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The latest First Amendment fun

July 13, 2015, 7:08 AM

From Ann C. Logue:

The power of California’s anti-SLAPP statute, which my lawyers used in my free speech defense against convicted felon Keith Gilabert’s suit. Full disclosure: I occasionally contribute to R Street, but I had no involvement in this story.

Texas’ risky decision on multiproperty insurance

July 13, 2015, 7:00 AM

Fifteen years ago, Texas faced a mold crisis. The crisis was caused not just by the fungus itself, but by ambiguous provisions in many homeowners insurance contracts that were held by Texas courts to increase insurer liability far beyond what it was in other states. The losses from mold claims helped make the years 2001 and 2002 some of the most costly to the state’s insurers, surpassed only by Hurricanes Ike and Dolly in 2008.

In response, rates spiked, many insurers stopped writing new homeowners business and at least one major insurer threatened to leave the state entirely. Ultimately, the Texas Department of Insurance adopted a revised set of forms that brought Texas back in line with nationwide liability standards.

Texas may be tempting fate again, albeit on a smaller scale. In RSUI Indemnity v. Lynd Co., the Texas Supreme Court has interpreted standard language in a multiproperty insurance contract in a way that could greatly increase insurer liability for multiproperty policies.

The case involved a dispute over an excess insurance policy that Lynd had taken out on more than 100 properties in 11 different states. Under its terms, Lynd was required to list values for each of the covered properties. Premiums were based on a percentage of the total value of the listed properties and liability was limited the least of (a) the adjusted loss, (b) “115 percent of the individually stated value for each scheduled item of property” or (c) the policy limit of $480 million.

At issue in the case was whether the 115 percent limit applied to each property individually, or whether it applied to the total value of all damaged properties. Applying the limits in the aggregate allowed Lynd to recover a substantially larger amount, because it could use the value of properties that were only slightly damaged to effectively raise the limit for properties where damages were more than 115 percent of the value stated in the policy.

Most other jurisdictions have found that this contractual language imposes separate liability limits for each property. A majority of the Texas Supreme Court, however, concluded that the provision was ambiguous, and so construed the provision in the manner most favorable to the policyholder (which is a longstanding legal practice).

Yet as Chief Justice Nathan Hetch noted in his dissenting opinion, the court’s decision leads to the highly peculiar result that the policy “pays more of the losses for one property if others are damaged at the same time.” The court’s interpretation also creates an incentive for policyholders to strategically undervalue some of their properties (and hence lower their premiums) because they can still recover the full amount based on the value of other properties.

Several amici in the case have argued that imposing this blanket liability on insurers could make multiproperty policies unaffordable in Texas. Given the more limited scope of this market, the ramifications of the decision aren’t going to be as big as with the mold crisis. But it is still odd that the court would choose to go down this road again.

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The Dodd-Frankenstein monster

July 10, 2015, 3:08 PM

The Dodd-Frank Wall Street Reform and Consumer Protection Act was passed in 2010 as Congress’ response to the 2007-2009 financial crisis, with a goal of reducing financial risks and creating safeguards against future economic collapses.

Yet on the eve of the bill’s fifth anniversary, even more assets are in the hands of big banks and little has been done to ensure consumers still have access to the kinds of financial products they actually want.

Having established new government agencies, such as the Consumer Financial Protection Bureau and the Financial Stability Oversight Council, one of Dodd-Frank’s initial purposes was to monitor the performance of big banks deemed vital to the performance of the U.S. economy. Some claimed these organizations were “too big to fail”.

Five years later, the law’s effectiveness in this regard has been a demonstrable failure, as some now question whether those same institutions have simply become “too big to regulate.”

Led by Chairman Jeb Hensarling, R-Texas, the House Financial Services Committee yesterday held a hearing yesterday on the status of U.S. financial markets five years after Dodd-Frank. Hensarling’s opening statement took a strong stance on the matter — Dodd-Frank has seemingly been a catalyst, not an inhibitor, of financial instability.

What is undebatable is the fact that since the passage of Dodd-Frank, the big banks are now bigger; the small banks are now fewer. In other words, even more banking assets are now concentrated in the so-called ‘Too Big to Fail’ firms. Pray tell, how does this improve financial stability?

Hensarling expressed similar sentiments during a June 9 conversation with the Wall Street Journal’s Mary Kissel, characterizing the act as an “avalanche of regulation” similar to Obamacare and oppressive regulatory agencies like the Environmental Protection Agency. He points to this regulatory burden as one of the reasons the biggest banks have been able to grow disproportionately large, while smaller institutions struggle with enormous compliance burdens.

In May, the Mercatus Center’s Margaret Pierce published a critique laying out the law’s principal problem – its failure to recognize that regulators, not just markets, can also fail:

This macroprudential approach places too much confidence in the regulators to always get things right, and it inhibits market mechanisms from responding organically to problems as they arise. The last crisis taught us that regulators do not always get things right, and markets absorbed in regulatory compliance are very poor at disciplining themselves. The result is a less stable financial system.

During Thursday’s hearing, the committee heard testimony from, among others, Pierce’s Mercatus Center colleague Todd Zywicki and Mark Calabria of the Cato Institute. Zywicki explained how the bill has resulted in higher prices and limited consumer choice through its inherent disregard for consumer interests. Among its specific effects has been a marked decrease in the percentage of banks offering free checking accounts, as exhibited by the graphic below.

Calabria noted that key ingredients of the financial crisis were exceptionally loose monetary policy and supply rigidities in U.S. property markets, things that Dodd-Frank simply did nothing to address. “It is not enough to just ‘do something’ – we must do the correct things,” Calabria said.

Whether the Dodd-Frank Act is reformed, replaced or phased out, it will be crucial for the future of the U.S economy to address its significant flaws. Overregulating the financial markets has proven through extensive failures to have been nothing but disastrous.

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Alabama Legislature to put Bentley’s special session on ice

July 10, 2015, 10:36 AM

An email sent to members of the Alabama House of Representatives from Speaker Mike Hubbard reveals plans to thwart Gov. Robert Bentley’s abrupt call for a special session.

The email shares plans by Speaker Hubbard and Senate Pro Temp Del Marsh to convene as called by Bentley Monday, then immediately adjourn until Aug. 3.

The adjournment is significant, because it keeps the 30-day special session clock running and gives the Legislature flexibility to address the General Fund budget on their timeline, rather than Bentley’s. The Legislature will have about a week remaining in the special session should it come back into session Aug. 3.

Bentley’s call Thursday for a special session came as a surprise to legislative leaders, who believed Bentley had agreed not to call them back into session until mid-August, at the earliest.

Bentley’s veto of a General Fund budget that he called “unworkable” made a special session necessary. He favors new taxes to reconcile the state’s “budget crisis,” Marsh touts a gambling package and many legislators feel budgets cuts are in order.

All of that was in the mix when the regular session ended, and Bentley promised he’d call a special session.

