The notion that the most powerful players on the Web – Facebook, Google, Twitter, etc. – favor the left and actively discriminate against conservatives is all in our heads, right? We’re all just paranoid. Well …
The “Don’t Be Evil” company today used its Google Doodle space to celebrate the birthday of the late Yuri Kochiyama, a Marxist radical who admired Mao; supported the black separatist movement; demanded the release of four Puerto Rican nationalists who opened fire in the House of Representatives in a terror attack; worked on behalf of cop killers Mumia Abu-Jamal and Assata Shakur; supported the Shining Path terrorist organization in Peru; and said in 2003: “I consider Osama bin Laden as one of the people that I admire. To me, he is in the category of Malcolm X, Che Guevara, Patrice Lumumba, Fidel Castro, all leaders that I admire.”
If Milton Friedman, Billy Graham, Ayn Rand, or Ronald Reagan got a Google Doodles for their birthdays, I must have missed it. But a Marxist radical who advocated violent revolution? Google takes “great pleasure” in honoring her.
Shirley Spellerberg of the conservative blog Texas Republican Vote issued a blog post on May 6th titled, “Strike Two for Gov. Abbott.” Spellerberg criticized Texas Gov. Greg Abbott (R) for supporting an Article V convention proposal backed by the Convention of States Project. Abbott announced his support for an Article V convention in January during an event sponsored by the Texas Public Policy Foundation.
The article brought up numerous false charges against the Article V movement. Some of the charges cite talking points from left-wing organizations funded by billionaire George Soros, such as Common Cause. According to Spellerberg, “An Article V Convention would open up our Constitution to the elimination of our protections under the Bill of Rights—the First Amendment: freedom of worship and speech, the Second Amendment: our right to keep and bear arms, which is already under attack, and to the elimination of the Electoral College.”
Heartland Senior Fellow Rob Natelson has said that an Article V convention is only limited to the subject matter listed in applications submitted by the states to the Congress and in the official convention call. This fundamental limitation makes it impossible for other rights, such as freedom of speech, to be at risk during a convention.
Spellerberg falsely asserts a convention cannot be limited, but it is well known states can limit the conduct of their delegates by enacting delegate limitation and selection laws. The law gives the state the ultimate authority to automatically terminate the credentials of a delegate who votes for an unauthorized amendment or motion. The Assembly of State Legislatures (ASL) , is set to meet in Philadelphia in June to ratify the rules for a convention. A ratified set of rules from the ASL ensures the convention will be truly limited in its operation and scope.
Another incorrect point that Spellerberg raised in her article is she tried to suggest many conservative organizations working to implement an Article V convention are working alongside leftist organizations. This is not the case. WolfPAC, a progressive organization, is pushing for an Article V convention to reform campaign finance laws for the national government. They are not working directly with conservative groups such as the Balanced Budget Amendment Task Force, Compact for America, and the Convention of States Project. They are all pursuing their own efforts for a convention.
Spellerberg even goes so far as to cite the Wisconsin-based John Birch Society (JBS) in her attempts to prove that the left and right are working together on an Article V convention, but the arguments presented by JBS have long been disproven.
Spellerberg was a former member of the Republican Party of Texas’ platform committee. The last time she served on the committee was during the 2010 gubernatorial election—when she urged Texas Republicans to remove a 2014 resolution affirming support for the Convention of States project.
You would think Spellerberg, with all of her time spent dealing with the Article V movement, would present a more balanced and accurate description of what’s going on. Unfortunately, that has not been the case. Spellerberg’s misleading statements and incorrect assertions should be avoided and refuted by all those who value the truth, regardless of where they stand on the Article V convention proposals.
Heartland Part of Full-Page Ad in New York Times Standing Up For Free Speech on Climate, Against Abuse of Power
Our friends at the Competitive Enterprise Institute (CEI) ran a full-page ad in the New York Times today that stands up for the right of individuals and organizations to speak their mind — on the climate, or any other issue. This is, naturally, in response to 18 state attorneys general taking legal action against CEI and other climate realist groups, demanding they hand over all correspondence related to their communication on the issue to ExxonMobil. Click here to see The Heartland Institute’s continually updated web page dedicated to this issue.
Heartland Institute President Joseph Bast was proud to add his name to those of 42 others who stand together against this egregioius abuse of power, as well as the right to speak out publicly against the state ideology of catastrophic man-caused climate change. You can view the ad in its full-color glory, and also read the text below.ABUSE OF POWER
All Americans have the right to support causes they believe in.
The right to speak out is among the most fundamental principles of American democracy. It should never be taken away.
Yet, around the country, a group of state attorneys general have launched a misguided effort to silence the views and voices of those who disagree with them.
Recently, New York Attorney General Eric Schneiderman, U.S. Virgin Islands Attorney General Claude Walker, and a coalition of other “AGs United for Clean Power” announced an investigation of more than 100 businesses, nonprofits, and private individuals who question their positions on climate change.
This abuse of power is unacceptable. It is unlawful. And it is un-American.
Regardless of one’s views on climate change, every American should reject the use of government power to harass or silence those who hold differing opinions. This intimidation campaign sets a dangerous precedent and threatens the rights of anyone who disagrees with the government’s position—whether it’s vaccines, GMOs, or any other politically charged issue. Law enforcement officials should never use their powers to silence participants in political debates.
We are standing up for every American’s First Amendment right to speak freely. We hope you will join us. This is a critical battle, and it will determine whether our society encourages spirited debate or tolerates only government-approved opinions.
President & CEO, Competitive Enterprise Institute
C. Boyden Gray
Former White House Counsel
Andrew C. McCarthy
Former Chief Assistant United States Attorney, Southern District of New York
Michael B. Mukasey
U.S. Attorney General, 2007-2009; U.S. District Judge, 1988-2006
Professor of Economics, University of Guelph
Ronald D. Rotunda
Distinguished Professor of Jurisprudence, Chapman University
Richard S. Lindzen
Professor Emeritus of Atmospheric Sciences, MIT
Emeritus Professor of Physics, Princeton University
President, The Heritage Foundation
James H. Amos, Jr.
President & CEO, National Center for Policy Analysis
John A. Baden
Chairman, Foundation for Research on Economics & the Environment
Lisa B. Nelson
CEO, American Legislative Exchange Council
Author & Energy Policy Analyst
Thomas J. Pyle
President, Institute for Energy Research
Steven J. Allen
Vice President & Chief Investigative Officer, Capital Research Center
President, National Center for Public Policy Research
Steven J. Milloy
President & CEO, Texas Public Policy Foundation
President, Rio Grande Foundation
Researcher & Author
William Perry Pendley
President, Mountain States Legal Foundation
President & CEO, FreedomWorks
President, American Council on Science and Health
Executive Director, Committee for a Constructive Tomorrow
CEO, Freedom Foundation
Richard B. Belzer
Heather R. Higgins
President & CEO, Independent Women’s Voice
Joseph G. Lehman
President, Mackinac Center for Public Policy
Executive Director, Independent Women’s Forum
President, The Heartland Institute
John C. Eastman
Founding Director, The Claremont Institute’s Center for Constitutional Jurisprudence
President & CEO, The Buckeye Institute
President & CEO, The Claremont Institute
Assistant Professor, South Texas College of Law
President, Tertium Quids
President, Committee for a Constructive Tomorrow
President & CEO, State Policy Network
President, Science and Environmental Policy Project
President, Americans for Prosperity
Director of the Center for Energy & Environment, Competitive Enterprise Institute
President, Frontiers of Freedom
CEO, Illinois Policy Institute
Craig D. Idso
Chairman, Center for the Study of Carbon Dioxide and Global Change
The world is threatened with a renewed wave of anti-capitalism and anti-business sentiments and policies. Many who cheered the demise of Soviet communism in the early 1990s, presumed that this meant that, by default, the case for free markets and competitive enterprise had won in the battle of ideas. Over the last twenty-five years it has become clear that the same misguided arguments against free market capitalism constantly reemerge, like an ideological vampire waiting to rise from the intellectual grave and drain market freedom of its lifeblood by more government regulations and controls.
One of the most persistent of these misguided ideas is the belief that left on its own, competitive markets tend to bring about concentration of wealth, inequality of income, and “market power” to exploit workers and consumers of what justly should be theirs.
The most recent example of this is an article on, “Monopoly’s New Era,” by Joseph E. Stiglitz, the 2001 Nobel Prize winner in economics, which appeared on Project Syndicate website on May 13, 2016. Professor Stiglitz is one of those thinkers who seem to see a “market failure” at every turn and apparently has rarely found a government intervention he did not like.
Two Ways of Looking at the Market Process
He contrasts two differing views of the market economy. One view, an outgrowth of Adam Smith and those who followed in his intellectual footsteps over the last 250 years, argue that freedom, prosperity, and income equity are generally assured wherever the market is kept open and competitive, with minimal government impediments.
The other “school of thought” that he interestingly identifies with no one particular thinker of the past “takes as its starting point ‘power,’ including the ability to exercise monopoly control or, in labor markets, to assert authority over workers,” Stiglitz explains. “Scholars in this area have focused on what gives rise to power, how it is maintained and strengthened, and other features that may prevent markets from being competitive. Work on exploitation arising from asymmetries of information is an important example.”
Professor Stiglitz insists that this second approach has shown its insight and efficacy in the clear evidence of concentration of market control and income inequality in such sectors of the market such as finance and banking, cable television, health care, pharmaceuticals, agro-business, and a variety of others.
The truth and reality of this concentration of power and wealth conception of capitalism, Stiglitz argues, is also shown, historically, in labor markets, to the disadvantage of many “minority” groups. “Of course, historically, the oppression of large groups – slaves, women, and minorities of various types – are obvious instances where inequalities are the result of [market] power relationships,” he states.
His conclusion, therefore, should not be surprising. If competitive capitalism leads to it’s opposite – concentrated, monopoly capitalism – then government regulation and control is essential to preserve a free, prosperous, and “socially just” society. Or in the words with which Professor Stiglitz concludes his article: “But if markets are based on exploitation, the rationale for laissez‐faire disappears. Indeed, in that case, the battle against entrenched power is not only a battle for democracy; it is also a battle for efficiency and shared prosperity.”
