011. Yet experience with solar deployments reveals that isn’t enough. Even at comparable cost, solar will not be able to outcompete coal, nuclear and natural gas on a level playing field.

    SunShot’s average cost metric is not a measure of cost-effectiveness, because it doesn’t account for the limits of solar’s ability to provide reliable power. Conventional resources are available around-the-clock. They don’t rely on favorable weather and sunny skies to operate. In contrast, solar power has natural limits in its ability to meet energy demand – even during the day. This difference in performance ability greatly effects the value of solar.

    To be clear, solar is valuable. It’s just not quite comparable to conventional sources. Since power demand is highest during the day, solar output actually tends to come at higher value times. In many areas, it can somewhat reduce the need to build power plants and transmission designed to meet peak power demand.

    Yet as more solar is installed, these benefits will diminish. More solar means more daytime energy generation, pushing net peak demand to times when solar output is weaker and other resources must make up the difference.

    Average cost is not a measure of the value of a resource. This has caused interest groups, academics, and even the government to voice concerns about using the “installed average cost” metric to compare solar apples to the oranges of conventional electricity sources. Unfortunately, it’s the popular measure of economic competitiveness for solar and other technologies like wind, even though it often leads to improper policy conclusions.

    Individual utilities and organized wholesale electricity markets use different methods to value resource performance. The natural conditions that affect solar performance also vary by area. This means the value of solar varies widely across regions.

    Just consider how solar gets valued in the United States’ largest wholesale electricity market, the PJM Interconnection, which spans 13 mid-Atlantic and Midwestern states and the District of Columbia. PJM uses a capacity market to encourage private investment decisions to ensure that enough reliable, competitive generation comes online to serve customer demand. In 2015, PJM implemented the Capacity Performance Initiative, a series of capacity-market reforms to improve future grid reliability.

    Under the new system, the 2016 PJM capacity-market auction cleared more than 140,000 megawatts (MW) of performance resources that can be counted on to provide power through the 2019/2020 planning period. Just 0.4 MW of those resources came from solar, despite hundreds of MWs of solar expected to come online in the planning period. This is a significant change: before the reliability reforms, solar performed much better in the capacity market. In other words, in a performance-based capacity market, solar provides little capacity value.

    That capacity value is what separates solar from conventional energy sources: companies can build solar installations and sell solar power to customers, but they can’t reliably do so on-demand. So while solar power displaces the operation of nuclear and fossil generation, it hardly replaces the need to build new nuclear or fossil generation or to keep those facilities open. In an industry characterized by high capital costs and long-term investments, that’s a limited value proposition.

    As the electric industry increasingly turns to valuing the performance of resources, the prospects for solar grid parity increasingly rely on the ability of solar to perform comparably to other resources. Improving solar performance, particularly by coupling solar with batteries or other storage technologies, adds great cost. Reducing the cost of storage is just as important to solar competitiveness as cost reductions in solar technology itself.

    To its credit, the SunShot program is also working to make solar power available on-demand, a goal that remains elusive. While research continues into these solutions, the Federal Energy Regulatory Commission has begun to identify obstacles to the future deployment of storage technology, which may lead to market rule changes that coincide with the evolving economics of solar and storage.

    Solar, wind and other variable-output resources are portrayed as becoming competitive with conventional electricity sources based on average cost alone. This limited focus creates a nice narrative for renewable advocates, but ignores the significant obstacles to making renewables reliable. Until we can cost-effectively get solar and wind power on-demand, we’ll be dependent on coal, nuclear and natural gas to keep the lights on.

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

    House spending data show where the staff are

    June 02, 2016, 1:29 PM

    As DemandProgress’ Daniel Schuman reports, the U.S. House just began publishing its spending reports online as data. The House’s “Statements of Disbursement,” which show how much money Congress spends on its operations, have been online in PDF format since 2009. Now the statements are available as CSV files, which one can open with Excel or a similar database program. This is great news, in that it enables those outside Congress to more easily mine the data and analyze them.