But the abrupt timing is nothing short of bizarre.

Legislators on both sides of the aisle are expressing dismay, and many have scattered for the summer based on the perceived agreement with Bentley. While some have been meeting to look at possible solutions, none were prepared to introduce fully formed legislation.

Given Bentley’s opposition to gambling, the only cursory justification floated about is that this timing might prevent the pro-gaming lobby from being able to develop any serious influence in the General Fund budget discussions.

The announcement caused a mad scramble and will do little to improve relations between the governor and legislators. In fact, Bentley’s actions may have ensured that his call for the special session might be his only role in developing a General Fund budget solution for the state.

(Some) Republicans get religion on climate

July 10, 2015, 10:07 AM

From Bloomberg Politics:

His timing may be good. Two-thirds of Americans say they think the world would benefit from reducing carbon emissions, according to a March poll by Yale and George Mason University. “The first collapse is the tendency on the right to say that climate change is not a problem,” says Eli Lehrer, president and co-founder of R Street Institute, a think tank in Washington that promotes policies encouraging free enterprise. “The equally strong collapse is the tendency on the left to say that only our way of solving it is workable.”

Airbnb faces trouble at home

July 10, 2015, 7:00 AM

Airbnb’s fate in San Francisco may soon be up for a vote. While the village that raised the 7-year-old company is not yet ready to abolish it completely, many citizens are hoping to use a ballot initiative this November to curb its reach significantly.

A petition with 15,983 supporters calling for further restrictions on short-term rentals has been dropped off at San Francisco City Hall. If the city can confirm at least 9,700 of the signatures are authentic, a vote will be held Nov. 3. Before analyzing the new petition, let’s look at the current situation:

What is home sharing? Home sharing allows property owners to provide short-term rentals to vacationers, travelers and business people in much the same way hotels provide lodging. The experience is often a unique one, in which guests get to see a part of town they otherwise would not, visit restaurants off the beaten path and often get free Wi-Fi, laundry and breakfast. Platforms like Airbnb, HomeAway and VRBO help match those looking to rent space with property owners who have space to rent. Airbnb is unique in that it always collects payment, provides insurance and remits taxes on behalf of owners in certain cities. Investors value the company at more than $25 billion.

Short-term rentals are often categorized into two different groups: owner-occupied and non-owner-occupied. The former describes an owner who is present for the duration of the guest’s stay, with space offered to the guest typically in a spare bedroom, on the couch or sometimes on the floor. A hallmark of the sharing economy, this type of rental allows property occupants to leverage unused space in order to make a little extra cash. In non-owner-occupied rentals, keys are turned over to the tenant for a set number of days, after which a new tenant is likely to occupy the property. The distinction is important. Across the country, non-owner-occupied rentals are usually met with more resistance. Concern over non-owner-occupied rentals also can lead to unwarranted legislation against owner-occupied rentals.

What are the current regulations? Last October, San Francisco passed an ordinance, dubbed the “Airbnb law,” making short-term rentals legal for the first time. The law required operators to register with the city—paying both a $90 business license fee and a $50 rental registration fee—before opening their doors to guests. The law also requires owners to pay the same taxes hotels and motels do. Airbnb has agreed to collect and remit these taxes and paid $25 million in back taxes this February

Perhaps most contentiously, the ordinance capped the period that non-owner-occupied spaces may be rented at 90 days annually. Essentially, this rule is supposed to make it impossible for homeowners to profitably rent out a non-owner-occupied home. That is, if you live in New York but own a vacation home in San Francisco, you would not be able to cover your mortgage payment only renting out just 90 days. However, it does allow someone going on vacation for a couple of weeks a year to rent out their home while they are away.

What changes have lawmakers proposed? Even though the ordinance only went in effect Feb. 1, lawmakers already have both proposed and made changes. Just last week, Mayor Ed Lee announced creation of the Office of Short Term Rental Administration and Enforcement to help enforce the new laws. The six-person team will seek to increase legal compliance because, according to the city, less than 15 percent of rental properties in San Francisco operate legally. Additional changes, like making business licenses available online and allowing owners to register without an appointment, aim to boost registration.

Lee and Supervisor Mark Farrell also have proposed capping all rental properties, including owner-occupied ones, at 120 days per year. Other council members propose a cap of 60 days per year, a proposal the council was supposed to hear later this month. However, if the ballot initiative is a go, it is likely the council will likely not weigh in on the matter until after November.

What does the petition say? Written by a coalition called ShareBetterSF, the petition aims to limit the number of days any property can be rented short-term to 75 days, regardless of whether or not it is owner-occupied. It also requires owners to notify their neighbors when a guest will be in town, mandates that platforms not list unregistered properties and demands quarterly reports from property owners.

Advocates for the sharing economy in San Francisco contend these new regulations infringe their rights, hurt the middle class and give preference to incumbent industry players, most notably hotels. They are not wrong.

Why should a local government be able to tell a property owner how he or may or may not use his or her own property? Private contracts between homeowner associations, landlords and neighbors can limit short-term rentals without government intervention. The middle class in San Francisco, which is fighting hikes in rental costs, use Airbnb to rent out spare rooms and couches to pay the bills. In fact, two of Airbnb’s three founders (Joe and Brian) started the company because they could not pay their rent. Guess where? In San Francisco!

Finally, these new platforms help keep hotel costs in check, even where their rates are rising. Studies have shown that, as Airbnb has become more popular, hotel rate increases have leveled off. This is a good sign. Despite the entrance of home-sharing platforms, hotels are doing better than they ever have. In San Francisco, average prices for a night’s stay increased 10.9 percent in 2014 and occupancy rates hit a record 84.1 percent.

Opponents of home-sharing argue that residential units have been taken off the market by landlords, who now seek to rent to travelers instead of long-time city dwellers. They, also, are not wrong. Some landlords have evicted tenants and instead turned to renting out their properties short-term. When these homes are taken off the normal rental market, prices do go up. In response, the city has contacted 15 hosts who are operating multiple homes illegally. By targeting non-owner-occupied properties, the city hopes to protect residents.

But what Airbnb naysayers often fail to acknowledge is just how few homeowners are using these new platforms. Estimates range, but at most, short-term rentals make up less than 5 percent of the housing stock; Airbnb lists about 10,000 properties in a city with 379,579 residential units. When you consider that some properties are likely cross-listed on multiple sites and that many rentals are owner-occupied, the impact is further diminished. In San Francisco, critics also fail to mention that costs were skyrocketing well before Airbnb was born. Consider this graph, with data from 1994 to 2009, from Liberty Hill Development LLC:

The growth of the Silicon Valley has increased salaries for almost everyone in the technology industry. This is not a bad thing! But what it means is that newcomers to the city are simply able to pay more for rent than current residents. It is the large increase in demand for housing caused by the booming tech industry—not a small decrease in the supply of housing caused by the rise of Airbnb—forcing the city’s rental rates up. In fact, allowing short-term rentals in the city makes building housing more profitable, and in the long-run, should lead to increased construction. This graph, comparing population and housing growth over the 15 years before Airbnb, proves our point:

In addition, even if a small amount of short-term rentals pressure rental rates higher, rent controls likely play a much larger role. Only slightly more than 10 percent of the city’s housing stock is available to rent through anything like an open market. According to TechCrunch, about 50 percent of homes in San Francisco are rent-controlled and another third are owner-occupied. We have already explained some of the perverse impacts of rent control, including: less quality housing, more government spending, more inequality, black markets and shockingly, less housing.

