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A plea to Congress not to ‘fix’ a music market that isn’t broken

June 21, 2016, 7:38 AM

Dear Congress,

By now, maybe you’ve read the “Dear Congress” letter that many music companies and individual artists have signed asking you to “fix” the Digital Millennium Copyright Act—a law Congress negotiated in 1998 in response to widespread fears that the Internet was going to kill the music industry because of digital redistribution.

As a lawyer who has been working on internet and copyright law for more than 25 years, I’m always a little surprised by these letters, not least because I have bought so much digital music from these companies and these artists over the last couple of decades. I know many songs by Pink and Pharrell, by Elvis Costello and Chicago and Randy Newman, by Sir Elton John and Carole King, by Lionel Richie and Mark Ronson – and I know them by heart because I play them over and over again on my iPhone or my computer. Or because I hear them in restaurants and sing along and happily support the restaurants that pay their fees to the American Society of Composers (ASCAP) or Broadcast Music Inc. (BMI) or the Society of European Stage Authors and Composers (SESAC) or the individual music companies.

I love the music of Lady Gaga and Sir Paul McCartney and Gwen Stefani, and I want to see them get paid, and I happily pay money to pay them.

But one of the reasons I’m able to sing along so quickly with the music of Taylor Swift or Ronnie Spector is that I’ve been able to hear them through the great array of digital technologies and digital choices that the new tools and devices, and that companies like Apple and Google and Microsoft, have brought to me and millions of other consumers. It’s precisely because those companies, like the web and the internet itself, are protected by the balances that the Digital Millennium Copyright Act struck so well back in 1998.

I don’t believe that Lionel Richie or Aaron Neville or Sheryl Crow really believe I’ve been stealing their music when I hear it for the first time on the internet, maybe through a friend’s iPhone or another friend’s subscription to Spotify or Pandora. I believe these great artists and performers, if they could see me discovering their music for the first time on these digital platforms, would be thankful for the balances struck not so long ago in the DMCA. They would be able to tell by the expression on my face that they had found their audience, and that they had won me over as a (paying) fan forever.

This world that has enabled me to find all this new music—and I’m not the youngest music fan around, since I’m set to turn 60 this year—is a world that Congress helped create when legislators decided carefully and wisely to put a framework in place that both allows music to be heard digitally nearly everywhere and that also makes it easy for artists to require—sometimes with just a letter of request – that infringing music be removed.

I will be frank here and say that, while I am a fan of the music companies that also signed this letter (together with so many of the artists that I know and love), I am reminded that these debates never end. The minute you change copyright law even one little bit to give them more ways to extract money from computer companies and phone companies and the people who make my earbuds, they already start planning for what they want to take next year, in the next Congress and the next legislative session, in response to whatever other technologies have developed by then to give me more choices to pay for the music I love.

Dear members of Congress, all I ask is that you not just roll over this time. I think you got the Digital Millennium Copyright Act mostly right back in 1998. When I look at the successful musicians on this latest letter, my own thought is that I am so happy for their success and for the success of all the new musicians who’ve gotten started since 1998. And so my request to you, members of Congress, is to please don’t assume the music marketplace is broken. For fans like me, it’s the fulfillment of the world of music that I want to listen to and be a part of. And if this marketplace ain’t broke, please, please, please don’t yield to the latest (yet weakest) calls to try to fix it.

Sincerely,

Mike Godwin
Director of Innovation Policy
R Street Institute

 

 

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

Gov. Cuomo needs to veto terrible short-term-rental bill

June 20, 2016, 3:51 PM

Forces aligned against short-term rentals are on the cusp of victory in their battle to harm the ability of spacesharing services like Airbnb and HomeAway to conduct business in New York state, under legislation just passed by both the state Assembly and Senate.

The measure would make it illegal to advertise entire homes or apartments for rent for durations of less than 30 days. The bill would charge violators $1,000 for a first offense, and up to $7,500 for repeat offenses.

That the Legislature’s effort has little to do with protecting consumers (despite passionate claims to the contrary) is obvious to most outside observers. For those in doubt, one needn’t look further than the statement released by the Hotel Association of New York City, a group that has not only actively lobbied against spacesharing, but that uncoincidentally stands to benefit the most if services like Airbnb lose their ability to fully operate within the state. According to their representative:

Airbnb facilitates the creation of a black market for illegal and unsafe commercial rental properties…This smart and innovative legislation will allow law enforcement agencies to better target, track and penalize lawbreakers, while also protecting one of New York’s most vital economic contributors — the hotel and hospitality industry.

That the hotel industry is opposed to innovative new services that threaten to compete for hospitality business is unsurprising. But the level of vitriol underpinning the group’s official statement is telling. This is a very personal fight.

