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Anne McCormick Hocine

March 16, 2015, 4:46 PM

Anne McCormick Hocine is executive assistant and office assistant for the R Street Institute.

Anne previously spent 10 years with World Learning, most recently as a program officer, before taking a break to spend more time with her family.

A native of Atlanta, Ga., she graduated from the University of Oregon with a bachelor’s degree in political science. Anne also studied abroad in Scotland, where she discovered the joys of hard cider.

After college, Anne’s existential crisis led her to Vail, Colo., where she earned a living planting flowers for the Town of Vail and entertained herself by attempting to master the art of snowboarding.

After her stint in the mountains, Anne moved to Washington for graduate school at American University, where she earned a master’s degree in international communications.

Anne lives in Washington, D.C. with her husband, Aghilas, and their two children, Annabelle and Abdellah. She is fluent in French and a voracious reader.

Email: annemh@rstreet.org

Other policy interests today at SXSW

March 16, 2015, 3:03 PM

From Politico:

House Oversight Chairman Jason Chaffetz will talk about music licensing reform with lobbyists from Pandora, the Digital Music Association and TwinLogic Strategies. DHS Undersecretary for Science and Technology Reginald Brothers will deliver a TED talk about wearable technology and public safety. Data.gov policy analyst Rebecca Williams will join Cato Institute’s Molly Bohmer, R Street Institute’s Molly Schwartz and CREW’s Daniel Schuman in a conversation about how public data improves accountability and empowers advocates. State Department senior adviser Krishanti Vignarajah will address investments in entrepreneurs around the world

Cancer-causing compound not prevalent in smokeless tobacco

March 16, 2015, 9:12 AM

From Z News:

Scientists at British American Tobacco in collaboration with professor Brad Rodu of the University of Louisville, undertook a comprehensive survey of toxicants in STPs.

New Orleans takes step in right direction on ridesharing

March 16, 2015, 9:00 AM

New Orleans has traditionally been hostile to the sharing economy. Airbnb and other room-sharing services are still effectively outlawed in the Crescent City. Ridesharing companies have not had it any better, which is why the city got a D+ on R Street Institute’s inaugural Ridescore.

UberX and Lyft are still essentially outlawed, but New Orleans could be looking to change that. Following in the footsteps of nearby Jefferson Parish, the New Orleans City Council is considering a bill to legalize and regulate ride-sharing.The Hayride reports that the council’s transportation committee approved an ordinance to allow ride-sharing companies to operate.

Uber Black, marketed as the solution to bad taxi services, is already operating in New Orleans after the City Council legalized the use of digital dispatching for car services back in September of 2014.

However, since Uber Black was legalized last year, the City Council proposed an ordinance back in January which would basically legalize Uber entirely.

Uber’s ‘ride-sharing’ service would allow for individuals to use their own vehicles to transport Uber customers around the city.

Though debate has sparked about how Uber would be allowed to offer ‘ride-sharing’ while bypassing city regulations that taxi cab drivers are mandated to follow, the City Council could be looking to roll back regulations for a change.

Interestingly, the city is also thankfully taking this opportunity to look at reducing the regulations on taxi cab companies. City councilmen and officials seem to agree the taxi industry was overregulated.

Among the requirements the city is considering to mandate for ridesharing companies is not permitting vehicles older than seven years to be used, requiring background checks be conducted by the ridesharing companies, requiring the vehicles be marked with the ridesharing company’s logo when it’s in service and commercial liability insurance would be required. Most ridesharing companies such as Lyft and Uber already would meet most of these requirements, particularly in the areas of background checks and insurance.

It seems that New Orleans is working on a way to create a win-win situation for travelers in the Crescent City. The city is going to allow choice between traditional taxicabs and more modern ridesharing services. This will improve rates and service for both locals and tourists alike through free-market competition.

The City Council should also follow through on its inclination to deregulate the taxicab industry. New Orleans has already proven it become a leader in innovative ideas, as demonstrated with its leadership on school choice. New Orleans needs to take this opportunity to become a leader in transportation choice.

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

Virginia legalizes ridesharing services

March 16, 2015, 8:45 AM

From the Heartlander:

R Street Executive Director Andrew Moylan says government regulators are struggling to adapt to new sharing-economy businesses like Lyft and Uber.

“Uber and Lyft have been facing aggressive regulators and special interests trying to shut down their businesses in cities and states across the country,” he said. “Rather than modernize rules to recognize technological advancement, many governments have taken a ‘ban first, ask questions later’ mentality to the services.”

Learning from Virginia’s Example

Moylan says Virginia regulators’ struggle to deal with the issue can be educational for government officials elsewhere.

“Virginia is an instructive example because it showed both the worst and best regulators have to offer in response to this important debate,” he said. “The state’s Department of Motor Vehicles sent out a cease-and-desist order to Uber and Lyft in an attempt to shut down the businesses as they were just getting off the ground.”

Moylan says consumer demand for ridesharing services forced regulators to open the market to Lyft and Uber. 

“The public backlash to that move forced the legislature and governor to respond, by passing a commonsense bill that contains only a few regulations in areas where government has a legitimate role: requiring insurance coverage, criminal background checks, and appropriate licensure for drivers,” he said.

