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Regulation



All Reason.com articles with the "Regulation" tag.



Published: Fri, 21 Jul 2017 00:00:00 -0400

Last Build Date: Fri, 21 Jul 2017 10:06:47 -0400

 



Brickbat: This Land Is My Land

Thu, 20 Jul 2017 04:00:00 -0400

(image) Clem Smith was homeless for six years, and if Jefferson County, Colorado, code enforcement has its way, he may be homeless again. He used inheritance money to buy land he plans to build a house on, an RV he lives in at the property until the house is built, and a shipping container he says he uses as work space. But code enforcement says it's illegal to park an RV or place a shipping container on a property without a house and is threatening to fine him if he doesn't move them.




Elon Musk Can't Sell His Teslas in Texas

Wed, 19 Jul 2017 15:05:00 -0400

"It makes no sense that an American manufactured vehicle would be so challenging to get," says Tesla owner Matt Holm. "You have to jump through so many hoops." When Elon Musk launched the first Tesla sports car in 2008, he didn't just set out to create a mass market for electric vehicles; Musk wanted to disrupt the entire auto industry by cutting out the dealership middleman and selling his cars directly to consumers. Tesla's sales approach has resonated with customers who want a more interactive car buying experience. Holm, a realtor based in Austin, Texas is one of those Tesla converts. He spends a lot of time on the road driving clients in his Model S. He loves the fact that his vehicle doesn't need much maintenance and can be charged overnight in his garage. But when Matt went to purchase his Tesla, he couldn't just walk into a store and buy one. "I actually had to go online, configure it, and order it sight unseen," says Holm. "It was like I was a spy or something getting some James-Bond car delivered." Unlike the big car companies, Tesla doesn't have a network of independent dealerships that sell its cars. The company runs its own showrooms, but in Texas—along with Connecticut, Michigan, Louisiana, Utah, and West Virginia—the government makes it illegal to walk into a Tesla store and buy a car. Tesla employees at these showrooms aren't even allowed to give pricing information or to direct customers to the company's website. Test drives require a special permit from the Texas Department of Motor Vehicles. Almost every state has some sort of restriction on directly purchasing cars from manufacturers. The purpose of these franchise laws, which date to the 1930s, is to prevent car buyers from cutting out the middlemen—a big political constituency. The Lone Star State has nearly 1,300 franchised car dealerships employing about 100,000 people. The National Auto Dealers Association (NADA) has repeatedly argued that the current system of franchised dealers is necessary to protect consumers and ensure fair competition. In a speech before the Automotive Press Association last October, NADA chairman Jeff Carlson stated that consumers preferred the dealership sales model and that dealership networks were "the best, most efficient, and most pro-consumer way of selling new cars and trucks." But if car buyers really preferred going through third-party dealers, why do they need government protection? Car manufacturers have tried to sell straight to consumers prior to Tesla. In the late 1990s, Ford attempted to circumvent the dealerships in Texas by starting its own stores and selling used cars through their own company website. The Texas Department of Transportation ruled that this violated the state's franchise laws and ordered Ford to shut down operations. Ford was also hit with a $1.7 million state fine. The following year, then Texas Governor George W. Bush signed a law that strengthened protections for the dealership cartel. Now Musk is taking his own shot at selling direct to consumers. According to figures from the Texas Ethics Commission, Tesla has spent over $1.2 million on Texas lobbyists in the last five years as part of an effort to eliminate the direct sales ban. Rep. Jason Isaac, a Republican state legislator from Dripping Springs, Texas, introduced a bill in the 2017 legislative session that would get rid of car dealership rules. "It's truly not a free-market approach," says Isaac. "What my bill basically says is that a manufacturer of an automobile can sell direct to the consumer if they want to." But Isaac has come up against the the politically connected Texas Auto Dealers Association (TADA), which opposes any efforts to change franchise laws. TADA claims that allowing Tesla to sell directly to consumers is a violation of "true free market" principles by giving Musk and Tesla "a monopoly just for them." Lawmakers didn't act on Isaac's bill this session, making it the third legislative defeat for Tesla's reform effort in Texas. But Elon Musk's campaign to remake the car industry i[...]