Contrary to the hotel lobby’s assertions, the average Airbnb renter is almost assuredly not a Dickensian slumlord “lawbreaker” peddling “illegal and unsafe” rentals through the “black market.” The accusations call to mind the Philadelphia cab industry’s decision to publicly compare Uber – another “sharing economy” company that has shaken up an industry and thus run afoul of established entities – to the terrorist group ISIS.

Instead, as Airbnb has argued, those using the service are most often middle-income property owners looking to supplement their salaries. Most make only modest profits. According to the data, the average unit listed through the site was rented for 42 nights per year and brought in $5,110 annually, on average.

That reality also makes more notable the fact that, despite the law’s already-hefty fines, there is already pending a bill in the New York City Council that would increase the minimum fine for breaking the law by tenfold, to $10,000. This is twice what the average renter is even making through the service, because the statute is primarily about punishing those who have the gall to challenge an entrenched special interest.

The bill’s impact would not be minor, either, but would make illegal the majority of properties listed through Airbnb in New York City. According to the New York Post: “Of the nearly 36,000 listings that were active in mid-November, roughly 55 percent — or 17,942 — were for rentals of entire homes or apartments.”

Though the hospitality lobby’s allies in the Legislature and the City Council have insisted these measures have nothing to do with the wealthy, powerful lobby vocally championing their implementation, their arguments appear to be wildly false based on currently-available data.

According to a study commissioned by Airbnb of the housing market in San Francisco – perhaps one of the only places on Earth with rental prices and housing scarcity that can rival Manhattan – the prominence of short-term rentals has had negligible impact on the region’s greater housing market. The study indicated that “a housing unit would need to be rented more than 211 nights annually on a short-term basis in order to out-compete a long-term rental.” Only 0.09 percent of the company’s San Franciso properties met those criteria. The report further found that “from 2005 to 2013 the number of vacant units in San Francisco has remained essentially unchanged,” a trend that casts doubt on warnings of housing scarcity due to short-term rentals, even in densely populated urban areas.

Despite this reality – and the fact that more consumer choice is a good thing for New Yorkers — the bill would law, barring a veto from Gov. Andrew Cuomo. That’s bad news for the hard-working New Yorkers who rent their properties in order to help to make ends meet and who may soon find themselves unwitting cannon fodder in the hospitality industry’s war to protect its own profits.

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

Austin sharing-economy rules headed to court

June 20, 2016, 11:05 AM

Recent controversies involving the sharing economy in Austin are about to enter a new phase, as lawsuits challenging city regulations of ridesharing and short-term rentals have been filed.

Over the past year, the Austin City Council has imposed burdensome new regulations on the sharing economy. Most of the media attention has focused on ridesharing. In December, the council mandated fingerprint background checks for ridesharing drivers, a move that ultimately led the two main ridesharing companies, Uber and Lyft, to suspend operations in the city.

At the same time, the city also has started to clamp down on short-term rentals, imposing a permanent moratorium on new licenses for properties not occupied by their owners and limiting the number of people who can rent or even gather in an STR property.

Regulating the sharing economy out of existence is bad policy. It may also be illegal. On Monday, the Texas Public Policy Foundation filed a legal challenge against Austin’s STR ordinance, alleging the law violates the Equal Protection and Due Course of Law provisions of the Texas Constitution. According to TPPF General Counsel Robert Henneke, “Austin’s short-term-rental ordinance goes way beyond the lawful scope of the city’s authority and purposefully infringes upon citizens’ fundamental constitutional rights.”

Austin’s new ridesharing ordinance has also come under legal attack. Last week, Austin Councilmember Donald Zimmerman filed suit, challenging the results of the recently defeated ballot measure that would’ve prevented new restrictions on ridesharing from going into effect. The challenge claims the city government wrote ballot language was confusing and did not provide enough information about the fingerprinting issue.

These lawsuits are more evidence that opposition to Austin’s anti-sharing-economy ordinances isn’t going away. Instead of wasting time and money defending itself from these suits, the city should adopt a new course and work out a regulatory system that allows the sharing economy to thrive.

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

Lavish pension hikes cause of O.C.’s exploding debt

June 20, 2016, 10:29 AM

The Orange County Grand Jury’s report on the state of the county’s pension plans painted a bleak but not unexpected snapshot of a challenging long-term fiscal situation. The Orange County Employees Retirement System touted some of the good – or, actually, less bad – news from the report, but it’s time to stop sugarcoating the problem.

Orange County’s “unfunded pension liability exploded from 2000 to 2012, going from a surplus in 2000 to a $4.5 billion liability in 2012,” according to the new report. “In January 2016 the county issued pension obligation bonds in the amount of $334 million. The numbers are huge.” Indeed they are, even though the liability fell a bit since 2012. (Those bonds, by the way, are fiscally irresponsible – similar to taking a loan to pay off credit cards.)

