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Flake, Duncan, Shaheen move to eliminate subsidies to farm bill’s taxpayer-funded profit-guarantee program

February 13, 2015, 12:47 PM

From Sen. Jeff Flake:

The Harvest Price Subsidy Prohibition Act is also supported by Heritage Action, the R Street Institute, the American Enterprise Institute, FreedomWorks, the National Taxpayers Union, Campaign for Liberty, Taxpayers Protection Alliance, Center for Individual Freedom, Coalition to Reduce Spending, Less Government, Taxpayers for Common Sense, Club for Growth and the Environmental Working Group.

…“The R Street Institute welcomes the introduction of the Harvest Price Subsidy Prohibition Act. Federal crop insurance payments repeatedly cost far more than projected, and this bill will go a long way toward securing vital protections for the American taxpayer, while still allowing reasonable protections for farmers who rely on the system as their main source of support. We praise Representative Duncan and Senator Flake for their leadership on this important issue, and encourage their colleagues to both support this measure and to continue to look for ways to limit taxpayer exposure by shifting more risk into the private market.” — R Street Institute

Should we regulate leggings worn as pants?

February 13, 2015, 9:16 AM

This week, Montana seemed poised to become the first state in the nation to ban yoga pants. Because, apparently, Montana’s male elected leaders were having a hard time focusing with all these leggings-clad women meandering about, distracting them. At least, ostensibly.

The real bill, Montana H.R. 365, which is tabled in committee and will likely die there, was authored in response to a “nude bicycle ride” that got under the skin, pun intended, of David Moore, a Montana rep. The bill was patently unclear as to what it actually banned, but didn’t specifically target yoga pants or, for that matter, my cultural arch nemesis, leggings worn as pants. It just happened that David Moore, when asked whether the bill would, in fact, ban the wearing of yoga pants in public, decided to make a very controversial statement.

The actual story behind this seems to be as follows: One Montana state legislator had a bad experience with some nude bicyclists, and this inspired him to craft a law banning … something. It is not exactly clear what, which is why the measure, H.R. 365, is currently tabled in committee. Everyone has been reporting that it banned yoga pants, but the bill does not mention anything about that. That is just what its sponsor said he wished it could ban. Instead, the bill bans “any device, costume, or covering that gives the appearance of or simulates the genitals, pubic hair, anus region or pubic hair region” a ban the legislator later told the Billings Gazette could include tight beige garments.

“Yoga pants should be illegal in public anyway,” the bill’s sponsor, Rep. David Moore, added.

Why he wound up with so much wrath against yoga pants instead of directing it against bicyclists remains unclear.

The law — which would probably be void for vagueness anyway, in it’s almost complete prohibition of personal expression through clothing — would likely have banned beige leggings, if you were wearing them in such a way as to confuse unsuspecting onlookers as to whether you were, in fact, wearing pants. Black leggings are a different story. But no matter, everyone’s Lululemon bottoms collections are safe, since Montana has no intention of picking up this bill anyway.

It does, however, raise the question: should leggings, which are not pants but are frequently worn as if they are, be banned? The articles of clothing themselves are intensely controversial, both for reasons of modesty and reasons of common sense. A “Christian blogger” recently set off a firestorm across the Internet for putting an end to her habit of wearing yoga pants around her husband, a decision which probably puzzled her husband (come on…he’s your husband, he can see you in yoga pants), but was enthusiastically embraced by a general population weary of seeing women’s underthings through their “pants.”

According to the Atlantic, which couldn’t find many examples of the GOP waging a war on yoga pants, there is tension between some conservatives and the practice of yoga, partly because the practice of yoga is affiliated with Eastern mysticism and partly because there are no practicing yoga teachers anywhere in the world who would readily admit to being part of the GOP’s target voter demographic. Frankly, as a libertarian myself, I can see reasons as to why leggings should be banned when they are worn as pants, not because I have any concern for any other human being’s self-respect, but because leggings are not, in fact, pants of any kind.

I, however, think that we should, of course, opt for the cultural “coercive” approach where non-pants pants-wearing is concerned. If you see someone in public mistakenly wearing leggings as pants, it is a service to explain to them that they are not, in fact, wearing pants. You can even refer to this handy chart, seemingly native to the Internet as a whole but published most recently by Buzzfeed, in providing educational services to people in need of pants-related education.

