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Chicago still isn’t giving Uber a fair shake

November 09, 2015, 10:35 PM

Uber, Lyft and other ride-hailing services will be permitted to pick up passengers at Chicago’s O’Hare and Midway airports under a plan approved by the City Council in a 39-11 vote.

The decision marks a step in the right direction for the city, which has come a long way from the prohibitionist approach it was still taking to the emerging industry just a year ago. Chicago did not start licensing ride-booking drivers until February of this year, but the industry is now expected to contribute $30 million in annual fees to the city.

But contrary to the claims of Chicago cabbies—who in recent weeks attempted to stage strikes at the airports and citywide in protest of the plan; filed suit seeking to revoke the licenses of ride-hailing service drivers, and disrupted recent City Council Transportation Committee hearings with chants of “same service, same rules”—the problems with the new regime are not that they fail to extend regulations to Uber and Lyft but that they explicitly tax the upstarts to prop up their incumbent competitors.

Under the new rules, ride-booking service users will be forced to pay a 30-cents-a-trip fee to the city of Chicago. Those fees will be used, in part, to offset the costs of fingerprinting, background checks, drug testing, driver-training classes and chauffeur license fees, which are expected to drop from $15 to $5.

Moreover, where taxis must pay a 50-cents-a-trip fee for airport pickups, the fee on ride-hailing pickups at the airport will be 52 cents per trip. Where taxis will continue to pay a $4 fee for access to the airports, ride-booking companies will now pay $5 for access to airport pickups, as well as for dropoffs or pickups either at McCormick Place or Navy Pier. The fees alone can be more than the typical ride.

What was that business about the “same rules,” again?

Taxis already have many built-in advantages over ride-booking services. Most important is monopoly access to accept fares hailed on city streets. Beyond that, there are cabstands set aside on city-owned property throughout Chicago where only taxis are permitted to solicit business.

Taxi fleets also can earn money by accepting advertising, something that’s significantly more difficult to pull off in the private cars that work with Uber and Lyft. And finally, there’s the fact that taxis—unlike ride-hailing services—still conduct a significant portion of their business in cash, which has the convenient property of being harder to track by agencies like the IRS.

Given those structural advantages, services like Uber and Lyft never should have stood a chance. That they have grown so rapidly and are so popular is a testament to just how inadequate the existing transportation-for-hire options truly were. Continuing to insulate the industry from this competition, including explicitly robbing Peter to pay Paul, serves no one well in the long run.

Chicago should be commended for liberalizing its regulatory framework and being open and welcoming to new ideas and business models. It is, in that respect, ahead of some of its peers, most notably New York.

Both Chicago and the state government in Springfield also have done important work in setting down consistent standards to address some of the reasonable public health and safety issues that ride-hailing presents, such as minimum insurance requirements and basic background checks.

But tearing down the sclerotic legal and regulatory structures that stand in the way of innovation will require much more work. Only when that task is complete will Chicago’s consumers and its entrepreneurs enjoy the kind of dynamic competitive market that they deserve.

How not to be Paul Krugman

November 09, 2015, 9:00 AM

One of my favorite bloggers is Scott Alexander of Slate Star Codex. In a recent post, Scott wrote about the inability of small children to conceive that other people have different beliefs or perspectives than they do:

In a classic demonstration, researchers show little Amy a Skittles bag and ask what she thinks is inside. She guesses Skittles, but the researchers open it and reveal it’s actually pennies. Then they close it up and invite little Brayden into the room. Then they ask Amy what Brayden thinks is inside. If Amy’s three years old or younger, she’ll usually say ‘pennies’ – she knows that pennies are inside, so why shouldn’t Brayden know too? If she’s four or older, she’ll usually say ‘Skittles’ – she realizes on a gut level that she and Brayden are separate minds and that Brayden will have his own perspective.

Scott then tied this in to a recent Washington Post article on police protests:

The Post argues that because the Democrats support gun control and protest police, they are becoming the ‘pro-crime party.’ I’m not sure whether the Post genuinely believes the Democrats are pro-crime by inclination or are just arguing their policies will lead to more crime in a hyperbolic figurative way, but I’ve certainly seen sources further right make the ‘genuinely in favor of crime as a terminal value’ argument. And this doesn’t seem too different from the leftist sources that say Republicans can’t really care about the lives of the unborn, they’re just ‘anti-woman’ as a terminal value. Both proposals share this idea of not being able to understand that other people have different beliefs than you and that their actions proceed naturally from those beliefs. Instead of saying ‘I believe gun control would increase crime, but Democrats believe the opposite, and from their different perspective banning guns makes sense,’ they say ‘I believe gun control would increase crime, Democrats must believe the same, and therefore their demands for gun control must come from sinister motives.’

So maybe it’s not just children who have a problem with understanding differing points of view. During a recent appearance on MSNBC, Nobel Prize-winning economist Paul Krugman boasted about how liberals like him were so much better at groking opposing viewpoints than were other people:

There’s this hermetic universe of you only watch Fox News and you only listen to people and if some information that doesn’t suit your worldview comes along, it’s because of the liberal bias of the media… People like me are aware of what’s on Fox News. I have a suspicion that the people who are Fox News watchers have no idea what’s on MSNBC. And we see that in lots of things. One of the kind of things we do in my professional circuit is we say a liberal economist can imitate a conservative economist, can pretend, what will one of those guys say? The reverse is not true. So there is a level of openness to at least acknowledging that there are other viewpoints – not agreeing with them, but understanding them –that is not symmetric.

Even more impressive, Krugman is able to predict what conservatives think despite the fact that he refuses to read conservatives:

Some have asked if there aren’t conservative sites I read regularly. Well, no. I will read anything I’ve been informed about that’s either interesting or revealing; but I don’t know of any economics or politics sites on that side that regularly provide analysis or information I need to take seriously. I know we’re supposed to pretend that both sides always have a point; but the truth is that, most of the time, they don’t.