“Unfunded pension liabilities” are, in effect, the debt backed by taxpayers to pay all the pension promises elected officials have made to current employees and retirees. Money is set aside to pay these inordinately lucrative benefits. But the system – like most systems statewide – is still falling billions short. (The report, OCERS notes, deals only with the county and not with other public agencies that participate in the system.)

OCERS Chief Executive Officer Steve Delaney, in a statement, pointed to “a number of encouraging aspects” that mitigated some of the grand jury’s concerns. “The grand jury found that OCERS is funded at the median point for public pensions plans,” he noted. Yet it’s troubling that 70 percent funding would be considered relatively good news.

“They should only be down at 80 percent in a bear market and we’re at the end of a bull market,” said Ed Ring, president of the Tustin-based California Policy Center, which advocates pension reform. “When pension systems are 100-percent funded, their returns have to average at least 7.25 percent a year just to keep the unfunded liability from getting bigger. When the system is only 70 percent funded, they have to average 10.4 percent a year.”

If you know an investment that can guarantee more than 10 percent annually for the next 30 years, please let me know. Those are aggressive and unrealistic goals. These “return on investment” games are the result of the way these defined-benefit systems are devised. Suffice it to say, they are designed to benefit public employees, not taxpayers.

In the private sector, most employees receive defined-contribution plans, such as a 401(k). The employee contributes and the employer sometimes matches a portion of the contribution. The dollars are invested in a fund, which rises and falls based on the market. No one incurs debts or liabilities. In the public sector, employees receive a formula that guarantees a set return for life – usually 80 percent or more of their final year’s pay. If the fund’s returns don’t pan out, public liabilities go up. Taxpayers are on the hook for shortfalls.

There are many pension-spiking gimmicks that let these public employees drive up their retirement payout above what they earned during their most lucrative working years. (Note the rapid growth in the $100,000 Pension Club.) And there are disability pensions and other benefits that sweeten the pie. The sweeter it gets, the harder it is to sustain this scheme – and the more governments have to cut back in other areas.

“Are there challenges ahead for public pension systems in an era of low market returns? Absolutely,” said OCERS’ Delaney in his statement. This would be a good place to insert one of those “roll my eyes” emojis. Pension-fund officials act as if a volatile stock market is the cause of their woes. In reality, pension-fund problems mainly are caused by politicians who have been ratcheting up pay and benefit levels to please a particularly powerful constituency.

The report points to 2000 as a year when the system last had surpluses. Hint: In 2001, Orange County supervisors gave deputy sheriffs a 50 percent retroactive pension boost, thus allowing them to retire at age 50 with 90 percent of their final year’s pay. The board of supervisors in 2004 granted “miscellaneous” employees (and themselves) another massive retroactive boost.

Courts have upheld the “California Rule,” which forbids government employers from reducing pension benefits even going forward. So localities kick the can forward, occasionally trimming benefits for new hires only. There’s not much we can do about union-controlled state officials and those court decisions that limit action, but the grand jury still is right that Orange County and OCERS can be “more aggressive” in dealing with this problem.

Reforming the U.S. Postal Service (CATO Institute)

June 20, 2016, 8:47 AM
06/29/2016 - 12:00 pm - 1:00 pm
Rayburn House Office Building
B-369
Washington

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June 20, 2016, 8:47 AM
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June 20, 2016, 8:47 AM
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    June 20, 2016, 8:46 AM
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    DC


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  • As Congress weighs anti-SLAPP legislation, stories abound on chilled free speech

    June 20, 2016, 8:22 AM

    From Washington Internet Daily:

    Historically, free speech, libel and First Amendment laws have been about the institutional press, but now such laws apply to all people, said Mike Godwin, general counsel for think tank R Street Institute during the Thursday-evening event. “That’s a really important generational shift that’s really just happened in the last few decades.” Some companies and individuals use strategic lawsuits against public participation — popularly known as SLAPPs — to chill free speech and deter people from even expressing their opinion, the panelists said.

    House kills zombie earmark (again)

    June 20, 2016, 8:20 AM

    From National Taxpayers Union:

    NTU was pleased this year’s vote of 268-153 garnered broad bipartisan support, growing by 16 new backers. In addition to NTU, this amendment was supported by the Taxpayers for Common Sense who bestowed their “Golden Fleece” award to the “Coal to Kaiserslautern” program in 2015, as well as Campaign for Liberty, Center for Freedom and Prosperity, Coalition to Reduce Spending, Council for Citizens Against Government Waste, Heritage Action for America, Less Government, Niskanen Center, R Street Institute, and the Taxpayers Protection Alliance. A coalition letter is available here.