Karl Marx’s Theory of Worker Exploitation
The nineteenth century economist most famous for insisting that capitalism leads to concentration, monopoly and exploitation was, of course, Karl Marx. He is the leading thinker that Stiglitz avoids mentioning by name. Marx claimed to have unearthed “the laws of historical evolution” that by a necessity as irresistible as the physical laws of nature, place human history on a trajectory that transformed society from feudalism to capitalism and would have to culminate in the triumph of socialism and a post-scarcity world of communism.
Marx was insistent that businessmen are driven in the pursuit of profits to invest in laborsaving industrial machinery. This results in two consequences. First, in this competitive race for profits through industrialization, some private enterprisers would be driven to the wall and pushed out of business, with their companies bought up by those capitalists who had better weathered the market storm. As this process repeated itself, there would be fewer and fewer private enterprisers left standing, with the result of the private ownership of businesses remaining in fewer and fewer hands. Hence, market competition leads to the concentration of ownership and wealth in the hands of a diminishing number of enterprise owners, according to Marx.
Second, as machines replace workers, there are fewer and fewer jobs for all those needing employment to feed themselves and their families. The non-property owning workers – “the proletariat,” in Marxian jargon – are joined by the businessmen driven out of business due to that concentration of ownership and wealth.
Workers competing for a decreasing number of jobs bring about a lowering of wages and decreased living standards for the vast majority of the population. Thus, a growing material inequality emerges between most working members of society and the handful of property-owning wealthy capitalists, or as it has become fashionable to describe them nowadays, the “one percent.”
Finally, in the Marxian version of this theory, the workers rise up and overthrow the remaining handful of exploiting capitalists, and the new dawn of historical progressivism arrives: socialism, with the State owning, managing and centrally planning the resources and enterprises of the society in the name of “the people.”
Marx’s Errors and the Benefits from Classical Liberal Capitalism
Both economic theory and the actual events of economic history have shown the errors and absurdities in this and related theories over the last two hundred years. Rather than a bi-polar social world of a handful of “the rich” versus a human mass of “the poor,” industrial and financial capitalism saw the emergence of what has become known as “the middle class,” whose numbers came from the ranks of the poverty-ridden poor of the pre-capitalist era.
The political philosophy of classical liberalism that gained intellectual ground in the eighteenth and nineteenth centuries called for the end to absolute monarchy and the establishment of representative, but constitutionally limited government. It espoused the cause of ending the governmental privileges and favors bestowed on a narrow group of special interest groups surrounding and serving the king, including legal monopolies that prevented market competition.
Classical liberalism called for the end to slavery, the emancipation of women, and an equality of individual rights for all in society to life, liberty, and honestly acquired property before an unbiased and impartial rule of law.
Domestic and international trade barriers were reduced or abolished, opening the field to virtually unrestricted free market competition. A smaller and far less intrusive government brought about a lowered tax burden on all in the society, leaving more of the earned wealth by all in the hands of the private individuals whose efforts and energies had produced it.
Respect and enforcement of private property rights; competitive markets open to all those with entrepreneurial visions of how to manufacture and sell more, better and less expensive goods and services to consumers as the peaceful and honest means of pursuing the earning of profits; freed labor markets giving all the opportunity to search out gainful employment wherever the most attractive terms of earning a living seemed to offer itself; and a growing financial sector provided the means for making possible the expensive industrial investments that created jobs and expanded the productive capabilities of society.
Capitalism Created a Prosperous Middle Class from the Poor
The last point is, perhaps, worth emphasizing. Through most of human history, the vast majority of people who found themselves able to somehow save anything out of their meager earnings were fortunate if they could hide away a few gold or silver coins as a form of accumulated wealth.
But the development of modern banking now made it possible for even those of meager material means to put aside their modest savings in a financial institution offering an interest return on their deposits. These financial institutions could now pool together large amounts of savings from many modest savers. They funneled these people’s savings out to entrepreneurs who could never have funded their dreams of industrial enterprises out of their own incomes.
Out of the profits earned by the successful entrepreneurial borrowers came the monetary means to pay back what had been borrowed plus the interest payments agreed to, to start up or to expand their private enterprises. This interest income earned by the banks both paid the interest owed to the depositors and increased the capital of the banks to develop their ability to lend to a growing number of enterprising borrowers.
The increasing field of created and expanded private enterprises was made possible through the savings of “the workers,” themselves, and who thereby earned interest on their individual savings accounts, and through the plowing back of retained earnings into those enterprises by successful businessmen widened the number of businesses looking for workers to fill the growing number of jobs in the marketplace.
At the same time, investment in more and better machines, tools and equipment in those industrial enterprises were increasing the productivity of each worker employment, helped to increase the wages worth paying each worker hired in conjunction with the increased demand of more employers competing for workers in their businesses.
Of course, wages for all types of labor did not all rise at the same time and to the same degree. But looking over the decades of the nineteenth and twentieth centuries, competitive and relatively free markets demonstrated the lie to all the naysayers like Karl Marx who claimed that “the workers” were doomed to poverty, destitution, and despair. Competitive capitalism did and has been raising increasing portions of mankind from wretched subsistence and starvation to unimaginable ease, comfort and convenience that even the richest and most successfully plundering kings and conquerors of the past could never have conceived.
Joseph Stiglitz and Asymmetric Information
Joseph Stiglitz, needless to say, is not a Marxist or a socialist, and it would be unfair to in anyway suggest that he is. His own variation on the injustice of capitalism and its potential for exploitation is partly based on his theory of “asymmetric information” and how it enables private enterprisers to take advantage of consumers and workers in society. Indeed, this theory helped earn him the Nobel Prize in Economics in 2001.
A core element in his theory is that individuals in the marketplace do not all possess the same type or degree of knowledge. Some people know things that others do not. And this “privileged” information can enable some to “exploit” others. For instance, the producer and marketer is likely to know far more about that product’s qualities, features and characteristics that he is offering on the market than most of the buyers possibly interested in purchasing it.
By withholding or not fully informing the potential buyer about all of the qualities, features and characteristics of his good, he may succeed in creating a false impression that makes the consumer have a greater demand for it and be willing to pay a higher price for it than would be the case if that consumer knew as much about the good as the seller knows.
Markets Integrate and Coordinate Decentralized Knowledge
There is no doubt that in a system of division of labor there is an accompanying division of knowledge, but this is a theme in theories of the market process long ago explained by economists in the “Austrian” tradition, especially Friedrich A. Hayek, who also received a Nobel Prize in Economics in 1974.
The Austrians have long emphasized that competition is a “discovery procedure” through which individuals find out things never known or imagined before. The peaceful rivalry of the marketplace creates the incentives for entrepreneurs to be unceasingly alert to profit opportunities to see possibilities that either others have missed or not thought of before. The unknown or barely perceived become seen and understood, and then taken advantage of in the form of new, better, and less expensive products offered to the consuming public.
The purpose of competitive markets and price systems is precisely to provide a way to integrate and coordinate the dispersed and decentralized knowledge in any society possessing a degree of complexity.
This same competitive market has also found ways to reduce and overcome the asymmetry of consumer versus seller knowledge concerning the qualities, features and characteristics of goods, as well, and thereby to reduce the potential and possibility of “exploiting” what the seller may know at the expense of the market buyers.
The Meaning of Search Goods and Judging the Quality of Products
In explaining how markets do this, economists sometimes distinguish between two types of goods offered and sold on the market: search goods and experience goods.
Search goods are those that can be examined and judged by the potential buyer before a purchase is made. For instance, suppose that a supermarket advertises that perfectly ripened bananas are available and on sale in their store. A consumer can enter the supermarket and fairly reasonably judge whether the quality of the good matches what has been promised in the advertising before buying it.
If examination shows that the bananas are either non-eatable green or over-ripened brown, the consumer can walk away without spending a penny on a product that has not met what was promised. By falsely or incorrectly advertising, or even unreasonably exaggerating in its advertising, the business runs the risk of not only losing that sale but the loss of its brand name reputation, threatening to see that consumer never return to that establishment again. Plus, that person can tell others what his “search” of the good came up with, potentially leading to those others not trusting that businesses advertising word without inspecting the good themselves.
This creates a self-interested incentive on the part of such sellers to practice “true in advertising,” or suffer the loss of some their regular customers upon whose repeat business their long-term profitability is dependent.
The Meaning of Experience Goods and Market Safeguards
Experience goods are those goods whose qualities, features and characteristics cannot really be fully known and appreciated without using the product in question for a period of time. Think of an automobile; you can go for a test drive, but your own best judgment of its safety, reliability and handling cannot be really known without driving the car in various weather and traffic conditions over a period of time. Or think of a bed mattress; you sit down and bounce on it, or stretch out and lay down on it in the furniture showroom, but you cannot really know if it will give you a comfortable and restful sleep every night until you’ve gone to bed on it for a period of time.
The same applies to many goods, such as household appliances, for instance. The competitive market’s response to this uncertain and imperfect knowledge on the part of potential buyers has been the seller and manufacture’s system of product warranties that enable the buyer to return the product over a period of time for his or her money back, or a replacement at no extra cost to the buyer.
It is, again, in the seller’s own self-interest to make sure that the product is what has been promised and is reliable in its working order and performance. Once more, the seller and manufacturer run the risk of losing their brand name reputation concerning quality and trustworthiness. Plus, if a warranty has to be fulfilled it is the manufacturer or seller who is forced to eat the cost of replacing the unit returned due to malfunction or failure to match buyer expectation, thus cutting into his own profit margin.
Market Uncertainty and Franchise Businesses
But what about those situations in which concern about repeat business or brand name reputation do not seem to be as present? For instance, suppose you are traveling on business or vacation and are passing through some town you are highly unlikely ever to see again.
You’re hungry for a meal or a place to stay for the night. How can you know about the quality of the meal in the local “Joe’s Greasy Spoon,” or the bedbug-free mattress in any of the rooms in the local “Bates Motel”?
The market has provided consumer information about the qualities, features and characteristics of such products and services to overcome this inescapable imperfect knowledge in the form of chain stores and franchises. You may never eat or sleep again in that particular town, but you will likely eat and sleep away from home somewhere at sometime again in the future.
The sight of the MacDonald’s “Golden Arches” or the sign for an IHOP (International House of Pancakes) anywhere, any place tells you the quality and variety of foods that you can have in any of their establishments, regardless of where its location in the United States or even the world. The same applies to seeing the sign for a Motel 6, or a Holiday Inn Express or an Embassy Suites, or a Hilton-family hotel.