Elon Musk Is Wrong about Artificial Intelligence and the Precautionary Principle

Tue, 18 Jul 2017 14:40:00 -0400

Artificial intelligence, or AI—the branch of computer science that aims to create intelligent machines—"is a fundamental risk to human civilization," declared Tesla and SpaceX founder Elon Musk at the National Governors Association's annual meeting this past weekend. "It's really the scariest problem to me." He finds it so scary, in fact, that he considers it "a rare case where we should be proactive in regulation instead of reactive. By the time we are reactive in AI regulation, it is too late." The regulators' job, Musk said, would be to tell AI developers to "make sure this is safe and then you can go—otherwise, slow down." This may sound reasonable. But Musk is, perhaps unknowingly, recommending that AI researchers be saddled with the precautionary principle. According to one definition, that's "the precept that an action should not be taken if the consequences are uncertain and potentially dangerous." Or as I have summarized it: "Never do anything for the first time." As examples of remarkable AI progress, Musk cited AlphaGo's victory over the world's best players of the game of Go. He described how simulated figures using DeepMind techniques and rewards learned in only a few hours to walk and navigate in complex environments. All too soon, Musk asserted, "Robots will be able to do everything better than us." Maybe so, but in the relatively foreseeable future, at least, there are reasons to doubt that. Musk, who once likened the development of artificial intelligence to "summoning the demon," worries that AI might exponentially bootstrap its way to omniscience (and shortly thereafter omnipotence). Such a superintelligent AI, he fears, might then decide that human beings are basically vermin and eliminate us. That might be a long-run risk, but that prospect does not require that we summon demon regulators now to slow down merely competent near-term versions of AI. Especially if those near-term AIs can help us by driving our cars, diagnosing our ills, and serving as universal translators. Despite Musk's worries, there is no paucity of folks already trying to address and ameliorate any existential risks that superintelligent AI might pose, including the OpenAI project co-founded by Musk. (Is Musk looking for government support for OpenAI?) If developers are worried about what their AIs are thinking, researchers at MIT have just reported a technique that lets them peer inside machine minds, enabling them to figure out why the machines are making the decisions they make. Such technologies might allow future AI developers to monitor their machines to ensure that their values are congruent with human values. Speaking of values, robotics researchers at the University of Hertfordshire are proposing to update Isaac Asimov's Three Laws of Robotics with a form of intrinsic motivation they describe as "empowerment." Empowerment involves the formalization and operationalization of aims that include the self-preservation of a robot, the protection of the robot's human partner, and the robot supporting or expanding the human's operational capabilities. Humanity may avoid being annihilated by superintelligent AIs simply by ourselves becoming superintelligent AIs. The Google-based futurist Ray Kurzweil predicts that by the middle of this century we will have begun to merge with our machines. As a result, Kurzweil told an interviewer at South by Southwest, "We're going to get more neocortex, we're going to be funnier, we're going to be better at music. We're going to be sexier." It is worth noting that Musk has founded a company, Neuralink, that could make Kurzweil's prediction come true. Neuralink is working to develop an injectable mesh-like "neural lace" that fits on your brain to connect you to the computational power and knowledge databases that reside in the Cloud. It would be a great shame if Musk's hypercautious regulators were to get in the way of the happy future that Musk's company aims to bring us.[...]



We Are The Economy They Want to Regulate

Sun, 16 Jul 2017 00:30:00 -0400

Critics of the libertarian philosophy think they can score points by calling libertarians "market fundamentalists." It's supposed to conjure images of dogmatic religious fundamentalists, just like the term global warming denier is supposed to conjure images of Holocaust deniers. It's a smear, of course, and if you think the tactic discredits those who employ it, I agree. The fact is that libertarians cannot be market fundamentalists. Why not? Because in the libertarian worldview, the market is not fundamental. What's fundamental is every person's right to be free from aggressive force. So fine, I'm a freedom fundamentalist. Guilty. Strictly speaking, it's not markets that can and should be free—it's people. The term free market merely describes one political-legal context in which people conduct themselves. It's shorthand for a subset of human action—the exchange of goods and services, usually for money. (The logic of human action, the study of which Ludwig von Mises called praxeology, applies to all purposeful conduct, not just market exchange.) It follows, then, that when politicians and activists call on the government to regulate the economy, they mean to regulate us. There's no economy to regulate. It's not a machine or a vehicle. It's an unending series of purposeful activities the logic of which gives rise to a process characterized by regularities. Hence, for example, the law of supply and demand. We can talk about this orderly process—the market—as though it were a thing, but we have to keep its metaphorical nature in mind. It's still only people cooperating with each other. When market critics demand government regulation, they imply that markets are by nature unregulated. But we've just seen that this is nonsense. An unregulated market is a logical contradiction. That we call it a market indicates the regularities, or laws, just mentioned. No regularity—no market. There could no more be an unregulated market than there could be a grammarless language or a perpetually disorderly society. We would not call a population a society if it did not display a general order expressed by rules (written and unwritten), customs, and mores. Without such things, a population would be not a society but a Hobbesian state of nature. So the question is not whether the market should be regulated, but who should regulate it. And the only two choices are: 1) market participants through the exercise of their free and peaceful choices or 2) politicians and bureaucrats relying on the threat of violence to impose their will. Easy choice, I'd say. Those who doubt the market is intrinsically regulated when people are completely free need only ask themselves what would happen if someone charged $100 for an apple or offered to pay workers $1 an hour (assuming no legislation forbidding this). The answer is simple: others would offer lower prices for apples and higher wages to workers. No need for government regulation. In other words, competition would discipline the would-be gouger and miser. Competition simply means the freedom to offer better terms to consumers and workers. As I say, free markets are nothing but free persons. Those who think cooperation is preferable to competition should realize they are two sides of the same coin. Competition is what happens when we're free to choose with whom we wish to cooperate. Two shoe stores compete, each hoping to be the one that cooperates with me in my quest for new shoes. Critics really must stop reifying the market because markets don't do things or have purposes. Only people do things and have purposes. You often hear it said (unfortunately, by some economists) that markets ration goods and services. This is often the retort when critics of national health insurance warn that rationing would eventually be necessary to sustain the system. When a government bureaucracy allocates medical services, that is indeed rationing. Think of food rationing during World War II, when you could buy no more eggs than[...]