    Testimony before the Texas House Committee on Economic and Small Business Development

    June 20, 2016, 7:00 AM

    Good morning. My name is Josiah Neeley and I am the Texas director for the R Street Institute, which is a nonpartisan research organization. The R Street Institute has done extensive research on the sharing economy, also known as the peer-production economy. We put out a yearly Ridescore report that ranks the 50 largest cities in terms of vehicle-for-hire regulation and a yearly Roomscore report that assesses regulation of short-term rentals in large cities and popular tourist destinations.

    Most of the discussion of the sharing economy has focused on two particular industries: ridesharing and short-term rentals. But it is important to note that both the potential and the reality of the sharing economy extends far beyond these areas. The largest sharing-economy company, for example, is not Uber or Airbnb, but eBay. Successful sharing-economy companies range from Etsy, which has created a massive international market for crafts, to TaskRabbit, which provides a market for simple home repairs, moving help and errands, to EatWith, which allows people to open their homes as “restaurants” for an occasional meal.

    What all these companies have in common is that they use new technologies to connect buyers and sellers, while vastly reducing the overhead and transaction costs that traditionally have required these services to be done through middlemen. According to the U.S. Department of Commerce, sharing-economy companies typically exhibit the following characteristics:

    • They use information technology, such as web-based platforms or mobile “apps,” to facilitate peer-to-peer transactions.
    • They rely on user-based rating systems for quality control.
    • They offer worker flexibility in terms of deciding working hours.
    • To the extent that tools or assets are necessary to provide a service, workers own these assets.

    Unsurprisingly, the size of the sharing economy is substantial, and has enormous potential for growth. This is particularly true when one considers that most Americans have yet to engage in the sharing economy personally. A recent survey by PWC found that 18 percent of Americans have used one of the major sharing economy services as consumers, while 7 percent of the U.S. population has provided services via the sharing economy. Based on the these soon-to-be tapped markets, global revenues of the major sharing-economy sectors are expected to increase from roughly $15 billion in 2014 to around $335 billion by 2025.

    The expansion of new alternatives for consumers is a boon to the economy. The added competition from the sharing economy will, of course, put pressure on some existing companies to adapt if they want to continue to be successful. Revenues for taxicab companies, for example, have fallen considerably after the introduction of ridesharing services in some localities.

    It is important to note that sharing economy companies often appeal to different market segments than traditional services. For example, a recent study from Boston University found the introduction of Airbnb into the Austin market was associated with an 8-10 percent decrease in hotel revenue. This decrease, however, was “non-uniformly distributed, with lower-priced hotels and those hotels not catering to business travelers being the most affected.” In other words, short-term rentals may appeal to families on vacation, while hotels remain a better fit for most business travelers.

    Given the potential benefits of the sharing economy for Texas, the state should not seek to limit the entry of new business models by passing restrictive regulation, and should seek to eliminate existing regulations that have the same effect. The state should also be prepared to step in when localities try to block new entry into a marketplace in favor of incumbent companies.

    I would be happy to answer any questions.

    My Father’s Day drinks wish list

    June 17, 2016, 3:53 PM

    Man does not live by bread alone. And a father, well, he needs even more, what with the middle-of-the-night wake-ups, the tantrums and the exploded filthy diapers. I have four children. Under the age of 10. Just this evening, my 4-year-old got out of bed seven or eight times with assorted excuses, including “My eye hurts.”

    Yes, my needs are many.

    Come Father’s Day, my hope is that I can slip out at the sunrise and head to the river. There, I’ll rent a rowboat and make my way onto the water, still turbid from today’s rain. Cormorants and other birds will lead me to a promising spot. I’ll pitch my anchor, bait treble hook rigs and let the heavy line from two rods sink in the Potomac. With any luck, the catfish will hit and I’ll return to dock midday feeling like a master caster.

    That’s how I want to start my day.

    And I will conclude Dad Day sitting outside with a glass in hand. A special day justifies a special drink, one I know and love. The possibilities are many but any of these would do quite nicely:

    Four Roses Small Batch Bourbon: I really like this whiskey. It comes in a bulbous, perfume-like bottle that shows its deep amber color. Sometimes I can handle this 90-proof drink straight up, but usually, I prefer it with a single ice cube, which softens it so I can better enjoy its rich flavors. It is worth every penny of the $30 to $35 a bottle my local retailer charges.

    Knob Creek Bourbon: One of my happier memories is visiting the Beam distillery on a lovely September morning some years ago. I watched as the bung was popped from a barrel and uncut Knob glugged into a trough. I scooped up a little in a paper cup and sipped it. Knob’s renowned fat maple note was present but delivered by 120+ proof spirit. It was really something, and each time I taste Knob Creek I recall that experience.

    Hibiki 12-Year Old Whisky: The Japanese began making Scotch-like whiskey in the first half of the 20th century. They do it very well. A friend gave me a bottle of Hibiki 12 to repay me for a small kindness. What a reward. This whiskey is terrific — it is loaded with subtle floral and fruit notes. It feels like honey in the mouth, and I only take it neat.