You may never again go to that particular MacDonald’s or Holiday Inn, but if you travel you may very well eat or spend the night at some other chain franchise of that company. And that is the repeat business and brand name reputation that is important to the “mother company.” Thus, each chain store and franchise is required to meet standards of quality and variety that enables the consumer to have a high degree of confidence and reduced knowledge uncertainty of what he or she is getting when they enter any of these establishments regardless of where it may be located.
What makes this practice in the market consistently happen and successfully relied upon? Market competition and the self-interested profit motive.
“Perfect Competition” versus the Competitive Process
Professor Stiglitz sets up the straw man of what in economics is known as the “perfect competition” model. The presumption is that a market is only and truly “competitive” when it is filled with such a large number of sellers that each one is too small to influence the market price and in which each seller offers a product the quality of which is exactly the same ones sold by his competitors; and in which every buyer already knows all the same perfectly correct information as is known by all the sellers in those same markets.
Friedrich Hayek demonstrated the essential fallacies in this argument exacting 70 years ago when he delivered a lecture on “The Meaning of Competition” on May 20, 1946 at Princeton University. He explained that the very nature of a truly competitive market is precisely one in which rivals are attempting to improve the qualities of the products they offer to consumers and try to devise ways to make their products at lower costs precisely to be able to afford to offer them at lower prices to buyers to attract business way from their competitors. That is what makes market competition a dynamic, never-ending process of improved and less expensive goods and services available for the members of any society.
For economists like Joseph Stiglitz, trying to offer goods at prices different than your rivals or with qualities and characteristics differentiated from those sold by your competitors is a sign of “market failure,” of “imperfect” or “monopolistic” market practices. But for economists like Friedrich Hayek, such price and product rivalry and competition is the essential indication of the vibrancy of the competitive process at work.
Market competition in Hayek’s sense of the concept does not need a large number of rivals to be “truly” competitive. What is required are no political or legal barriers that stand in the way of potential competitors either at home or from abroad. From the economic point-of-view the market encompasses the world, regardless of where those who runs governments may have drawn lines on a political map.
Stiglitz’s “Market Failures” are Really Forms of Crony Capitalism
And this gets to the crucial and essential error in Professor Stiglitz’s argument concerning the concentration of “monopoly” power in the marketplace, and any resulting “unjust” inequality of wealth.
Every one of the examples that he lists as instances of such concentration of “market power” – finance and banking, cable television, health care, pharmaceuticals, agro-business – are all instances in which the competitive, free market has been interfered with by the paternalistic and regulatory hand of the government. It is not the market that has “failed” in these corners of the economy, but rather it is the presence and pervasiveness of the interventionist state.
But this, too, is typical of market critics such as Professor Stiglitz. They deceptively call “market failures” instances not of competitive free markets but of “crony capitalism” under which special interests have successfully interacted with politicians and bureaucrats to rig the market for their own benefit at the expense of both consumers and potential competitors who are legally prevented or hindered from entering sectors of the economy where they would like to try to gain market share and earn profits by offering better and lower priced goods than their privileged rivals are offering to those consumers.
Con Men Are Always with Us, Free Markets Constrain Them
Are there con men, hucksters and cheats? Of course there are. They existed in ancient Athens just as they exist today. There are always people who will try to dishonestly get what others have, when doing it that way seems easier and less costly than through honest production and trade.
The question is not whether human nature can be transformed to eliminate this aspect of human conduct. The question is, are their market institutions and incentives that can systemically reduce this type of behavior and, instead, generate more honest and properly informed human interactions?
And the answer is, yes. In fact, most of these positive incentive mechanisms have emerged and evolved out of the competitive market process, itself. These “market solutions” to the “social problem” of asymmetric information were discovered by market participants themselves to be profitable ways of gaining consumer trust and confidence and business, without any government command or imposition. Plus, their discovery and practiced institutional forms could never have been fully anticipated or imagined in their detail before and separate from the competitive market processes that generated them.
Once again, the “let-alone” principle of peaceful competitive market association has demonstrated itself to be superior to the presumption and arrogance of the governmental social engineer.
Worker Exploitation has Its Source in Government Intervention
Furthermore, if workers have been exploited in the past or present, and do not receive the full and proper value for the labor services they may render, this, too, has been the result of politically-sponsored or allowed “power” inside the market. Compulsory labor unions have manipulated and rigged labor markets, giving wage and work privileges and favors to some workers, but at the expense of other workers locked out of employment and income opportunities due to the “closed shop.”
Government imposed minimum wage laws have priced some low and unskilled workers out of jobs leaving them unemployed and possibly permanent wards of the government’s welfare state programs. Anti-competition regulations and related market restrictions (including burdensome taxes on business) have reduced the private sector’s ability and incentives to create jobs and invest in ways that raise the value of workers’ output over time.
If workers are “exploited” in the modern world, Professor Stiglitz should look at the very interventionist policies that he proposes and defends. They are the primary cause of the very conditions and injustices that he deplores, including the greater degrees of material inequality than would or need exist, if only the regulating and paternalistic state they he so much desires and admires were to get out of the way of the free market competitive process.
Heartland Daily Podcast – Dr. Mike Koriwchak: “Meaningful Use” Regulations Killed Health Record Innovation
So you want electronic medical records (EMR) and electronic health records (EHR)–and so you should. Doctors in private practice were innovating to provide top-flight electronic records long before the federal government encumbered EMR and EHR with fruitless reporting requirements under the guise of “meaningful use,” which distract physicians from providing patients with the highest quality care.
In today’s Health Care News Podcast, Dr. Mike Koriwchak, vice president of Docs4PatientCare Foundation and co-host of The Doctor’s Lounge joined Heartland research fellow and Health Care News Managing Editor Michael Hamilton to share why the day the feds rolled out “meaningful use” was the day innovation died in the realm of EMR and EHR, and how lawmakers and CMS can help revive it.
A silver lining to the withdrawal of Sen. Ted Cruz, R-Texas, from the presidential race is that we will be spared a battle over whether he met the Constitution’s requirement the president be a “natural born citizen.”
The evidence is not all one way, but on balance there is a good case Cruz did not meet the constitutional requirement.
As a general rule, the Constitution uses legal terms such as “natural born” in their 18th-century English legal sense. Under the law of the time, a foreign-born person did not qualify unless he had a citizen father not then engaged in treasonous or felonious activities.
Cruz was born in Canada of an American mother and a Cuban father.
Cruz, who in other respects is a strict constitutionalist, blew off the question, claiming it already had been decided in his favor.
This was demonstrably untrue. Although Cruz was born a citizen by virtue of federal law, federal law cannot, of course, alter constitutional definitions.
As Harvard law professor Lawrence Tribe has pointed out, the Supreme Court has never determined authoritatively the constitutional definition of “natural born.”
Several conservative commentators wishing to back up Cruz’s claim pointed to a 1790 congressional statute that can be read as recognizing as “natural born” children born abroad of citizen mothers.
But the statute was problematic for several reasons: (1) It can be read in other ways, (2) prevailing contemporaneous law rendered the Cruz-favored reading unlikely, (3) the statute probably had purposes unrelated to the presidency, and (4) it was soon repealed.
Liberal commentators appeared to be split on the issue.
Some upheld Cruz’s position, while others were not willing to be seen applying a doctrine as politically incorrect as patrilineality — the doctrine that one’s citizenship status comes through the status of a child’s father.
Some claimed founding-era law disqualified anyone not born in the U.S. Others claimed a child born abroad was “natural born” only if the citizen-parent was in active government service at the time.
Both of these positions are demonstrably false as well. Founding-era law did recognize as natural born those children born abroad whose fathers were citizens, and those fathers frequently were merchants or others not involved in government service at the time.
On top of everything else, several courts, when ruling in Cruz’s favor, cited an article authored by two former U.S. solicitors general.
The article relied heavily on a citation from 18th-century legal commentator William Blackstone.
As it happened, the authors’ report of what Blackstone had written was diametrically opposed to what Blackstone actually had said.
If the case had gone to the Supreme Court, you can bet the justices would not have been so sloppy.
Cruz’s withdrawal gives us some more time to think about the issue.
In the wider context of founding-era jurisprudence, the citizenship patrilineality rule was not particularly “sexist,” because it was balanced by matrilineal rules in certain other areas. However, these rules —matrilineal or patrilineal — make little sense today.
Perhaps a constitutional amendment is in order, recognizing as “natural born” the foreign-born child of either an American mother or American father.
This is a good illustration of why the Constitution has an amendment process.
It’s planting season, and farmers are taking to the fields to put food on our tables. Even though Ted Cruz has withdrawn from the presidential race, his victory in the Iowa Caucuses caused political pundits of all stripes to speculate about the future of the Renewable Fuels Standard (RFS) and the corn ethanol mandate, largely because someone, Cruz, had finally campaigned against the ethanol mandate and managed to win in Iowa. While some wonks in Washington, DC may talk about a political end for the ethanol mandate, for the nation’s farmers, the biofuel bubble has already burst.
Many of the agriculture-related policy discussions taking place in the nation’s capital focus on how corn farmers will be hurt by the biofuel mandate because RFS requires traditional forms of biofuel, such as corn, to be replaced by “advanced biofuels” in the future. This assessment is correct. If advanced biofuels ever become viable—thus far they have not— it would eat into the share of biofuel derived from corn. However, this view ignores the damage that has already been done to farmers as a result of the ethanol mandate distorting crop prices.
For every action, there is a reaction, and for every boom, there is a bust. The ethanol mandate created a boom in the price of corn by driving up demand, because it resulted in approximately 40 percent of the nation’s corn crop being converted into fuel. The mandate had the dual effect of tying the price of corn—as well as other farm commodities—more closely to the price of oil. As a result, corn prices surged from approximately $2.50 per bushel before the ethanol mandate, to more than $8 just a few years after it was enacted. As corn prices surged, farmers devoted more acreage to growing corn, which in turn drove up the price of other crops, such as soybeans and barely.