If your bottoms fail any one of these simple yet comprehensive tests, you are not, in fact, wearing pants and should cease such non-pants-wearing immediately.

If nothing else, you’ll make David Moore happy.

Rocking homeowners

February 13, 2015, 9:00 AM

“California Rocks.” That’s the clever slogan for a new advertising campaign by the California Earthquake Authority (CEA), the state’s privately funded, publicly managed earthquake insurance fund.

The message is both an allusion to the Golden State’s culture of musical cool and a literal statement of fact: California is earthquake country. The state experiences hundreds of tiny temblors every day that most people never notice. But it’s only a matter of time before a destructive quake rocks the Golden State. The Southern California Earthquake Center estimates the state has a 99.7 percent chance of experiencing an earthquake of magnitude 6.7 or greater within the next 23 years. Yet thanks to shortsighted public policy, only about one in 10 California residents holds an earthquake-insurance policy.

Until recently, California’s insurers struggled to align their premiums with the actual peril that earthquakes represent. Insurance companies discovered after the 1994 Northridge earthquake that their estimates had been much too low. That magnitude 6.7 temblor killed more than 60 people, injured 9,000, damaged and destroyed thousands of buildings and left parts of Los Angeles’ freeways in ruins. The losses suffered by insurers—$12.5 billion in all—were greater than the sum of earthquake insurance premiums they’d collected over the previous 25 years.

Politicians have always recognized that earthquakes pose a long-term problem, but their solutions have tended to be ad hoc and counterproductive. Two developments in particular made earthquake insurance less attractive to California homeowners. First, in 1985, the state took the unusual step of mandating that insurers offer earthquake insurance anytime they sell a residential insurance policy. At the time, an estimated 5 to 7 percent of homeowners had earthquake insurance. Publicly, legislators maintained that the goal of linking residential policies with earthquake policies was to raise awareness of earthquake insurance and encourage more people to purchase private coverage. But the underlying reason for the mandate was a state court decision that dramatically expanded insurers’ civil liability for damages not covered under existing policies.

The Legislature had at least two choices in responding to the court’s ruling: take a free-market approach while limiting liability, or link the earthquake insurance to residential policies. Lawmakers went with the second, with the encouragement—later regretted—of some in the insurance industry. Insurers believed that most customers would turn down an offer of earthquake insurance, seeing it as an expensive option to hedge against a remote risk; meanwhile, the insurers would have insulated themselves from liability. In fact, the problem worsened: after Northridge, spooked insurers scrambled to limit their exposure to future quakes by refusing to sell residential policies. As a result, the real estate market ground to a halt.

In 1996, looking for a way to get insurers to issue policies again, legislators established the state earthquake authority, which offers earthquake insurance to satisfy the 1985 law. Participating insurers fund the CEA by pooling premiums in the state fund. The CEA’s earthquake insurance is better than what came before, but it’s still expensive, with high deductibles and limited coverage. So it’s unsurprising that only 10 percent of homeowners today are willing to pay for it.

The best way to control costs related to earthquake damage is to restrict development in earthquake-prone areas, but that opportunity passed long ago; the most dangerous areas in California are among the most densely populated. The most realistic and effective way to control earthquake exposure is to distribute the risk privately. Privately financed insurance policies aren’t susceptible to the political whims of state officials and regulators. They have the added virtues of scale, speed and sensitivity to individual claims.

State Sen. Bill Monning, a Democrat from Carmel, has taken the lead on reforming the CEA and seeking ways to encourage more homeowners to buy insurance. But he’s found little support from his fellow Democrats. The best Monning could manage last session was a resolution encouraging Congress to pass the Earthquake Insurance Affordability Act, a taxpayer-funded insurance backstop.

If lawmakers really wanted to see the public covered, they would liberalize the state’s insurance market and compel companies to innovate and compete. If they considered earthquake peril a statewide risk worthy of universal sacrifice, they might even make buying earthquake coverage a requirement for obtaining a mortgage, not unlike the mandate to purchase flood insurance in flood-prone areas. But until such changes come into effect, homeowners and taxpayers will wind up paying a steep price when California rocks again.