So how does Krugman explain why conservatives think how they do? Easy, it’s because they “have an intense desire to be wrong.”

One criticism I face fairly often is the assertion that I must be dishonest — I must be cherry-picking my evidence, or something — because the way I describe it, I’m always right while the people who disagree with me are always wrong. And not just wrong, they’re often knaves or fools. How likely is that?

But may I suggest, respectfully, that there’s another possibility? Maybe I actually am right, and maybe the other side actually does contain a remarkable number of knaves and fools.

Sure. And maybe little Brayden only says the bag is full of Skittles because she is a knave and a fool with an intense desire to be wrong. After all, we know the bag is full of pennies.

As it happens, researchers have tested whether liberals or conservatives are better able to predict the other’s point of view, and the results may surprise you, at least if you’re Paul Krugman. For example, in one experiment, conservative participants were asked to fill out a questionnaire on moral issues as if they were a liberal, while liberal participants answered pretending they were conservative. Conservatives were able to predict more accurately how real-life liberals answered the various questions, while liberals struggled to put themselves into the mindset of a conservative. In particular, liberals tended to assume, that since conservatives favored polices they thought were unfair or uncompassionate, therefore conservatives must not value fairness or compassion. Sound familiar?

I say all this not just to pick on Paul Krugman. Krugman is a smart guy. If he is so blind to his own biases, then chances are, so am I. So, probably, are you, my dear reader. And as the twelve-steppers say, the first step to recovery is admitting you have a problem.

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Nevada power markets need more competition

November 09, 2015, 8:00 AM

Nevada’s power markets need more competition. Plagued by continued reliance on the outdated regulated utility model, Nevadans pay more for electricity than all but four states west of the Mississippi. Recent changes in state law and regulation will only make that situation worse.

The state’s Public Utilities Commission (PUCN) is the testing ground for all these changes. NV Energy is asking PUCN to approve construction of a new $1 billion natural-gas power plant. The full cost of that facility, plus an additional 10.5 percent return to NV Energy shareholders, would be borne by all ratepayers through higher electricity bills.

This past June, the PUCN denied a request from data storage giant Switch to circumvent NV Energy entirely in favor of third-party pathways to access cheap, clean power. Switch since joined with gaming companies Wynn Resorts and Las Vegas Sands and the solar firms SolarCity and Sunrun to form the Nevada Coalition to Protect Ratepayers, an effort dedicated to promoting choice and competition.

By the end of the year, PUCN must determine the future of competition at a smaller scale. Through the Net Energy Metering (NEM) program and other state initiatives, more than 2,500 Nevada households have installed rooftop solar panels. The panels power their homes and occasionally produce enough excess power for the households to sell back to their neighbors.

That’s the heart of NEM. You can sell your electricity to your neighbors and receive a payment for the full retail price. NV Energy sees that as a subsidy; NEM customers pay less than their share for maintaining and operating the power grid. Solar customers see it as fair payment for services, since these private investments may defer pricey capital upgrades in grid and generation infrastructure. A July 2014 study performed for PUCN found no evidence the program is unfairly burdening customers or the utility.

Nonetheless, NEM was limited by the Legislature to 3 percent of the state’s net-energy mix. Nevada customers exceeded that cap this past summer. That means that new customers interested in rooftop solar have no market for their excess electrons, and their neighbors are stuck buying their power from the utility.

The PUCN currently has an opportunity to allow customers to challenge the utility. By lifting the arbitrary cap on NEM customers and establishing a payment scheme that works for every Nevada customer, we can increase competition across the state.

Let’s take a step back. This regulated utility model is a loser for Nevadans. Electricity is too expensive, competition and innovation are squashed, customers are financing frivolous investments and utility profits and real jobs are on the line. We should deregulate the electricity system and promote a model of increased competition and full consumer choice.

Nevadans should be allowed to buy power from any source they want. If that’s inexpensive coal, fantastic. If it’s solar panels on their roof, wonderful. The key here is that NV Energy and misguided legislation and regulation are taking Nevada down a no-win pathway. The PUCN can get the government out of the way and let Nevadans choose the energy mix that’s right for them.

Ohio dodged a bullet on ‘legal’ pot

November 09, 2015, 7:00 AM

Ohio voters last week voted down legalized recreational marijuana use, but the state also may be taking a first step toward exploring the medical research and ameliorative capability of marijuana extracts. The campaign to vote Ohio into the “legal” cannabis club – along with Colorado, Washington and the District of Columbia – may have failed by a two to one margin, but it revealed a deep vein of support for medical marijuana use.

I believe my home state made the right decision, for several reasons. While there was plenty of rhetoric about the state “legalizing” marijuana use, technically, it can’t – not as long as federal law insists that marijuana is a Schedule I narcotic under the federal Controlled Substances Act. This is considered the most dangerous of five classes of controlled substances by the U.S Drug Enforcement Administration. LSD, Ecstasy and heroin are all classified in Schedule I, which are considered to be of no medicinal value and present the gravest profile for abuse. For comparison’s sake, methamphetamines and cocaine are found in Schedule II.

Over time, various organizations have petitioned the DEA to reclassify marijuana to a less serious schedule. The first petition, originally made in 1972, was rejected in court after 22 years of legal and administrative proceedings. A second petition was filed in 1995 and rejected in 2001. A third petition was filed in 2002 and rejected in 2011. A fourth petition, filed in 2011 by Washington state Gov. Christine Gregoire, is still pending before the DEA.

Meanwhile, the federal government does not currently enforce the law in states that have acted to decriminalize possession, and Congress last year asked the feds not to prosecute for medical use in states where that is permitted.

Ohio’s Issue 3 actually had no language describing marijuana possession or use as legal. Instead, it would endow growing rights to 10 specific plots of land, listed by real property descriptions. It also would grant marketing rights to up to 1,100 licensed distributors. Home growers could produce up to 4 ounces for themselves annually, but could not sell it.