Crop prices weren’t the only the thing to skyrocket. The price of farming inputs, including farmland, seed, and farm machinery, has skyrocketed over the past 10 years due to years of corn prices being $6 or $7 per bushel. In 2005, the average cost of land rent in central Illinois was $147 per acre, but within seven years, that price nearly doubled to $270 per acre. The rise in the cost of inputs made it harder for smaller, family farmers and young people interested in becoming farmers to buy or rent land and machinery.
Things boomed for a while, but because corn prices have fallen 60 percent from their highs—and below the cost of production for many farmers—farmers who took on debt in order to purchase equipment or land are finding these assets may not be worth what they were during the boom.
For example, 2014 marked the first year farmland values dropped since the Reagan administration. Although the declines were fairly modest, about 3 percent, the trend does not bode well for the next few years, when rising yields per acre, slowing economic growth in China, and low oil prices are likely to keep a damper on a recovery in grain prices.
Defenders of the ethanol mandate often argue higher biofuel mandates are needed in order to prop up crop prices above the cost of production. These pleas are often couched in phrases such as, “No policy in history has brought more wealth back to rural America than the ethanol mandate,” and for a time, this was true. But all bubbles eventually burst, and the aftermath is often messy.
The problem with government intervention in markets of any kind is eventually the market adapts, and more and more distortion is needed to maintain prices. The old adage “the cure for high gas prices is high gas prices” applies to all commodities. As high corn prices increased, the incentive for farmers to convert land for growing more corn increased along with them. The price has come down accordingly, but the malinvestment brought on by artificially inflating the demand for corn remains. In the end, policies such as these end up hurting the very people they were supposed to help, which is why Congress should act to phase out the ethanol mandate.
In this episode of the weekly Budget & Tax News podcast, managing editor and research fellow Jesse Hathaway talks about the U.S. Food and Drug Administration new “deeming regulations” for electronic cigarettes, which require e-cigarette manufacturers to submit their products through an arduous federal approval process.
Cynthia Cabrera, president of the Smoke-Free Alternatives Trade Association, the largest e-cigarette and smoke-free alternative trade association representing the interests of manufacturers, online retailers, small businesses, distributors, importers and wholesalers, and someone who the people in Big Tobacco probably find really annoying, joins Hathaway to talk about the new regulations, and how they will affect consumers, both non-smoking and smoking alike.
According to Cabrera, the new regulations effectively promote smoking traditional cigarettes, and how e-cigarettes do serve a purpose in the fight against preventable diseases like those caused by tobacco use.
Any comprehensive review of green energy and its politics and policies has to include the name of wealthy liberal Tom Steyer—who has been called the environmental movement’s new “Daddy Warbucks.” Having made his billions from his tenure atop Farallon Capital Management—much of it from coal projects around the world—Steyer apparently had an environmental epiphany and now wants to atone for his past sins by trying to save the planet from manmade climate change.
He is using his wallet to try to elect candidates who will promote policies and energy plans that agree with him. And that plan is “green.” As I’ve previously reported, he spent nearly $75 million in the 2014 midterms and intends to top that for the 2016 election cycle. Steyer–– a long-time donor to Democratic causes––was a 2008 Hillary Clinton supporter. After her campaign failed, he emerged as a bundler for Obama in 2008 and again in 2012. Additionally, Steyer is a Clinton Foundation donor, and last year, at his San Francisco home, he held an expensive fundraiser for Clinton’s 2016 presidential run.
Along with researcher Christine Lakatos, whose Green Corruption File was recently praised on the Michael Savage Show, I’ve repeatedly addressed Steyer’s involvement through our work on President Obama’s Green-Energy Crony-Corruption Scandal. Anytime there is a pot of government money available for green energy, as Lakatos found, Steyer’s name seems to be attached to it. Some of the most noteworthy include: Sungevity, ElectraTherm, and Project Frog—all funded by Greener Capital (now EFW Capital), which is a venture firm that invests in renewable energy, with Steyer as a known financial backer.
Steyer claims to have “no self-interest” in his political activism. The Los Angeles Times quotes him as saying: “We’re doing something we think is good for everyone.” Yet, as Forbes columnist Loren Steffy points out, he is spending his fortune lobbying for “short term political gains” rather than into research and development “aimed at making renewables economically viable.”
While he may say what he is doing is good for everyone, the policies he’s pushing are good for him—not for “everyone.” The Washington Post called him: “The man who has Obama’s ear when it comes to energy and climate change.” In California, where he has been a generous supporter of green energy policies, he helped pass Senate Bill 350 that calls for 50 percent renewable energy by 2030. California’s current mandate is 33 percent by 2020—which California’s three investor-owned utilities are, reportedly, “already well on their way to meeting.” It is no surprise that California already has some of the highest electricity rates in the country. Analysis released last week found that states with policies supporting green energy have much higher power prices. In October, Steyer spent six figures for an ad campaign calling for the next president to adopt a national energy policy similar to California’s: “50 percent clean energy mix in the U.S. by 2030” —which will raise everyone’s rates.
With Steyer’s various green-energy investments, these rate-increasing plans are good for him but bad for everyone else—especially those who can least afford it. And, it is the less affluent, I recently learned, he’s targeting with predatory loans for solar panels through Kilowatt Financial, LLC, (KWF)—a company that listed him as “manager” on corporate documents. KWF recently merged with Clean Power Finance and became “Spruce.” The financing structure used, according to the Wall Street Journal (WSJ), allows “homeowners to get solar systems at no upfront cost and then to pay monthly for the use of the power generated. Homeowners end up saving on their total electricity use, while financing companies get steady revenue over 20 years.” WSJ, points out, the KWF financing can be offered to “people who wouldn’t be approved otherwise.”
In the KWF model, contracted payments come from homeowners and “create a steady and reliable income stream, part of which is owned by its venture investors, including Kleiner Perkins.” About the arrangement, KWF chairman and Chief Executive Daniel Pillmer said: “Kleiner Perkins will make a lot of money.” Apparently, the money to be made is from selling the loans that are then securitized on Wall Street—much like the “sub-prime” mortgage crisis that offered loans to people who couldn’t qualify with “traditional lenders.” KWF’s website brags: “We support financing terms for almost every customer and provide ways for dealers to participate in the pricing process to generate even more approvals and create even lower consumer rates.” KWF offers “Instant Approvals, even for customers with lower credit scores” and “Same-as-Cash and Deferred Payment Offers.” In these types of payment plans, a low rate is usually offered in the beginning and increases retroactively if all the terms of the loan are not met.
In this model, the homeowners don’t actually own the solar systems—which means KWF receives the benefit of the federal tax incentives, such as the 30 percent federal “Investment Tax Credit,” designed to benefit the owner of the solar system.
It is practices like this that have drawn the ire of Congress. Several congressional Democrats sent a letter to the Consumer Financial Protection Bureau that warned about the similarities between the solar industry and what led to the subprime mortgage crisis: “easy initial financial terms, increased demand and a rapidly expanding industry.” These factors create a high risk potential that could, ultimately, be harmful to consumers. Similarly, Republicans sent a letter to the Federal Trade Commission that noted pressure from Wall Street is reportedly leading companies who use “potentially deceptive sales tactics”—which doesn’t sound like it is something that is “good for everyone.”
Yet, it is these very types of finance products, promoted by Steyer’s Kilowatt Financial that Greentech Media reports are “doing well.”
While Steyer claims to want to give everyone a “fair shake,” his pet policies increase costs for everyone, and offer a hand-shake for Wall Street. Steyer and his billionaire buddies win, “everyone” else loses—and that is a big part of the green-energy crony-corruption scandal.
The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc., and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy—which expands on the content of her weekly column. Follow her @EnergyRabbit.
A recurring headline in the Age of President Barack Obama begins with things like “Obama Administration Issues New Rules…” and “Administration Targets…” and various variations on this theme. To wit:
The rolling tally – and the damage done – is devastating:
- The federal regulatory cost reached $1.885 trillion in 2015.
- Federal regulation is a hidden tax that amounts to nearly $15,000 per U.S. household each year.
- Many Americans complain about taxes, but regulatory compliance costs exceed the $1.82 trillion that the IRS is expected to collect in both individual and corporate income taxes from 2015.
And it is inordinately difficult to argue that Obama’s isn’t the Regulation Administration:
- Some 60 federal departments, agencies, and commissions have 3,297 regulations in development at various stages in the pipeline.
- The 2015 Federal Register contains 80,260 pages, the third highest page count in its history.
- Of the seven all-time-highest Federal Register total page counts, six occurred under President Obama.
- …(T)he Obama administration has averaged 81 major regulations annually over seven years.
- In 2015, 114 laws were enacted by Congress during the calendar year, while 3,410 rules were issued by agencies. Thus, 30 rules were issued for every law enacted last year.
That last point is vitally important. Many (most) of these new regulations – are unlawful and unconstitutional. The Obama Administration is the Executive Branch. It executes laws – it does not write them. That’s Congress’ (the Legislative Branch)’s job. Issuing regulations untethered to preceding legislation – is violating the rules. As per usual, the Republican-led Congress is doing far too little to defend its Constitutional turf and rein in the Administration. And far, far too infrequently, this happens:
Far, far too frequently – Obama’s myriad fiats stand. The rolling tally – and the damage done – is devastating.
Productivity Growth of U.S. Economy Collapses to Record Low: “U.S. productivity growth, the greatest determinant of living standards, has been lower for the past five years than any five-year period on record. New data from the U.S. Bureau of Labor Statistics shows that productivity growth has averaged 0.4% per year over the past half-decade. This is 82% below the average of the prior six decades, which is as far back as this data extends.”
Obama is First President Ever to Not See Single Year of 3% GDP Growth: “The rate of real economic growth is the single greatest determinate of both America’s strength as a nation and the well-being of the American people….Ronald Reagan brought forth an annual real GDP growth of 3.5%. Barack Obama will be lucky to average a 1.55% GDP growth rate.”
Ingrained decades of over-regulation lead to things like this:
Sounds great, right? Except:
“The euro zone’s dominant economy grew 0.7 percent, its strongest quarterly rate since an identical reading in the first quarter of 2014….”
Wow. 0.7% growth. Dominating all of the Euro Zone. Let us please not be (even) more like Europe, eh?
So when our domestic Sauron turns its Eye on the Technology Sector – we get worried. The guilty over-extended arm of the Leviathan here – is the Federal Communications Commission (FCC).