    Laphroaig 10-Year Old Single Malt Scotch: They can bury me with a bottle of this stuff. I love it. Pour three fingers in a glass, and buckle up — this 86-proof whiskey is not for the faint of palate.  Laphroaig reeks of smoke, iodine and seaweed, which seems fitting, seeing as the distillery is right next to the Irish Sea.

    El Buho Mezcal: Tequila long has garnered the limelight, but another Mexican spirit finally is getting its due. Mezcal is a remarkable spirit, which is nearly as varied in flavors as single malt Scotch whiskies. El Buho is a steal for $35. The flavor is really a trip; it begins sweet then shifts to smoky and a touch salty. You don’t need ice or water, because this liquor is incredibly smooth.

    Any one of these distilled spirits would put a bow on my Father’s Day. Unfortunately, I so enjoy these spirits that none of them presently reside in my liquor cabinet. The District of Columbia permits Sunday sales of liquor. (Hint, hint, my dear family.)

    California lawmakers mobilize to weaken transparency initiative

    June 17, 2016, 3:11 PM

    From Reason:

    Almost everyone has some idea for fixing whatever is wrong in Sacramento, ranging from new campaign spending limits to a requirement that legislators wear NASCAR-style sponsor logos. Such reforms, however interesting they might sound in theory, never change anything.

    The American Civil Liberties Union rightly rejects the No Fly List for gun control

    June 17, 2016, 2:18 PM

    Even the American Civil Liberties Union (ACLU) thinks there’s a problem using the No Fly List to prohibit gun purchases.

    According to ACLU National Security Project Director Hina Shamsi, “The standards for inclusion on the No Fly List are unconstitutionally vague, and innocent people are blacklisted without a fair process to correct government error.”

    If there is a time to adhere to our principles of constitutional due process, it’s when we’re reacting to horrific attacks. As emotions run high, procedural protections help us keep our wits—and our liberties.

    Forget about the gun issue for a minute.

    Should we allow association, religious belief or some other combination of noncriminal factors to sever a constitutionally protected right? Under Attorney General Eric Holder, the government argued that the No Fly List requires “predictive judgments about individuals who may pose threats to civil aviation and national security.”

    “Predictive judgments.”

    That means the government takes actions based on its determination that someone might commit a crime in the future. Even if that’s a highly educated and informed guess, we’re still talking projections rather than realities. And because it’s related to national security, individuals finding themselves on the No Fly List have a tough time responding to or even understanding the circumstances that landed them there in the first place.

    “If you’re too dangerous to get on a plane, you are too dangerous to buy a gun in America,” said presumptive Democratic nominee Hillary Clinton.

    If it’s as simple as a catchy political slogan, why stop there?

    We know that ISIS and other terrorist groups use social media and the internet to recruit and radicalize. If they’re too dangerous to fly, then they are probably too dangerous to espouse their radical religious views on Facebook or YouTube. Right?

    You know what else all these mass shooters and terrorists seem to have in common? Cell phones. Those phones clearly pose a threat because they improve the communications capabilities of aspiring terrorists. If they’re too dangerous to fly, they are likely too dangerous to purchase a phone.

    And what about gatherings of people whose names are on the No Fly List? It stands to reason that such meetings pose a risk to national security. If they’re too dangerous to fly, then they’re probably too dangerous to associate freely.

    We can keep playing this game with the Postal Service, vehicle purchases, and even acquiring certain types of fertilizer.

    There is one place where we already restrict travel, association, phone use, commerce and mailings in the United States: Prison. Even there, due process requirements have been met through the legal process.

    We shouldn’t revoke ANY constitutional right based on “predictive judgments” of the government—that includes the Second Amendment. What’s at stake here isn’t just national security; it’s the bedrock of our liberty.

    If we’re going to treat American citizens like criminals before they’re even charged with a crime, we’ve stepped into dangerous territory. We’ll continue to debate gun issues, but we must not throw out constitutional safeguards in the name of election year political expediency.

    Six energy-policy reforms conservatives should embrace

    June 17, 2016, 12:50 PM

    The U.S. House demonstrated last week that the politics of climate solutions remain intractable. With bipartisan support, lawmakers overwhelmingly passed a resolution describing a carbon tax as, “not in the best interest of the United States.”

    While R Street considers the vote to be an unwise obstacle to future debate on how best to repeal damaging Environmental Protection Agency regulations, it’s clear the appetite for legislative activity explicitly to rein in carbon emissions isn’t yet here.

    Supporters of a carbon tax tout the incentive for innovation such a tax would provide. But even without an explicit price on carbon, there’s plenty for Congress to do. Our cumbersome, piecemeal energy policies hold back competition, creativity and progress. While many Republicans are understandably skeptical of plans to layer a carbon tax on top of this quagmire, cleaning out the muck and modernizing our energy sector will ensure the market is better equipped to deal with a carbon-constrained future.