Oregon Town Cracks Down on Pot-Selling Robotic Blonde Mannequins

Fri, 14 Jul 2017 15:45:00 -0400

(image) The new trend in the Pacific Northwest is cracking down on marijuana dispensary mascots. First there was the Washington cannabis bill that banned costumed mascots and inflatable arm-flailing tubemen from advertising for cannabusinesses. Now the town of Wood Village, Oregon, is fining Aaron Michelsen, owner of NW Compassion Medical Center, $2,000 for the two buxom, sign-wielding mannequins he had stationed outside his store.

Michelson was told his blonde mannequins—which wave signs reading "got chronic" when plugged in—ran afoul of Wood Village's recent sign ordinance, which among other things bans "portable signs." Michelsen netted another $1,000 fine for a placing a prohibited rooftop sign atop his cupcake store, which is ingeniously located in the same building as his marijuana dispensary.

City Manager Bill Petersen told the Portland Tribune that the fines were not about persecuting pot, insisting that they were a neutral enforcement of a statute that was "being uniformly applied regardless of the business type." But Wood Village's ordinance does in fact create different standards for different business types. The portable sign provision that got Michelsen in trouble, for instance, creates exemptions for real estate businesses, political campaigns, and garage sales.

Not only is that not uniform regulation, it's also likely unconstitutional.

"When you have an ordinance that regulates who can use a type of medium or signage, that is presumably unconstitutional," says William Mauer, an Institute for Justice attorney who has litigated similar cases in the past.

The Supreme Court took up this issue in 2015, when it heard the case of Reed v. Town of Gilbert. A small Arizona church had sued over a local sign ordinance that allowed it to deploy temporary signs only in the 12 hours prior to any church service. It also required those signs be no larger than six square feet. Meanwhile, temporary political signs could be set up at any time and could be 32 square feet. This, the Court ruled unanimously, was unconstitutional. Justice Clarence Thomas declared the ordinance a "paradigmatic example of content-based discrimination."

Wood Village's ordinance seems to have many of the same problems as the Gilbert one, specifying the different sign sizes and number of display days that are allowed for temporary signs, depending on whether they for a construction site, garage sale, political campaign, or real estate.

Part of the point of the First Amendment is to prevent such petty restrictions on expression. The City of Wood Village should recognize this and let Michelsen's life-sized, drug-pushing barbies do their work unmolested.




Alabama Bans Margarita Pitchers, Declaring Them Adulterated

Wed, 12 Jul 2017 19:35:00 -0400

The Alabama Alcoholic Beverage Control Board (ABC) recently informed Will Haver, founder and CEO of the Taco Mama restaurant chain, that he was breaking the law by serving his customers pitchers of margaritas. That edict, which was accompanied by the threat of a fine up to $1,000 and up to six months in jail per pitcher, was based on a counterintuitive interpretation of a law that has been on the books for decades: It shall be unlawful...for any person to fortify, adulterate, contaminate, or in any manner change the character or purity of alcoholic beverages from that as originally marketed by the manufacturer, except that a retail licensee on order from a customer may mix a chaser or other ingredients necessary to prepare a cocktail or mixed drink for on-premises consumption. According to ABC General Counsel Bob Hill, mixing a single cocktail does not qualify as adulteration, but putting several in a pitcher does. The problem, as ABC spokesman Dean Argo explains it in an interview with R Street Institute Vice President Cameron Smith, is that the alcohol in a pitcher of mixed drinks tends to settle to the bottom. "The person who is poured the first or second drink may receive only a .25 to .5 ounce of alcohol," Argo tells Smith, "where a person receiving the third, fourth or even fifth pour may receive much more alcohol than mix." I'm no chemist, but that explanation seems dubious to me. If the ingredients in a margarita separated, wouldn't the alcohol migrate toward the top, since it is less dense than water or lime juice? Perhaps what Argo means is that the first and second servings of a frozen margarita tend to contain more ice, which would reduce the alcohol content. But if the margaritas are served on the rocks (the way most of them seem to be served at Taco Mama, where "frozen" is one of a dozen varieties), melting ice would tend to make later servings weaker. In any case, the ABC's reading of the law is outlandish, especially in light of the explicit statutory exception for mixed drinks. If six margaritas in separate glasses are not adulterated, pouring them into one vessel cannot make them so. The ban on adulteration is aimed at protecting consumers from being cheated or endangered by trickery behind the bar, not from getting exactly what they want, which for many Taco Mama customers is a pitcher of margaritas. Pressing Argo on the ABC's logic, Smith asks whether it would be legal for a bar to sell a pitcher of margarita mix alongside six shots of tequila. "I can't [see] anything that would prohibit that," Argo says. "The patron would [be] able to tell exactly the amount of alcohol he or she is getting and the server/bartender would be able to know when the patron becomes overserved." Smith is puzzled: "So the real danger is the alcohol settling in the pitcher, but that's only a problem if a bartender mixes it? If the patron does the exact same thing on the other side of the bar, then it's completely reasonable....You truly have to be overserved to buy that kind of nonsense." Trying to impress upon Smith the hazards of tolerating margaritas in pitchers, Argo trots out a parade of horribles. "If one licensee is allowed to serve mixed drinks in a pitcher," he says, "then other licensees would have to be allowed to serve mixed drinks." That could include not only margaritas, Argo warns, but even rum and Coke. Who would want to live in such a world?[...]