As per usual, the Republican-led Congress is doing far too little to defend its Constitutional turf and rein in the FCC. So that means the conga-line-to-the-courthouse will get even longer.
And what’s happening to the economics of the Tech Sector?
Capital Expenditures Declined Under FCC’s Network Neutrality Rules: “A casual reader of the Federal Communications Commission’s many documents on network neutrality would reasonably conclude that the network neutrality rules are necessary for robust investment in the broader information sector. The linkage between FCC rules and investments animates the FCC’s recent court brief in which the agency defends its latest rules in the D.C. Circuit Court.
“The empirical economics, however, are the opposite of the FCC storyline. Capital expenditures grew less rapidly when network neutrality rules were in place.”
So the government claimed their new regulations would help the economy. They then imposed them – and Reality rudely intervened. I believe this has happened before.
Reality is a harsh mistress – when you’re wedded to big government.
As we see in every other sector of our economy (and everyone else’s) – more government means less private sector economy. The former crowds out the latter. Each and every time it’s tried.
The Tech Sector has been Obama’s anemic economy’s one saving grace. So his Administration has in its last years dramatically ramped up its Tech Sector assault.
Because no inkling of positive economic activity can be allowed to stand. It makes everyone and everything else look bad.
With all of human history as a guide – sadly, big government will be just as squashing-ly successful here as it has been everywhere else.
“Climate refugee” claims reflect deliberate mendacity and belief that we and reporters are stupid
Employing his college degree in fiction writing, White House communications strategist Ben Rhodes wrote deceitful talking points on the Benghazi attack and one-sided Iran nuclear deal – and later bragged about manipulating “clueless reporters.” Perhaps he’s also orchestrating administration climate spin.
Rising ocean tides will bring “waves of climate refugees” to America and Europe, President Obama has declared. “Environmental migrants” are already fleeing shrinking islands in the Pacific, and it is a “dereliction of duty” for military officers to “deny the reality” of dangerous manmade climate change.
Even if we act in accord with the Paris climate “accords” (none dare call it a treaty) and “can stem the increase” in global temperatures, Interior Secretary Sally Jewell insists, “very rapid” climate changes “are expected to force the relocation of hundreds of Alaskans from their homes.”
Manmade climate change is a “threat multiplier,” a Pentagon report asserts. It will “exacerbate” many of the challenges the United States faces today, including infectious diseases and terrorism, destructive extreme weather events, disputes over who has rights to dwindling land areas and basic resources like water and food, and intense disagreements over how to absorb millions of climate refugees.
Echo-chamber journalists disagree only over the identity of America’s first climate refugees: Alaskan Natives in Newtok being inundated by rising seas and melting ice and tundra – or 25 Biloxi-Chitimacha-Choctaw families whose little island in the Mississippi Delta has been eroding away since 1950?
Not to be outdone, ultra-liberal radio talk show host Thom Hartmann told me, “You’ve got five million climate change refugees fleeing into Europe right now because of droughts in Syria.” When I called this nonsense and said they are trying to escape war and ISIS butchers who are beheading little children, for the tenth time in a ten-minute interview, he railed that I “should be in jail” as a “climate denier.”
Unfortunately for Rhodes & Company, inconvenient truths eviscerate manmade climate chaos claims.
Throughout Earth and human history, climate change has ranged from regional to hemispheric, from beneficial to harmful to destructive. It has included Roman and medieval warm periods, little ice ages, and five “mammoth” glacial epochs that buried continents under mile-high walls of ice. Natural climate change inflicted a Dust Bowl that sent millions of Americans scurrying in search of better lives, and decades- or centuries-long droughts that brought entire civilizations to their knees.
Roman, Mayan, Mesopotamian, Egyptian, Chinese and other cities and cultures prospered in warm periods and collapsed in cold and drought eras, climate historian Dennis Avery observes. This happened “over and over, in a centuries-long rhythm of affluence followed by long success, followed by long and utter failure.” Entire cities in the eastern Mediterranean were abandoned for centuries.
Storm activity rose by 85% in the second half of the 16th century, during the Maunder Sunspot Minimum, while the incidence of severe storms increased four-fold, writes historian Brian Fagan. British Navy logbooks show more than twice as many major land-falling Caribbean hurricanes during the cold decades of the 1700’s as during the warm years of 1950–2000.
Little ice ages and extended droughts brought crop failures and mass starvation, Avery notes. Rome shrank from a million inhabitants in its heyday to barely 30,000 a century later. The Mayan civilization plunged from perhaps 15 million to one million, as its cities were abandoned in a century-long drought.
Climate mood swings in the past 50 years have been far less dramatic than in previous millennia. Few people will have to flee the tiny portion of future climate change that might be attributable to humans.
The Climate Crisis Consortium ignores these eons, millennia and centuries of natural climate change. It wants us to believe Earth’s climate was stable and benign until the Industrial Age – and humans can now control climate and weather merely by controlling carbon dioxide levels. It’s all Hollywood nonsense.
Oceans have risen 400 feet since the last ice age glaciers melted. Pacific islands rose with them, as corals expanded their habitats with every new inch of sea water. Seas are now rising at seven inches per century – and EPA’s anti-coal Clean Power Plan would prevent barely 0.01 inches of rise over the next 100 years.
Greenland’s icecap is shrinking because of subterranean magmatic activity – not global warming. Arctic regions have long experienced warming and cooling cycles, as recorded by Francis McClintock and other whalers and explorers, dating back some 300 years. Polar bear populations are at an all-time high: 25,000.
Antarctic ice masses continue to grow, and the continent’s average annual temperature of minus-55 F means it would have to warm by 88 degrees year-round for that ice to melt. Even Al Gore in his wildest rants doesn’t say that is likely. So his beachfront home is safe from the 20-foot sea rise he has predicted.
Meteorologist Anthony Watts concludes that the only reliable long-term surface record comes from 400 official US rural thermometer stations that were never corrupted by location changes, airport heat or urban growth. Those stations show no significant warming for the past 80 years. The “record warming” we keep hearing about comes from data that have been “adjusted” or “homogenized” (ie, manipulated) upward to conform to computer model projections, IPCC proclamations and White House press releases.
Other studies have concluded there has been no increase in the severity or frequency of thunderstorms, tornadoes, hurricanes or winter blizzards for decades. Indeed, no Category 3-5 hurricane has struck the United States since October 2005 – a record lull that exceeds any hurricane hiatus since at least 1900.
Malaria was common in the USA, Europe and even Siberia until the 1950s, when window screens, DDT and better medical practices wiped it out. It has nothing to do with global warming or climate change. Its continued prevalence is due to incompetent health ministries that refuse to learn from past successes.
The notion that a warmer world with more atmospheric CO2 will bring crop failures and famines is sheer delusion. They are already “greening” the planet and making crops, forests and grasslands grow faster and better. New hybrid and biotech seeds, combined with modern fertilizers and farming practices, are yielding bigger harvests, even during droughts, as India is proving right now.
There is no manmade climate crisis. Solar, galactic and oceanic cycles rule – not carbon dioxide. The biggest threat to agriculture and humans would come from another little ice age, not moderate warming.
In reality, the enormous amounts of energy packed into coal, oil, natural gas and nuclear fuels create the wealth, and power the wondrous technologies, that give us the greatest advantages mankind has ever enjoyed – to survive, adapt to and deal with climate changes and weather events.
The worst thing we could do is lock up that reliable, affordable, compact energy – and switch to expensive, heavily subsidized, wildly unpredictable wind and solar energy … and to biofuels that require millions of acres of land and billions of gallons of precious water.
Those who control energy control lives, livelihoods and living standards. Allowing climate alarmists and anti-energy zealots to dictate what energy sources we can use, and how much each of us is “permitted” to have, would put all of us at the mercy of their unaccountable whims, ideologies and fraudulent science.
Their callous policies are already killing millions of people every year in impoverished nations, by depriving them of the energy and technologies that we take for granted. Shouldn’t we be helping the world’s poor take their rightful places among the healthy and prosperous? Do we want to be next?
The only “evidence” the alarmists have for a looming climate cataclysm are Al Gore movies, Mike Mann hockey sticks, garbage in-garbage out computer “scenarios” that bear no resemblance to Real World events, and more spin and scare stories from White House novelist Ben Rhodes.
We need a president who will send the Paris climate treaty to the US Senate, where it can be properly vetted and rejected … overturn EPA and other regulations that are based on manipulated data and falsified pseudo-science … and lead the world back from the precipice of climate lunacy.
Medicaid expansion is an expensive endeavor that many critics believe does not provide better or more affordable health care. Many of the expansion plans that states are now considering use federal dollars to expand their Medicaid programs to a larger portion of their state, creating new costs the federal government may not always be able to cover and leaving state taxpayers on the hook for the new liabilities.
Oklahoma legislators are now considering a Medicaid expansion proposal that has been pitched by its backers as an alternative to a full Medicaid expansion under the Affordable Care Act. The legislation, called the Medicaid Rebalancing Act, is similar to the expansion undertaken in Arkansas. It would shift about 175,000 pregnant women and children off of Medicaid and into private health insurance plans, which would be purchased with subsidies through the federal marketplace.
About 175,000 Oklahomans without health insurance would fill the vacated Medicaid spots through the Insure Oklahoma program, which requires co-pays and deductibles. This expansion could cost as much as $100 million, and it would be funded by a $1.50-per-pack cigarette tax increase, which would make Oklahoma’s cigarette excise tax the highest in the region, raising the average cost of a pack of cigarettes to $7.44, according to an estimate by the National Association of Convenience Stores.
Emulating Arkansas’ model is problematic for several reasons. First, despite various private-market characteristics of the program, it still represents an expansion of a failed Medicaid system. The federal government would dictate multiple aspects of insurance plans, effectively reducing many of the benefits linked to real market competition. It’s true many of these programs attempt to include some limited free-market reforms, such as copays and employment requirements, but the Centers for Medicare and Medicaid Services has largely rejected similar proposals.
A second significant problem is related to funding. Medicaid is one of the fastest-growing liabilities in state and federal budgets. Under the ACA, the federal government promises it will provide 90 percent of Medicaid expansion costs, but since the ACA was implemented and Medicaid expanded, spending on Medicaid has exploded to unsustainable heights.