R Street urges lawmakers to support Harvest Price Subsidy Prohibition Act

February 12, 2015, 5:33 PM
WASHINGTON (Feb. 12, 2015) – The R Street Institute applauds today’s introduction of the Harvest Price Subsidy Prohibition Act, sponsored in the U.S. Senate by Sen. Jeff Flake, R-Ariz., and Sen. Jeanne Shaheen, D-NH, and in the U.S. House by Rep. John Duncan, R-Tenn. The legislation would rein in the most costly and extravagant federal crop insurance product, known as the harvest price option (HPO) policy. Because HPO policies give farmers the option to claim the higher of either the standard locked-in price for a crop or its market price at harvest, they can actually result in a farmer’s revenues exceeding the expectations when the crop was planted.

“Federal crop insurance payments repeatedly cost far more than projected, and this bill will go a long way toward securing vital protections for the American taxpayer,” said Andrew Moylan, R Street’s executive director. “These significant savings can be achieved while still allowing reasonable protections for farmers who rely on crop insurance as their main source of support.”

The Congressional Budget Office estimates the Flake-Duncan bill would save more than $18 billion over the next decade, with no effect on the premium subsidies farmers receive for standard crop insurance policies.

“We praise Rep. Duncan and Sen. Flake for their leadership on this important issue, and encourage their colleagues to both support the measure and to continue to look for ways to limit taxpayer exposure by shifting more risk into the private market,” said Moylan.

Tallying up the high costs of extreme weather

February 12, 2015, 3:08 PM

From On Point with Tom Ashbrook:

Epic snows in my backyard lately, in Boston.  Six feet-plus in a month, and it’s still coming.  The most ever recorded coming down that fast.  It’s been paralyzing.  And very costly.  Exposing all kinds of infrastructure problems you would never think of on a gentle day in May.  That’s what extreme weather does, whether it’s blizzard or drought or hurricane or deluge.  Paralyzes.  Costs a lot.  And can take apart an economy.  Now American business is paying attention.  To climate change.  This hour On Point:  extreme weather and its mounting consequences for the economic bottom line.

– Tom Ashbrook


Laurie Johnson, chief economist in the climate center at the Natural Resources Defense Council. (@laurietjohnson)

RJ Lehmann, senior fellow, editor-in-chief and co-founder of the R Street Institute. (@raylehmann)

Frank Nutter, president of the Reinsurance Association of America. (@franknutter)

Capitol Hill

February 12, 2015, 3:01 PM

From Washington Internet Daily:

The bill is the same as HR-5586, which Farenthold introduced last year, a spokesman said. Farenthold “understands we expect the devices we buy to belong to us, for us to re-sell or give away as we please,” Mike Godwin, R Street Institute innovation policy director, said in a news release. “This bill says in a very few words what we all believe about what we buy: we own it and we can re-sell it as we see fit.”

Bill addressing insurance company dust-up advancing

February 12, 2015, 2:58 PM

From Utah Political Capitol:

Ian Adams, western region director at the R Street Institute, believes that the state is putting itself at an economic disadvantage by changing its interpretation of what an inducement is. “Our concern is that in moving out of alignment with the mainstream of jurisdictions in the interpretation of what it is to be an inducement, Utah is placing itself at a disadvantage.”

Support the Harvest Price Subsidy Prohibition Act

February 12, 2015, 2:42 PM

Dear Member of Congress,

On behalf of the millions of Americans represented by the undersigned organizations, we write to urge your strong support of the Harvest Price Subsidy Prohibition Act, sponsored in the Senate by Sen. Jeff Flake, R-­Ariz., and Sen. Jeanne Shaheen, D-­N.H., and in the House by Rep. John Duncan, R-­Tenn. This common-­sense legislation would protect taxpayers from being asked to subsidize the most costly and extravagant federal crop insurance product, known as the harvest price option (HPO) policy. The non-­partisan Congressional Budget Office estimates the Flake-­Duncan bill would save $18.9 billion over the next decade, with no effect on the premium subsidies farmers receive for standard crop insurance policies.

A standard crop insurance policy locks in a guaranteed level of revenue at planting time. When
Congress designed crop insurance to be a safety net for farmers, this is the system they intended to create. The harvest price option, which fast is becoming known as the “Cadillac” coverage option of federal crop insurance, differs from standard insurance by paying farmers using either the standard locked-­in price or the market price at harvest, whichever is higher. HPOs actually can result in a farmer’s revenues exceeding the expectations when the crop was planted.