Janice Rogers Brown, America's Most Libertarian Federal Judge, Is Retiring

Wed, 12 Jul 2017 15:30:00 -0400

President Donald Trump will soon have the opportunity to fill a key vacancy on the federal bench. As The Wall Street Journal and Buzzfeed have reported, Janice Rogers Brown, an outspoken federal judge with strong libertarian tendencies, will retire next month after serving 12 years on the U.S. Court of Appeals for the District of Columbia Circuit. A former California Supreme Court justice, Brown was first nominated to the federal judiciary in 2003 by President George W. Bush, but Senate Democrats repeatedly blocked her confirmation. She was eventually confirmed in 2005. During her tenure on the D.C. Circuit, Brown emerged as a powerful voice in defense of civil and economic liberties. In the 2015 case of United States v. Gross, for example, Brown filed a sharp dissent lambasting the pro-police "prevailing orthodoxy" in Fourth Amendment cases. The right to be free from unreasonable search and seizure, Brown maintained, should clearly forbid law enforcement from conducting "a rolling roadblock that sweeps citizens up at random and subjects them to undesired police interactions culminating in a search of their persons and effects." Yet somehow "our case law considers such a policy consistent with the Fourth Amendment." Brown disagreed: "I continue to think this [case law] is error." Brown has been equally critical of government malfeasance in the economic realm. In the 2012 case of Hettinga v. United States, for instance, Brown came out swinging against the Supreme Court case law that left the D.C. Circuit with no choice but to uphold a federal price-rigging scheme that made it illegal for an upstart family dairy farm to bottle and sell its own milk for 20 cents less than the competition. This case "reveals an ugly truth," Brown wrote. "America's cowboy capitalism was long ago disarmed by a democratic process increasingly dominated by powerful groups with economic interests antithetical to competitors and consumers. And the courts, from which the victims of burdensome regulation sought protection, have been negotiating the terms of surrender since the 1930s." Brown also has the distinction of being denounced as a crazy libertarian by Barack Obama. In 2005, then-Sen. Obama voted against Brown's confirmation to the D.C. Circuit because he disliked her views on economic liberty and the Constitution. "One of the things that is most troubling is Justice Brown's approval of the Lochner era of the Supreme Court," Obama said, referring to Lochner v. New York, the 1905 case in which the Supreme Court struck down a state economic regulation because it served no legitimate health or safety purpose and thus violated the 14th Amendment. As it happens, Obama is the one who is wrong about Lochner. The news of Brown's retirement has already prompted speculation and debate about her possible replacement. At The Volokh Conspiracy, Case Western law professor Jonathan Adler suggests that the Trump administration may want "to use the D.C. Circuit opening to break the apparent logjam over nominations to the U.S. Court of Appeals for the 5th Circuit." That logjam, which has been extensively covered and analyzed by David Lat at Above the Law, boils down to this: There are currently two Texas openings on the 5th Circuit and three real contenders in the running. Each contender has the support of powerful political figures in Texas. One of the three contenders is Texas Supreme Court Justice Don Willett. Because Willett recently appeared on Donald Trump's Supreme Court shortlist, he would seem to be a natural pick for the 5th Circuit. But Texas politics have so far apparently prevented any 5th Circuit nominees from being named. The solution now proffered by Adler is for Trump to nominate Willett (or one of the other two) to the D.C. Circuit and thus make federal appellate judges out of all three in one swoop. Hugh Hewitt, the conservative talk radio host and influential political pundit, is[...]



Brickbat: Poison Whiskey

Thu, 06 Jul 2017 04:00:00 -0400

(image) The Texas Alcoholic Beverage Commission charged Spec's Wines, Spirits and Finer Foods with a host of violations and asked that a Texas administrative court either fine the company $713 million or yank the license for each of its 164 stores. But the judges said the only charge that the commission proved was that Spec's might have paid an invoice a day or two late. The court issued Spec's only a warning. But the investigation cost Spec's more than $1 million in legal fees and other costs, and the three-year freeze the commission imposed on issuing Spec's new licenses until the case was resolved kept it from expanding.