    American energy policy largely was devised when the United States feared energy scarcity and mainstream renewable alternatives were too risky and expensive to attract investment. These policies are now hopelessly outdated. American ingenuity in oil-and-gas development has caused a worldwide oil glut and wind-and-solar executives now say they can do without government subsidies. There are a few obvious places to start to clean up energy policy, and none of them have to do with carbon.

    Here are six items the House and Senate can take up to make energy markets healthier, expand consumer choice and get government out of the way of our innovative energy sector.

    • End tax extenders once and for all. The threat of renewable tax extenders has again reared its head. Energy tax extenders include provisions for biodiesel, residential energy equipment, electric vehicles and a dozen other special interests, which amount to $7.4 billion in lost revenue this year alone. Cutting these is a great start, but Congress can go further and strip out energy incentives across the board that have found a permanent home in the tax code. Sure, we can quibble about which tax provisions are special breaks for energy, but Congress can and should put a stop to wasteful, unnecessary, market-distorting spending across the energy sector.
    • Curb the Department of Energy’s efficiency standards. The DOE establishes minimum efficiency standards for more than 50 categories of appliances that Americans use in their households and businesses. Operating under statutory authority granted when the United States was plagued by concerns about energy scarcity, the DOE uses these standards to ensure that appliances don’t use more power than needed. But the standards also limit consumer choices and restrict the availability of appliances that are inexpensive and reliable. Labeling programs, like the EPA’s Energy Star, enable consumers to make informed choices without taking preferred products off the shelves. It will take Congress to stop the continuous flood of new standards.
    • Repeal the Renewable Fuel Standard. Initially conceived as a policy to replace imported oil with domestically produced ethanol from agricultural products, the RFS is now a prime example of unintended consequences. The fuel-blend requirements cannot be achieved without sacrificing the safety of older engines; diverting agricultural products to the fuel supply has increased food prices; ethanol is more expensive and less energy dense than gasoline; and elevated prices for corn are converting more and more prairies and wetlands to agricultural products, sacrificing conservation goals. The House and Senate have conducted seven hearings on the RFS since 2014, but have not yet taken action to reform substantially or eliminate completely this wasteful program.
    • Extend Master Limited Partnerships. The MLP structure is unique, in that it allows pass-through partnerships to be traded publicly. They’ve enabled oil-and-gas companies that engage in exploration, development, mining, production, processing, refining, transportation or marketing to attract capital and drive investment. But a lot of other energy sources have income streams akin to oil and gas. Hydro, wind and solar, among others, are all intuitively similar to pipelines (the most common type of energy MLP) in that they are capital-intensive but passively involved in generating business income. It’ll take an act of Congress to allow the IRS to extend this tax structure beyond the exclusive list of what qualifies today.
    • Cut environmentally harmful spending. Green Scissors – a coalition of Friends of the Earth, Taxpayers for Common Sense and R Street – has identified tens of billions of dollars in annual wasteful spending across public lands, energy, transportation, insurance and agriculture. The coalition’s report offers an itemized list of provisions that should be repealed to clean up the environment and shrink the size and reach of government.
    • Streamline siting and permitting for critical infrastructure. Regulatory requirements designed to protect Americans and the environment have grown so burdensome that they restrict our ability to make necessary investments in energy infrastructure. Congress has advanced several necessary provisions to improve these requirements, especially in streamlining the permitting -approval process for modern hydroelectric facilities and siting needed pipeline infrastructure for clean-burning natural gas. The slow approval process for energy facilities tethers the U.S. economy to old and dated technology and infrastructure; it’ll take Congress to move us into the future.

    The House and Senate are about to go to conference on a sweeping energy package for the first time since 2007. The appetite for energy legislation is greater than it’s been in a decade. If that momentum can’t be focused to limit the EPA’s damaging regulatory overreach in carbon, it should push for commonsense steps that will encourage the market to solve our biggest energy challenges.

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

    Pennsylvania’s drinks reform changes too little

    June 17, 2016, 11:29 AM

    From American Spectator:

    The Keystone State’s Legislature could have gone big. Instead, it settled for a bill that is about as potent as near beer. Only the politicians are likely to be satisfied…

    Want to add a teen driver to your auto policy? It’s going to cost you

    June 17, 2016, 8:32 AM

    From the Pasadena Star-News:

    Eli Lehrer, president of the nonprofit R Street Institute, agreed.

    “Driving well takes practice, and since all teens are new drivers they make all sorts of mistakes that more seasoned drivers can avoid,” Lehrer said in a statement. “Because of this, they make many more claims, which makes them more expensive to insure.”

    Will we ever really get flying cars?