    The statements are detailed—one can see how much a particular congressional office spent on office equipment, or what a committee spent on travel. Schuman points out the value of these data:

    Among the most powerful stories it can tell include looking at patterns in congressional staff pay, staff turnover rates, the best and worst members to work for, issues arising from the revolving door, corruption, and a full accounting of all congressional staff in the form of a free staff directory. Seamus Kraft of the OpenGov Foundation used it to identify trends in information technology spending. Of course, the information can be used for silly or counterproductive purposes, such as reporting on how much then-Speaker Pelosi spent on flowers, member spending on bottled water, etc.

    For those of us interested in congressional capacity, the data also detail who works for whom, in what position and how much they are paid. Thus, for example, we can see the speaker spent $1.4 million on staff in the first quarter and the minority leader spent $1.3 million. Meanwhile, Rep. Ralph Abraham, R-La., logged $204,000 in employee expenditures and the House Committee on Agriculture spent $925,000 in the first quarter of 2016. A worthy research task would be to cut and compile these data to map the staff spending topography across the House’s committees and leadership. The results would help clarify the relative staff power within the chamber, and serve as a basis for considering staffing levels vis-a-vis jurisdictional responsibilities.

    To date, the Senate has not made its disbursements available as data. One hopes the chamber will step up to fix this soon. If the data can be compiled in PDF reports, certainly they can with little to no cost be integrated into usable data.

    The House spending data are at http://disbursements.house.gov/.

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

    Why deleting the FDA’s ban of e-cigarette flavors is good for public health

    June 02, 2016, 1:05 PM

    In what should be taken as a note of common sense amid the highly contentious debate surrounding the Food and Drug Administration’s oversight of tobacco products, reports have surfaced that the White House intervened to delete sections of draft FDA regulations promulgated early last month that would have required flavored e-cigarette liquids be removed from the market almost immediately.

    This is good news. As I detailed in a recent policy study for the R Street Institute, vapers use flavors to help sustain the level of nicotine they derive from e-cigarettes. Many vapers rotate flavors through the day to allow them to continue vaping. And most importantly, these vapers report that without flavors, they are likely to return to smoking.

    This is crucial, because evidence demonstrates that e-cigarettes pose less than 5 percent of the risk of potentially fatal illness presented by combustible tobacco cigarettes. Encouraging smokers to switch to e-cigarettes offers the opportunity to improve public health outcomes tremendously.

    Nonetheless, some in the U.S. public health community point to what they allege is selective marketing of e-cigarettes to young people, and focus in particular on the role of flavors they say are targeted at children. The proposed FDA rules wisely address this concern by requiring that e-cigarettes may not be sold to children in any state. But proposals to remove flavored e-liquids from the market are misguided.

    For one thing, surveys of confectioners and candy makers reveal that there is no such thing as “children’s flavors,” per se. E-cigarette flavors identified by critics as attractive to children are by no means the most popular with that audience. And there is no evidence that curiosity about a specific flavor has compelled children to try e-cigarettes. Despite this lack of evidence, the FDA recommended a ban on flavoring in their original submission to the White House.

    With the change in the rules, flavored e-liquids will join other vaping

    products in enjoying a two-year grace period, during which their manufacturers may submit marketing applications to continue to sell their products. Without the change made by the White House Office of Management and Budget as part of the interagency review process, flavored e-liquids would have had a grace period of only 90 days.

    The news highlights radically divergent paths taken by health regulators on both sides of the Atlantic with regard to the role of e-cigarettes in smoking cessation and tobacco harm reduction. In the United Kingdom, e-cigarettes are dispensed by the National Health Service. Meanwhile in the United States, e-cigarette products introduced since February 2007 – representing almost 99 percent of the market – could effectively be banned within two years under the current FDA regulations.

    The U.S. House currently is considering H.R. 2058, legislation that seeks to modify the “grandfather” date for products included in the current FDA regulations. One hopes that Congress would go one step further and amend the FDA tobacco law in a way that would mandate the FDA to consider the substantial public health benefits that e-cigarettes offer both to current smokers and to teens who otherwise would become lifelong smokers.