So, the problem is not with existing housing. The problem is that new housing is not being built at the rate the city needs it. The reason is that San Francisco has incredibly strict zoning laws, lengthy application and wait times and tough rent-control legislation.

It’s easy for local politicians to point their fingers at brave entrepreneurs that no one denies are disrupting the market. What would be braver still, and more beneficial to their citizens, would be to acknowledge all the areas where government intervention already has fallen short in the San Francisco housing market.

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15 sheep explain the Chinese stock market crash

July 09, 2015, 3:37 PM

In the Chinese lunar calendar, 2015 is the Year of the Sheep. Thus, what better animal to guide us through the market panic that has seen China’s stock markets lose 30 percent of their value over the past month?

In 2014, after decades of staggering rates of growth, China’s economy began to falter, slowing to 7.3 percent growth, its lowest rate in 24 years. For the first time since 1999, the economy failed to hit its government-set annual growth target.

The slowdown forced China’s central bank in November to cut interest rates for the first time in two years. Combined with the launch that same month of the Shanghai-Hong Kong Stock Connect – a new investment channel linking the nation’s two largest stock markets – equity prices in the fourth quarter once again began to rise.

Stocks continued to rally through most of 2015, with many traders buying on margins enabled by the lower borrowing rates from the central bank and with support provided to the brokerages by the government-run China Securities Finance Corp. The Shanghai Index hit a June 12 peak of 5178.19, a seven-year high that was up more than 162 percent from its 2014 low. Together, at their peak, the Shanghai and Hong Kong exchanges had a combined value of more than $10 trillion. Some thought it would go on indefinitely.

With margin financing having grown fivefold, to about $434 billion, from June 2014 to June 2015, the China Securities Regulatory Commission on June 13 introduced rules capping the amount of margin trading a securities brokerage could do at four times its net capital. The CSRC also announced it would be investigating the huge market of investment finance used to trade stocks outside of the brokerage system. This brought the bull market to a screeching halt.

Investor reaction was nearly instantaneous. With these tighter leverage restrictions and a lack of guidance about whether the central bank would extend any further liquidity, China’s stock market saw its biggest two-week plunge since December 1996. There was a massive round of profit-taking as investors headed for the exits.

By June 26, the Shanghai Index had fallen 19 percent from its June 12 high, including a 7.4 percent drop on that Friday alone. The People’s Bank of China responded June 28 with its fourth rate cut since the November cut that started the rally, cutting the one-year lending rate by 25 basis points to a record-low 4.85 percent. It did little to calm the market’s jitters.

The central bank, which previously had cut banks’ required reserve ratio by 50 basis points in February and 100 basis points in April, also stepped in with a contingent 50 basis point cut in the reserve ratio, which for some banks – particularly those lending to farmers and small businesses – would now be just 18 percent. This news was treated as ho-hum.

Instead, the crash began to accelerate, with a 3.3 percent fall in the Shanghai Index on June 29 being called China’s “Black Monday.” Though the CSF (the government’s margin-financing provider) reassured markets that margin calls were manageable and the CSRC urged calm, investors remained jumpy.

Things briefly looked brighter on June 30. The Hang Seng Index in Hong Kong finished up 1.09 percent; the Shanghai Composite Index was up 5.5 percent; the Shenzhen Component Index was up 5.7 percent and the tech-heavy ChiNext Index was up 6.3 percent. This may partially have been a reaction to the announcement that local government-managed pension funds would be allowed to invest in the stock market for the first time, offering the possibility of $161 billion in fresh capital.

But the good news didn’t last long. When trading closed on the first day of July, stocks were down 5 percent for the day and total shareholder wealth lost since the sell-off began hit $2 trillion.

On July 2, the CSRC walked back the margin-trading requirements that had sparked the sell-off, ending compulsory sell-offs. The China Securities Finance Corp. also announced it would boost its support of brokers’ margin-lending services from 24 billion yuan to 100 billion yuan. The markets nonetheless fell another 3.5 percent, as investors let everyone know what they thought of this belated plan to undo the damage.

The China Financial Futures Exchange reportedly imposed a one-month suspension of short-selling by 19 accounts and the country’s 21 largest brokerages pledged to invest $19.3 billion into the markets. Nonetheless, the slide continued, as the Shanghai Index lost 29 percent from its peak through July 3. Investors remained spooked.

Through the sell-off, public anger about short selling continued to fester in some quarters. Rumors spread through the Wechat messaging service that the market’s crash was the result of foreign actors like Morgan Stanley or George Soros, with the CSRC at one point specifically having to quell a charge that Goldman Sachs was responsible.

Nonetheless, on July 5, the China Financial Futures Exchange moved to halt short selling through index-futures contracts, capping the number of new contracts an investor could buy or sell daily at 1,200. What’s more, the country has halted all initial public offerings and more than half the country’s stocks have suspended trading altogether.

But there are signs the worst may be over. The CSF announced July 8 that it would lend 260 billion yuan (about $42 billion) to the 21 largest brokers to buy shares of blue chip stocks. The country’s main stock indexes have had a bumpy few days, trading gains and losses. Today, the market enjoyed its biggest gains in six years. The Shanghai Composite closed up 5.8 percent, the Shenzhen Composite was up 3.8 percent and the Hang Seng was up 3.9 percent. Nonetheless, it’s likely to be a while before it’s once again smooth sailing in Chinese markets.

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

C.A. blasts lawyer over ‘Nazi’ references, overturns verdict

July 09, 2015, 9:53 AM

From the Metropolitan News-Enterprise:

Bilotti not only violated the in limine orders, she also broke “Godwin’s Law,” the Internet adage invented by attorney and author Mike Godwin, Bedsworth went on to say.  

“Broadly speaking, Godwin’s law is that the first side in an argument to compare the other side to Hitler or the Nazis loses,” the justice wrote. “Apparently unaware of this rule, Bilotti used Martinez’s damaged motorcycle to make a gratuitous, out-of-the-blue attempt to link Martinez to Nazis.”

Vox Sentences: South Carolina waves the white flag

July 09, 2015, 9:23 AM

Feds spent $2 million to have wives nag men about chewing tobacco

July 09, 2015, 9:21 AM

From the Washington Times:

“This is big government intervention for a small-risk lifestyle choice,” said Brad Rodu, a professor of medicine at the University of Louisville.