Marx, Smith, Amplifyd and Nestle: social investing in 2015

March 16, 2015, 8:00 AM

One of the more interesting signs that the economy is picking up again is the new focus on social responsibility emanating from the C-suites of major corporations. The signs are everywhere, from McDonald’s executives announcing the company won’t buy chicken raised with antibiotics to the Ringling Brothers circus retiring all of its elephants to such conservative investors as Vanguard announcing activist campaigns.

Start-ups are getting into the act, too, for profit. Last month, I received a press release for a company called Amplifyd Pledges, which asks people to pledge money to cover the cost of companies making various “socially conscious” changes. Its first project is asking Peet’s and Starbucks to use organic milk. The effort is unlikely to pay off, but Amplifyd has one advantage over petitions posts on Change.org or on Facebook. It is asking signatories to its campaigns to commit real dollars and reports $15,000 pledged so far.

In a perfect world, companies would maximize value for shareholders and consumers alike. In the real world. companies cut corners, consumers want rock-bottom prices and investors want steady growth in earnings-per-share every quarter. No one really wants companies to destroy the environment or to take behave in a way that damages society, but making more “socially responsible” decisions often has a price tag, and it’s one few are willing to pay.

Maybe the secret to more socially responsible corporations isn’t in finding market inefficiencies that need to be corrected by regulation, but simply having a better, more prosperous economy. Perhaps social responsibility is, ultimately, a luxury good. The wealthier a society is, the more its consumers can afford organic milk, if that’s what they want. Companies like Nestle can afford to experiment with natural ingredients, and shareholders can ask companies to be better positioned to take advantage of an improved market. The story is no longer “Lumber Liquidators can hold on in a down housing cycle, hurray!” but rather “Lumber Liquidators needs to stop cutting corners to serve consumers who don’t want illegal, toxic materials in their houses!”

It isn’t that only the wealthy make socially responsible decisions. At the very low end of the income spectrum, there are common consumer choices that are exceptionally responsible from an environmental perspective, even if that concern wasn’t what motivated them. Think of clothes from thrift stores or reusing grocery bags for trash. Many of these efforts are inferior goods; as income increases, Goodwill shopping and frugal living are cast aside. At the high end of the consumer market, interest in sustainability is a sign of prestige. People value such luxury items as Teslas and farm-to-table, snout-to-tail, organic restaurants in part because they are expensive. They signal wealth in a way that reused lunch bags do not.

The vast middle of the market views environmental, social, and governance issues as nice-to-have features, as long as they don’t cost more or impede function. Hence, the environmental and the social are normal goods, where demand changes proportionally to income.

Here is the synthesis between Karl Marx and Adam Smith. No, I’m not kidding.

Marx was a student of business cycles. He then developed his political theories as a way to eliminate the business cycle, and we all know how that worked out. But his concept of capital accumulation as the economy expands – holds.

Smith, on the other hand, talked about how the “invisible hand” managed production based on supply and demand. In a weak economy, people want basic goods for as low a price as possible. As the economy expands, customers demand more, and the industry is able to improve itself. We often think of that improvement coming in the form of new and better technology, but it does not have to be. Finding ways to raise healthy chickens without the use of antibiotics meets the test.

Social, environmental and governance factors may be distractions from profit-making activities in some market cycles, but they are not frivolous in all cycles. If customers are willing to pay more for social features, and if investors pay as much attention to risk as to return, then these concerns are no longer luxuries. They are necessary parts of doing business, at least until the next recession.

Consumers will vote with their pocketbooks, just as Smith explained. And they’ll wring some concessions out of capitalists in the process, living up to a Marxist ideal.

In a free market for ideas, we can find a way for these two opposing theorists to get along.

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

R Street / CDT Happy Hour at SXSW

March 14, 2015, 12:00 PM

Sorry, this event is by invitation only.

I love the 90s!

March 13, 2015, 2:10 PM

The Millennial Generation — into which I have been unceremoniously lumped, care of a post-Reagan inauguration birthdate — has a thing for the ’90s.

It’s no secret that anyone south of 40 is, these days, looking to extend their neon-colored childhood into the foreseeable future. After all, the harder we cling to our Polly Pockets and our Tamagotchis, the less likely we are to have to handle the day-to-day minutiae of reality: paying taxes, having a job, shoveling driveways, keeping potted plants alive and the like. The longer we hold on to what we had when we were comfortably siloed off from the hardships of responsibility, the less likely we are to wake up one morning and face down our own mortality in the bathroom mirror, realizing that the $100,000 Gender Studies education we paid for is unlikely to earn us any living beyond a one-bedroom urban apartment that lacks central air-conditioning.

Call it the folly of progress; our parents did well and spent well. The Me Generation — the baby boomers that raised us — never wanted for anything for themselves. The 1970s and ’80s were a time of conspicuous excess, questionable financial practices and rampant narcissism (seriously, who would ever wear shoulder pads if you cared about what other people thought of you?), and it birthed a generation of people who can’t quite figure out why the world doesn’t bend to their every whim. And so, Urban Outfitters can sell an entire swath of naval-gazing post-graduate humanity on the faux-widespread appeal of tutu overalls.