    By deleting references to flavor in the otherwise exhaustive FDA regulations, the White House has shown a degree of insight into an important public health problem. Adult smokers could benefit from flavors in e-cigarettes.

    Scandal dampens Sacramento’s world-class designs

    June 02, 2016, 12:27 PM

    I have a simple observation after years of writing about local-development issues: Whenever civic boosters talk about creating a “world-class city,” their city is by definition not one now. The more eager city officials are to use the “world-class” term, the more certain you can be they are governing second-rate places.

    Few politicians have used such terminology as much as Sacramento’s outgoing Mayor Kevin Johnson, who was about to be celebrated as something akin to the capital’s savior when he abruptly declined to seek a third term. “It should have been a high point in a career of high points,” reported The New York Times last October, referring to a planned ESPN documentary about how Johnson “helped rejuvenate this once-ailing capital city.”

    If Newsweek can proclaim Gov. Jerry Brown the “savior” of a decidedly unsaved California, as it did recently, why can’t a sports network highlight how a former NBA star saved a second-tier capital city by subsidizing a new arena that kept its basketball team from heading to Seattle? Unfortunately for Johnson, old allegations of sexual abuse reappeared because of a news story. The documentary was shelved. He decided not to run for a third term, although he denied the allegations and denied the scandal had anything to do with his exit from public life.

    These weren’t the first allegations Johnson faced. “Johnson, who was first elected as the mayor of his hometown in 2008, faced similar allegations from five students at his St. HOPE Academy in Sacramento, though charges were never filed,” according to the New York Post. Johnson denies those allegations, as well as a sexual-harassment claim filed by a city worker last year (her financial claim was rejected by the City Council). Johnson blames his political enemies, including teachers’ unions he believes are angry for his (laudable) efforts to turn a high school into the St. HOPE charter.

    There are other questions about St. HOPE, however. In 2007, then-President George W. Bush had appointed Gerald Walpin as an inspector general for the federal agency that oversees AmeriCorps, which dispenses grants for “public service” purposes. As the Wall Street Journal reported in 2009, Walpin’s “office recommended that Mr. Johnson and St. HOPE itself be ‘suspended’ from receiving federal funds” after an $850,000 grant allegedly had been used in inappropriate ways.

    Sacramento faced a loss of stimulus funds because of the suspension. The U.S. attorney declined to pursue criminal charges and produced a settlement that cleared Johnson and let the city receive its federal funds. In a 2013 piece for National Review, Walpin wrote that he “received pressure to drop the case against Mr. Johnson” and when he “declined to repudiate my staff’s work, the guillotine fell.” Walpin said he got a call from a White House telling him to resign within an hour or be fired. Johnson, by the way, has boasted about his closeness with the president.

    Of course, political scandal plagues cities large and small, world class and otherwise. But it was interesting what little impact it had locally. “If this was proven true or there was an indictment, this might be different story,” Johnson’s political adviser told theTimes, referring to the abuse allegation. “This is Sacramento. We have drunk legislators being arrested all the time. People are like, ‘Whatever.’”

    The leading candidate to replace Johnson is former Senate Majority Leader Darrell Steinberg. Although Steinberg is by all accounts an ethical man, he ran the Senate when three of his fellow Democratic members were indicted on corruption-related charges. Some observers have criticized Steinberg for only suspending (not expelling) the troubled senators, but that has yet to register as a serious mayoral campaign issue.

    My office is two blocks from the new Golden 1 Center that will be home to the Sacramento Kings, who now play in an aging suburban arena. As much as $255 million of the center’s $534 million price tag will be picked up by the taxpayers. But frankly, Sacramento wasn’t a world-class city before the new downtown arena was conceived and it won’t be one after it’s finished. If anything, the project epitomizes what’s wrong with this city and state.

    California businesses have long complained about the 1970s-era California Environmental Quality Act, or CEQA. It allows – actually it encourages – critics of any project to file environmental lawsuits to slow or stop it. Unions file lawsuits to get leverage for union-only construction agreements. Businesses file them to hobble competitors. Environmental groups file them to stop growth.