Jonathan Small and Jonathan Ingram recently examined the question of whether the state can withstand any form of Medicaid expansion in an Oklahoma Council of Public Affairs study. They found states will inevitably find the situation impossible to maintain without spending cuts, incurring massive debt, or tax hikes. Small and Ingram say Oklahoma’s share of Medicaid costs already swelled to $2.1 billion by the end of 2015, a 553 percent increase over the state’s share in 1995. Further spending increases are sure to push the state’s budget well beyond its limits.
The proposed $1.50-per-pack cigarette tax increase would also have many negative consequences. Tobacco taxes are an unreliable and have been proven to be a shrinking tax revenue stream. Using them to pay for a Medicaid program that is increasing in costs will likely create budget problems in the future. According to recent data from the U.S. Census Bureau, state revenue from tobacco product sales taxes decreased in 2013 by 0.9 percent, to $17 billion. In 2012, revenue dropped by 0.5 percent. The National Taxpayers Union Foundation found tobacco tax collections failed to meet initial revenue targets in 72 out of 101 recent tax increases.
After Indiana and Pennsylvania moved to expand their Medicaid programs under the false promise of offering a “free-market alternative” to “Obamacare,” some Republican governors have started to reconsider their opposition to Medicaid expansion. But the so-called “private option” plans are merely machinations concocted by Medicaid expansion supporters to give conservative legislators political cover for expansion. This is done so that politicians on both sides of the aisle can grab what they incorrectly claim is “free money” from the federal government.
The Medicaid Rebalancing Act faces several hurdles, including federal approval for the expansion and a three-fourths vote for the tobacco tax increase, but it is important to recognize the real problems expansion create. Medicaid expansion should be opposed whenever it is considered—and under any form.
So where does Democratic presidential contender Hillary Clinton stand on Common Core? The answer is she’s squarely on the side of national standards and assessments, because she played a key role, along with other insiders, in getting this statist scheme rolling a quarter-century ago.
That is not to say she can’t take a few shots at pro-Common-Core educrats to please parents thoroughly fed up with the math and English prescriptions being imposed on their schools.
Meeting with Newsday’s editorial board on April 11, Clinton may have impressed some dissenters by slamming New York state’s rollout of Common Core directives as “disastrous.” Although she didn’t name names, her criticism was applicable to President Barack Obama’s new secretary of education, John King, who as state commissioner of education led New York’s hurried debut of Common Core.
King’s imperious leadership provoked so much ire that one of New York’s U.S. senators, Kirsten Gillibrand, wound up voting against his confirmation as U.S. education secretary. King’s tenure in New York, Gillibrand said, “was very adversarial, leaving families, students, and teachers without a voice on important issues.” If Newsday’s editors had wanted to put their guest on the spot, they could have asked Clinton how she would have voted if she were still serving in the Senate.
To their credit, the editors did elicit from Clinton a declaration that she has “always supported national standards.” That is the essence of Common Core, by whatever name: one-size-fits-all, government-imposed uniformity, or education redefined to meet national goals. Clinton believes any problems lie merely in the process of implementation, the “rollout.” The substance is just right.
Even before her husband’s election as president in 1992, Clinton worked closely on education reform geared to national workforce development in association with Marc Tucker of the National Center on Education and the Economy (NCEE). Tucker continues to be a prime mover with Common Core to this day.
In 1990, Clinton, an NCEE trustee, collaborated with industrial consultant Ira Magaziner to promote recommendations made by the U.S. Labor Department’s Commission on the Skills of the American Workforce, which issued a series of reports breaking down in minute detail every work-related, certifiable skill schools should teach all students. Later, the duo would team up again to devise what became Clinton’s failed national health care proposal.
In March 1992, Clinton and Magaziner argued in the education journal Educational Leadership that it was imperative for the United States to have a single system of performance-based standards that virtually all students would have to meet at age 16.
Without a “Certificate of Initial Mastery,” they argued, students should not be allowed to go on to work, college, or technical training. Dropouts would be shunted off to youth centers, which they termed “an essential component of the whole strategy for national human resource development.”
Forced early choice between work and college draws from the German model. The statist plotting of a new economic man is nothing if not Soviet.
When Bill Clinton was elected president in November 1992, Marc Tucker could not contain his ebullience. In an 18-page “Dear Hillary” letter, Tucker foresaw with the Clintons’ ascension a chance to create “a seamless web of opportunities, to develop one’s skills that literally extends from cradle to grave and is the same system for everyone.”
This statist’s dream world would consist of “a national system … in which curriculum, pedagogy, examinations, and teacher education and licensure systems are all linked to the national standards.” In other words, Common Core to the core.
Under Bill and Hillary Clinton, the Goals 2000 Act and the School-to-Work Act made a significant move toward establishing this system. When grassroots opposition slowed its advance, the collaborators did not despair. Their big-business allies organized as Achieve, Inc. and were ready to advance the agenda via Common Core when the Obama administration came to town. President George W. Bush had helped the cause by instituting federally mandated testing under No Child Left Behind.
Hillary’s recent pandering to New York parents who are opting out of Common Core testing in droves caused New York magazine to fret in its April 12 edition that she and Bill are deserting school reform. Given her long and extensive work for nationalization of education, it is extremely unlikely she is abandoning the agenda. Whether such a totalitarian scheme ever deserved to be called “reform” is another question.
In today’s edition of the Heartland Daily Podcast, Dr. Keli’i Akina, President of the Grassroot Institute of Hawaii, joins host H. Sterling Burnett to talk about the efforts to ban gasoline and diesel vehicles in the state of Hawaii and more.
Dr. Akina says it is important to allow market forces determine which energy sources should be used. He says government action only serves to disrupt the free market system. He also discusses moves to ban GMO crops in the state and the need to repeal the Jones Act.
Whether it’s gun control, health care reform, climate change, or a host of other issues, President Barack Obama does not follow the law if it conflicts with his policy preferences. While Obama is not unique in this regard, he has taken ignoring the oath U.S. presidents take to uphold and faithfully execute the Constitution and the laws of the United States to a whole new level.
On June 26, 2015, the U.S. Supreme Court set aside the Obama administration’s far-reaching Environmental Protection Agency (EPA) regulations targeting mercury and other emissions from coal-fired power plants.
When EPA initially drafted the rule early in the Obama’s first term, it considered mercury emissions from coal-fired power plants as a “proxy” for limiting carbon dioxide. After it became clear Congress would not pass cap-and-trade legislation to limit carbon dioxide emissions, the White House decided to act administratively to limit greenhouse gases through the backdoor.
The Supreme Court ruled in Michigan v. EPA the agency should have taken into account the cost to utilities, consumers, and others before deciding to implement the regulation. EPA’s failure to conduct a cost-benefit analysis violated the Clean Air Act, the court ruled.
Writing for the majority, the late Justice Antonin Scalia stated, “It is not rational, never mind ‘appropriate,’ to impose billions of dollars of economic costs in return for a few dollars in health or environmental benefits. Statutory context supports this reading.”
Essentially giving the Court what amounts to the middle finger, in December 2015 the EPA decided to enforce the rule despite the Supreme Court’s ruling. It made this decision after a perfunctory review was released stating the benefits of the rule exceed the costs, a conclusion it came to by narrowly defining what counts as “costs” — ignoring the loss of human life, job losses, and lost income its own calculations indicate would occur.
More recently, contrary to the law, the U.S. State Department announced it had delivered $500 million to the United Nations’ Green Climate Fund (GCF), a program intended to bribe the leaders of developing countries not to use fossil fuels.
Members of the Senate Foreign Relations Committee were outraged by this announcement, since Congress had not approved funding for GCF.
Heather Higginbottom, deputy secretary of state for management and resources, said under questioning during a committee hearing that the GCF funds were diverted from the department’s Economic Support Fund. “Did Congress authorize the Green Climate Fund? No… We’ve reviewed the authority and the process under which we can do it, and our lawyers and we have determined that we have the ability to do it,” said Higginbottom.
There’s just one little problem: Congress alone is constitutionally delegated the power of the purse, not State Department lawyers or the president.
Sen. John Barrasso (R-WY) called the GCF funding a “blatant misuse of taxpayers’ dollars” and alleged the Obama administration violated the 1982 Anti-Deficiency Act, which prohibits the use of funds for programs not authorized by Congress.
Sen. Cory Gardner (R-CO), also outraged by the State Department’s action, told Fox News, “Lawyers cannot replace the constitutional requirement that only Congress can appropriate money.”
In late April 2016, 27 Senate Republicans — citing a 1994 law that prohibits the United States from providing funds to any U.N. agency that recognizes as a member country a nation not recognized as a sovereign state by the United States — demanded the Obama administration cut off all funding for the GCF and the millions in annual funding given to the UN Framework Convention on Climate Change (UNFCCC).
The Senate Republicans argue because Palestine, which is not recognized as a sovereign country by the United States or the United Nations, recently joined the UNFCCC, the United States must stop funding the GCF.
In the letter to Secretary of State John Kerry, Barrasso, who led the lawmakers to write the letter, said, “The administration needs to obey the law, and we’re going to do everything we can to enforce it.”
Citing the law, Obama cut off funding to the UN Educational, Scientific and Cultural Organization in 2011 after it admitted Palestine as a member.
Eugene Kontorovich, a professor of international law at Northwestern University School of Law, told the Hill the argument made in the Republican Senators’ letter puts the Obama administration in a difficult situation.
“The president is committed to climate change, and the president is also opposed to Palestinian unilateral statehood efforts at the UN, and the U.S. clearly does not regard Palestine as a state, per its official stated foreign policy,” said Kontorovich to the Hill. “It would be a step beyond anything that’s been done before for the administration to ignore this provision, because it’s the power of the purse.”
It’s time for Obama to do some soul searching and ask not what he can do in pursuit of his climate obsession, but rather what he should do under the existing laws he swore to uphold. If he’s honest about this, he will stop funding the UN’s climate boondoggle and rescind blatantly illegal regulations he has imposed on the power industry.
I’m not holding my breath.
If you don’t visit Somewhat Reasonable and the Heartlander digital magazine every day, you’re missing out on some of the best news and commentary on liberty and free markets you can find. But worry not, freedom lovers! The Heartland Weekly Email is here for you every Friday with a highlight show. Subscribe to the email today, and read this week’s edition below.