Before I start sounding, though, like I’ve been drilled on the Republican Party’s official platform regarding the Millennial voter (get off my lawn!), let me say that the power of nostalgia isn’t always bad. Conservatism, for all its successes and failures, is built on the principle that, at one point in time, things were better than they are today, and that it’s because of the slow, lumbering march of progress that is undertaken without heed to the traditions and values on which the framework of freedom is laid that we’ve ended up miring ourselves in a hellhole of debt and damnation. Nostalgia brings us good things: jurisprudence, Jell-o salads, comfortable furniture, ranch housing, the one-hour scripted television dramas that take place in hospitals, the practice of forcing politicians to shake hands with people who hate them, Aqua Net hairspray, Third Eye Blind reunion tours and the Ford Mustang. But it can also bring the bad: Jane Fonda, classic movie retreads, microwave pizza, Styx.

And Hillary Clinton.

Living through this last week has been nothing short of a painful reminder that we have not yet managed to cleanse American politics of the Clinton family. And like much of what I remember from the 1990s, including the Republican leadership and the rise of platform jelly sandals, they refuse to acknowledge that somehow they have moved out of the realm of functionality and “fashion forward.” Nothing about this week’s events surrounding Hillary Clinton’s private homebrew server and her heap of deleted emails — excused, apparently, because she couldn’t be bothered to force her closest aide to carry a second phone in her designer handbag — would be out of place in 1996. Replace the allegedly missing communications with allegedly missing FBI files, the Security Council UN backdrop with the set of the Today show and Hillary Clinton’s reflective metallic spacewoman pantsuit with a padded headband and a spray of L’Air du Temps, throw in a couple of presidential residence lamps (literally, as Hillary did), and you’d swear you’d built yourself a time machine.

She even got the old band back together. Defending Hillary on the airwaves are none other than Lanny Davis, David Brock and James Carville, the dream team. The hairstyles have changed a little — David Brock’s coif looks almost like it’s about to declare its sentience and subsequent emancipation from his forehead — but the talking points haven’t: “there’s nothing to see here,” “it’s none of your business,” and “don’t you have a Republican member of Congress to try for treason?” Like the lingering scent of a ’90s-era middle school boy who bathed in Drakkar Noir, the Clinton theory of political scandal strategy is still very much alive and well. First comes denial, then comes silence, then comes excuses and then comes mockery, but never a word of responsibility or apology.

And even though the prevailing assessment of the Clinton email scandal by Clinton allies has indeed been the more modern “who gives a sh*t?,” and former Secretary Clinton is more adept at sending media releases and packing press scrums than she was then, it’s not hard to imagine that the first thought going through Hillary’s mind at her UN pulpit speech wasn’t of the living, breathing digital spawn of the vast right-wing conspiracy. If only so many weren’t watching in real time on a live feed, she could have easily blamed them. Instead, like the Clinton family is wont to do, she laid much of it on Bill. And as the glass-ceiling smashing feminist leader she is, she laid the rest on her womanly inability to decipher the marvels of modern technology.

Now, while current polls seem to indicate that Americans see Hillary’s pending presidential campaign as more unwelcome Odd Couple remake and less ironic My Little Pony lunchbox, that sentiment may not last forever. It’s a tried-and-true Clinton tactic to tread the bad stuff ahead of the good, and we could all, as Mark Steyn notes, be the unfortunate, unwilling guinea pigs in the development of a media strategy. If it works, and America forgives (or better yet, ignores) her transgressions, we could still be in for a Democratic primary featuring the grandmother-in-chief herself. And given how essential the warm, fuzzy embrace of the Clinton years were to the Millennial generation’s security and self-esteem, Clinton nostalgia could still turn. After all, we all remember writing letters in crayon to Socks the Cat. And we can never recapture the feeling we got when Socks wrote back. He was incredibly adept with a pen for a feline.

I’m counting on the cooler heads in my generation to win out. But I will warn you. I also counted on them to ensure Leonardo DiCaprio’s career was firmly capped with Titanic and that doesn’t seem to have worked out.

A few weeks into the legislative session, here are the most important issues facing the Alabama Legislature

March 13, 2015, 12:58 PM

With the Alabama Legislature in full swing, both the Senate and House have released their respective agendas. Those agendas usually reflect priorities that legislators are relatively confident they will be able to achieve. Unfortunately, the issues facing the state are rarely that convenient.

While only a few of these items made the formal list of platform legislation for the Alabama House and Senate majorities, here are several of the most important issues facing the state:

  1. State Budgets – Financial issues have plagued the State of Alabama for years, particularly since the last recession. Uncertainty over state prison issues, Medicaid expenses that invariably grow every year and heavily earmarked revenue streams make the task of enacting balanced budgets rather difficult. Gov. Robert Bentley’s net tax increase has met a cool reception in the Legislature. Many legislators remain reluctant to the idea of combining the state’s budgets to put Alabama on the same footing as the vast majority of states around the nation, but doing so while removing revenue earmarks would give the state significantly more budgetary flexibility.
  2. Charter Schools – Public charter schools seem likely to pass in Alabama this session. The current language has received high remarks for accountability, transparency and local control. Even opponents of the bill are highlighting some of its positive attributes. Perhaps the greatest challenge with charter schools, should they become a reality in Alabama, is avoiding the feeling that the work is done on improving public education in Alabama. School choice is important, but the students who do not use the new available education lifelines still deserve and need the attention of Alabama’s political leaders.
  3. State Prison Capacity – Alabama’s prisons are over capacity to the point where failure to address those issues will possibly result in federal intervention. The problem is that the state’s General Fund is facing a deficit, and most voters do not want to see their resources used to improve conditions for prisoners over other priorities. Sen. Cam Ward, R-Alabaster, has worked tirelessly to draft a bill that could possibly garner enough votes to begin to address the problem. His measure would send parole violators immediately to a local jail for several days, rather than sending them to prison for months in the future. It also creates a class D felony category that would remove some nonviolent offenses from the state’s habitual offender act. Moving legislation on prisons may not be politically easy, but failing to act is not an viable option for the state.
  4. State Employee Pension Reform – State employee pensions are about as fun to talk about as watching paint dry. While benefits that are earned must be protected, the state’s defined benefit plans are out of step with the retirement benefits offered to the majority of the state’s workforce. Future employees should be moved to a cash balance plan or some type of hybrid plan that takes the burden of guaranteeing retirement income off the Alabama taxpayers, who likely do not enjoy those type of plans themselves. The move could save the state significant financial resources in the future that could be redeployed to growing fiscal obligations like Medicaid.
  5. Innovator Liability – In 2013, the Alabama Supreme Court created a radical new tort theory called “innovator liability,” which it used to hold a brand-name pharmaceutical company responsible for injuries caused by the use of its competitor’s generic medicine. The court aligned Alabama’s tort law with lower courts in California and Vermont. The decision even raised eyebrows nationally. For instance, The Wall Street Journal criticized the decision, noting that “the court’s judgment contradicts decades of Alabama tort and product liability precedent.” Holding a company liable for products that they never produced or sold is far from the business friendly climate Alabama’s legislators have vowed to create.

The Alabama Legislature only has 30 legislative days in the regular session to take on such a wide range of issues. What priorities do you think are more important than these five? What would you like to see the legislature address?

Marketplace Fairness Act foes hopeful House Judiciary develops ‘origin sourcing’ alternative

March 13, 2015, 12:57 PM

From Consumer Electronics Daily:

Opponents of the Marketplace Fairness Act are hopeful that the House Judiciary Committee will introduce an alternative online sales tax bill would tax online retailers based on their location but lets states redistribute those taxes based on the location of the purchaser, said experts in interviews. The latter method, known as “origin sourcing,” doesn’t have unanimous consensus among conservative groups opposed to the MFA, but many see it as useful compromise, said R Street Institute Executive Director Andrew Moylan. Some anti-MFA groups are still developing a position on origin sourcing, he said. The committee’s attention to immigration, patent and copyright issues has put online sales tax issues on the back burner, said the experts.

…MFA is “bad news for conservative principles and the cause of limited government,” said a letter from a coalition of conservative groups sent to the Senate Thursday. The organizations included Americans for Tax Reform, Heritage Action for America, the National Taxpayers Union and R Street Institute. MFA would “dismantle proper limits on state tax collection authority while causing serious damage to electronic and interstate commerce,” they said. “Conservatives in Congress should oppose this unwise legislation and instead pursue thoughtful alternatives that preserve geographical limits to tax authority and encourage tax competition.” Any “reform” of the online sales tax regime would “have to preserve the physical nexus standard, protect businesses from audits and harassment from other jurisdictions, and hold taxpayers harmless overall,” said ATR President Grover Norquist in a Daily Caller op-ed Thursday. By that standard, he said MFA “dramatically fails on all counts.”

Sloan Kettering corrects e-cigarette study

March 13, 2015, 12:18 PM

Memorial Sloan Kettering Cancer Center researchers, led by first-author Sarah Borderud, claimed on Sept. 22, 2014, that e-cigarettes did not help cancer patients quit smoking. They based that statement on a study they published online in Cancer, a journal of the American Cancer Society.

The researchers had enrolled 1,074 cancer patients in a smoking-cessation program. They subsequently found that “e-cigarette users were as likely to be smoking at the time of follow-up as nonusers (odds ratio, 1.0; 95% confidence interval, 0.5-1.7).”

Upon reading the study, I found a significant error. The main results table reported the exact opposite of the text. On Oct. 16, I submitted a letter to the Cancer editor, co-signed by my colleagues Nantaporn Plurphanswat and Carl Phillips, requesting a correction.

Six weeks later, on Nov. 25, a correction was published on the Cancer website. It said: “The authors discovered some errors…in Table 2.” The circumstances strongly suggest that the authors didn’t “discover” the errors; we did. The journal office had our letter on Oct. 16, six weeks before the correction appeared.

Our letter, published online on March 4, 2015, described other problems with the study. One is particularly important. Borderud, et al. claimed: “Using an intention-to-treat analysis, e-cigarette users were twice as likely to be smoking at the time of follow-up as nonusers (odds ratio, 2.0; 95% confidence interval, 1.2-3.3).” In other words, e-cigarettes were harmful.

They reached this striking result by assuming that anyone lost during follow-up had continued to smoke. We pointed out that “amokers who were e-cigarette users were twice as likely to be lost to follow-up as the other smokers (66 percent versus 32 percent)… The conclusion that e-cigarette users were twice as likely to be smoking is purely an artifact of the assumption. An equally plausible counter-assumption is that dropouts left the program because they had quit smoking.” They didn’t consider this possibility, but they should have.

Carl Phillips’ goes into more detail about the technical irregularities here.