As The Columbus Dispatch reported:

A core of about two dozen wealthy investors, including former NBA star Oscar Robertson, two descendents of President William Howard Taft, and boy-band member Nick Lachey, contributed about $25 million to the Issue 3 campaign.

This core group consists of the owners of the 10 plots of land and their affiliated investors, who tried to convince Ohioans to grant them a marijuana-production monopoly. The constitutional monopoly was not a popular idea, although a similar structure was what allowed four casinos to be built in the state in the last few years. But gambling, by itself, is not a federal crime.

To make sure the argument was not lost on the voters, the Legislature cobbled together its own constitutional amendment, Issue 2, which passed. It specifies that no future initiatives could create monopolies, oligopolies or cartels that benefit private persons unless the voters vote affirmatively in a two-step process. To circumvent the restrictions, voters in future elections would face two separate ballot questions: one to exempt the cartel or monopoly from the anti-monopoly provision and then another to approve the scheme itself.

The local media have been full of “try again” sentiments from Issue 3’s supporters. But the political class, including House Speaker Cliff Rosenberger, R-Clarksville, would rather limit the next step to medicinal marijuana. During the Issue 2 and Issue 3 campaigns, letters from parents who lost children and other relatives to drug abuse or at the hands of marijuana-impaired drivers have been a staple of the state’s newspapers.

The evidence from Colorado, particularly as compiled in a September report from the Rocky Mountain High Intensity Drug Trafficking Area on the first year of that state’s experiment with legal recreational use, suggests there’s good reason to proceed with caution. The report was based on information from 34 different federal, municipal and state agencies, charitable institutions and companies, including McDonalds and Starbucks.

One immediate cause of concern is how to police marijuana-intoxicated drivers. As Erie, Colo. Police Chief Marco Vasquez recently described it:

‘We have what they call drug recognition experts and so we’ve trained up almost 300 in the state of Colorado and those are the people that will come in, they are the experts that will look at the different indicators to try to determine what else they may be impaired with.’

Once they have a reasonable amount of evidence they need to test for it. That’s where it gets complicated. Right now they rely on voluntary blood tests until the state patrol figures out if an oral fluids test, where saliva is collected, really works.

‘Right now we are just doing a pilot program to try to determine are those devices, is that technology effective and reliable enough that we may ultimately be able to use them for prosecutions,’ said Vasquez.

The level set for impaired driving in both Colorado and Washington state is 5 nanograms of THC per milliliter of blood. But many toxicologists will not certify an impaired condition at that level, and even the National Highway Traffic and Safety Administration offers that “it is inadvisable to try and predict effects based on blood THC concentrations alone, and currently impossible to predict specific effects based on [saliva] THC-COOH concentrations.”

According to the RHIDTA, while the overall number of traffic deaths in Colorado has fallen from 535 in 2006 to 488 in 2014, the number of deaths where operators tested positive for marijuana rose from 37 to 94. Thus, as a percentage of total traffic fatalities, marijuana-related fatal accidents grew from roughly 7 percent to nearly 20 percent.

Over the same period, the rate of hospitalizations statewide tagged as “likely related” to marijuana rose from 267 per 100,000 visits to 524 per 100,000 visits. The average number of annual drug-related suspensions (counting all drugs) in Colorado schools rose 34 percent from 3,864 for 2004 through 2009 to 5,167 for 2009 through 2014.

Ohio would stay fairer to its culture by moving to the medicinal question first.  It now appears that question will be answered sooner rather than later, based on what our citizens and lawmakers think they have learned from the recent campaign.

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The ninja are among us

November 08, 2015, 3:45 PM

Ninjas. Just the word can send a shiver down one’s back.

Originating in feudal Japan and reaching their peak during the Sengoku era that spanned the 16th and 17th centuries, outside of Indonesia – which has suffered from periodic panics over the past few decades – ninjas today are generally presumed to be confined to movies, video games, comic books and the pages of history.

That’s what they want you to think. But the truth is…they are among us and they are growing more dangerous. We must be ever-vigilant about the ninja threat.

Please note that I speak here not of the common criminals to whom the press sometimes mistakenly applies the title “ninja,” such as Staten Island’s “ninja burglars” or Maine’s “Black Ninja.” These pretenders inevitably are caught by the authorities, thus belying that they are not true masters of ninjitsu.

I speak, instead, of the hidden menace. They go almost entirely undetected, but sometimes are sufficiently careless to make their presence apparent, if one knows where to look.

And the place to look, overwhelmingly, is single-sentence descriptions in the police blotters of largely small-town newspapers.

ITEM! From the Arkansas Democrat-Gazette, dated June 14, 2007:

8:16 p.m. A man at First Presbyterian Church, 901 N.E. J St., reported four Ninja warriors fighting on the playground.

There is no follow-up and no further context is offered. A report is made, published and then long-forgotten, as the ninja no doubt work their connections in the police-media industrial complex to suppress any further evidence-gathering. This is true even when the sighting is highly unusual, such as when ninja are found waging war against their eternal enemy – pirates. Witness:

ITEM! On Aug. 26, 2007, the Austin American-Statesman printed this report from the University of Texas’ security department:

UT police officers responded to the West Mall on a report of a male subject running and yelling at pedestrians along the West Mall. During the investigation, the officers were informed that there was a subject wearing a black mask and dressed as a ninja. The officers further learned that the ninja was chasing a pirate. As the investigation continued, the officers discovered that both subjects had ‘jumped ship’ and had left the area.

We cannot simply abide this ninja invasion. They are training in our suburbs. See:

ITEM! From the Ladera Ranch, Calif. sheriff’s blotter, published in the Feb. 22, 2008, edition of The Orange County Register:

A call on Feb. 8 reported that six suspects, dressed all in black, were jumping into the backyards of houses on Narrow Canyon and Thoreau Street and hiding in the bushes at 11:24 p.m.

They have infiltrated our schools!

ITEM! From the Sunnyvale, Calif. Department of Public Safety’s incident log, as published in the March 16, 2009, edition of the San Jose Mercury News:

Feb. 25, 2:45 p.m. Someone found a ninja star in a classroom storage room.