A Real Bet for the Tough Guy in a Bow Tie
Joe Bastardi, Patriot Post
Heartland Institute friend Joe Bastardi, a professional meteorologist and weather forecaster, is throwing down the gauntlet and challenging Bill Nye, “The Science Guy,” to a wager on global warming. Nye has recently proposed similar bets to prominent climate change skeptics. Bastardi is now betting that 2017, based on sun and ocean cycles, will be cooler than 2016. UPDATE: Bill Nye has accepted the challenge. READ MORE
ELPC Left Exposed: Chicago’s Partisan Front Group for a Radical Environmental Agenda
Ron Arnold, Somewhat Reasonable
The Environmental Law and Policy Center of the Midwest (ELPC), a left-leaning lobbying and litigating organization, fêted the regulatory victories of colleagues in the Obama administration with its “2016 Dinner and Celebration” at the Chicago Hilton on April 29, 2016. The group hosted two influential Democrat headliners, U.S. Sen. Elizabeth Warren (D-Massachusetts) and U.S. Sen. Dick Durbin (D-Illinois). After the speakers left the dais and the dinner party had adjourned for chit-chat around the open bar, the celebration’s point had become crystal clear: “Regulatory statutes are the cornerstone of the progressive agenda.” READ MORE
Video: Nature Unbound: Bureaucracy vs. the Environment – Ryan Yonk
What if what we think we know about ecology and environmental policy is wrong? What if environmental laws actually make things worse? What if the very idea of nature has been hijacked by politics? Ryan Yonk answered those questions, and more, at a Heartland Institute presentation of his book Nature Unbound: Bureaucracy vs. the Environment. It’s long past time to rethink environmental objectives, align incentives with goals, and affirm the notion that human beings are an integral part of the natural order. If you missed the event, you can watch the presentation in full at Heartland’s YouTube page. WATCH IT HERE
Featured Podcast: Lennie Jarratt and Tim Benson: Strike Vouchers and SOS Accounts
As threats circulate about another possible Chicago Teachers Union strike, Lennie Jarratt, project manager for education at The Heartland Institute, and Heartland Policy Analyst Tim Benson responded with a Policy Brief proposing an innovative solution to keep students in a safe learning environment. Jarratt and Benson join the Heartland Daily Podcast to discuss “strike vouchers,” which would provide displaced students with funds to attend private schools or other learning institutions while the government’s teachers refuse to return to the classroom. LISTEN TO MORE
Join us and fellow lovers of liberty for this special series of Heartland Movie Nights, in which we’ll show each part of the trilogy on three Wednesdays in a row – May 18, May 25, and June 1. Based upon the enormously influential 1957 novel by Ayn Rand. Atlas Shrugged: Part 1 follows the struggles of Dagny Taggart, a railroad heiress trying to maintain her integrity and keep her family’s railroad alive in the midst of a rapidly decaying world. Doors to Heartland’s Andrew Breitbart Freedom Center open at 5:30 p.m. Film starts at 6:00 p.m.. Group discussion follows. SEE UPCOMING EVENTS HERE
Virgin Islands AG Expanding Climate Witch Hunt
H. Sterling Burnett, Climate Change Weekly
The attorney general of the U.S. Virgin Islands is targeting dozens of think tanks, businesses and consumer groups, and individual researchers in his widening probe of organizations that have written skeptically about purported human-caused climate change and policies proposed and implemented to fight it. His efforts are nothing less than a witch hunt – an assault on the First Amendment’s guarantee of free speech in an effort to silence political opponents. READ MORE
The Holy Grail of Health Insurance Alternatives
Michael Hamilton, Consumer Power Report
As health insurance costs continue to increase, a growing number of people are turning to a cost-effective alternative. Carved into Obamacare’s individual mandate is an exception for members of health care sharing ministries (HCSMs). While HCSMs operate similarly to insurers, they cost much less, accommodate members’ objections to Obamacare, and reduce health care inflation by placing patients directly in charge of their health care costs. READ MORE
Oh, the Places ESAs Can Go
Joy Pullmann, School Choice Weekly
Technology seemingly advances by the day. When this technological innovation is used to enhance school choice options, the possibilities are endless. A recent study by Jonathan Butcher explores the potential of combining education savings accounts with mobile payment technologies. Parents could pay for individual lessons from multiple small businesses and tutors with a simple click of a button. READ MORE
Bonus Podcast: James Wanliss: Climate Models Still Failing to Project Temperatures Accurately
Every few months, we hear about the latest projections from people like Al Gore and Paul Ehrlich saying the global warming tipping point is only a few years away. And when these dates come and go, the alarmists just point to a new date a few years further down the line. James Wanliss, senior fellow with The Cornwall Alliance for the Stewardship of Creation, joins the Heartland Daily Podcast to talk about how and why we still can not trust climate models. READ MORE
Don’t Let the FDA Kill Vaping
Matthew Glans, Real Clear Policy
This week, the Food and Drug Administration (FDA) unveiled new regulations placing electronic cigarettes under an avalanche of new rules requiring they be approved as a new type of tobacco product. These new regulations will force the vast majority of these products to go through a lengthy and expensive approval process. The hurdles will likely stop most of these innovative products from ever making it back onto store shelves. READ MORE
Help Us Stop Wikipedia’s Lies!
Joseph L. Bast, Somewhat Reasonable
Many people rely on our profile on Wikipedia to provide an objective description of our mission, programs, and accomplishments. Alas, the profile they find there is a fake, filled with lies and libel about our funding, tactics, and the positions we take on controversial issues. Wikipedia refuses to make the changes we request. It even deletes and reverses all the changes made by others who know the profile is unreliable. We need your help! READ MORE
Invest in the Future of Freedom! Are you considering 2016 gifts to your favorite charities? We hope The Heartland Institute is on your list. Preserving and expanding individual freedom is the surest way to advance many good and noble objectives, from feeding and clothing the poor to encouraging excellence and great achievement. Making charitable gifts to nonprofit organizations dedicated to individual freedom is the most highly leveraged investment a philanthropist can make. Click here to make a contribution online, or mail your gift to The Heartland Institute, One South Wacker Drive, Suite 2740, Chicago, IL 60606. To request a FREE wills guide or to get more information to plan your future please visit My Gift Legacy http://legacy.heartland.org/ or contact Gwen Carver at 312/377-4000 or by email at email@example.com.
Arizona Republican Senator John McCain has over his decades in government built a reputation based largely on a few key tenets. As a genuine Vietnam War hero, and as Chairman of the Senate Committee on Armed Services, he is one of the lead defenders and proponents of all things military. He relentlessly champions “good government” – i.e. spending government money more wisely and well. And he has engaged in a relentless pursuit of “campaign finance reform” so as to allegedly remove the undue influence of political donors on policy decisions.
What the Senator is currently doing calls all of these reputation-al tenets into serious question.
McCain, McCarthy Team Up to Ban Russian Rocket Engines: “Two Republican powerhouses (Senate Armed Services Committee Chairman John McCain [Ariz.] and House Majority Leader Kevin McCarthy [Calif.]) teamed up Wednesday to introduce a bill that would stop U.S. military reliance on Russian-made rocket engines (RD-180) for its national security space launches.”
Except you can’t actually end our reliance on Russian rockets – unless you have a viable alternative ready to go. The United States does not. As McCain’s Senate colleague Richard Shelby (R-AL) points out: “Given the current volatility of our relationship with Russia, our nation needs to develop a reliable, American alternative to the RD-180 as soon as possible. Unfortunately, that may not be for another four to five years at best.”
How important to what we do is the RD-180? “Today, approximately two-thirds of our military, intelligence community, scientific and weather satellites are launched into orbit on the Atlas 5, which uses the Russian RD-180 rocket engine.”
So Senator McCain wanting to immediately ban this vital rocket component is terrible for the military. And it isn’t just me saying it – again, Senator Shelby: “(R)ecklessly restricting the use of the RD-180 in the near-term will undermine both national security and the prospects for real competition in the military launch business.”
What does Senator McCain propose we purchase instead? “Sen. McCain pushed these restrictions in close coordination with SpaceX, which stands much to gain by eliminating competition. The SpaceX Falcon 9 rocket was recently certified for some of these launches by the Air Force, albeit under intense political pressure from the Obama administration….SpaceX has…suffered numerous delays and anomalies. Shortly after the Air Force’s certification of the Falcon 9, a catastrophic failure in June led to the complete loss of both the vehicle and all of its taxpayer-funded cargo, thus grounding the vehicle. The company was already over two years late developing the Falcon 9 and now has a substantial backlog of its current launch schedule, which raises the question of what the launch priorities will be if it does resume flights.”
SpaceX doesn’t sound anywhere near ready for prime time. In fact, it’s actually worse than that: “SpaceX has yet to undertake any form of national security launch. Yet without changes to the restrictions pushed by Senator McCain, virtually all of America’s military space missions will depend on SpaceX’s grounded rocket and its problematic launch history.”
Why on Earth (and beyond) is Senator McCain joining with the Obama Administration in pushing completely inadequate SpaceX as the next thing – when it clearly yet isn’t?
John McCain Bought and Paid For by Elon Musk: “Sen. John McCain (R-AZ) and businessman Elon Musk, creator of SpaceX, Tesla Motors, and SolarCity, have enjoyed a long and close business and political relationship that have helped support the senator while enriching Musk at taxpayer expense. Musk and his companies have support McCain and his McCain Institute while the senator has consistently supported and advanced the legislative interests of Musk’s companies in the Senate.”
So Senator McCain is pushing an amendment that is terrible for the military and our national security. That will almost certainly cost us untold additional billions of dollars in failed launches and lost materials – because of unready rockets. All to reward with even more government coin – a man who has given McCain lots and LOTS of political coin.
All of which contradicts every tenet for which Senator McCain claims to stand. The biggest opponent of McCain’s amendment – should be McCain.
Here’s hoping everyone else in Congress will do the wise, prudent and fact-based thing – and oppose what McCain is proposing.
A study by the Global Warming Policy Foundation (GWPF) finds little evidence purported human-caused climate change is increasing the number or intensity of droughts or heatwaves in the United Kingdom or worldwide.
Citing research in Nature Scientific Data from scientists at the University of California, the GWPF study notes, if anything, there has been a slowly declining trend in drought since 1982. Even the Intergovernmental Panel on Climate Change (IPCC) has found it almost impossible to attribute changes in drought since the mid-twentieth century to anthropogenic warming.