Louisville should find way to accommodate home-sharing

March 13, 2015, 12:07 PM

The growth of the popular home-sharing website Airbnb over the past few years has engendered opposition in some quarters. Most recently, Louisville, Ky. is the latest city to try and essentially ban the service.

Airbnb allows homeowners to rent out a spare room, a couch or even an entire house on a short-term basis to travelers. Hotels and the rest of the lodging industry don’t like it because, in many cases, Airbnb rentals are priced cheaper than hotel rooms on a per-night basis.

Louisville says that property owners who rent their properties on Airbnb are essentially operating illegal hotels. According to The Courier-Journal, owners who don’t stop renting out their properties on Airbnb could be subject to fines of as much as $500 a day.

Some Louisville property owners renting out space in their homes to travelers through popular online home-sharing sites have been told by metro government they are operating illegal hotels or motels and need to stop immediately or risk significant fines.

Several owners and their attorney want to work with the city to find a solution, and they said they are not opposed to regulations, paying a fee or purchasing a license.

But one host who uses the Airbnb home-sharing site, which lists more than 400 properties for short-term rental in Louisville alone, said there is no flexibility in the city’s letter — they are ordered to “cease immediately.”

In fact, Airbnb rentals don’t actually meet Louisville’s statutory definitions of a hotel. At the same time, there’s nothing in the Louisville municipal code that allows them exist. This has created a legal limbo that has been exploited by Louisville officials in their attempt to kick the service out of the city.

The best situation all around is for officials in Louisville to draft regulations that would allow Airbnb and other similar services to set up shop, while dealing with whatever reasonable tax or consumer protection concerns the city might have. This would provide an affordable option for travelers who, for whatever reason, don’t want to stay in hotels. The regulations should be focused on protecting public safety, public health and protecting against fraud and should not be used punitively to create an unfair competitive advantage for the lodging industry.

Like other sharing economy services, the home-sharing market is largely self-regulating. There are options to users to post reviews of their guest experience. In order to attract more potential customers, property owners also can have people post references. When you download the Airbnb app, you can sort through the reviews, which describe the property, the owner, the neighborhood, the condition of the lodging and user experiences. Just as on sites like Yelp, a negative review can be detrimental to an owner. Just as with any other business, customers will steer away from property owners with bad reputations.

A vibrant market in home-sharing can be a particular asset whenever Louisville hosts a major festival, convention or sporting event, such as the annual Kentucky Derby. Many times during a big event, Louisville hotel rooms sell out. Home-sharing provides an option for those willing to stay in someone’s private home. This would help Louisville attract more tourists by giving the city additional lodging capacity. The additional tourists mean more money for local businesses and, in turn, additional sales-tax revenue for the city. The property owners, as they invest in their properties or otherwise spend their earnings, would also generate more revenue for the city.

It’s also not entirely clear the degree to which Airbnb-like services and the lodging industry are actually in competition. There are many people who aren’t comfortable staying in a stranger’s private home and would opt for a traditional hotel. There are others who actually want the comforts a traditional hotel provide. Finally, there are people who don’t want to stay in a traditional hotel. They like the individuality and charm of private homes, compared to the relatively stale environs of commercial hotels.

I recently utilized Airbnb’s services when I visited D.C. to cover the Conservative Political Action Conference (CPAC). I found a room that only cost $30 a night. Since the trip was for work, I didn’t need a whole lot in terms of accommodations. I simply needed a private room to sleep in and working wi-fi access. There were several options for me at $30 a night, but what sealed the deal was when one owner said he had a dog inside. I’m a dog lover, so that was perfect. I believe I received an excellent value for what was provided and I was able to extend my trip a day longer than I would’ve if I stayed at a traditional hotel.

Having enjoyed Airbnb first-hand, I would not use them on a vacation, in most circumstances. On personal trips, I enjoy being pampered and only a traditional hotel could do that. But on a work trip, I would gladly use them again when I need a place to stay cheaply.

Louisville lawmakers should give their citizens the choice of accommodations and provide a source of income for some property owners. They should draft legislation that legalizes and regulates Airbnb and other house-sharing services. It’s the best idea for the city, from both an economic and tourist standpoint.

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

Justin Trudeau, Steven Blaney and Godwin’s law of Nazi analogies

March 13, 2015, 8:57 AM

From CBC Radio:

Mike Godwin, creator of Godwin’s Law, joined Day 6 to discuss when it’s okay to make a Nazi comparison.

Brent Bambury: We just heard two prominent Canadian politicians make reference to Nazi Germany. I want to find out from you if you think those references were warranted. Let’s start with Mr. Trudeau. Did you think what he said was appropriate? 

Mike Godwin: Yes I actually do I think that it’s served Canada well to remain aware that the singling out of people on the basis of their ethnic or religious background is not something that Canadians have totally been a stranger to. That in the run up to World War Two certainly Jews in Canada had that experience …. I think that Canada of this century is a better place and I think what Mr. Trudeau is saying is in line with what I think majority of Canadian values are today. 

You are aware that some people did criticize him for that comparison perhaps unconsciously thinking of Godwin’s Law. 

I am aware of it and I think that the thing that I would say in defence of Mr. Trudeau is that he is not saying that anyone who is afraid of people of different cultures or people of different ethnic groups is inherently going to act like a Nazi or be like Hitler. I think what he’s saying is look, let’s be aware of history, we should remember our mistakes and not repeat them. 