Indeed, they are threatening our children.

ITEM! As the Asbury Park Press reported on June 25, 2008, a ninja sighting in Barnegat, N.J. forced the lockdown of several local schools

Shortly after 9 a.m., police received a call from a librarian at the local Ocean County Library branch on Burr Street reporting that a man dressed as a ninja, carrying a large sword, was running through the woods, Lt. Patrick Shaffery said. Police than initiated a lock-down of the five schools as a precaution, police said.

More recently in Belleville, N.J., the Belleville Times reported Aug. 27, 2015, on a robbery in broad daylight on that city’s Heckel Street, and its details show that…ITEM!:

The victim stated that he had been sitting on his porch when he was approached by a black male, who was wearing all black, with a black backpack and a black ninja-style mask. The suspect allegedly pointed a gun at the victim and stated, ‘what do you got and where is it?’ The victim then handed over his iPhone and a lighter, before the suspect fled north on Heckel Street. The investigation remains open.

Ninjas love smartphones. They download ninja game apps and use them for further training. But showing how the ninja’s evil extends even to more passive-aggressive bullying, ITEM! From the Ellensburg, Wash. Daily Record, dated May 2, 2007:

A person dressed in a ninja costume with a mask was miming people on Chestnut Street.

That’s below the belt, ninja. There’s never an excuse for mime. But worse still, unchecked ninjitsu escalates inevitably to violence, as….

ITEM!  Ellensburg would be visited again by even worse ninja atrocities a few years later, as the Daily Record reported on March 2, 2010:

A man in a ninja face mask reportedly came into a residence and hit someone in the head on Cascade Court.

ITEM! Washington state is a hotbed of ninja reports. The Daily News of Longview, Wash. reported in its July 25, 2013, edition that:

A woman in the 200 block of N. First Avenue in Kelso told police she was concerned about a young man who appeared to be jumping around and standing on the railroad tracks. The 19-year-old male told police that he was ‘practicing ninja warrior moves.’

ITEM! Indeed, reports of ninja brazenly practicing their moves in public are common across the land. See this one, from the May 21, 2014, edition of Montana’s Great Falls Tribune:

Havre, May 15: A caller reported that a shirtless man was doing ninja moves in the middle of a street and also chased after the caller’s vehicle with a crowbar.

ITEM! The ninja have moved beyond their traditional weapons to more modern means of attack. As the Charleston, S.C.  Post and Courier reported on Dec. 23, 2010:

A robber reportedly held up a man with a fake gun Dec. 10 and got away with his wallet and cash. The masked suspect also was dressed in a ninja outfit, according to a Dorchester County Sheriff’s Office report.

ITEM! But some would-be victims are learning to fight back. As the Tribune-Review of Greensburg, Pa. reported on April 25, 2011:

A Fayette County man attacked by a ‘ninja’ with a sword quickly ended the encounter by pulling a gun.

‘The only word that comes to mind is, ‘seriously?” Santino Guzzo, 29, of South Union said today. ‘I know this isn’t a laughing matter, but how many people get attacked by a ninja? Really, a ninja?’

More than you might expect, Santino. Over the years, The New York Post has documented just how serious the escalating ninja threat has become in the nation’s largest city.

ITEM! From Oct. 17, 2004:

A very thorough pistol-packing thief dressed like a ninja is being sought for robbing an Upper West Side Japanese restaurant, police said yesterday.

ITEM! From March 27, 2005:

Cops are looking for a mugger dressed like a ninja who robbed a woman in her 60s in a Forest Hills subway station yesterday morning.

(I’d also point to this item from July 27, 2006, but it’s too sad to include a jokey “item” header).

There was briefly a moment where one man appeared ready to tell authorities all about the conspiracy. Witness this Post ITEM! from Nov. 7, 2007:

Paul Maldonado, 39, allegedly clogged the drains in his Adams Avenue apartment near Mason Avenue at 10:50 p.m. Thursday because his landlady, who lives below him, phoned 911 to complain about a noisy party he was throwing.

When police arrived to ask him to keep it down, Maldonado began shrieking, ‘This is ridiculous! I’m going to get the ninja, I know who the ninja is,’ authorities said.

And Mr. Maldonado was never heard from again.

The press has been almost entirely complicit in sweeping this conspiracy under the rug, but there are exceptions. In September 2010, after Columbus, Miss. became the latest scene of ninja nonsense, columnist Roger Truesdale of The Commercial Dispatch sought to rouse his fellow citizens to create a “ninja watch.”

Try peering over the fence to inventory the new neighbor’s clotheslines. All that walking on water and carrying on should cause even the best conditioned ninja to perspire, not to mention getting a little dirt on their suits. I’d venture that most silk ninja suits aren’t made for the clothes dryer. If you see a pair of black leotards hanging on the line next to a black mask, call 911. A word of caution before making the call: Quickly flip through the pages of your Frederick’s of Hollywood catalog to make sure it’s not some (how should I put this?) sporting apparel used for more recreational activities.

Godspeed to you, Mr. Truesdale. We at R Street also are doing our part.

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Speak now or forever hold your peace on Deepwater Horizon oil spill

November 07, 2015, 10:00 AM

By now, it’s no secret that many coastal residents aren’t happy with the proposed settlement between BP, the federal government and the five Gulf Coast states. They have until Dec. 4 to make their thoughts known to the U.S. Department of Justice before the consent decree is finalized.

But this is more than simply wanting a pound of flesh from BP after the oil spill. The final settlement consent decree provides for $5.5 billion in Clean Water Act (CWA) civil penalties. That means the actual penalty assessed ($1,724 per barrel of oil) is 60 percent less than the maximum allowable under law.

Why does that matter to coastal residents?

In 2012, Congress passed the Resources and Ecosystem Sustainability, Tourist Opportunities, and Revived Economies of the Gulf Coast States (RESTORE) Act. The law redirects 80 percent of those CWA penalties in a manner that affords local and regional officials significantly more control over restoring the economic and environmental damage inflicted on their communities.