In 2012, a year that saw corn and soybean prices increase 32 and 23 percent from planting to harvest, HPOs increased payouts to farmers of both crops by a total of $6 billion. In a year where crop insurance payouts topped $16 billion, the $6 billion in taxpayer losses due to HPO policies was an egregious and unnecessary misuse of tax dollars. This product goes above and beyond the definition of a safety net. It is the crop insurance equivalent of your auto insurer surprising you with a new Cadillac Escalade after you’ve totaled your Toyota Corolla.

While we’d like to see premium subsidies eliminated entirely, the time has come to address some of the “lowest-­hanging fruit” in the federal budget. The Harvest Price Subsidy Prohibition Act is a terrific first step.

We commend Sen. Flake and Rep. Duncan for their leadership and urge you to sponsor and support swift action on this important legislation.


R Street Institute
Campaign for Liberty
Center for Individual Freedom
Club for Growth
Coalition to Reduce Spending
Competitive Enterprise Institute
Council for Citizens Against Government Waste
Heritage Action
Less Government
National Taxpayers Union
Taxpayers for Common Sense
Taxpayers Protection Alliance

Apply now for R Street’s 2015 Google Policy Fellowship

February 12, 2015, 11:22 AM

Applications are open now for R Street’s 2015 Google Policy Fellowship in technology policy. The deadline to apply is March 12.

R Street’s Google Fellow will have the opportunity to contribute op-eds and blog posts, work on a significant research project, help oversee coalition efforts, do legal research, and as well as other work on tech and regulatory policy.

The program is open to law students, undergrads, and graduate students. A background in either coding, law, public policy, or economics is strongly preferred.

Apply here for the fellowship. Read the full terms and conditions here. For more information about the program, contact Zach Graves.

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

Inhofe introduces the Federal Lands Freedom Act (FLFA) of 2015

February 12, 2015, 10:05 AM

From Sen. James Inhofe:

The legislation has the support of Heritage Action, Western Energy Alliance, the R Street Institute, and the American Legislative Exchange Council (ALEC).

Don’t ignore RESTORE

February 12, 2015, 9:00 AM

Depending on the outcome of ongoing litigation, Texas soon may find itself the recipient of a sizable windfall. But the state shouldn’t fall victim to the temptation to treat this as free money.

Earlier this month, a federal court in Louisiana wrapped up final testimony in what has been nearly two years of litigation surrounding the 2010 Deepwater Horizon oil spill. The court, which previously found BP to have been grossly negligent in the spill, must now decide how much to fine the company for its actions under the Clean Water Act. The penalties are certain to be in the billions, and could be as much as $14 billion.

Thanks to provisions of the RESTORE Act, passed by Congress in 2012, some of that money will be coming to Texas. Under RESTORE, proceeds from the fines paid by BP are distributed to the Gulf Coast states and other organizations according to a complicated formula. Each state is then supposed to use its portion of the funds to deal with the environmental and economic damage caused by the spill.

Exactly how much money is coming to Texas is not known, but along with other similar mechanisms, the total amount will be in the hundreds of millions if not billions of dollars. Some money already has started to flow. Last November, the National Fish and Wildlife Foundation, which operates a related distribution program, announced $13.2 million in grants for affected regions in Texas.

By the time the funds are distributed, more than a half-decade will have passed since the spill. But the process for spending RESTORE Act funds still needs to be heavily scrutinized to ensure the money isn’t wasted and the state doesn’t incur ongoing financial responsibilities once the pot runs dry. To ensure Texas makes the most of its share of RESTORE Act funds, there need to be clear guidelines about what is and is not an appropriate use of the money.

In 2009, Sen. Tom Coburn attempted to amend the federal stimulus bill by including language forbidding the use of stimulus funds on casinos, convention centers, museums, aquariums, golf courses, stadiums, theaters or art centers. State use of Gulf spill funds have not always passed this “Coburn Test.” Mississippi committed $15 million from the initial oil spill settlement toward the construction of a baseball stadium in Biloxi, while Alabama spent $58 million of its money on a “lodge and meeting facility” in Gulf State Park. Texas can do better.

Texas should also be proactive, investing in ways to mitigate future as well as past coastal damage. Coastal wetlands, for example, not only spur recreational tourism, but also serve an important flood protection function. A 2011 study from the Duke University Center on Globalization, Governance and Competitiveness found that, by mitigating the damage potential of storms and waves, wetlands provide the equivalent of $23 billion of storm protection annually.