Concerning heatwaves and climate-related deaths, IPCC concluded the number of heat-related deaths has likely increased due to climate change; the GWPF study finds that conclusion to be a “case of the IPCC inventing conclusions rather than taking them from the peer reviewed literature” that finds most people can adapt to modest changes in temperature with no ill effects. One study shows the number of cold-related deaths was 18 times higher than deaths related to heat, meaning a modest warming could result in fewer temperature-related deaths overall.
Finally, the GWPF study finds the notion that manmade climate change will cause an increase in global conflicts is based on extremely flimsy evidence. The Stockholm Peace Research Institute noted, “‘conflict researchers’ find it hard to understand how such bold claims [linking climate change to global conflicts] can be made on the basis of such thin evidence, perhaps not realizing that this is normal in climate-related fields,” with one conflict researcher calling the link between manmade warming and increasing conflicts a “myth,” noting, “History shows that ‘warm’ periods are more peaceful than ‘cold’ ones. In the modern era, the evolution of the climate is not an essential factor to explain collective violence. Nothing indicates that ‘waterwars’ or floods of ‘climate refugees’ are on the horizon.”
More good news comes from another study published in the Proceedings of the National Academy of Sciences which finds climate change will not harm plankton, an important finding since plankton are the foundation for the ocean food chain.
Using a computer model of global ocean circulation to simulate how plankton follow the world’s ocean currents and the temperatures they are subjected to, the study found since plankton travel around the world on ocean currents, they have evolved to survive a wide range of conditions, enduring far more rapid and significantly larger temperature changes than those predicted by even the most dramatic models of global warming.
The study’s lead author, Martina Doblin, Ph.D. a professor at the University of Technology Sydney, said in a press statement, “[D]rifting plankton, that are invisible to the naked eye, are responsible for half the Earth’s oxygen and for global fisheries yields, and are therefore important in providing other essential ecosystem services. Previous exposure to fluctuating temperature can influence how planktonic populations fare under future temperature changes. Our results suggest that the effects of climate change on ocean plankton will need to be re-evaluated to take this into account.”
Why does the company that by far collects the most private information that the FCC claims it wants to protect, and that also has the worst consumer privacy protection record with the FTC, (Google), get 99% exempted from the telecom and cable privacy protections expected of telephone, broadband, cable and satellite providers?
Is it the same reason, that the edge platforms with much more gatekeeper power and private data collection opportunity than ISPs somehow warrant no FCC privacy regulation? (See info-graphic here; explanation here.)
How can the U.S. credibly demand a data safe harbor in the EU on the basis of promises that the U.S. has vigilant, robust and comprehensive privacy enforcement in the U.S., when the worst privacy offender in both Europe and the U.S., Google, de facto enjoys special lenient privacy treatment from both the current FTC and the current FCC?
Those are good questions for the Senate Judiciary Committee to ask FCC and FTC leadership this week at its privacy oversight hearing, which in part is examining why the FCC and FTC appear more interested in protecting Google and other Big Internet companies from privacy regulation, than in protecting consumers’ expected communications and viewing habits privacy.
What are the facts?
Google collects and stores vastly more private information than any other entity – see the evidence here. Google also has the worst privacy record of any major American company – see the evidence here. Google’s dominant mobile operating system, Android, also has the worst data protection record of any major American company – see evidence here. To understand why Google is a uniquely problematic privacy problem, see the detailed analysis and evidence here.
Google collects vastly more private information than any ISP: IP addresses via Search, Analytics, Cookies, & Chrome; Email addresses via Gmail scanning & Postini filters; WiFi, SSID & MAC addresses via WiFi war-driving; Phone/mobile #s via Play, search, Android, Voice, Talk; Voiceprint recognition: via Hangouts, Translate, YouTube; Face-print recognition via Google+, Photos, YouTube; 103 Languages identified via Translate, Voice, Video; Home info: via Maps, Earth, StreetView, Android, Play; personal info via Account, apps, product, service registrations; Social Security, passport &license #s via Desktop Search; Credit card & bank info: Checkout, Shopping, & Wallet; Health identifiers by Search, Google+, Gmail, News, Books; and Click-print IDs via analysis of multiple web histories.
Where is the special treatment of Google?
Concerning the FCC’s Title II Section 222 privacy rules that apply to telecommunications, a week before the FCC voted on the Open Internet order, Google submitted an ex parte recommendation to the FCC, that the FCC adopted, that said both the FCC and the Verizon v. FCC court were wrong in their understanding of telecommunications. This last minute legal interpretation whipsaw, meant Google politically exempted itself not only from Title II Section 222 privacy rules, but also exempted itself from CALEA responsibilities to cooperate with law enforcement investigations.
Concerning the privacy rules for the AllVid set-top box proceeding, Google’s commentsclaimed special treatment in so far as they urge the FCC to not apply cable and satellite viewing-habit privacy regulations to over the top video like Google. Effectively Google is rejecting the overwhelming bipartisan votes in 1992 and again in 2004 for ensuring that consumers’ video viewing habits were private not public information.
Google’s AllVid comments to the FCC also glistened and wafted in “Goobris,” (defined as hubris to the Google power), in telling the FCC that it did not need to try and regulate Google because “the robust privacy and data security protections that already apply at the federal and state levels will continue to protect consumers.”
Some context is essential to grasp the full extent of Goobris here.
Concerning State law enforcement, let’s not forget that for over a year during 2015 and 2016, Google secured a Federal Court injunction that effectively prevented any state law enforcement authority from even investigating an alleged Google violation of any state consumer protection law, including state privacy laws. For those shaking their head in disbelief how such a perverse outcome could or did happen, here is the documentation and explanation of this dark period in state law enforcement vis-á-vis Google.
Concerning FTC law enforcement vis-á-vis Google, let’s not forget that since the FTC abruptly and suspiciously dropped all FTC antitrust charges against Google in January 2013, including its Android investigation without a peep, the FTC has not enforced privacy law against Google.
Making matters worse, since then, the FTC has ignored repeated charges and evidence that Google has further violated its FTC-Google-Buzz privacy order.
A December 2015 EFF petition and complaint to the FTC charged that Google violated its promise to protect students’ privacy in publicly signing the Student Privacy Pledge. To date the FTC has done nothing.
It gets worse.
The FTC has known of Google Apps for Education serious privacy problems for almost two years with no action.
In March 2014, Education Week reported that Google was exposed in a civil suit deposition to have secretly read all student-Gmail before it was received without any notice or “informed consent,” for the commercial purpose of creating a targeted advertising profile on the student for the future. In an April 2014 mea culpa blog post, Google effectively had to admit that for three years until April 29th 2014, Google secretly had been illegally collecting private student data for advertising purposes in violation of their public privacy representations and FERPA. The analysis here by world-leading privacy advocate Simon Davies explains why this three-years-late, Google privacy invasion disclosure affecting minors is especially serious, inadequate and misleading.
In short, Congressional overseers should question how the FTC and FCC can defend the least privacy regulation/enforcement of the worst consumer privacy violator?
And also ask why consumers’ privacy interests overall, have apparently been subordinated to Google’s corporate interests?
Scott Cleland served as Deputy U.S. Coordinator for International Communications & Information Policy in the George H. W. Bush Administration. He is President of Precursor LLC, an emergent enterprise risk consultancy for Fortune 500 companies, some of which are Google competitors, and Chairman of NetCompetition, a pro-competition e-forum supported by broadband interests. He is also author of “Search & Destroy: Why You Can’t Trust Google Inc.” Cleland has testified before both the Senate and House antitrust subcommittees on Google and also before the relevant House oversight subcommittee on Google’s privacy problems.
A couple power points in the internet ecosystem were on display this week.
On Monday, a Gizmoda report charged that Facebook employees were biasing the “trending” bar by avoiding stories popular among conservatives, and even outright blocking conservative news outlets. Facebook responded in a statement that did not completely reject the report, “There are rigorous guidelines in place for the review team to ensure consistency and neutrality. These guidelines do not permit the suppression of political perspectives. Nor do they permit the prioritization of one viewpoint over another or on news outlet over another.” In not providing an outright rejection Facebook makes clear what we likely know about this accusation anyway, that something was awry likely because of people.
According to reports, at Facebook people play a role in choosing the words, people pay a role in what news sites and publications are searched, and even whether some news stories were injected in the list without actually “trending.” People being involved is not shocking. It is a good idea to have people involved so that algorithms do not return silly or unwanted results. No one is really interested in the consistently most searched item on the web, pornography, “trending” every day.
So were conservatives being left out? Were people biasing the results? Did Facebook do something, or did their independent contractors act outside of corporate policy? Honestly who cares? Market competition could arise to Facebook if in fact it were applying any sort of bias as part of actual operations. If this practice was disclosed then what difference does it make? If not, there is a problem. But Facebook has made the alleged bias, however it came to be, a problem given the company’s loud argument that strict net neutrality should be the standard for service providers while not including themselves in the new sticky web of government control. Taken together this is exactly the sort of hypocritical, inauthentic talk and action that voters are rejecting in droves this election.
Also this week, Google announced that they will ban advertisements from payday lenders. In this case that information was announced very publicly, including providing the reason that Google does not like that the pay day lenders charge high interest rates. Who knows who Google won’t like next.
In both cases it’s fair enough – their website, their rules, their power. And that is the important point to take from this week’s news.
These stories demonstrate that there is “power” in various parts of the Internet ecosystem. Market power is not a bad thing and consumers wield it as well. Contrary to the FCC’s bias as expressed in the current privacy rule-making, it is not the service providers alone who might have some ability to effect a user’s experience, and neither are the consumers powerless . This proven reality exposes that the FCC’s proposed privacy rules will do nothing to increase consumer protection, but instead will burden only one part of the ecosystem with intrusive regulation even while backing away from the so called consumer protections in other areas. In short, the FCC is merely acting politically, and recklessly.
The power of various players in the internet ecosystem has been made clear this week, in neither case were service providers involved and yet end results were altered. If the FCC insists in playing in the privacy field despite plenty of other government oversight, then rather than creating fantastical windmills of unproven marketplace power for a quixotic FCC to tilt, it should be seeking to create clear rules that consistently protect consumer data end to end while promoting competition and innovation in the online marketplace.