The R Street Institute, where I also work, has tracked restoration efforts on the coast and even developed a scorecard for evaluating RESTORE Act projects, but what strikes me most is how the proposed consent decree impacts the very nature and scope of coastal restoration efforts.

The consent decree reduces the maximum funds available through the RESTORE Act process from $10.97 billion to $4.40 billion. Control over billions of restoration dollars appears to have shifted away from the impacted communities to state governments, in the form of economic damage payments, and to the federal government, through natural-resources damages.

Let’s be clear. This isn’t a case of excessive verdicts, crazy tort laws or judges gone wild. More than a year ago, U.S. District Judge Carl J. Barbier found that BP acted with “gross negligence” that resulted in 11 deaths and tremendous environmental and economic damage.

While any settlement requires compromise, such a significant CWA penalty reduction against a party with clear culpability for damages raises significant questions.

The shift also has coastal residents in Alabama nervous that Montgomery will spend the state settlement funds with little regard to actual harm to communities on or near the water. The State of Florida has pledged 75 percent of its economic damages to the eight counties most impacted by the spill. It’s anyone’s guess as to whether Alabama will follow a similar path.

If that weren’t enough to chap coastal residents who endured the spill, Forbes contributor Robert Wood notes that BP should be able to take around $15.3 billion in payments as a tax deduction.

Not only will impacted communities likely have less say over restoration efforts, the timeframe for payments potentially changes the types of projects themselves. Coastal communities realized many of the economic and environmental harms almost immediately, but BP has until 2031 or later to make most of the payments. Local governments, coastal communities and even states won’t receive massive lump sums of money to invest in major infrastructure projects unless they’re willing to issue bonds and pay fees to essentially accelerate the timeline.

The financial certainty and finality of the settlement shouldn’t be dismissed, but it’s important for coastal residents to voice their thoughts, if they haven’t already. While it’s unlikely that the decree will change, the only option left is to comment now or forever hold your peace on settling one of the worst disasters ever to hit the Gulf Coast.

Hurricanes Katrina and Rita: Ten Years Later

November 06, 2015, 3:33 PM
This event has passed 11/09/2015 @ 7:00 pm - 8:30 pm

R Street Senior Fellow R.J. Lehmann will discuss the role of the private sector in rebuilding New Orleans following Hurricane Katrina, and other changes the storm wrought in disaster-preparedness policy, on a panel at Stephen F. Austin University looking at the legacy of Katrina and Hurricane Rita, ten years later. Other panelists will include Brian Greene, CEO of the Greater Houston Food Bank; Keith Kiplinger, fire chief of the City of Nagogdoches, Texas; and Kathy Wendling, director of community service development for Camp Restore.

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  • Obama’s disappointing keystone rejection

    November 06, 2015, 3:10 PM

    President Barack Obama’s rejection of Keystone XL is far from surprising. That doesn’t stop it from being extremely disappointing.

    Debate over the pipeline morphed over time into a completely political conversation, devoid of reference to the actual costs and benefits of building this one discrete piece of infrastructure. Rejection was the only possible response from an administration beholden to the interests of the environmental left.

    The pipeline represents a much more humble investment than the discourse has made it seem. Capable of carrying up to 830,000 barrels per day, it would provide one option for the secure transport of oil to American refineries built to process the resource. In fact, in a nod to the value of new pipeline infrastructure, the president gave the southern leg of the pipeline the go-ahead in 2012. The northern portion of the pipeline was contentious only because it would ease access to Canadian oil sands.

    Without Keystone, oil companies have been relying on trucking and rail infrastructure, alternatives that are more expensive, polluting, and dangerous. Since the pipeline was proposed in 2008, these alternatives have contributed an additional 8.8 million tons of CO2 emissions to the atmosphere and raised the risks of spills and fatal accidents.

    The environmental movement and the Environmental Protection Agency contend that, given low current oil prices, the oil sands will be too expensive to develop without the pipeline and the resource will stay in the ground. Like all doom and gloom predictions about oil trends, this is being proven wrong. The price to develop the oil sands continues to fall, thanks to advancements in technology and efficiency.

    The administration’s choice is thus purely a matter of optics. Canadian oil sands will continue to be developed and will continue to bolster North American energy security. The oil will continue to flow into the United States via less secure and riskier infrastructure. Worse, it may find alternative markets overseas, further increasing the emissions profile that so concerns environmentalists. Today’s rejection is a Pyrrhic victory paving the way for more emissions and other negative consequences.

    It also costs Americans in real ways. The pipeline could have brought in billions in private investment, 42,100 jobs, and $2 billion in earnings over the past seven years, including during the depths of the recession. Instead of investing in the economy, TransCanada was forced to invest in an overwrought regulatory and political process, spending millions seeking approval.

    The biggest cost is yet to come. In 17,000 pages of review documents, the president’s own State Department found time and again that the pipeline would be in the country’s national interest. Instead of relying on those studies, the administration let the political process win out. Future investment in cross-border infrastructure likely faces the same fate: exhaustive study, convincing benefits, and no sure way forward.

    This is the wrong time to chill the investment climate. The North American oil boom has upended the global oil trade, brought down prices, challenged OPEC and Russian energy hegemony, and made the continent more diplomatically potent. Energy cooperation would help the United States, Canada, and Mexico achieve more security, still-lower prices, and more rapid achievement of environmental targets. That cooperation will be far more difficult if private interests have deteriorating confidence in our regulatory system.

    Our productive natural-gas industry has found consumer markets in Canada and Mexico, even as the middling export-approval process crawls along. Northern Canadian hydropower is a huge and untapped resource of carbon-free baseload, dispatchable power. Mexican investments in geothermal power are advancing technological progress and making that resource cheaper to access. Intermittent American wind and solar deliver power at incredibly low prices during optimal conditions. Stronger cross-border infrastructure would benefit and secure as the energy economy continues to change at a rapid pace.