    June 17, 2016, 8:01 AM

    If you listen to some entrepreneurs and investors, the flying car – a longstanding staple of science fiction – is right around the corner. Working prototypes exist. At least two companies already take orders for the vehicles, with deliveries promised next year.

    The last decade has seen the introduction of practical consumer videoconferencing, voice recognition, drones, self-driving cars and many other items that once were found only in science fiction stories. It therefore might seem plausible that practical flying cars are around the corner. They aren’t. Indeed, massive safety, infrastructure and technology problems make them a near impossibility.

    The first concern is safety. While flying a commercial airline is always safer than driving oneself the same distance, it’s an entirely different story if one looks at per-trip fatality rates. The Department of Transportation estimates that Americans take about 350 billion car trips per-year and experience about 30,000 fatal accidents; roughly one fatal accident per 11 million trips. By contrast, there are roughly 35 million scheduled air flights around the world each year. Over the past decade, the number of commercial aviation incidents that have proved fatal has averaged 17 annually. This means about one of every 2 million commercial air flights ends in death.

    We see these fatalities every year, despite pilots’ years of intense training, planes’ extensive safety equipment requirements, regular maintenance checks and airlines’ need to maintain sterling reputations for safety. All of these provide far more safeguards than anything that applies to cars on the road.

    It’s true that there are some factors that might make flying cars safer than commercial jetliners. They would travel at lower speeds and lower altitudes, for instance. But there’s no practical way to subject them to the same safety and training standards imposed on commercial airplanes if they are to become anything like a consumer product. Indeed, the per-trip fatality rates for private planes already is very likely higher than commercial airliners, but there are no worldwide statistics available. Safety advocates would make a plausible case for banning flying cars on these grounds alone.

    Even if one thinks these risks are acceptable—and they probably are, given the potential advantages of flying cars—that doesn’t solve the even greater infrastructure or technological problems. The current working models of flying cars need runways to take off and land. Bringing them into regular use would require runways just about everywhere, without obviating the need for parking lots. The world’s busiest airport, Atlanta’s Hartsfield-Jackson, accommodates slightly less than 2,500 aircraft movements each day on its five runways and 4,700 acres. Any sizable office building would need its own version of Hartsfield-Jackson if people were to commute to work via their flying cars. The space to build facilities this size for flying cars simply doesn’t exist anywhere near any city of any size.

    New technologies could theoretically obviate the need for runways. One Japanese team has shown off a modified lightweight drone supposedly capable of vertical takeoff and landing like a helicopter. But making these vehicles practical would require breakthroughs that appear to be decades away. Existing helicopters and military “jump jets” still require a significant amount of space to land, are even noisier than commercial jets and drink huge amounts of fuel. As such, they’re not really used for travel. Commercially produced helicopters have existed since the 1940s and aren’t currently used for scheduled commercial service anywhere in the United States. Technological breakthroughs could eventually solve these problems, but it’s unlikely that a few years of flying-car development will overcome problems that have bedeviled helicopter designers for more than seven decades.

    While the promised 2017 deliveries of working flying cars seem unlikely, it’s far from impossible that a commercially produced civilian airplane with the kinds of retractable wings and safety equipment that would allow it to be driven on highways might make it to market within the next decade. But widely available flying cars, more likely than not, will remain clearly in the realm of science fiction.

    Worry about bad marijuana—not Big Marijuana

    June 16, 2016, 7:13 PM

    From Brookings Institution:

    The three-tier system aimed to deter the vertical integration of the tied-house days, but now is controversial with critics who argue that the distribution tier is oligopolistic. “The second tier is the choke point,” Kevin Kosar, a senior fellow at the R Street Institute and author of Whiskey: A Global History, told us. “If you want to keep the small players in the market, then the small producers should be allowed to sell direct to retail outlets. That’s the absolute key.”

    Secrecy lobby runs amok at State Capitol

    June 16, 2016, 6:35 PM

    Last week, I reported on an ominous development in the California Capitol — an effort to criminalize a political point of view. Democratic leaders authored a bill that would have made it illegal for corporations and think tanks to “mislead” the public on climate change. To the officials who would police it, skepticism of climate change — or, perhaps, even disagreement with state policies to combat it — could lead a prosecutor or the attorney general to file an “unfair competition” lawsuit and potentially bankrupt groups that dissent.

    The California Climate Science Truth and Accountability Act was shelved, but offered insight into the totalitarian mindset that’s taking hold among leaders of the nation’s most-populous state. That measure, S.B. 1161, cannot be written off as an aberration. Consider A.B. 2880, another bill that would let the state government sue political activists, ordinary citizens, and the media for publicizing information officials would rather keep under wraps. This bill has widespread support from Democrats andRepublicans.