Mr. Rodu, who has been studying the effects of smokeless tobacco and smoking for over 20 years, said that there is substantial scientific evidence demonstrating that the risks of using smokeless tobacco are so small they can’t even be measured.

Procedural quagmire dooms California vaping ban, for now

July 09, 2015, 9:00 AM

In a victory for commonsense, the California Assembly’s Governmental Organization Committee has voted to amend a bill that would have classified vapor products as tobacco products. As a result, the author of S.B. 140, state Sen. Mark Leno, D-San Francisco, has removed his sponsorship of the bill, leaving it to languish in committee.

The committee’s refusal to pass S.B. 140 as presented stands in stark contrast with the treatment that bill received in previous committees. Unchecked by serious scrutiny, S.B. 140’s structural infirmities were overlooked in favor of a breathless desire to demonstrate concern for public health.

At the core of the bill was a false equivalence between vapor products and traditional cigarettes. Playing on a paucity of information, proponents of S.B. 140 spoke with authority about the consequences of tobacco use, while nuancing the extent to which vapor products present anything like a comparable threat.

Thus, for the throngs of passive participants in the legislative process who came to voice their opposition to the bill, the committee’s path to shelving it must have been confusing. For those more familiar with the process, it was a classic example of hostile amendments.

Here’s how it went. Sen. Leno brought the bill forward to the committee with knowledge of four amendments that would be suggested by the chairman. Of those amendments, he found three palatable. But one amendment, concerning the application of the definition of “tobacco product” to vaping systems, he refused to compromise on.

When the committee’s chairman, Assemblyman Adam Gray, D-Merced, put forward a motion for adoption of the full slate of four committee amendments, Sen. Leno expressed his intention to remove his support for the bill if the motion should pass. Gray noted Leno’s admonition and attempted to move forward with the vote, only to be stifled by a subsequent motion on the original motion.

At that point, not only was the audience confused, the members were too.

After taking time to confer with staff, Gray chose to proceed with the motion on his motion, which was to adopt only the amendments that Leno approved. That motion failed. Immediately following that vote, Gray held a vote on his original motion, which passed. Asked if he would support the amended bill, Leno stated that he would not, because the bill was now “very dangerous.”

Sponsorless, S.B. 140 is now held in committee and will move no further in its current form. But, no doubt, the Legislature will have an opportunity to revisit the vaping question soon. Perhaps it will now once more fall to the Assembly Governmental Organization Committee to disabuse the rest of the Legislature of its persistent confusion, but I wouldn’t lay money on that prospect.

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Michigan v. EPA: Pyrrhic victory or a sign of more to come?

July 09, 2015, 8:00 AM

Last week, the Environmental Protection Agency hit a roadblock in its quest to enact new standards for mercury emissions from U.S. power plants. In Michigan v. EPA, the Supreme Court held that EPA had improperly refused to consider costs when it decided to regulate the mercury emissions from electric utilities under its Utility MACT (Maximum Achievable Technology Control) rule.

Coming on the heels of several Supreme Court decisions that were disappointing to conservatives, it’s not surprising that the Michigan case has been seized on as a hopeful sign in the ongoing battle between liberty and the regulatory state. But I wouldn’t break out the Champagne bottles just yet.

Athwart regulation, shouting ‘stop’

Strange as it might sound, EPA’s loss at the Supreme Court is unlikely to kill the Utility MACT rule; it will merely slow down final implementation. Of course, even the mere delay of an overly burdensome regulation can be beneficial. As the great British statesman Lord Salisbury once put it, “delay is life.” In this case, however, the fact that the Utility MACT rule was not stayed pending the result of the litigation means that most power plants have already done what the rule required of them, up to and including shutting down.

We can also be pretty sure that forcing EPA to consider costs before deciding to regulate mercury emissions won’t change its decision. That’s because EPA did eventually get around to considering the cost of the Utility MACT rule as part of the cost/benefit analysis required for new regulations. According to EPA, the Utility MACT rule will cost $9.6 billion a year.

That’s a new record, or at least it was when EPA first proposed the rule. But EPA also calculates that the rule will have $37-90 billion in benefits. Per this analysis, the benefits from EPA’s rule would thus easily justify its costs.

Friends with co-benefits

Yet as Justice Scalia noted in his majority opinion, there is something curious about EPA’s cost/benefit calculation in this case. As EPA admitted, the benefits from Utility MACT from the reductions in mercury and other hazardous pollutants were only “worth $4 to $6 million per year.” Thus, “[t]he costs to power plants were thus between 1,600 and 2,400 times as great as the quantifiable benefits from reduced emissions of hazardous air pollutants.”

The other 99.994 percent of the calculated benefits came from what are called “co-benefits.” The idea is that regulations that reduce mercury emissions will have the unintended side-effect of also reducing other harmful emissions, specifically fine particulate matter.

EPA has increasingly relied on co-benefits from reductions in fine particulates to justify its air quality rules. During the first three years of the Obama administration, EPA performed cost/benefit analysis on 13 rules. Co-benefits from fine particulates comprised the majority of calculated benefits for 11 of these 13 rules, and in six of the 13 cases 100 percent of the benefits were from co-benefits.

EPA’s reliance on co-benefits from fine particulates is legally curious. The Clean Air Act already requires EPA to set air quality standards for fine particulates that are fully protective of human health regardless of cost. As such, co-benefits from fine particulates shouldn’t exist.

At oral argument, Chief Justice Roberts noted that heavy reliance on co-benefits allowed EPA to skirt procedural requirements of the Clean Air Act, allowing regulation of substances that could never be justified on their own. Yet while the tone of the majority opinion in Michigan v. EPA appears hostile to the idea of co-benefits, it never directly takes up the issue, presumably because it was not raised by the parties.

Peculiar assumptions

That’s too bad, because a close examination of how EPA calculates the benefits from reductions in fine particulates reveals even more troubling aspects. In 2009, EPA made a methodological change in the way it estimates harm from fine particulates that instantaneously tripled the amount of damage particulates were supposed to cause. Instead of basing its damage calculation on available evidence, EPA assumed without evidence that even minuscule amounts of fine particulates continued to be harmful to human health.

Taking this new methodology seriously leads to absurd results. According to EPA’s calculation, for example, 13 percent of all deaths in America are due to fine particulates. In some regions of the country nearly a quarter of all people supposedly die from particulate inhalation. These numbers are not plausible, but their very implausibility also gives them their potency. If fine particulates are killing one out of eight Americans, then any regulation that even slightly lowers particulate emissions is going to be hugely beneficial. And by including these co-benefits, EPA can justify virtually any regulation it wishes.