    The president rejected the pipeline saying, “It became a symbol too often used as a campaign cudgel used by both parties rather than a serious policy matter.” He’s right. Keystone XL was always just one pipeline, forced to carry vapid debate and politics instead of oil. His rejection perpetuates the political contamination of a broken regulatory approval process and dims the prospects for future ambitious investment in the North American energy system.

    R Street frustrated by White House rejection of Keystone XL pipeline

    November 06, 2015, 1:14 PM

    WASHINGTON (Nov. 6, 2015) – The R Street Institute was disappointed by today’s decision from President Barack Obama to reject the Keystone XL pipeline, a project that would have created thousands of jobs and pumped billions of dollars into the U.S. economy.

    “This decision is yet another in a long line of anti-business rulings from this administration, often at the cost of citizens,” said Catrina Rorke, energy policy director at R Street. “We’ve been documenting for years what this project would bring to the economy, but we also can’t forget what killing it will cost us.”

    Over the past seven years, while federal officials debated the pipeline, oil transport by trucking and rail that otherwise could have been handled by the pipeline have contributed 8.8 million additional tons of greenhouse gas emissions, the equivalent of adding 1.8 million passenger vehicles to the road.

    “Every year that we rely on rail instead of pipeline infrastructure to carry this oil results in more emissions, more spills and more fatal accidents,” Rorke said. “With the pipeline project now effectively killed, that number will continue to compound.”

    The pipeline would have offered U.S. refineries access to a secure source of North American oil. The State Department’s own estimates show it would have created 42,000 jobs and contributed roughly $3.4 billion to the U.S. economy, in addition to reducing greenhouse gas emissions and the likelihood of transport-related oil spills.

    “This administration has once again sent a signal that companies looking to invest in American infrastructure should do so very warily,” said Rorke. “You could spend millions of dollars to advance a crucial infrastructure project, prove its benefits, follow the exhausting multiyear regulatory process and still be left with nothing.”


    DOD spent millions so sports teams would ‘support the troops’

    November 06, 2015, 8:45 AM

    I have, at least as far as I can tell, never been paid to be patriotic.

    I mean, it’s not as though I’ve wanted to be paid to hang a flag outside my house or meet a returning group of veterans or write in support of taking care of the soldiers we send off to war in perpetuity. It’s just that I never realized it was a possibility. Or, for that matter, something that required any red-blooded American be paid to do.

    But according to a Senate report released this week, major sports teams – some of whom have multimillion dollar bank accounts – were paid to host events supporting our troops and veterans. In fact, “paid patriotism” has been the rule, not the exception, since 2012, and the government has spent more than $6 million of taxpayer money on it.

    The Department of Defense has been slammed for wasting taxpayers’ money after they gave $6.8million to some of the richest sports teams, just so they could honor troops.

    Multimillion dollar franchises in the NFL, MLB, NBA, NHL and MLS have received huge sums of government funds for so-called ‘paid patriotism’ since 2012, including ceremonial first pitches, puck drops and color guard performances.

    A damning Senate report has criticized the scheme of marketing ‘gimmicks’ as ‘unnecessary’ and a ‘abuse’ of government funds that could instead be used to help veterans and other military programs.

    Franchises have also been paid to have a National Guard member sing the national anthem and to recognize wounded warriors during a game. 

    Sports fans and millions of Americans have contributed to the expenses, including $20,000 given to the New York Jets to honor ‘Hometown Heroes’ and $49,000 to the Milwaukee Brewers for the Wisconsin National Guard to sponsor Sunday performances of God Bless America.

    The most ironic? The New England Patriots are one of the biggest money hounds, netting a whopping $700,000 in DOD cash, just to host supportive events for returning military (though their owner, Bob Kraft, is worth $4.8 billion). They’re eclipsed only by the Atlanta Falcons, who got around $800,000. NASCAR, as a whole, was given more than $1 million to host supportive events at races across the country.

    Now, the results are nice, of course. Troops are welcomed to drop pucks and throw out first pitches; color guards are welcomed on to the field before matches. But aren’t we supposed to be doing all of this anyway? It’s insulting that some of the nation’s largest organizations need to be told – and worse, paid – to pay homage to the sacrifices our troops have made in the line of duty.

    Youth e-cigarette bans increase youth cigarette smoking

    November 06, 2015, 8:26 AM

    Smoking increased significantly among teens aged 12 to 17 in states that banned e-cigarette sales to minors compared with states that didn’t impose bans, according to a study in the Journal of Health Economics by Yale School of Public Health’s Abigail Friedman.

    Friedman used smoking data from the National Survey on Drug Use and Health  from 2002 to 2013. She accounted for other youth-smoking factors that vary among states, such as cigarette taxes, smoke-free air laws and medical marijuana laws. Friedman concludes:

    Across the board, this paper’s analyses find that reducing e-cigarette access increases smoking among 12 to 17 year olds. The effect is large: over the eight years preceding the first bans on e-cigarette sales to minors, smoking in this age group fell an average of 1.3 percentage points per two year period. The estimated 0.9 percentage point rise in smoking due to bans on e-cigarette sales to minors counters 70 percent of the downward pre-trend in states with such bans.

    She notes:

    This paper’s findings will prove surprising for many: policy discussions to date have not considered that banning e-cigarette sales to minors might increase teen smoking. Assuming that e-cigarettes are indeed less risky to one’s health than traditional cigarettes, as suggested by existing evidence on the subject, this result calls such bans into question. [emphasis in original]

    Friedman makes a bold suggestion – one that is sensible and defensible: ban e-cig “sales to those younger than 16 instead of 18, as initiation of regular smoking first spikes at the former age.”

    E-cigarette companies and advocates support bans on e-cig sales to minors. While health organizations like the American Cancer Society and Heart Association object to youth e-cig use, they oppose bans for two reasons:

    1. E-cig companies support them; and
    2. According to the health groups, youth bans are not as effective as higher sales taxes and smoke-free or clean-air laws (discussed here).