Uber, Lyft Can Now Bring Jobs and Better Transportation to Alaska

Fri, 30 Jun 2017 16:00:00 -0400

After being forced out in 2015, transportation network companies (TNCs) like Uber and Lyft are back in Alaska. New legislation signed by the governor earlier this month will allow for ride-sharing in the final frontier without so many burdensome regulations. In 2014, Uber clashed with the Alaska Department of Labor and Workforce Development's Workers' Compensation Division while operating in Anchorage. According to the state, classifying drivers as independent contractors was fraudulent and a violation of the Alaska Workers' Compensation Act. The startup begrudgingly left in 2015 and paid a $77,925 fine to the state as part of a settlement contingent on ceasing operations. Uber had also been providing free rides for six months during unsuccessful negotiations with Anchorage city officials. Lawmakers have warmed up to the sharing economy since then. In testimony to the Alaska House Labor and Commerce Committee on House Bill 132, Michael D. Farren of the Mercatus Center called the bill "some of the best TNC legislation I have seen to date." Farren praised the bill for allowing cash payments for transportation services, requiring a national background check for drivers but not stipulating the type, letting drivers stay classified as independent contractors, and not establishing a licensing fee in order to operate. The most controversial element of the legislation prevents municipalities from enacting their own ordinances to regulate transportation network companies or their drivers unless approved in a municipal election. Cities still have the right to levy a sales tax. Representatives from local governments, which are oftentimes under the influence of the taxi lobby, are not thrilled about state preemption. Juneau assembly member Maria Gladziszewski claims that each specific city needs to regulate transportation: "We don't have near enough information to think this might be OK in Juneau. I think that you want to maintain local control. We have very specific transportation needs." Others in Juneau have expressed concern that Uber would result in too much traffic during tourist season or harm existing taxi companies. Yet, city-level regulations sometimes put the "needs" of entrenched interests over drivers and passengers alike. According to Farren's testimony, municipalities created a patchwork system of anti-competitive regulations across the state. These measures included licensing fees, record-keeping for all trips, and caps on the number of taxis. Sometimes drivers were required to prove that a city "needed" new services above and beyond existing taxis. These regulations have made owning a taxi medallion a rather lucrative business, with medallions in Anchorage selling for $155,000 in 2013. It seems unlikely that Juneau's "specific transportation needs" were best met by mandating that vehicles have signs with six-inch letters or requiring all taxi entrepreneurs have permits that cost $1,700 total. As a result, reliable transportation for Alaskans is sorely lacking. Smaller communities that taxis choose to avoid are hit the hardest. Executive Director of the Chugiak-Eagle River Chamber of Commerce Susan Gorski described this problem in a 2014 pro-Uber op-ed: Most taxis choose to stay in the Anchorage bowl, where they can rely on lucrative fares to the airport. We have a population of 35,000 and no reliable or convenient intra-community or inter-community transportation. This situation serves taxis and taxi companies quite well. But it doesn't serve riders in Chugiak-Eagle River, where public transportation options and population growth make an already untenable situation worse. And it doesn't serve Anchorage small businesses, who are denied potential customers who can't find a reliable ride downtown…Uber brings efficiency to a market that is sorely lacking. Regulations limiting entry into the taxi indus[...]



Reformer Neomi Rao Sails Through Senate Confirmation to Become the Government’s Top Regulatory Analyst

Thu, 29 Jun 2017 17:51:00 -0400

Today the Senate confirmed Neomi Rao as administrator of the Office for Regulatory Affairs (OIRA), which is charged with vetting the federal government's regulatory activities for cost-benefit sanity and recognizable legislative intent. Rao, founder of the Center for the Study of the Administrative State at George Mason University's Antonin Scalia Law School, has a long track record of criticizing the accrual of power and latitude at the executive branch's regulatory agencies (see Christian Britschgi's detailed report from earlier this month). The vote was 59-36. Six Democrats joined the entire Republican caucus and independent Angus King of Maine in voting yes. Key moderate Sen. Claire McCaskill (D-Mo.) likely sealed the deal with her enthusiastic endorsement Monday: "I look forward to finding opportunities to join with the Trump Administration to reduce the regulatory burden on Missouri small businesses," McCaskill said in a statement. "I'm hopeful about working with Ms. Rao to eliminate unnecessary regulations while protecting Missourians' health and safety." Rao had sailed through the Senate Homeland Security and Governmental Affairs Committee last week by a vote of 11-4, including affirmatives from Democrats McCaskill, Tom Carper (Del.) and Heidi Heitkamp (N.D.). Heitkamp had said during Rao's confirmation hearings, "we are very excited about the expertise you bring." Only staunch regulatory activists seemed to sound the alarm against Rao, and they didn't have much notable influence. Hiring a knowledgeable regulatory reformer in this position is a big deal. As mentioned in this post of mine a month ago, when I was interviewing deregulatory specialists for my recent cover story on the possibilities of Donald Trump's presidency, the number-one future indicator they told me to look out for was whether Trump would tab someone good for OIRA. How is Rao seen in that universe? Here's Kent Lassman, president of the Competitive Enterprise Institute (CEI), from earlier today: CEI applauds the confirmation of Neomi Rao as the next Administrator of the Office of Information and Regulatory Affairs. Administrator Rao brings years of respected scholarship on the regulatory process and a principled perspective to one of the most important jobs in Washington. She combines strong scholarly credentials with success as a policy entrepreneur….Now is the time to bring the regulatory state to heel, back to reason, and under the law. Neomi Rao is the right woman for the job. And Rao—or at least a paragraph in Rao's opening statement during her confirmation hearings—has drawn praise from one of her more respected Democratic predecessors at the job, Cass R. Sunstein, who directed OIRA from 2009-2012. Was Sunstein just working the refs a bit (Rao's sentiments "are in real tension with numerous comments from the Trump administration," he asserted), and/or trying to buck up his ex-colleagues who are dreading the new gal? Maybe. But consider this: His very next column, about the Senate's Regulatory Accountability Act (read Eric Boehm on that here), was headlined "A Regulatory Reform Bill That Everyone Should Like: Look! Bipartisanship is alive, and cranking out good ideas." Excerpt: [C]ongressional Republicans, joined by some Democrats, have been thinking seriously about regulatory reform. They've produced an intelligent, constructive, complex, imperfect bill – the Regulatory Accountability Act of 2017 – that deserves careful attention. […] Though progressive groups have raised some legitimate (if overheated) concerns, most of its provisions deserve bipartisan support. […] The good news is that Portman and Heitkamp have produced a bill that reflects much of the learning of the last three decades, that emphasizes the importance of science and economics, and that could ultimately lead to h[...]