Costly benefits analysis

Cost/benefit analysis requirements for regulation were originally imposed as a way to rein in regulatory overreach. The Supreme Court’s decision in Michigan v. EPA is based on the same premise: if you require EPA to consider costs when deciding whether to regulate, you are less likely to get harmful regulations. But as an examination of the cost/benefit analysis for the Utility MACT rule shows, EPA has long since learned how to effectively evade the constraints of cost/benefit analysis.

And while the Supreme Court in Michigan v. EPA broke from the typically extreme deference courts show to federal agencies, I don’t think we can rely on courts alone to police EPA’s conduct. Congress should consider recent legislation, such as the Regulations From the Executive in Need of Scrutiny (REINS) Act or the just introduced Ratepayer Protection Act (H.R. 2042), which would prevent the Clean Power Plan from going into effect until legal challenges are resolved, as a way to reassert its authority as a coequal branch of government.

Florida fumbles ridesharing

July 09, 2015, 7:00 AM

After not taking up ridesharing legislation during either the Legislature’s earlier this year or its special session in June, Florida has left ridesharing companies subject to the often harsh jurisdiction of local governments.

During the regular session, both Rep. Matt Gaetz, R-Fort Walton Beach, and Sen. Jeff Brandes, R-St. Petersburg, had proposed ridesharing bills die respectively in the State House and Senate. While the bills slightly differed in some aspects, they both established fair regulations, including minimum insurance requirements, background checks and vehicle inspections. There briefly was an effort during the special session to call for a state-financed study and a moratorium on local rules, but that was quickly withdrawn, reportedly under orders from Senate President Andy Gardiner.

Vastly different from Rep. Gaetz and Sen. Brandes’ proposed legislation, local governments in Sarasota and Broward County have exerted overly-burdensome regulations that have all but obliterated the ridesharing market in their respective regions.

This past Monday, Sarasota city commissioners voted unanimously to accept the first reading of some of the harshest ridesharing regulations in the country. The laundry list of reprehensible rules includes fingerprint analysis, both a permit and public transport license, a log of all trips, drivers not being allowed to curse or yell and two large signs to put on the vehicle to designate it as a ride-for-hire.

The list of aforementioned rules raises several red flags. TNC’s all already institute background checks and have rating systems to ensure the safest and most satisfactory customer experience, so why the need for two certifications, fingerprinting and restricting driver speech? These measures are not only excessive, but intrusive to individual rights.

Additionally, keeping a log of all trips will perpetuate existing concerns about the privacy of consumer data.

Based on the intrusiveness of these potential regulations in Sarasota, it wouldn’t be surprising if TNC’s ceased operations in the city. Only two days ago, Uber exhibited its intolerance for such regulations by its decision to pull out of Broward County.

The suspension of services in Broward County will officially go into effect July 31. Similar to Sarasota, Broward County mandated fingerprint analysis and both a permit and chauffeur registration. The county also required its TNC drivers to carry state-required commercial insurance.

An online petition to keep Uber in Broward has collected nearly 73,000 signatures, but that effort appears unlikely to avoid the company’s withdrawal. Broward County Mayor has said the commission won’t revisit the ridesharing ordinance until at least August.

Dan Lindblade, president of the Greater Fort Lauderdale Chamber of Commerce, shared Uber’s frustrations and stated:

[This is] bad for the citizens, bad for our tourism industry, bad for our economy. It’s just overregulation. They could have done something else than just hammer it all the way to the wall. They went too far.

Unfortunately, this isn’t out of the ordinary for the state of Florida, as cities such as Orlando have imposed significant barriers to competition and innovation through its regulations of transportation network companies. Speculation abounds that more local ordinances – like one set to go into effect in Tallahassee – might lead the company to pull out of other cities and counties. Broward’s neighbor to the north, Palm Beach County, already has plans to revisit its ridesharing ordinance in the fall.

Given the mess this patchwork of local rules is creating, a sensible framework for ridesharing has to be near the top of the agenda when the state Legislature reconvenes.

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How conservatives should deal with climate change

July 08, 2015, 11:38 AM

Remarks as Prepared for Delivery

Climate of Confusion: How Should Conservatives Think About Climate Change?
Co-Hosted by The R Street Institute and National Affairs
The Rayburn Building
Washington, D.C.

July 6, 2015

In 1980, when I was four-going-on-five, my father really scared me.

He told me about the upcoming presidential election and said that if, Ronald Reagan won, Sesame Street would be canceled.

I remember running up the stairs of our home on the North Side of Chicago, turning the dials on our old-style television the day after the election (I didn’t know about transitions) to find, to my relief, that Sesame Street was still on.

Today, of course, I’m a proud conservative and count Reagan among our greatest presidents. My experience taught me two lessons.

First, grownups can be wrong.

Second, everyone makes predictions in ways that attempt to influence others to accept their worldview.

The way my father thought about Sesame Street has a lot in common with the way the left thinks about climate change: they see a real forthcoming event as a way to sway others to their worldview on a wide variety of issues.

But the things they want to do are bad.

Climate change is, to borrow a phrase from the management literature, a “wicked problem.” It’s one that is, to quote C. West Churchman, “difficult or impossible to solve because of incomplete, contradictory and changing requirements that are often difficult to recognize.”

That doesn’t mean we can’t have ideas about where to start the debate. Here’s what I’d say:

“There is no doubt that climate change is real, human caused to a very significant extent and likely to have long-term negative consequences somewhere in excess of its positive ones. The magnitude of these consequences isn’t known with certainty and, while science can measure the problems, it cannot test most solutions.”

Jim Manzi and Pete Wehner have presented the best argument I know of for thinking about things this way. Expressing doubt about the magnitude of the problems should not be called “anti-science.” And expressing opposition to the things that liberals want to do about these problems ought to be called “common sense.”

The real question isn’t “is climate change happening?” but rather, “how do we deal with what is happening?”

The answer I propose in the article I’ve written for National Affairs is, I must admit, a long list of things that we ought to do even if climate change weren’t a significant problem. Here are four:

First, we currently spend an enormous amount of public money on things that are clearly maladaptive with regard to climate change; this must stop. Coastal development subsidies, particularly the National Flood Insurance Program, should be phased out in short order. Farm subsidies should be made conditional on doing the right things with regard to the potential impacts of climate change. The Obama administration’s recent executive order to improve floodplain management deserves support. (One of the few times you’ll hear me say this about an Obama administration policy.) We should also expand the zone natural areas where, following the principles of Ronald Reagan’s Coastal Barrier Resources Act, we eliminate all subsidies for development. All of these things might and should be done for reasons other than the impact of climate change, but the reality of climate change makes it more important that we do them.

Second, we need more energy. I’m indebted to Lee Lane’s article for a better understanding of the topic overall. It’s difficult to think of any growing segment of the energy sector that is bad for the environment, on balance. In the short term, the single most important thing we can do to reduce CO2 emissions is to increase natural gas production. Opposing natural gas should be anathema to people concerned about climate change. But only one mainstream environmental group has embraced natural gas at all. We also need to invest in pipelines and in energy research that the private sector won’t undertake on its own. By contrast, the “green jobs” agenda so beloved of the left deserves euthanasia.