Let’s look at minister Blaney who seemed to draw a line between certain kinds of speech and the Holocaust. Do you think that that comparison was acceptable. 

Yeah. Well first of all it should be understood that I have never been trying to say that there were unacceptable comparisons. I’ve always been very careful not to say this is forbidden or this is something that you can’t say. What I’ve always tried to do is make people aware when they are making comparisons of what his history teaches us … I want to say, in defence of Mr. Blaney, that in fact bad ideas can lead to bad real world outcomes. That is certainly true and nobody can dispute that. But what free and open societies like Canada’s and like those of other developed nations really try to do is not attack the ideas by suppressing them. We try to have an open full airing and full discussion and full debate and we think that bad ideas will fail on their merits. We think that if we allow people to speak freely that will ensure that the democratic values, the inclusive values that we care about in the developed world, and in our democracy, that is going to prevail. 

But isn’t part of the idea, or the spirit of Godwin’s Law, the idea that if you do make these comparisons you have to be careful and you have to be prepared to back them up, because otherwise you could lose the argument?

I think that is absolutely one of the things that I tried to do when I first when I first came up with Godwin’s Law 25 years ago. I really wanted people not to make silly or glib comparisons that really show no awareness of history… and I think that to that extent Godwin’s Law has succeeded. 

Can you give me examples of times when people did make comparisons that were unjustifiable say in the last quarter century since the law came into effect?

Oh sure! Well even in political races in the United States that I’ve voted in where they had said for example that Michael Dukakis is some kind of a communist or they say that Bill Clinton is really sort of an authoritarian figure … people compare each other to Ayatollahs and Hitler all the time I guess you can’t take those comparisons very seriously. I think that if all Godwin’s Law ever does is make people think harder about how they invoke history, I think I’ve done some good. 

Do you do you ever worry that it goes too far? A few weeks ago Newsweek published an article that asked whether it’s unfair to compare ISIS to the Nazis. What do you think?

Well as you know, I was quoted in a piece by Benny Avni for Newsweek and I had a discussion with him on the phone and I said, ‘First of all I’m not too worried about being fair to ISIS. I think ISIS invites all the unfairness that they get.’ But having said that, ISIS in terms of the great currents of world history, has not yet risen to the level of a worldwide threat the way some other movements that we remember from the twentieth century have done. And let’s hope it never does. Let’s hope that the community of nations figures out effective ways to respond to problems like ISIS. 

Did you ever have any idea when you coined it that it would become one of the most famous internet rules of all time?

I got the idea that I wanted to spread it around and I was quite enthusiastic about it when I started out .. but I didn’t know I was going to be continue to be talking about it twenty five years later!  I was interviewed a couple years back for a magazine piece … and the reporter said ‘How do you feel about the fact that this will be in the first line of your obituary?’ and I said ‘I’m still alive I’m still working if I work really hard maybe I can get it down into the second line!’

R Street Panels at SXSW

March 13, 2015, 3:00 AM
Join the R Street Institute in Austin, Texas for three policy-focused panels during SXSW Interactive.

Judges say labor laws outdated to deal with sharing economy firms

March 12, 2015, 4:28 PM

New laws might be needed to provide courts better guidance on how to classify the employment status of drivers for transportation network companies, and indeed, other services offered through the burgeoning “sharing economy,” according to a pair of federal judges in rulings handed down this week in two separate cases before the U.S. District Court for Northern California.

The immediate effect of the rulings by Judges Vince Chhabria and Edward M. Chen was to deny motions for summary judgment in putative class actions brought by current and former drivers of Lyft and Uber, respectively. The drivers claim they were misclassified as “independent contractors” when, they believe, they should have been considered employees under California law. Rulings for the drivers could bring stiff penalties, as well as a likely reassessment of the TNCs’ business models.

In both rulings, the judges expressed that the combination of factual and legal issues under dispute would best be heard by a jury. While contracts signed by the drivers of both services stipulate that services would be rendered under an independent contractor model and that no employer-employee relationship was created, California labor law is among the most stringent in the country on these questions. Under the law, there is a presumed employer-employee relationship whenever services are rendered for compensation, and the burden is on the putative employer to prove the putative employee was instead a contractor.

The tests to establish that relationship were primarily laid down by the California Supreme Court in 1989’s S.G. Borello & Sons Inc. v. Department of Industrial Relations. That case affirmed that the most important question to settle is the degree of control the alleged employer has over the work performed by the employee or contractor. The ruling also set out a host of “secondary” factors to consider, including how the alleged employee is paid and whether he or she has a highly defined skill set.

But the tests don’t actually amount to a checklist. Instead, courts and juries are supposed to consider the evidence as a constructive whole. The end result is that, long before the rise of app-based “peer production” services, the waters were already somewhat murky. Often, factors considered significant in some cases (wearing a uniform, setting one’s own hours, using one’s own tools or vehicles) fail to lead to similar judgments in other cases.