Oregon Wants to Regulate Flexible Work Schedules Out of Existence

Wed, 28 Jun 2017 14:54:00 -0400

State Sen. Michael Dembrow wants Oregon to be the first state in the union to micromanage workers' schedules. Dembrow's 'fair work week' bill, requiring employers to provide worker schedules one week in advance (and two weeks by 2020) and pay workers extra if shifts are added, removed, or changed, is quickly working its way through the legislature. Nearly identical laws have been passed locally in San Francisco and Seattle. Dembrow (D-Portland) says his bill will give workers "stability to know when to schedule childcare, second jobs, college classes and other aspects of everyday life." Creating 'stability' through regulation, however, comes at a cost. Employers' workplace needs change suddenly, sometimes shift to shift, for all sorts of reasons. Dembrow would like to penalize them for responding to those changes. The penalty might be triggered by the request of an employee, according to a University of Washington (UW) study commissioned to measure the impact of Seattle's "secure scheduling" ordinance. The study found 80 percent of managers had within the previous two weeks of being surveyed changed schedules at the request of employees. The reasons were as simple as illness (28 percent), recreation time (18.6 percent), or caring for a sick child (18 percent). "Flexibility is a benefit all our employees enjoy," one West Seattle manager told survey takers. "Employees' needs dictate our schedule." Penalties for changing schedules on short notice, the manager said, would "take control of schedules away from the workers." In San Francisco, the only city to implement scheduling regulations so far, 35 percent of managers in a study said they had responded to their city's scheduling law by reducing flexibility in hours. The study found one-fifth of businesses reported hiring fewer part-time workers after the scheduling law went into effect. A similar number said they were making do with fewer workers per shift, and 17 percent said they had cut back employment of full and part-time staff. Seattle workers—30 percent of whom said in the UW study that they'd want more work at their current jobs—will likely see similar hours reductions when that city's "secure scheduling" ordinance is implemented July 1. Jacob Vigdor, author of the UW study, said in an email to Reason, "Quite a few employees reported that their employer scaled back hours in order to avoid the ACA employer health care obligation." That means the many Oregon workers who wrote and testified in favor of Fair Work Week legislation in the hopes of getting more hours, would likely see the opposite should the bill pass. Oregon employers, too would be less likely to grant days off for private or family matters if it meant having to call in a more expensive employee. They would also be more likely to simply hire fewer workers, and give their current ones fewer hours. The attempt to give workers more hours through regulation also ignores the fact that many workers are not getting enough hours because of regulation. State level ordinances add to the problem. In the past year Oregon has passed a sizable minimum wage increase and mandated paid sick leave. "To add more regulations requiring our payroll costs to go up will force us to reduce our staff to compensate," said Cindy Ertell, of Oregon Coffee Roasters, in written testimony to the Oregon Senate. "We don't want to have to do that." Despite these problems, Oregon's Fair Work Week has received healthy bi-partisan support both in the Senate, which passed it last week, and in the House where its moved out of committee with near unanimous approval. Should it pass as expected, some Oregonians might get a fairer worker week. Others might have no work week at all.[...]