Third, we need a better system to distribute power. This would save a lot of CO2 emissions and the benefits could immense. This is mostly a job for the private sector, but as with any networked infrastructure, there’s also a role for the public sector. A smart grid makes sense and some elements of it might be justified on national security grounds alone. We also need to find ways to make more and better use of distributed generation. Waste heat and co-generation systems deserve active encouragement and government should get out of the way of rooftop solar.

Finally, a carbon tax makes sense. Although, I actually agree with most of Oren Cass’ criticisms. There is little evidence that a carbon tax will spur a huge revolution. In the global context, the impact of U.S. CO2 emissions is limited. I’m particularly impressed by his argument about co-benefits, which I think should be an effective rejoinder.

But there’s one simple fact: the courts have basically mandated CO2 regulation and getting rid of that regulatory regime entirely appears almost impossible.

Even if you think there is a path to do fight implementation of the Clean Power Plan, there’s nothing to stop the left from bringing it back later. The Obamacare fiasco demonstrates what happens when the right offers no solutions to something recognized as a problem. A carbon tax is an alternative to current policy, not a perfect policy.

The best thing about a carbon tax is that we can use it to cut taxes on productive activity. Coupled with taxing dividends and capital gains as regular income, a carbon tax could be used to eliminate the corporate income tax entirely.

Is what I want unrealistic? Maybe. Maybe not. I’d argue that doing nothing and hoping the left stops using climate change to gain favor for the proposals it wants is the unrealistic point of view. Plenty of conservative ideas that once seemed improbable – from welfare reform to school choice – are no longer beyond the pale.

It’s better to price things than to strangle them with regulation. Even as William F. Buckley told us to stand athwart history yelling “stop,” he also told us that “idealism is fine but, as it approaches reality, the costs become prohibitive.”

I frankly don’t object to anyone who wants to beat up on a carbon tax. Many of the carbon tax plans from the left are really bad.

Above all, we need to approach this issue with a fair dose of humility. That includes admitting that we probably don’t know much for sure, coupled with a clear commitment to a philosophy of limited, effective government.

Conservatives ought to take climate change seriously. Ignoring it should not be an option, even if one doesn’t find the prospects of climate change nearly as dire as many on the left do.

A lot of the best ways to deal with climate change call for smaller government and more freedom. Above all, the one way we can be sure is best to deal with climate change is this: be really, really rich in the future.

Thank you.

Can this businessman’s green turn GOP green?

July 08, 2015, 7:56 AM

From the Washington Examiner:

Andrew Moylan, executive director of the free-market think tank R Street, also believes that money isn’t the difference-maker many assume.

“The impact of political donations tends to be overstated,” Moylan said, while also noting that it is “interesting to have a donor of the scale that [Faison] is engaging with folks in a way that’s pushing conservatives on the issue of climate change.”

A new dawn for solar in Texas?

July 08, 2015, 7:00 AM

Something peculiar is happening in Texas.

In 2011, Austin Energy, the electric utility for the Texas capital, began receiving electricity from Webberville Solar, a 30-megawatt photovoltaic plant, at a price of about 16.5 cents a kilowatt-hour.

Last year, Austin Energy signed a 25-year contract with Recurrent Solar under which the company would provide the city with 150 megawatts of solar-powered electricity for slightly less than 5 cents a kilowatt-hour.

Last month, Austin Energy announced the results of a competitive bid request it had put out for new solar projects. The offered bids included roughly 1,200 megawatts of solar power at a price of 4 cents a kilowatt-hour or less.

Source: Austin Energy

Needless to say, this is a striking trend. Ironically, the price declines have been so dramatic that Austin is considering holding off on entering into any new long-term contracts for a while, on the theory that prices may soon fall even further.

Not only has the price decline for solar power been steep, but as Ramez Naam notes, it’s happened more rapidly than even official energy experts like the U.S. Energy Information Administration had expected:

In an update on June 2015, the EIA projected that the cheapest solar deployed in 2020 would cost $89/mwh, after subsidies. That’s 8.9 cents/kwh to most of us … The reality is that solar prices in the market are less than half of what the EIA projected three weeks ago.

I don’t have a crystal ball that can tell me whether these trends will continue, and I’ve noticed that everyone else’s crystal balls don’t seem to be working so well. But if it does, it could be the beginning of an energy revolution, the impact of which rivals the fracking boom of the last decade. And as with fracking, it will take a lot of people by surprise.

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

Government doesn’t need a ‘golden key’ to our communications

July 07, 2015, 4:25 PM

Encryption has a rich history in the United States, dating all the way back to the coded messages smuggled by George Washington’s network of spies. While the technology has changed significantly, the practice of securing one’s private communications continues.

While the tech industry and privacy advocates push to maintain and even improve encryption practices, there are those who hope to undo this important protection. Over the past several months FBI Director James Comey has been reiterating his concerns over current encryption practices, calling for a “golden key” that will enable the government to access encrypted information.

Comey claims to support an approach that balances privacy and security. But in many respects, his request is akin to asking for a master key to every American’s home, making all confidential information vulnerable to prying eyes. Comey will make his case for this plan tomorrow before the Senate Judiciary and Intelligence committees. I hope senators and their staff will consider these ramifications of undermined encryption, whether it’s by the FBI, Central Intelligence Agency, National Security Agency or any other three-letter agency.

Intelligence community divided on strong encryption

Many in the intelligence community do not want to weaken privacy practices. During a May 2015 address to the Joint Service Academies Cyber Security Summit at West Point, Admiral James A. Winnefeld Jr., vice chairman of the Joint Chiefs of Staff, answered a question from “security guru” Bruce Schneider on the balance between security and surveillance:

I think we all win if our networks are more secure. And I think I would rather live on the side of secure networks and a harder problem for [NSA Director Mike Rogers] on the intelligence side than very vulnerable networks and an easy problem for Mike. And part of that — it’s not only the right thing do, but part of that goes to the fact that we are more vulnerable than any other country in the world, on our dependence on cyber.

This divide in the intelligence community should give senators pause as they consider calls to create backdoors for government agencies.

Code specialists oppose government access to encrypted communication

This week, expert cryptographers, computer scientists and security specialists released a study titled “Keys Under the Door Matt,” looking at proposed mandates for government access to all data and communication. The paper concludes that “analysis of law enforcement demands for exceptional access to private communications and data show that such access will open doors through which criminals and malicious nation-states can attack the very individuals law enforcement seeks to defend.”

While there has been heavy criticism from individual tech companies and public interest groups of the Comey proposal, this report adds the perspective of actual cryptologist experts.