    The state repeatedly fails to approve reforms. The only exception is for projects favored by legislators. Steinberg and others wanted the arena, so the Legislature rushed through a CEQA exemption for this project alone. Labor unions were cut in on the deal by granting them a union-only Project Labor Agreement. New hotels that popped up around the new arena are pressured to unionize, given the public subsidies involved.

    The arena is located at the west end of one of Sacramento’s crummiest downtown streets. K Street has long been controlled by city officials and their now-defunct redevelopment agency. It mostly resembles Skid Row. There are some new restaurants, including a bar where women dressed as mermaids swim around in a giant fish tank. That one (along with a nearby pizza shop and nightclub) received $3.7 million in city subsidies.

    “Redevelopment” has become a key issue in the mayor’s race, but only because the more conservative candidate is blasting Steinberg for his role in eliminating these controversial planning agencies. Steinberg isn’t good on the issue, either, but he helped Brown shut them down when the state needed additional cash.

    Yes, there’s a building boom all around the new arena. But, as Stanford Professor Emeritus Roger Noll has long demonstrated, new sports stadiums do not create economic growth. They just shift resources around a city. The same is true for all redevelopment-type projects: They aren’t a long-term source of jobs and growth, but mainly let politicians “build” the kind of projects they prefer.

    Despite its wretched summertime heat and the often low-level behavior of its most notorious part-time residents (legislators), Sacramento is a lovely city. It may never be “world class” in the San Francisco, New York, or Paris sense, but it certainly could have a thriving downtown and a business climate not entirely tied to state government.

    The problem isn’t primarily one of scandal, although breaking the one-party control of local and state government might lead to higher ethical standards. The real problem is that little happens here unless it’s subsidized by taxpayers, favored by politicians, controlled by unions, and regulated by bureaucrats. Sorry, but that’s the recipe for building a third-world city, not a world-class one.

    Top-two primary limits voters’ choices

    May 31, 2016, 6:01 PM

    If a California-style “top two” primary were in place for presidential races in 2008, the nation’s voters would have had to choose between Barack Obama and Hillary Clinton in the general election. There would have been no “third party” candidates on the ballot – and no chance for voters to show their disgust by writing in “Mickey Mouse.”

    How’s that for a choice that reflects – as the “Top Two Candidates Open Primary Act” promises – “the right of every Californian to vote for the candidate of his or her choice?”

    Of course, “top two” doesn’t exist for presidential races. California’s system – whereby the top two vote-getters in the primary face off in the November general election, even if they are from the same party – applies to statewide races, legislative races and to U.S. Senate and congressional races. But that “what if” illustrates its fundamental flaw; instead of enhancing voter choice, this reform significantly contracts it.  The only way to protest the choices is to not vote at all.

    This presidential year, Americans are faced with what many view as distasteful alternatives: Donald Trump or Hillary Clinton. Many voters are seeking alternatives and looking to third-party choices. Why shouldn’t voters have the same chance to seek out alternatives in lower-profile races?

    I’ve voted in almost every election over the last 36 years, yet in the last election I declined to vote for U.S. Congress and some other races given the unacceptable “either-or” choice on the ballot. As a registered Libertarian, I can vote for my preferred candidate in the primary – but the general election is what really matters.

    The “top two” ballot initiative promised a lot. “Our state government is broken…,” explained the argument in favor of Proposition 14. “It’s time to end the bickering and gridlock and fix the system.” Supporters said its passage would result in the election of more moderates who would work across party lines because the primary election would force candidates to seek out votes from everyone – not just party loyalists.

    The problems Proposition 14’s backers pointed to in 2010 – 12 percent unemployment rates, $20-billion-plus budget deficits, gridlock – have subsided. But it would be fanciful to give this system credit. Voters also approved Proposition 25 in 2010, which allowed the Legislature to pass budgets with a simple majority, rather than a supermajority. Democrats no longer need Republican votes to ram through budgets. Furthermore, voters agreed to raise their taxes, thanks to Proposition 30. The economy has recovered. None of this has led to less partisanship – but the general-fund budget crisis has subsided, as one party gained more power over the other.