If divining the difference between an employee and a contractor was difficult before, these new services make it close to impossible. Both judges attested to the challenges a jury will face in weighing the claims against Uber and Lyft. In an extended introductory section to his ruling, Chhabria wrote:

At first glance, Lyft drivers don’t seem much like employees. We generally understand an employee to be someone who works under the direction of a supervisor, for an extended or indefinite period of time, with fairly regular hours, receiving most or all his income from that one employer (or perhaps two employers). Lyft drivers can work as little or as much as they want, and can schedule their driving around their other activities. A person might treat driving for Lyft as a side activity, to be fit into his schedule when time permits and when he needs a little extra income.

But Lyft drivers don’t seem much like independent contractors either. We generally understand an independent contractor to be someone with a special skill (and with the bargaining power to negotiate a rate for the use of that skill), who serves multiple clients, performing discrete tasks for limited periods, while exercising great discretion over the way the work is actually done. Traditionally, an independent contractor is someone a principal might have found in the Yellow Pages to perform a task that the principal or the principal’s own employees were unable to perform—often something tangential to the day-to-day operations of the principal’s business… Lyft drivers use no special skill when they give rides. Their work is central, not tangential, to Lyft’s business. Lyft might not control when the drivers work, but it has a great deal of power over how they actually do their work, including the power to fire them if they don’t meet Lyft’s specifications about how to give rides. And some Lyft drivers no doubt treat their work as a full-time job—their livelihood may depend solely or primarily on weekly payments from Lyft, even while they lack any power to negotiate their rate of pay. Indeed, this type of Lyft driver—the driver who gives “Lyfts” 50 hours a week and relies on the income to feed his family—looks very much like the kind of worker the California Legislature has always intended to protect as an “employee.”

On the whole, Chen’s ruling is perhaps somewhat less receptive to Uber’s arguments than even Chhabria’s was to Lyft’s. (Chen denied Uber’s request for summary judgment, while in the Lyft case, it was the plaintiffs who sought summary judgment.) In their pleadings, Uber went to great lengths to separate the conditions under which their drivers operate from the facts in last year’s Alexander v. FedEx Ground Package Systems Inc., in which the Ninth Circuit ultimately concluded that FedEx drivers could not be considered independent contractors. In the Alexander case, Uber noted, drivers were subject to quarterly “ride-alongs” with FedEx management, who scrutinize how they conduct their work. By contrast, the company said, Uber drivers are never subject to similar inspections.

But Chen pointed to Uber’s user rating system as arguably giving the company an even MORE extensive means of monitoring, going so far as to cite French philosopher Michel Foucault’s Discipline and Punish: The Birth of the Prison and its assertion that “a state of conscious and permanent visibility assures the automatic functioning of power.”

Nonetheless, Chen concluded that the traditional tests courts use to judge employment status aren’t terribly helpful when applied to Uber’s business model, or to the sharing economy in general.

Arguably, many of the factors in that test appear outmoded in this context. Other factors, which might arguably be reflective of the current economic realities (such as the proportion of revenues generated and shared by the respective parties, their relative bargaining power, and the range of alternatives available to each), are not expressly encompassed by the Borello test. It may be that the legislature or appellate courts may eventually refine or revise that test in the context of the new economy. It is conceivable that the legislature would enact rules particular to the new so-called “sharing economy.”

Or, as Chhabria put it in his conclusion, the jury in this case “will be handed a square peg and asked to choose between two round holes.”

The test the California courts have developed over the 20th Century for classifying workers isn’t very helpful in addressing this 21st Century problem. Some factors point in one direction, some point in the other, and some are ambiguous. Perhaps Lyft drivers who work more than a certain number of hours should be employees while the others should be independent contractors. Or perhaps Lyft drivers should be considered a new category of worker altogether, requiring a different set of protections. But absent legislative intervention, California’s outmoded test for classifying workers will apply in cases like this.

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

Letter to U.S. Senate: Oppose the Marketplace Fairness Act

March 12, 2015, 1:17 PM

Dear Senator,

On behalf of the millions of citizens represented by the undersigned organizations, we write in strong opposition to the so-called “Marketplace Fairness Act” (MFA). Despite what some supporters claim, this legislation is bad news for conservative principles and the cause of limited government. It would dismantle proper limits on state tax-collection authority while causing serious damage to electronic and interstate commerce.

MFA would countenance an enormous expansion in state tax-collection authority by wiping away the “physical presence standard,” a baseline protection that shields taxpayers from harassment by out-of-state collectors. Current law dictates that a state can only require a business to collect its sales tax if it is physically present within its boundaries. Far from a “loophole” intended to advantage the Internet, it is the result of a Supreme Court decision grounded in a bedrock foundational principle of tax policy: states must not be allowed to extend their taxation and regulatory authorities beyond their borders. Dismantling this protection for remote retail sales would create a very slippery slope for states to attempt collection of business or even income taxes from out-of-state entities.

Furthermore, the bill would create a decidedly “unlevel” playing field between brick-and-mortar and online sales. Brick-and-mortar sales across the country are governed by a simple rule that allows the business to collect sales tax based on its physical location, not that of the item’s buyer. Under the “Marketplace Fairness Act,” that convenient collection standard would be denied for online sales, forcing remote retailers to quiz their customers about their place of residence, look up the appropriate rules and regulations in thousands of taxing jurisdictions across the country and then collect and remit sales tax for that distant authority.