Airport Scrutiny to Get Worse as House Moves to Mandate Sex-Trafficking Training

Wed, 28 Jun 2017 13:50:00 -0400

A plan to privatize air-traffic control operations has dominated discussion of the House's Federal Aviation Administration (FAA) reauthorization bill, but the bill's regulatory parameters go far beyond that. An array of government expanding proposals are also included in the House's 21st Century Aviation Innovation, Reform and Reauthorization (AIRR) Act. One of them would require new mandatory training for all "ticket counter agents, gate agents, and other air carrier workers whose jobs require regular interaction with passengers" on "recognizing and responding to potential human trafficking victims." The trafficking-training amendment, from Rep. Julia Brownley (D-California), was one of dozens of AIRR-Act amendments voted on Tuesday by the House Transportation and Infrastructure Committee. After more than nine hours of markup and amendments, the Committee approved the AIRR Act, by a vote of 32 to 25. On the surface, Brownley's trafficking amendment may seem beneficial, or at the very least harmless. But it's part of a larger and ongoing government project that is anything but benign. Under the Department of Homeland Security's (DHS) "Blue Campaign" and related initiatives, federal agents have already been training flight attendants and other airline personnel on how to "detect" human traffickers or trafficking victims on their planes. They've also been conducting public outreach at airports and elsewhere to encourage ordinary travelers who "see something" suspicious to "say something"—by texting the tip directly to Immigration and Customs Enforcement (ICE). There is no evidence these efforts have actually yielded any trafficking busts—which shouldn't surprise anyone not immersed in some Taken-style fantasy. Immigrants who wind up victims of sex or labor exploitation here are generally lured via fraud—the promise of an opportunity that either doesn't exist or isn't what it was made out to be. Some enter the country illegally, but many come over on tourist, student, or temporary-work visas, flying into the country alone or with others in the same situation. "Potential human trafficking victims" flying into the U.S. on commercial flights through major U.S. airports aren't the sort who can be pre-screened by well-meaning gate agents. But what do employees do with all that extra "awareness"? A heightened sensitivity to anything out-of-the-ordinary—which in the United States can still mean interracial families or a child traveling with two fathers—means a propensity to profile passengers based on stereotypes. An Asian-American woman traveling with her non-Asian husband, a dad traveling alone with his daughter, a gaggle of young Korean women traveling together are the folks flagged by well-meaning and woke customer-service staff. The ICE, DHS, and other law-enforcement staff who greet them aren't always so well-intentioned, although they are fast. "When reports come in to the hotline, [Immigration and Customs Enforcement] agents come immediately to meet the plane as it reaches the ground," Deborah Sigmund, co-founder and president of the group Innocence at Risk, has said. It's worth noting that Brownley's amendment provides no description of the kind of training airport employees will receive, how often they'll receive it, or who will develop and conduct it. Most likely, responsibility for the training will fall to DHS and its nonprofit advisers, which have already been involved in training truckers, flight attendants, and motel employees on the alleged "signs" of sex trafficking. And from previous experience the training will be useless. The "signs" of sex trafficking they offer range from the rare and ridiculous (the stuff of action-movie lore, like someone with a bar-code tattoo with the word "Daddy" next to it) to exc[...]



Connecticut's Liquor Pricing Scheme Is a Bad Law That Just Won't Die

Tue, 27 Jun 2017 12:45:00 -0400

Shoppers in Connecticut pay the price of paternalism every time they frequent a local liquor store. Prices are 24 percent higher than in neighboring states or up to $8 more a bottle, thanks to a law that has its roots in prohibition. Unlike some other states that prevent liquor retailers from selling below a product's cost, Connecticut instead allows wholesalers and manufacturers to post a minimum per bottle and per case price. Once prices are posted to the Department of Consumer Protections, prices can be amended to match a competitior's before a price is finalized for the next month. Retailers then add their shipping and delivery costs to the per-bottle price and cannot sell below this cost. Wholesalers must sell at the same price to all retailers. Despite efforts from liquor giant Total Wine and Company and the free-market Democratic Governor Dannel Malloy, the pricing cartel continues. Most recently, Total Wine's antitrust lawsuit, which accuses the state of price-fixing, was dismissed by a federal judge earlier this month. Chief United States District Judge for the District of Connecticut Janet C. Hall decided that the complex state regulations do not violate federal antitrust laws. The archaic pricing system has made business rather cozy for the state's small liquor stores, which never have to worry about competitor's prices. For Total Wine, a chain with 138 stores in 18 states, this law prevents it from offering lower prices due to its comparative advantage. As summarized in their legal filing: "Under this anti-competitive regime, a retailer like Total Wine & More cannot use its market and business efficiencies to reduce the prices offered to consumers." Total Wine has previously been called a "gorilla" and accused of being "diabolical" and "predatory" for trying to save consumers money. The state's 1,150 small package stores have consistently lobbied against changing the pricing scheme. Total Wine attracted attention to their suit with full page newspaper ads, promising to sell liquor below the state minimum. Another company, BevMax, joined in on the protest and lawsuit. Total Wine paid $37,500 in fines as a result. The stores also posted signs requesting customers call their legislators when the state required prices be raised. Company spokesman Ed Cooper called it an act of "civil disobedience." The state legislature responded with two bills to increase penalties for violating minimum bottle price or false advertising. The legislature has been notoriously defensive of the minimum pricing scheme and repeatedly blocked Gov. Malloy from tossing the law out. Here's more on Gov. Malloy's efforts by Reason's Jacob Sullum. This is now the fifth year in a row in which the governor has proposed overturning the pricing scheme and adopting a system similar to other states in which products can be sold for the price paid. Most likely, the legislature will again strike down his proposal. According to Malloy, in any other industry, an anti-competitive law would be tossed out immediately: "If we had a law that forced stores to sell bread for a price that was determined by state government, people would be screaming about capitalism and big government. But for some reason, we allow this anti-free market mandate to continue for this one particular industry." Proponents of the law, such as Lawrence Cafero a former House minority leader and executive director and general counsel of the Wine and Spirits Wholesalers of Connecticut, said in testimony that "this change in our decades old law will be devastating to most local family owned Connecticut package stores." Malloy has stated that doing away with the regulation would increase state tax revenue by $5 million due to increased liquor sales, while supporter[...]