    E-cigarette opponents have been quick to challenge the Yale study. In a Winston-Salem Journal article, Dr. John Spangler of Wake Forest Baptist Medical Center called the study flawed because it “does not account for unmeasured factors, such as racial and ethnic population mix in states.”  This is a false charge, as the researchers adjusted “for the percent of [each] state’s population identifying as Black, as a different racial minority, and as Hispanic.” These factors were noted in all three results tables.

    Other e-cig prohibitionists support the bizarre logic of University of California-San Francisco professor Stanton Glantz, who has argued in the past that banning e-cigarette sales to kids only makes teens want them more. Friedman’s study turns this argument on its head: banning e-cig sales increases teen smoking.

    Northeast states offer only modest discounts in insurance bundling, according to new study

    November 06, 2015, 8:16 AM

    From Insurance Business America:

    Nevertheless, Eli Lehrer, president of the nonprofit research organization The R Street, said that bundling is an effective tool in selling policies.

    “Bundling insurance saves money on processing, administration and selling costs for insurers, so it’s good business sense to encourage customers to do it by sharing some of the savings with them,” he said in the report. “[A] customer who bundles two products is almost certainly more likely to buy a third. It’s all a beneficial model.”

    The House Freedom Caucus wants looser party control on the floor. This is what would happen if they did.

    November 05, 2015, 8:00 AM

    The following piece was co-authored by R Street Governance Project Director Kevin Kosar.

    Former House Speaker John Boehner, R-Ohio, was often attacked by fellow Republicans for influencing House processes to get policy outcomes that he wanted. We all know what’s happened since. Boehner resigned, and his heir apparent, Majority Leader Kevin McCarthy, R-Calif., withdrew. In the meantime, the House Freedom Caucus outlined a list of policy and process demands for the next speaker, who we now know is Rep. Paul D. Ryan, R-Wis.

    One demand was a return to “regular order.” Republican senators were asking for the same while they were in the minority. “Regular order” is a vague concept, but most consistently, those asking for it don’t want party leaders to restrict them from offering floor amendments to bills.

    No one knows yet what will come of these demands. But it hasn’t happened yet in the Senate, if that’s any indication of what might happen under Speaker Ryan. True, since taking over as majority leader, Sen. Mitch McConnell, R-Ky., has led the Senate to consider many more amendments than did his predecessor, Sen. Harry Reid, D-Nev. But members of both parties have still criticized McConnell sharply for shutting off amendments on several important bills.

    So why not let House members offer amendments at will?

    Here’s the problem with calls for making it easier for members to amend bills. As we show in our recent white paper, members behave much differently than they once did when allowed the freedom to act independently on the floor. These changes make party leaders’ jobs much more difficult, at a time when leaders also need to deal with increased time demands stemming from a heavier overall workload and members’ need to spend more time in their districts campaigning and raising reelection funds.

    Here’s where we got our data.

    To evaluate how members’ behavior has changed over time, we took advantage of a new dataset on congressional amendments and roll calls from the University of Georgia Amending Project. Since 2010, 53 undergraduate students and two high-school students have worked with two faculty members and eight graduate students to collect data on 29,860 amendments to 497 landmark enactments across 40 Congresses, from the 45th (1877-1878) through the 111th (2009-2010). The data include information on, among other things, how an amendment was dispensed with (roll call vote, division, teller, voice, withdrawn, not voted on); whether it was offered by way of a motion to recommit; whether it was dispensed with by some other procedure (a point of order, motion to table, failed cloture vote, etc.); whether it passed or failed; what it sought to amend (i.e., the bill, another amendment); who the sponsor was; and if it was offered on behalf of a committee.

    While the data are preliminary, we found substantial shifts in senators’ approach to amending bills. For one thing, the number of amendments filed for each landmark bill passed has generally increased. For another, the amending process has gotten steadily more partisan. The figure below shows the percentage of non-committee amendments sponsored by minority-party senators.

    Most of these minority-party amendments fail on the floor — and senators generally know that even before they’re offered.

    Filing amendments to send a message slows Congress down. A lot.

    So why bother? Because their real purpose is electoral messaging. Perhaps the most famous recent electoral-messaging amendment was from Sen. Tom Coburn, R-Okla., to bar Affordable Care Act premium subsidies to plans that covered Viagra for child molesters and rapists. Democrats dubbed it a “crass political stunt.” Republicans featured the vote in electoral ads.

    But in addition to forcing members to take difficult votes, such amendments also burden party leaders with far more demands on their time. That’s made still worse by the rapid increase in how many amendments are now subjected to roll calls. The default voting mechanism in Congress is the unrecorded voice vote. Those votes usually go quickly, and no records are kept of who voted how.

    But there’s a catch. The Constitution’s Article I, Section 5 specifically states:

    the yeas and nays of the members of either House on any question shall, at the desire of one fifth of those present, be entered on the journal.

    In other words, any member can request a roll call vote, if supported by a sufficient second.

    The figure below plots the percentage of Senate amendments granted floor consideration that receive roll-call votes.

    Of the 17,838 Senate amendments in our dataset, 2,467 (or 13.83 percent), went to roll call votes. But during the four most recent Congresses for which we have data (the 104th, 106th, 109th and 111th), that jumps to 34.8 percent. This surge in “messaging” amendments comes alongside a spike in competitive (as opposed to uncontested) elections and a dip in Congress’s ability to work on policy, both because it has cut its own legislative staffing and because of increased deference to the executive and judicial branches.

    As goes the Senate, so goes the House?

    Back in May, Sarah Binder warned here that McConnell would have a hard time keeping his promise to operate the Senate according to “regular order.” Her Monkey Cage post pointed out that polarization between the Democrats and Republicans on the one hand, and deep divisions within the GOP on the other, would force McConnell to curb floor amendments in order to bypass filibusters and enact legislation.

    Binder was right. Individual senators have strong electoral incentives to introduce floor amendments when they can. McConnell was forced to use his position as Senate majority leader to block amendments on several key bills.