Imposing this unworkable collection standard on remote retail sales but not on brick-and-mortar retail sales would not only be unfair, it would result in enormous complexity, while damaging interstate commerce. Online sellers would be weighed down by substantial compliance burdens associated with the existence of 9,998 separate taxing jurisdictions, each with its own unique definitions, holidays and rates. The bill’s paltry “small seller exception” of just $1 million (when the Small Business Administration sets the limit as high as $30 million in some cases) in remote sales does little to mitigate the damage.

In seeking to address the failures of the “use tax” systems employed by states, the “Marketplace Fairness Act” ends up giving a federal blessing to a massive expansion in state tax-collection authority, the dismantling of a vital taxpayer protection upon which virtually all tax systems are based, while harming a segment (online sales) that despite its dramatic expansion still accounts for less than $0.07 of every $1 in retail spending.

Conservatives in Congress should oppose this unwise legislation and instead pursue thoughtful alternatives that preserve geographical limits to tax authority and encourage tax competition.


Andrew Moylan
R Street Institute

Phil Kerpen
American Commitment

Grover Norquist
Americans for Tax Reform

John Tate
Campaign for Liberty

Andrew F. Quinlan
Center for Freedom and Prosperity

Jeff Mazzella
Center for Individual Freedom

Wayne Crews
Competitive Enterprise Institute

Thomas A. Schatz
Council for Citizens Against Government Waste

Katie McAuliffe
Digital Liberty

Matt Kibbe

Evan Feinberg
Generation Opportunity

Joe Bast
The Heartland Institute

Mike Needham
Heritage Action for America

Bartlett Cleland
Institute for Policy Innovation

Seton Motley
Less Government

Pete Sepp
National Taxpayers Union

Paul Gessing
Rio Grande Foundation

David Williams
Taxpayers Protection Alliance

The Marketplace Fairness Act is back

March 12, 2015, 12:39 PM

From Somewhat Reasonable:

Each version of the bill has also attracted a wide array of critics, who argued in a letter to Congress that the Act would override important tax precedents and harm consumers. The letter was co-signed by several conservative, free market and libertarian groups, including The Heartland Institute, R Street Institute, Americans for Tax Reform, Americans for Prosperity and FreedomWorks. In the letter, the group argued the Marketplace Fairness Act would “dismantle proper limits on state tax collection authority while causing serious damage to electronic and interstate commerce.”

…Critics argue the bill has not improved over time. “This was a bad bill in the last Congress and it’s still a bad bill now,” said Andrew Moylan, R Street executive director in a statement. “By wiping away geographic limits to state tax authority, the legislation would impose serious burdens on Internet retail and undermine basic tax policy principles.”

AP sues State for Hillary’s emails

March 12, 2015, 10:21 AM

The State Department may have initiated the request for Hillary’s emails, but it seems they weren’t overly specific in terms of what they were looking for. Their oversight may end up testing the boundaries of the Freedom of Information Act.

The Associated Press filed a lawsuit today in an attempt to force the State Department to release certain key emails authored or in the possession of one Hillary Rodham Clinton. Apparently, the AP has been filing FOIA request after FOIA request for years, seeking a response, and the State Department has been reticent to address them. One such FOIA request has been languishing for five years. And so, in light of Secretary Clinton’s statements on the subject (including that 30,000 of her emails are now lost to the “brown file”), they’re taking their request to the courts.

The lawsuit, filed in the U.S. District Court for the District of Columbia, comes a day after Clinton broke her silence about her use of a private email account while secretary of state. The FOIA requests and lawsuit seek materials related to her public and private calendars, correspondence involving longtime aides likely to play key roles in her expected campaign for president, and Clinton-related emails about the Osama bin Laden raid and National Security Agency surveillance practices.

“After careful deliberation and exhausting our other options, The Associated Press is taking the necessary legal steps to gain access to these important documents, which will shed light on actions by the State Department and former Secretary Clinton, a presumptive 2016 presidential candidate, during some of the most significant issues of our time,” said Karen Kaiser, AP’s general counsel.

“The press is a proxy for the people, and AP will continue its pursuit of vital information that’s in the public interest through this action and future open records requests,” she said.

The State Department “declined to comment” according to the Associated Press, except to say that they get a lot of FOIA requests and, like any government agency, it takes them an extended amount of time to respond to basically anything.

If you’re wondering, yes, it is possible to get those 30,000 deleted emails back, especially given that the Clintons seem to know so little about servers. Much of what’s “deleted” remains, unless completely scrubbed. ClintonEmails.com’s archives may not be as easy to dispose of as, say, the mythological FBI files that allegedly appeared in the White House residence that time in the mid-1990s.

Groups urge Judiciary to support Innovation Act

March 12, 2015, 10:17 AM

From Politico:

Twelve free-market groups will send a letter today to the House Judiciary Committee in support of Chairman Bob Goodlatte’s Innovation Act. The groups, including R Street Institute, Americans for Tax Reform and the Hispanic Leadership Fund, support patent litigation reforms, calling the current environment an “Achilles heel that invites abuse and exploitation from a multitude of bad actors.”

Property insurance: Lot of hot air, not much in solutions

March 12, 2015, 10:14 AM

From the Beaufort Observer:

But we took note when we got a press release from the R Street Institute. Here’s what they had to say about these new bills…

…Click here to go to the original source.

Now, don’t you feel much better?

No, we don’t either. We don’t have the answer, but we don’t think the Really Smart People do either.