The important thing is that Texas makes these decisions in the most transparent and thoughtful manner possible. State officials tasked with implementing the RESTORE Act have so far done a good job, but we need to make sure this commitment and focus remains through the entire process.

Compared to the overall budget, RESTORE Act funding may not seem like much. But whether the money is spent wisely or poorly could have an impact far greater than the official funding tally. As Sen. Everett Dirksen was fond of saying: “A billion here, a billion there, pretty soon you’re talking about real money.”

States would be better stewards of most federal lands

February 11, 2015, 4:57 PM

Tell the typical American that the federal government controls 640 million acres of land (close to 28 percent of the nation’s total area), and you’re likely to get a blank stare. The numbers are too large to contemplate, and for the most part, federal land is concentrated away from highly populated areas.

Federal ownership in the eastern half of the country is relatively limited, but in the westernmost 12 states, federal holdings are vast, ranging from 29.9 percent of Montana to a whopping 84.5 percent of Nevada. Yet despite what East Coast elites may believe, federal land ownership has major implications for all Americans.

These federal lands hold a large amount of untapped potential resources that could be developed to provide boosts both to our energy sector and to other parts of the economy. But the permitting process to extract these resources is long and onerous, sometimes taking years before permission is granted. In 2011, the Bureau of Land Management reported that the average application took 307 days.

Given this backdrop, who could blame our extractive industries for seeking to develop resources elsewhere? This unfortunate bureaucratic quagmire results in hits to the American economy, both in terms of lost production and higher fuel prices. It furthers our dependence on foreign energy sources and exacerbates unemployment in areas that could greatly use a boost.

Recent increases in domestic oil production, along with strong foreign output, have resulted in a dramatic dip in fuel prices, with average per-gallon gas prices currently $1.11 lower than in February of last year and diesel prices a striking $1.14 less per gallon. This drop could put an extra $300 billion in the pockets of consumers in desperate need of a boost.

Additionally, though federal subsidies for so-called “green energy” development should not be encouraged, solar power has become a more competitive energy source in recent years. Environmentalists at odds with oil and gas production should bemoan the regulatory barriers to exploring solar investment in these sun-rich states.

Beyond providing a boost for consumers seeking cheaper energy, developing these lands would provide much needed jobs. Of these 12 western states, seven rank above the median in unemployment rates. In Nevada, where federal control is greatest, unemployment is fifth-highest in the nation. California, where the feds control 45.3 percent of the land, boasts the second-highest unemployment rate in the nation. Energy development creates vital domestic jobs, and Americans who otherwise would be productive workers shouldn’t have to sit on the sidelines while their government dawdles over whether or not to allow them to use their skills.

Finally, every taxpayer should be outraged at the appalling inefficiency that is the permitting process. Federal agencies should be accountable to the taxpayer, yet the Bureau of Land Management seems to feel no pressure to streamline their processes to allow faster review and approval.

The answer to this problem is to devolve the permitting process back to the states. Today, Rep. Diane Black, along with 21 cosponsors, re-introduced the Federal Land Freedom Act, and companion legislation will be filed in the Senate soon. As opposed to the federal morass, states typically review an application within days or weeks. The Federal Land Freedom Act still requires states to satisfy all applicable laws related to developing the land, and it exempts lands such as the National Park System and Indian lands from this development, ensuring our most important lands are still protected for future generations.

Conserving America’s most important lands is an admirable goal, but at what point should the line be drawn? The tradeoffs between conservation and economic development are real, and states, which are most in touch with their land resources, should be the ones to make the tough calls. Perhaps the recent economic boon from lower energy prices will be the wake-up call Congress need to support this important effort.

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

R Street applauds introduction of YODA

February 11, 2015, 1:43 PM

WASHINGTON (Feb. 11, 2015) – The R Street Institute is encouraged by today’s introduction of the You Own Devices Act, or  “YODA,” sponsored by Rep. Blake Farenthold, R-Texas.

The bill amends Title 17 of the U.S. Code to ensure consumers can re-sell their electronic devices and other consumer items that include licensed essential software, without running afoul of copyright law. Farenthold was joined this afternoon by original co-sponsor Rep. Jared Polis, D-Colo, at an R Street policy luncheon, where they unveiled the legislation.