    As with the climate-truth measure, A.B. 2880 does not challenge the First Amendment or the state’s Public Records Act directly. Legislators instead use other excuses to clamp down on speech. The Climate Thought Crimes bill cited “unfair” business competition. This latest bill uses federal copyright laws to do thin-skinned officials’ dirty work. After heated opposition from tech companies and open-government groups, the bill’s author late Wednesday reportedly offered some amendments that might fix the bill, but the fact that it got this far says much about the thinking in the Legislature.

    Basically, the bill would allow government officials to claim ownership of the work they produce, and therefore restrict public access by exerting a copyright. It’s absurd, given public employees are supposed to work for the public; all the work they produce has been paid for by taxpayers for an ostensibly public purpose. This bill is yet another reminder that legislators and bureaucrats view themselves not as our servants, but as our masters.

    The legislation “means state bureaucrats will be able to wrap their reports, research, emails and even videos of public meetings in onerous legal restrictions, backed by federal lawsuits and six-figure penalties,” according to the Electronic Frontier Foundation. The bill was amended to strip local governments from the right to impose copyrights, but a 2015 Inglewood case remains illustrative of what we’re dealing with here.

    A resident posted publicly available videos of City Council meetings on YouTube, with his own commentary imposed over the images. The city said he was violating their copyright and claimed in a lawsuit that it caused “irreparable harm and damages.”

    A federal judge rejected the lawsuit and required the city to pay $117,741 in legal fees. “First, the court determines that the city is barred as a matter of law from bringing a copyright claim based on the City Council videos,” the judge ruled. “Second, even if the city could assert a copyright claim, the accused Teixeira Videos constitute fair use as a matter of law.”

    But consider what happens if the government does get the right to bring copyright claims. Even if “fair use” trumps such claims, the chilling effect could be brutal. Not many people can risk spending their life’s savings litigating these matters through the federal courts.

    The bill now excludes local governments, but consider the mischief California’s state government can do. One need only recount some of its recent scandals to remind us of the incentive state bureaucrats have to quash access to information.

    Consider the rebuilt eastern span of the Bay Bridge, which connects Oakland to San Francisco. The scandal-plagued project was completed last year, 10 years late and 2,500 percent over budget. A state Senate report alleged that “[o]fficials frequently told contractors and employees not to put concerns about quality into writing — ostensibly to avoid disclosure under the state Public Records Act,” according to the Sacramento Bee. In 2012, the state Department of Parks and Recreation was discovered to have amassed $54 million in a hidden fund. Scandal is a routine fact of life here.

    So why does the Legislature want to give these agencies yet another tool to withhold information from the media and the general public — and to punish critics with chilling taxpayer-funded lawsuits?

    Supporters of A.B. 2880 say it will help agencies manage intellectual property. They point to an admittedly outrageous situation that helped spark the effort. A company that had run hotels and other services at Yosemite National Park has claimed rights to the park’s iconic names (Ahwahnee and Wawona hotels, Badger Pass Ski Area, etc.). But a narrow effort to protect a few legitimate trademarks has morphed into a broad attack on the public domain.

    The bill claims to protect access to the documents through the California Public Records Act, but it gives the government the ability to control what people do with many of those records. The Legislature expressed concern that “unscrupulous parties” will misuse public records, but doesn’t consider the more likely scenario: unscrupulous officials will exert a copyright privilege to quash the public’s right to know. The bill calls for most records to be released into the public domain, but it will still force bloggers and activists to self-censor.

    “On one hand, the Public Records Act is designed to provide wide access to information and the purpose behind copyright is to prevent access and control information,” said Jim Ewert, general counsel of the California Newspaper Publishers Association. “They are on a collision course. It is impossible to find a way for them to coexist. If there’s anything embarrassing or even criminal, (government agencies) can use their copyright power to prevent the use of any information that they’ve lawfully obtained. That is undemocratic.”

    State officials and open government certainly are on a collision course. It’s hard to believe these myriad attacks always are mere anomalies or the result of misguided good intentions. We see an endless stream of secrecy measures and few legislative efforts to protect a public-records system that already grants the government enormous loopholes.

    As I write, the Legislature is trying to weaken a citizen initiative that would merely require all bills to be in print for 72 hours before a final vote — something that imperils the secretive way that legislators routinely gut, amend, and pass major bills without public vetting. And then there’s the same-old, same-old regarding government workers. Modest bills that would improve accountability and oversight are dying. Meanwhile, a noxious one, A.B. 2533, is moving forward; it would let police unions delay or even stifle the release of body-camera footage.

    “The people, in delegating authority, do not give their public servants the right to decide what is good for the people to know and what is not good for them to know.” Those are the oft-repeated words to the preamble to California’s open-meetings law. Anyone who still believes in such ideals is naïve. You’ll say what’s allowed and see what officials let you see, or you’ll be defending yourself in court. Expect things only to get worse.