    Richard Winger, publisher of Ballot Access News and a longtime critic of the “top two” system, was the one who clued me into the fact that in 2008, because of a crowded split field, there would have been no Republican candidate under a Top Two system. He also points to a 2013 study in the American Journal of Political Science that examines primaries and partisanship across the country. “It studied 18,000 legislators between 1992-2010,” Winger explained. “It finds no correlation between type of primary system and the degree of polarization and partisanship in legislatures.” So it’s questionable this loss of choice is providing much in return.

    Winger notes another likely side effect: declining voter participation. “California turnout declined more than any other state between November 2010 and November 2014,” he added. No wonder. When the general election choices often are between two members of the same party, there’s little motivation to vote. There’s plenty of motivation to leave blank the ballot in some major races.

    The “top two” is like many other gimmicks good-government activists have embraced over the years. Term limits, for instance, was meant to replace career politicians with citizen legislators. Instead, it created a game of musical chairs. Politicians always jockey for the next office. That reform also reduced the capitol’s institutional knowledge.

    “Top two” likewise has caused unforeseen consequences, as The Atlantic explained in its December profile. The magazine looked, in part, at moderate Democrat Steve Glazer’s special state Senate election against liberal Democrat Susan Bonilla. This race is often used as evidence of the new primary’s success and, in my view, was the best outcome. But the details also spotlight the system’s flaws.

    Bonilla had the backing of the Democratic establishment and unions and was the almost-certain winner if Republican candidate Michaela Hertle grabbed second spot. But Hertle pulled out and endorsed Glazer. As The Atlantic reported, “just before the election a flyer appeared on the doorsteps of voters in District 7 telling them to vote for her because she’s a ‘real Republican,’ in an apparent effort to trick voters into casting ballots for a candidate who was no longer running.”

    Glazer came in second and then won the general election – but the “top two” makes such games-playing more likely, even if it occasionally leads to a good, moderate candidate beating out a union ally. It rarely leads to a clearer choice for voters.

    “Top two” was conceived in backroom political shenanigans. Back when a supermajority was needed to pass a budget, moderate Republican Abel Maldonado agreed to support a budget deal in exchange for putting the new primary system before voters. Voters favored it 54 percent to 46 percent. But it’s troubling to change the election rules to achieve specific political outcomes – i.e., moderates passing reforms designed to elect more moderates.

    Often, interesting ideas come from the extremes. Liberal Democrats often back important civil-liberties reforms (including asset forfeiture and police accountability) while conservative Republicans push useful fiscal measures. Rarely does much innovative policy come from the middle. Moderates may be more open to deal-making than legislators firmly grounded in a political philosophy. One can argue about the value of having more moderates in office.

    Without question, though, the system fails at a key promise: giving voters more choices.

    Recap of R Street’s May 26 GSE reform conference

    May 31, 2016, 2:18 PM

    Government-sponsored enterprises Fannie Mae and Freddie Mac have essentially no capital, have been in government conservatorship for nearly eight years and are totally dependent on the taxpayers.

    As Congress considers measures such as H.R. 4913, the Housing Finance Restructuring Act of 2016, the R Street Institute hosted a May 26 conference on ways to reform the GSEs, moderated by R Street Distinguished Senior Fellow Alex J. Pollock. The bill’s sponsor – Rep. Mick Mulvaney, R-S.C. – was on hand to discuss the bill and address various criticisms of it, explaining how it would require much stronger capital formation for Fannie and Freddie than in the past.

    Jim Glassman of the American Enterprise Institute emphasized putting Fannie and Freddie on the same plane as private “too big to fail” financial institutions, citing ideas he and Pollock outlined in their co-authored paper “How to fix Fannie and Freddie.”

    Jim Parrott of the Urban Institute and Falling Creek Advisors discussed the importance of having a deep market for credit risk, backed with infrastructure in the public domain; he also raised a number of difficult questions H.R. 4913 leaves open. Mike Fratantoni of the Mortgage Bankers Association discussed credit availability, mortgage rates and the effect Fannie and Freddie reform could have on these key factors.