“Rep. Farenthold understands we expect the devices we buy to belong to us, for us to re-sell or give away as we please,” said Mike Godwin, R Street’s director of innovation policy. “This bill says in a very few words what we all believe about what we buy: we own it and we can re-sell it as we see fit. When we do that, the buyer should be free and clear that he or she owns the device and can operate it freely.”

The bill echoes legislation Farenthold introduced last year, which garnered broad support from industry groups.

“This bill calls for a change that confirms what we already expect, which is that we can re-sell a device that we paid for,” said Godwin.

Internet ain’t broke, don’t let AG try to fix it

February 11, 2015, 12:01 PM

For all that we complain about the Internet from time to time, the fact is, for the most part, we love the Internet. Yet not all of us know how the Internet came to be something we would want to love.

It was no accident. Today’s Internet is rooted in specific decisions made by Congress back in the 1990s. By protecting the Internet from needless litigation and censorship, Congress helped give us the Internet we love, an Internet one local politician has set out to take away.

For me, this isn’t just bad judgment; I also take it personally. I was lucky enough as a young lawyer in Washington during those years to work on these issues in my first job. So what Mississippi Attorney General Jim Hood is doing now — trying to force Google to act as a censor and a snoop — is a direct attack on the work that I and all the other free-speech and privacy advocates did, years before companies like Google, Yahoo and Facebook even existed.

What we did is help craft a legal provision in 1996 that guaranteed no one on the Internet — from giants like Google and Facebook down to a single blogger or tweeter — could be held liable for something someone else says or does. The inside-baseball name for this principle is “Section 230”; specifically, Section 230 of the Communications Decency Act of 1996. It’s something that almost everyone agrees the lawyers got right. Without it, a company like Facebook, which hosts hundreds of millions of users posting their opinions on every conceivable subject, couldn’t exist. Search engines like Bing and Google and resources like Wikipedia couldn’t exist either.

Congress ultimately supplemented Section 230 with the Digital Millennium Copyright Act of 1998, which provided copyright-specific protections. But not everyone is happy with all the changes our free-speech Internet has wrought. In Hollywood, the movie studios continue to press for ways to restrict the Internet. They’re afraid Google and other Internet services make it too easy to download unlicensed movies and TV shows. Record companies and recording artists also are worried that Internet-based services will somehow destroy the music business.

They’re not crazy to worry. The Internet does change things. I watch a lot of television on Amazon Prime. I’ve bought music by Taylor Swift or Bruno Mars without ever opening one of their CDs. The Internet is mostly a fountain of opportunities, even as it pushes us to find new ways to do business, be creative, speak freely or connect to one another. Alas, for Hollywood and many other major corporate interests, the connected world in which we now live is a lawless, dangerous place that needs to be reined in.

The most notable recent public effort by the corporate giants was the Stop Online Piracy Act (SOPA), which required a huge public protest to shoot down in Congress. SOPA would have severely damaged the ability of companies like Google or Facebook, or nonprofits like Wikipedia, to serve the public as information resources and global platforms for human collaboration. (Full disclosure: I was a legal adviser for Wikipedia in 2011 and 2012, when the online encyclopedia chose to “black out” its site for a day to challenge SOPA.)

More recently, (and more quietly) the movie studios have pursued new strategies, taking advantage of enterprising government officials like Jim Hood. Hood is now fighting Google in court, arguing the search-engine giant must let him and other top law-enforcement officials go on fishing expeditions in ways that invade our privacy and chill the free speech we have come to expect on the Internet.

Over the last two years, Hood has publicly targeted Google for its video content (YouTube) and for its search results — in effect, he says Google is aiding and abetting crime for its own profit. But as reporters at The New York Times and Ars Technica have shown, Mississippi’s attorney general has found a powerful ally in the Motion Picture Association of America — the movie studios’ trade association. Hood’s recent wide-ranging subpoena of Google was, in fact, secretly drafted for him by the MPAA’s law firm.

The connections between the MPAA and Hood go even deeper. Mississippi’s Clarion Ledger newspaper recently published an opinion article defending Hood written by Hemanshu Nigam, a consultant for an “astroturf” group called the Digital Citizens Alliance, that the Times revealed had been created by the MPAA. Nigam is also (of course) a former vice president of the MPAA.