Seattle's Businesses Buckling Under Increased Minimum Wage

Tue, 27 Jun 2017 09:25:00 -0400

Seattle was one of the first major American cities to adopt a $15 in June of 2014. At the time of its passage city officials were optimistic about the changes the new law would bring. Seattle mayor Ed Murray said the minimum wage hike was "a great step forward" in the fight against income inequality. "Seattle," he said, "has shown that we can help our employees without hurting our employers." A newly released University of Washington (UW) study suggests strongly Seattle's lower wage workers and employers have taken a great step backward. The current $13 minimum wage, scheduled to reach $15 for all employees by 2021, is costing workers $125 a month, according to the study. The study found that while wages for those earning under $19 an hour increased by 3 percent, the number of hours worked dropped by 9 percent, resulting in a steep net pay decrease. Seattle businesses added roughly 43,000 jobs since the minimum wage law was passed, but eliminated the equivalent of 6,317 full time positions paying $19 an hour or less. Those new jobs produced an extra 23 million work hours while the jobs in the lower wage category lost 1.5 million work hours, according to the study. This decline is reflected in the experience of business owners in the city. Jillian Henze of the Seattle Restaurant Alliance tells Reason the "business model is evolving" for restaurants thanks to the minimum wage increase. "Some of our members are reducing the number of employees or hours," she says. Other restaurants are adding service charges and fees to their checks to make up for the increased minimum wage costs. Overall economic growth in the Seattle-area has boosted Peter Aaron's Elliot Bay Books, but not enough to make up for the effects of a higher minimum wage. "To some extent the payroll increase has been greater than the sales volume increase," Aaron tells Reason. Increasing labor costs have put "pressure on profitability." Despite this, Aaron says sales growth has been robust enough prevent him from having to make drastic changes, crediting his location in the thriving Capitol Hill neighborhood of Seattle and the overall economic health of the city. "Had we not seen the kind of sales growth that we have," he says, "I do not know that the business would have been able to continue." Similar results have been witnessed in San Diego and Washington D.C., which saw relative declines in low wage and restaurant employment thanks to sky-high minimum wage increases. Seattle businesses beginning July 1 are also facing a new "secure scheduling" ordinance that requires employers to guarantee their workers a certain number of hours a week, and penalizes them for changing work schedules to accommodate smaller staffs. As Reason has covered, Seattle is also squeezing small businesses with an onerous soda tax, and the city is even mulling a municipal income tax. All this has businesses thinking twice about expanding in the city says Henze. "Members are asking themselves if they're going to open a new restaurant, is it going to be in Seattle with the current regulatory environment" she says. "We are asking a lot of different questions than we were previously."[...]



How the FAA Killed Uber for Planes

Tue, 27 Jun 2017 08:30:00 -0400

Private flight has long been a luxury limited largely to the über-rich or super dedicated. Unless you have the deep pockets or connections to buy or rent your own small plane, plus a pay for a pilot, fuel costs, insurance, and hangar fees, you will be stuck in the chicken coop of crammed commercial flights with the rest of us peasants for all your flying needs. But what if it didn't have to be that way? What if you could purchase an empty seat on a private flight that was going where you needed to go anyway for a majorly discounted price? This was, for a glorious and brief period of time, made possible by a promising new crop of startups dedicated to bringing flight-sharing to the masses. Dubbed "the Uber of the skies," startups like Flytenow and AirPooler aimed to connect pilots whose private flights were not yet filled to passengers eager to reach their destinations without suffering the horrors of commercial air travel. Founded in 2013, the services were a great win-win for both parties: Pilots no longer had to simply eat the cost of empty seats on each trip, and passengers got to enjoy the thrill of small-scale flight for a very affordable price. For the first time, it seemed like consumers would have a real inexpensive alternative to the hell of economy class travel. That is, until the Federal Aviation Administration (FAA) caught wind of all this innovation and decided to quash it once and for all. In a sneaky bid to shut down this kind of arrangement, the FAA decided to expansively interpret its own definition of a "common carriage" operator so that non-commercial small-scale pilots using these services would be legally put on the same level as the big boy commercial flights—with the same expensive regulatory and licensing requirements. The FAA knew that small services like Flytenow and AirPooler simply could not keep up with these requirements, and thus effectively shut them down. Flytenow valiantly challenged the FAA's capricious actions in court all the way up to the Supremes; but unfortunately, the Supreme Court declined to take up the case in January of this year, effectively upholding the lower courts' siding with the FAA. My Mercatus Center colleague Christopher Koopman recently released a study analyzing the sad saga of flight-sharing's destruction at the hands of the FAA. It is an amazing tale of regulatory overreach and targeted statutory interpretation that seems to have been undertaken for little reason beyond FAA antipathy to non-commercial cost-sharing arrangements. And unfortunately for all of us non-millionaires out there, this agency bias ultimately leaves the public bereft of an encouraging new development in transportation. To understand the current brouhaha surrounding the legal status of flight-sharing services, you have to know a little bit about the FAA's historical approach to non-commercial flights. Services like Flytenow and AirPooler are really only a new evolution of long-standing practices among amateur pilots. For around as long as small scale flight has existed, pilots would leave messages on airport bulletin boards advertising their upcoming flight plans. Other pilots who needed to get to the same destination could hitch a ride and help defray the cost of the unused seats. This kind of cost-sharing arrangement made the relatively expensive hobby of amateur flight a lot more reasonable for all parties involved, and was explicitly authorized in the federal code, albeit with a considerable set of limitations. Chief among these caveats was that flight-sharing pilots could not seek to profit from flights, but rather merely offset the costs. This was good enough for the pilots' needs, and the convention became [...]