Encryption is the Second Amendment for the Internet:

Earlier this year, Sunday Yokubaitis, president of Internet security company Golden Frog, wrote an op-ed connecting the Second Amendment to encryption:

If you encrypt your digital communications, you should be celebrated. You’re fighting the good fight. You should not draw suspicion from the FBI or NSA. In the same way that firearms are synonymous with the Second Amendment and protecting yourself, using encryption to protect your data should be a fundamental right.

Yokubaitis goes onto describe how, just as the right to bear arms has been used to defend against threats, encryption protects individuals, not just from government overreach, but also protects against other prying entities like hackers and foreign governments.

It isn’t just the military or James Bond-type agents who rely on encryption. Many Americans use encryption to protect against intruders in every facet of their lives, whether it’s my wife changing her online banking passwords weekly, an entrepreneur protecting their “secret sauce” from prying eyes, missionaries working in countries unwelcoming of their religion, attorneys defending clients, baseball teams devising “sabermetric” strategies to get a competitive advantage or teens writing in their diary about the latest gossip in school.

To some government agents, obtaining “exceptional access” to our private data and communication appears a shiny new object to catch bad guys. But careful consideration demonstrates that the costs far outweigh the potential benefits. Strong privacy protections go hand-in-hand with good policymaking. We should not cast aside the benefits of encryption, but should preserve its viability in the future.

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

Pandora’s radio station purchase just latest twist in labyrinth of music rights

July 07, 2015, 1:00 PM

Anyone who follows the ongoing disagreements between Pandora and the publishers rights organizations (PROs, including the two giants, the American Society of Composers and Broadcast Music Inc.) is left to wonder what to make of the announcement that Pandora now has acquired a traditional radio broadcasting station, and what impact it has on the company’s plans to seek a new copyright arrangement with PROs.

The sad fact is, unless you’re a lawyer specializing in copyright (and, in particular, in music copyrights), the more you study the issue, the more complicated it looks. This is particularly ironic, because so much of music-copyright reform over the last century—both in Congress and in the courts—has aimed to make copyright licensing simpler and more consistent, with an eye both to protecting rights-holders’ interests and to encouraging lawful, innovative uses as our technologies advance.

There’s a lot of history to know. The first federal Copyright Act was passed in 1790, not long after the writing of the U.S. Constitution itself. It lasted without major revision for more than a century. It took the Industrial Revolution – in particular, the invention of piano rolls – to inspire the first major revision, the Copyright Act of 1909.

Here you start to see the seeds of some important themes that have dominated copyright-policy discussions since 1909. The first is making sure creators and copyright holders get paid for at least some uses of their works. The 1909 Act extended copyright protection to piano rolls and similar technological advances, which had undermined the market for sheet music. It also created the first compulsory mechanical license, which enabled others to use a rights-holder’s musical composition (provided certain other conditions are met) without first needing to secure permission.

There were some disputes early on about the scope of protection for a “public performance” of a copyrighted work. ASCAP began as a nonprofit organization seeking to obtain payments from restaurants and other public venues where piano-roll music was played. This strategy was vindicated by the U.S. Supreme Court in 1917’s Herbert v. Shanley. As radio became a popular entertainment medium, ASCAP expanded its strategy to cover broadcast recordings of musical works, leading both to new revenue streams and to the founding of its major competitor in the United States, BMI.

ASCAP and BMI both had a lot of clout in their early years and both PROs eventually felt compelled to participate in consent decrees administered by the U.S. Justice Department. Until relatively recently, music rights-holders and the PROs have been mostly happy with the consent decrees, which create a clear framework of royalty rights, but allow publishers to opt out if they think they can obtain more revenue in separate negotiations with companies that broadcast their content. The consent decrees for ASCAP and BMI date from 1941.

By 1976, many new forms of communication (radio, TV, movies, recordings) raised calls for expansion or clarification of copyright law. Congress felt compelled to revise the Copyright Act yet again — partly to expand the terms of copyright protection (to give more money and incentives to creators, it was argued) and partly to bring U.S. copyright law into greater alignment with the laws of other countries, particularly in Europe.

Registering your copyrighted work with the U.S. Copyright Office became less important after 1976 and even less so in light of still-later amendments to the Copyright Act. Copyrighted works now are understood to be protected from the moment you write them down or engage in any other “fixation” of your creation.

Perhaps the most contentious music-copyright issues of our era have centered on the development and growth of digital technologies and the Internet. As the Internet became more accessible to the public, and CD burners became standard equipment on personal computers, copyright holders became more and more concerned. Mixed cassette tapes and programmable videocassette recorders were bad enough, but digital reproduction of copyrighted works—in particular, music recordings, whose files were easy to compress—meant that unlicensed copies could (and likely would) undercut traditional sales of recorded music to consumers.

The Digital Performance Right in Sound Recordings Act of 1995 created a brand new, wholly separate copyright interest in “transmission” via new digital distribution media. In their specific expansions of copyright protection, the WIPO Treaties of 1996 and the Digital Millennium Copyright Act (DMCA) of 1998 similarly reflected rights-holder anxieties about digital tech and the Internet. Terrestrial broadcasters like traditional radio and other pre-webcasting services like cable and satellite are grandfathered in to these regimes at comparatively low rates, with traditional broadcasters getting the best deal. (Broadcasters don’t have to pay for rights to redistribute sound recordings; they just have to pay the PROs for the right to use the compositions.)

Webcasters – the category into which Pandora has been classed, at least until recently – have had the least leverage and what generally are regarded as the highest rates for both sets of rights.

There are two results of these last developments:

  1. If you want to provide a music service that distributes copyrighted music to a mass audience, you need to get both rights to “perform” the compositions and rights to distribute/stream/transmit the sound recordings. More often than not, these rights belong to two separate individuals or entities.
  2. The rates you have to pay to do this – especially, but not only, if you negotiate with PROs – will vary according to the kind of service you provide. Sometimes, they’ll vary a lot.

All of this brings us back to where we started: Pandora has bought a radio station. Its motivation almost certainly includes wanting to qualify for the licensing rates on which terrestrial broadcasters rely. ASCAP was sufficiently worried about this strategy that it vigorously fought the acquisition for two years in proceedings at the Federal Communications Commission.

Now that Pandora has finally won, ASCAP’s new view is that Pandora’s status as a broadcaster in one market shouldn’t matter. Buying the radio station, the PRO now says, shouldn’t enable Pandora to take advantage of the broadcast licensing framework in the context of offering an Internet-wide music service.

At this point, scanning how complicated the music-copyright landscape is, one no doubt might wonder if there’s some alternative to wipe away the hodgepodge of byzantine copyright statutes and court-administered consent decrees and, you know, just let the market work. The difficulty with copyright law is that the copyright market has been a creature of statute and court decisions since the founding the American Republic. There’s no pre-existing “free market” to get back to.