    Here’s an educated guess about how many amendments House members would try to introduce. (It’s a lot.)

    It’s hard to know how much “demand” there might be waiting in the House for the ability to offer amendments freely. For most of the 20th century, the House Rules Committee has restricted amendments on controversial bills.

    But there’s evidence to suggest that the pent-up demand is quite strong. A forthcoming paper from Michael S. Lynch, Anthony Madonna and Jason Roberts analyzes the demand for amendments under structured rules. Structured rules are rules issued by the Rules Committee that allow a limited set of amendments to be considered on the floor. Members must submit their amendments to the Rules Committee for review.

    The authors show that, from the 109th to 111th Congress, or between 2005 and 2010, House members proposed 7,250 amendments for consideration under structured rules. Of these, only one-third (or 2,440 amendments) actually reached the floor.

    That’s a lot of demand. Allowing House members to introduce amendments freely  — and to have lengthy debates and votes, as the Senate does — would likely bring the House to a halt.

    Bernie Sanders doesn’t like Uber; uses it literally all the time

    November 05, 2015, 7:00 AM

    Bernie Sanders is the champion of the little guy, the downtrodden and the oppressed victims of (big “C”) Capitalism who have found themselves trapped in the lower-middle class by bank loans, greedy politicians, lackluster bank accounts and their four-year degree in gender studies, which had literally no job prospects to begin with but was approved for massive funding regardless.

    As part of his jihad against “The Man,” Bernie spoke recently about how terrible Uber – the ride-sharing company that cropped up in response to the bloated, expensive taxi cartels – is, arguing that it operates out of reach of the long arm of government, beyond transportation regulation and in violation of the sacrosanct bond of the labor union. Sanders said he had “serious problems” with Uber because it went unregulated. After all, how can businesses operate without the heavy hand of government guiding their way?

    Apparently, they can operate well and conveniently, for Bernie Sanders. According to a report from National Journal, Uber works so well for Bernie Sanders that his campaign takes it literally everywhereOne-hundred percent of the Sanders campaign’s claimed transportation costs are for Uber vehicles.

    That goddamn free market, always being convenient and stuff! How dare a subversive transportation company be so darn useful to a socialist’s campaign that they can’t seem to bring themselves to use anything else!

    Create. Innovate. Reform.

    November 04, 2015, 2:52 PM
    This event has passed 11/17/2015 @ 8:30 am - 12:00 pm

    Join the Re:Create Coalition and R Street President Eli Lehrer for a discussion of copyright issues, the creative economy and how to modernize copyright law for today’s reality. Coffee and a light breakfast will be served. RSVP here.

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    November 04, 2015, 2:52 PM
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  • Prop F fails, but news not all rosy for Airbnb on home turf

    November 04, 2015, 12:24 PM

    On a night of statewide and city races across the country, the highest-profile vote may have occurred in San Francisco. There, voters decided by a 55 to 45 percent margin to forego strict control on spacesharing arrangements facilitated by firms like Airbnb and VRBO.

    Had Proposition F been enacted, San Francisco would have required hosts to file reports of their rental activities with the city on a quarterly basis and capped the total number of days a property could be rented per-year at 75.

    The failure of Prop F is worthy of celebration, not only because of the onerous regulations avoided, but also because of the stubbornness with which it would have entrenched them in law. In San Francisco, what is enacted by popular vote can – practically without exception – only be undone by popular vote. For a new and swiftly developing market, enshrining such an intractable regulatory regime could have been disastrous, even for those who do have legitimate concerns about the rise of spacesharing.

    The measure split San Francisco’s political class sharply. Former mayor and current U.S. Sen. Dianne Feinstein, D-Calif., supported the measure, while it was opposed both by current Mayor Ed Lee and by his immediate predecessor, Lt. Gov. Gavin Newsom.

    But the night was not a complete success for supporters of liberalization. In a hotly contested race for a seat on the San Francisco Board of Supervisors, Prop F supporter Aaron Peskin prevailed over his opponent, Julie Christensen, who was in opposition. A hostile Board of Supervisors may turn into an ongoing sore for the room-sharing industry in San Francisco.

    In fact, Airbnb already faces a fairly hostile political environment on its home turf. Earlier this year, the city passed rules limiting property owners to 90 days of short-term rentals per-year when they aren’t physically present at the property. The city would fine violators $1,000 a day. But it also bears noting that, according to vacation rental tracking site Beyond Pricing, San Francisco accounts for just 0.3 percent of the company’s total inventory of properties.

    Some have gone so far as to characterize the defeat of Prop F as a pyrrhic victory in the national context, because, by spending $8.4 million to combat the measure, Airbnb signaled that it is prepared to spend big to defeat hostile regulation.

    But while opponents of spacesharing will no doubt seek to marshal efforts in other cities, the defeat of Prop F gives the industry time to seek legislation at the state-level to pre-empt the worst excesses of municipal regulation. With the stakes for the spacesharing industry so high, the returns on large investments in advocacy across the country stand to be enormous.

    The most encouraging take-away from San Francisco’s rejection of Prop F is that public policy arguments that favor free markets and liberalization can succeed, even in the most putatively regulation-friendly jurisdictions.

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

    Group disappointed that Keystone XL will be delayed again

    November 04, 2015, 12:03 PM

    From Ohio.com:

    Having already waited seven years for a decision from the U.S. State Department, the R Street Institute was disappointed at yesterday’s news that TransCanada was forced into asking for further delays to the Keystone XL review and approval process.

    CEA, Zenefits, Yelp and R Street Institute brief congressional staff on negative impacts of SLAPPs

    November 04, 2015, 12:02 PM

    From Virtual-Strategy Magazine:

    On Monday, the Consumer Electronics Association (CEA)® along with CEA members Yelp, Zenefits, and R Street Institute briefed Congressional staff, businesses and advocacy organizations on the chilling impacts of lawsuits filed to censor or intimidate critics, called strategic lawsuits against public participation (SLAPPs).