It’s not hard to connect the dots. The MPAA, unhappy both with the potential for copyright infringement on the Internet and with its SOPA failure, is still pounding away to turn Google into an Internet snoop and enforcer. Other services have been in the same crosshairs, and will be again, if we don’t remind our government officials that the Internet we’ve got is, in fact, the one we want.

I can’t pretend we young lawyers knew back in the 1990s what kind of powerful economic, democratic, freedom-of-speech powers the Internet would someday embody. If we had known it, we’d all be billionaires now. But we could see that if we got the right kind of free-speech and privacy framework in place, more and more Americans, and other folks around the world, would find the Internet to be a huge opportunity for creativity and freedom.

Congress made a great decision in 1996 that gave rise to the Internet we love today. Let’s not let opportunistic politicians and big-money movie studios take that away.

Conservative groups seek to kill harvest-price insurance subsidies

February 11, 2015, 9:10 AM

From Agri-Pulse:

Representatives of Heritage Action and the American Enterprise Institute will appear at a news conference Thursday with Sen. Jeff Flake, R-Ariz., and Rep. John Duncan, R-Tenn., to promote companion bills called the Harvest Price Subsidy Prohibition Act…The Environmental Working Group and R Street Institute, a libertarian think tank, also will participate in Thursday’s news conference.

Illinois Gov. Bruce Rauner brings mandatory union dues to an end

February 11, 2015, 8:41 AM

Apparently, when it comes to the game of issuing executive orders, both parties can play.

Monday night, just in time for the 6 o’clock news, newly minted Republican Illinois Gov. Bruce Rauner announced that he will use his pen and his phone to put an end to a requirement forcing all Illinois state workers to pay dues to the Illinois government employees union. The move, which Rauner takes in open defiance of a heavily Democratic state Legislature, will cut off the spigot Illinois’ public-sector unions use to fund Democratic candidates without having to encounter the people who receive their hefty checks.

Gov. Bruce Rauner, the newly elected Republican who has often criticized public sector unions, took his first step toward curbing their power on Monday by announcing an executive order that would bar unions from requiring all state workers to pay the equivalent of dues.

Mr. Rauner, who faces a Democratic-controlled legislature with strong ties to labor, took the unilateral step saying that he believed those fees violate the United States Constitution.

“Forced union dues are a critical cog in the corrupt bargain that is crushing taxpayers,” Mr. Rauner said. “An employee who is forced to pay unfair share dues is being forced to fund political activity with which they disagree. That is a clear violation of First Amendment rights — and something that, as governor, I am duty bound to correct.”

The move will affect about 6,500 state workers, but won’t have any effect on those who choose to be in unions. The ones who choose not to be in unions will no longer be forced to pay what unions call “fair share” contributions, which the unions claim compensates them for having to advocate on behalf of “free riders” who use the union’s contract negotiations services, and which can run workers up to $1,000 per year.

Of course, that claim assumes that the state’s unions use what they collect from the state’s workers to actually negotiate contracts. In Illinois, Department of Labor filings tell a different story. All three of the state’s main public sector employee unions spend less than half the revenue they collect on actual representation (and that includes more than just contract negotiations).

For every dollar the Illinois Education Association, or IEA, spent, only 28 cents went to representation. For the Illinois Federation of Teachers , or IFT, that figure was 43 cents, and the state Service Employees International Union, or SEIU, Leadership Council spent only 23 cents out of every dollar on representation. The American Federation of State, County and Municipal Employees Council 31 was less bad than the rest, but barely half of its spending was on representation – 51 cents out of an average dollar.

So, of course, you’re probably wondering where the rest of the money goes. That part is easy. Illinois unions spend an exorbitant amount on overhead — IEA alone spends two-thirds of what it collects on administration — and making political contributions. In the case of SEIU, 44 percent of their revenue intake went back in to politics. And according to the Illinois Policy Institute link referenced above, that share assumes their contributions to non-profits were non-political and, of course, they weren’t. Taking all donations to politically or ideologically oriented non-profits into account, as well as donations made to non-profits allied with the union itself, IPI found that a whopping 71 percent of every dollar SEIU takes from Illinois employees goes to politics. 