That hasn’t prevented ASCAP, other PROs and music publishers from arguing that there’s a way to get closer to a free market in music copyright. For instance, publishers could engage in a “partial withdrawal” of copyrighted works from the PRO agreements. That is, allow them to withdraw only the digital rights, but the PROs would continue to administer blanket-licensing agreements at set rates for traditional radio, cable and satellite markets. That way, they say, we can at least find out what a free market in digital copyrighted works might look like.

To which Pandora and other digital platform providers respond (with unsurprising agitation): why penalize a new platform trying to offer music to audiences in a way that’s mostly like over-the-air radio, except that it allows listeners more ways to learn about new music they may love?

Who’s right? Right now the “rate courts” (what a federal court gets to call itself when deciding a question under the consent decrees) agree on some matters (no partial withdrawal) and disagree on others (digital rates are going to be higher – sorry, Pandora).

At this point, it remains unclear what effect Pandora’s new status as a traditional broadcaster will have. Plus, I’ve been oversimplifying even in this already lengthy entry. I haven’t even mentioned the role that the Copyright Royalty Board, a part of the Copyright Office, which is part of the Library of Congress, may play in rate-setting.

All we know for certain are two things:

  1.  In the near term, the federal rate courts will revisit the issue of whether Pandora deserves different rates from the PROs, and the Justice Department is revisiting the question of whether the consent decrees really need to prohibit publishers from “partial withdrawal” of their digital rights, rather than the all-or-nothing choice the rate courts have thus far mandated.
  2. There’s no path forward that leads to what any economist would truly call a free market. The available choices –the only ones being actively pursued – are among somewhat differing, highly regulated music-licensing ecosystems. Where the balances are struck will depend on which of these frameworks lawmakers, policymakers and judges believe will best manifest the goals of the Constitution’s Copyright Clause.
This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.

Health-care premiums about to spike again

July 07, 2015, 8:50 AM

The Affordable Care Act is about to get a little less affordable. Again.

Health insurers have petitioned for rate hikes of 20 percent or more, because all the people who’ve gotten health insurance under the law are the people they turned down for costing them too much before the law mandated they accept them. As a result, everyone has to pay more. A lot more.

Health insurance companies around the country are seeking rate increases of 20 percent to 40 percent or more, saying their new customers under the Affordable Care Act turned out to be sicker than expected. Federal officials say they are determined to see that the requests are scaled back.

Blue Cross and Blue Shield plans — market leaders in many states — are seeking rate increases that average 23 percent in Illinois, 25 percent in North Carolina, 31 percent in Oklahoma, 36 percent in Tennessee and 54 percent in Minnesota, according to documents posted online by the federal government and state insurance commissioners and interviews with insurance executives.

The Oregon insurance commissioner, Laura N. Cali, has just approved 2016 rate increases for companies that cover more than 220,000 people. Moda Health Plan, which has the largest enrollment in the state, received a 25 percent increase, and the second-largest plan, LifeWise, received a 33 percent increase.

I’m pretty psyched to see BCBS on there (she said, sarcastically). After losing our (fantastic, low-deductible, low-cost) health insurance plan with them a few years ago when the exchanges launched, we were forced on to their Obamacare plan, which hiked our rates by almost 25 percent, while our deductibles skyrocketed to an insane $3,500 per person.

And that’s for the best, most comprehensive plan available on their website that wasn’t an HMO. The plan went up last year, something of which we weren’t immediately aware because the backlog of ACA-related paperwork BCBS failed to process included our automatic debit information. When they discovered the premiums weren’t exiting our bank account swiftly enough, BCBS canceled our plan – something they’re not supposed to do under the new law – leaving us without insurance for months, but never actually telling us about it.

Now, it’ll cost us even more to have terrible customer service and an inscrutable health insurance system that’s not guaranteed to work.

The Obama administration appears vaguely aware that Americans are unhappy about the effects of the new law. Since they can’t do anything about the rate increases – they’re built in to the law, which insurance companies helped author to their own benefit, alongside a de facto bailout the law will trigger when the insurance companies eventually go bankrupt from the financial pressure such a large pool puts on their systems –- the administration is tasking states with making sure the rate increases are legitimate. In his speech to Tennessee on the subject, President Barack Obama said that, if state commissioners and regulators were doing their jobs correctly, they’d be able to sniff out the pure, unadulterated, scandalous corporate lies buried in the proposed rate hikes.

So, long story short, don’t blame Obama when you can’t afford the insurance you’re mandated to have, blame the state insurance regulators who aren’t doing their jobs properly. Because nothing, after all, is his fault. Though I do blame him for that SNAFU with BCBS. He owes me some cash.

Conservatives refusing to celebrate America should be ashamed

July 07, 2015, 8:31 AM

On a planet filled with more than 7 billion people, less than 5 percent have the privilege of calling themselves Americans.

Yeah, that’s right. It’s a privilege.

Yet this past Independence Day, I saw something that made me hopping mad. Many of my fellow Americans refused to celebrate. Take this comment as an example:

Not celebrating today for first time in my life. Nothing to celebrate. Freedom/liberty is dead in the U.S. We are slaves to abusive socialist federal and state governments taking our incomes and giving it to others who did not earn it; high taxes, fees, fines; government spying; big corporations.

Nothing to celebrate?

Really?

We celebrate because our nation fundamentally stands for the proposition that free people should chart their own course. We might not always like the direction, but we live in one of the few places on earth where average people can change their country’s trajectory.

This attitude that we should stop celebrating America is hogwash. But America needs more than cheerleaders; she needs champions.

Where would she be if our Marines, soldiers and sailors decided that our country wasn’t worth honoring because they didn’t agree with certain aspects of public policy or a decision by the Supreme Court?

Thankfully, enough of America’s sons and daughters throughout our history believed she was worth the fight. Whether it was in the Durham boats crossing the icy Delaware, on the blood-stained beaches of Normandy or through the dark steamy jungles of Vietnam, men and women throughout our history have decided to put their nation before their immediate self-interests, and, in some cases, their entire future.

If new marriage licenses and retired flags leave you willing to abandon our nation, then I’m not sure you really understand America in the first place.

Charting our national course demands the sacrifice of our time, talents and treasure. You don’t get there by taking down your flags and refusing to celebrate on the Fourth of July.

Battles for the soul of America aren’t won or lost with guns and ammunition. We don’t respond particularly well to whining and complaining about better days gone by either.

You want a government that doesn’t tax everything that moves? Maybe regulatory environments that are remotely comprehensible? Or a spiritual revival in America?

Then fight for it. Vote for it. Let your life be the example.

To turn our society, you have to win our hearts and minds.

Don’t quit on America because of the struggles we face. Don’t fold up the stars and stripes because of lost arguments or disagreements.

We have the blessed opportunity to win over our countrymen and women. At any moment, we’re one election or Supreme Court opinion away from radical national change. What an amazing responsibility.

So bring out Old Glory and let it fly high. Shoot some fireworks if you’d like. You might be a few days late, but America’s worth the extra effort.