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

    Some American values may be dimming, but transparency continues to shine bright

    May 31, 2016, 10:57 AM

    Attending a Memorial Day ceremony in my little city yesterday, I couldn’t help but wonder what happened all of the sudden to make it palatable for so many young people, according to the polls, to be voting in utter disregard of their progenitors who bled and died to keep America off the socialist path.

    I grew up a military dependent, as did my wife. Her grandfather was the senior officer aboard his flagship, the USS Arizona, and he went down with her during the Japanese attack on the American fleet that brought us officially into World War II. Her father commanded, directly or indirectly, three of our four naval fleets. My father piloted a plane in the first B-29 raid on the Japanese homeland, flying over the Himalayas to bases in China.

    Most people like me have been raised to think that what 1,320,357 Americans wearing our military uniform gave their lives to protect has an enduring and unique value for all of us. Part of that value was always understood to be a publicly provided safety net for those caught by unfortunate circumstances, but like its namesake, it was reserved pretty much for people who lost their balance. Then it was expanded for people we owed, like military veterans.

    But most of those well over a million defenders didn’t put their lives on the line to protect the safety net or Veterans Affairs benefits or Medicare. They fought in defense of the right to make their own life choices, to live with unfettered possibilities and to worship how they chose.

    But enduring apparently does not mean what it used to, and the economic system that is today failing so spectacularly in Venezuela nonetheless finds its supporters. Even social-media videos of shoppers looting what’s left in the grocery stores doesn’t seem to have destroyed the brand for lots of Americans. The link between shortages of food, medicine or other basics of civilization and price-and-currency controls is something that is not guaranteed to be understood by adults in this country anymore, to say nothing of our youth.

    In fact, there is an inelegant theory to explain why so many young people could support a socialist this year for president. They want someone else to pay their student loans.

    Part of the disaffection with the “system”– both here and, literally, around the globe – is almost certainly due to different lessons in schools today than we were taught, and part of it could be lack of transparency. This helps to explain why revelations of personal gain and manipulation of the levers of government by elected officials have caused vacancies in the national leadership of Iceland and Brazil in the past couple of months.

    As in many other areas of public policy, the states have led the way in updating their efforts to allow citizens to evaluate government services and expenditures based on availability of data. Lack of transparency led one brave constitutional officer in Ohio – a former Marine, by the way – to go all-out to inform Buckeye State citizens of how taxpayer money is spent. The officer was Ohio Treasurer Josh Mandel, who put every single state check online for everybody to see – a total $400 billion of state expenditures.

    Mandel effectively and inexpensively developed a program and website to allow taxpayers to see what they are paying for. In doing so, Ohio earned the only A+, and perfect score of 100, in the U.S. Public Interest Research Group’s 2015 survey of state government transparency. The site, OhioCheckbook.com, has since launched partnerships with the Ohio police and fire pension fund and with many of the state’s largest counties, including those that contain major cities like Cincinnati and Columbus. Mandel and his team are moving to include school-district data as well.

    Alas, not even Ohio has a comprehensive list of government entities that are self-funded outside the state budget. In some states, current reform efforts focus on abuses in civil-forfeiture laws, illustrating how lack of transparency translates into lack of oversight by those officials responsible to taxpayers.

    So if responsibility to the foundational ideals of the country isn’t always in evidence, even on Memorial Day, at least we still have public opinion on the side of accountability to taxpayers to afford us some protection.

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

    Should we just take the nicotine out of cigarettes?

    May 31, 2016, 10:35 AM

    The short answer is…not yet.

    In the United States, the ultimate goal of tobacco-control programming long has been a “tobacco-free society.” This goal is clearly articulated in the most recent Surgeon General Report, in the FDA Tobacco Law (formally, the Family Smoking Prevention And Tobacco Control Act of 2009) and in multiple pronouncements by the Centers for Disease Control and Prevention, the Food and Drug Administration, the Campaign for Tobacco-Free Kids and others.