Rauner argues these forced contributions are unconstitutional, and he may be right. The SCOTUS case, Communication Workers v. Beck, found that employees could, in fact, opt out of the portion of their union dues that go toward political activity, though the term “political activity” is very narrowly defined. In this case, the contributions aren’t technically defined as union dues, either — they’re considered “contributions” for services rendered — so Rauner may still find his idea tied up in litigation. Actually, given the makeup of the Illinois Legislature and how much that money means to some very key re-election campaigns, he can probably bet on it. But for now, it’s nice to enjoy the reverberations from the unions’ abject terror.

Memo to the CDC: Tell the WHOLE truth about e-cigarettes

February 11, 2015, 8:10 AM
The contrast between the spin put on youth e-cigarette use data last fall and the story told by the actual data, released last month, is startling, but not surprising, given the U.S. government’s over-zealous prohibition posture.
Last November, the Centers for Disease Control released selective information from the 2013 National Youth Tobacco Survey.  A resulting New York Times headline was typical: “E-Cigarettes gain among high school students.”

The CDC withheld the survey data until a couple weeks ago. Now, the rates of e-cigarette use can be viewed in context with cigarette smoking.  The chart at left shows the real story, and it’s stunning.  Past 30-day cigarette use (the CDC definition of current smoking) among high school students was 9.7 percent, a whopping 34 percent decline from 2011.

E-cigarette use increased, as did dual use, but in no way does the data suggest that e-cigarettes are a gateway to smoking among teens.  In fact, this chart, along with the Monitoring the Future study I discussed previously, indicates that e-cigarettes may be driving teenage smoking down.

Jacob Sullum at Reason got it right: “Vaping rises to record highs, smoking falls to record lows, and activists insist ‘e-cigarettes are a gateway to smoking.'”

The CDC regularly misrepresents e-cigarette statistics (see here, here, and here).  The agency cherry-picks information from restricted federal datasets; the media amplifies the CDC’s spin; and the story cannot be challenged until months or years later, when the agency provides access to the underlying data.  The public should not tolerate such misfeasance from taxpayer-funded public health agencies.

Copyright Policy Lunch

February 11, 2015, 7:15 AM

Join Public Knowledge and the R Street Institute for an informational briefing on the hill explaining the basics of copyright law, and the policy challenges that arise in an age of monkey selfies, Taylor Swift, and Buzzfeed.

Featuring opening remarks from Reps. Jared Polis (D-CO) and Blake Farenthold (R-TX).

Details and RSVP: http://copyrightpolicy.splashthat.com/

Coalition letter to Congress urging comprehensive tax reform now

February 10, 2015, 12:38 PM

Dear Members of Congress:

The current U.S. federal tax system is out of date and desperately in need of an overhaul. Current U.S. policies were formulated in the 1980s at a time when manufacturing and trade in tangible goods were the predominant forms of economic activity. The last three decades have witnessed revolutionary changes in business methods, products and assets, and a global economy that is increasingly driven by growth in sectors not even imagined 30 years ago.

Unfortunately, those tax rules have not kept pace with these new global market realities for business, the increasingly complex way small business owners file their taxes or the economic challenges individuals and families face.

Businesses now operate more freely across borders with business location and investment decisions being more sensitive to tax considerations than ever before. As new market access has increased, nations’ tax systems have become a greater factor in the success of global companies. While most of our major trading partners have reduced their corporate tax rates, nothing has changed in the United States, resulting in the United States having the highest tax rate in the world. Being a glaring outlier discourages investment in the U.S., reducing growth and limiting job and economic opportunities.

Additionally, small businesses and individuals see some of the highest rates and most complicated tax laws. As the backbone of America, small businesses should be afforded every opportunity for a fair and simple tax code, saving them significant accountant and legal fees to ensure compliance with a growing and complex code.

Considering that many small businesses and their owners have to file under individual tax rules, it is even more important to work to alleviate some of the same problems that face larger businesses. Over the decades individuals have faced an increasingly complex, labyrinthine tax code that few understand. Such complication by its very nature is unfair, often more heavily burdening those least able to shoulder the extra load.

While some issues may be complicated, the overall immediate necessity is clear: The United States needs a coherent, simpler, fairer tax code for individuals, small business, and corporations as part of a broad national strategy to ensure long term competitiveness. The 114th Congress was elected to govern, and the American people expect results. We encourage Congress to roll up their sleeves, get to work and make their primary goal to reform the U.S. tax code for everybody.