    All agree that smokers smoke for the nicotine, but die from the tar in the smoke. All of the commonly referenced 480,000 annual deaths from tobacco products in the United States are from a single tobacco product – the combustible cigarette. This being the case, pursuing a goal of a “smoke-free society” would seem more reasonable and more easily achievable than a goal that eliminates all tobacco products, regardless of their relative levels of risk.

    For better and for worse, however, a “tobacco-free society” has been set as the goal, with the underlying problem framed as tobacco-company recruitment of teens to a lifetime of nicotine addiction, ultimately only satisfied by cigarettes, the most addictive and most hazardous nicotine-delivery products. This goal is pursued as a moral imperative – a crusade against the evil tobacco industry, as opposed to a more limited public-health initiative intended to reduce, if not eliminate, tobacco-related addiction, illness and death.

    Thus, as seen by American tobacco-control leadership, there is no possibility that any non-pharmaceutical nicotine-delivery product, no matter what the risk, might have public-health benefits. High-risk products will kill people. Low risk products, as envisioned, will recruit teens to nicotine addiction, who will then switch to cigarettes for bigger and faster nicotine hits.

    The British have wrestled with this same question. Looking at all the same research and survey data, they have reached a very different conclusion. They are endorsing e-cigarettes and related vapor products as low-risk alternatives to cigarettes, and doing so without fear of major additional recruitment of teens to nicotine addiction.

    Ruling out any such endorsement, one of the more popular ideas in the American tobacco-control community has been removing nicotine from cigarettes. A provision was written into the FDA Tobacco Law that specifically authorizes the FDA to require nicotine in cigarettes be reduced to non-addictive levels.

    Last fall, the New England Journal of Medicine published a paper and opinion piece exploring this issue. The basic message was that reduced-nicotine cigarettes could yield major reductions in smoking prevalence, but only if smokers could easily switch to satisfying lower-risk nicotine-delivery products.

    Herein lies the rub. The only low-risk nicotine delivery products now recognized by the FDA are the pharmaceutical nicotine-replacement-therapy (NRT) products (gums, patches, etc.). These will not meet the need because they satisfy so few smokers.

    The only families of low-risk nicotine-delivery products that appear capable of satisfying large numbers of smokers are the customizable nicotine vapor (i.e., e-cig) products assembled and sold by vape shops, or Swedish snus. Unfortunately, in its recently released deeming regulations, the FDA has proposed pre-market (PMTA) application requirements so costly that they will, if implemented as proposed, wipe out the entire vape-shop component of the e-cig industry by virtue of the cost to apply. Despite more than 30 years of high-quality epidemiologic data, the FDA has to date refused to allow the Swedish snus products to claim lower risk than cigarettes. Thus, at least for the time being, the FDA has slammed the door on tobacco harm reduction (THR) as a possible component of tobacco-control programming.

    The FDA and others in the American tobacco-control community now face a difficult choice. Either they open themselves to the possibility of considering a THR initiative that uses non-pharmaceutical nicotine-delivery products, or they must give up their dream that eliminating most or all nicotine from cigarettes will do more good than harm.

    If implemented, the THR initiative would be exceedingly low cost. It would simply consist of both public-health authorities and manufacturers of low-risk products advising smokers that they could reduce their risk of potentially fatal tobacco-attributable illness by 95 percent or more by switching from cigarettes to a low-risk product (e-cigs, snus or other smokeless tobacco).

    As seen by this public-health physician, 90 percent or more of the desired public-health benefit could be secured by implementing a well-structured THR initiative. Once implemented, the FDA could then consider how much additional benefit could be secured by reducing the nicotine in cigarettes.

    Reducing the nicotine in cigarettes to non-addictive levels in the absence of a pre-established THR initiative would likely do more harm than good. If the decrease is gradual, it could cause smokers to smoke more and inhale more deeply to secure the desired dose of nicotine, as appears to have been the case with the so-called “low-tar” cigarettes. Others, dissatisfied with this option, would likely turn to totally unregulated contraband cigarettes.

    So, if the question is “should FDA just take the nicotine out of cigarettes?” the answer, at least for now, remains “not yet.”

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