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All articles with the "Regulation" tag.

Published: Tue, 24 Apr 2018 00:00:00 -0400

Last Build Date: Tue, 24 Apr 2018 04:49:41 -0400


Don't Overregulate CRISPR Genome Editing

Thu, 19 Apr 2018 17:00:00 -0400

The recently developed genome editing technique CRISPR enables researchers to make very precise modifications in the genes of nearly any organism. Researchers are racing to use the technique to create drought-resistant corn, reduced-gluten wheat, and tastier tomatoes. Research on CRISPR-based treatments for maladies such as cancers, heart disease, and Duchenne muscular dystophy is advancing rapidly. It looks like the current wave of new genetic engineering techniques will largely escape the bans, moratoria, and overregulation that greeted the first wave in the 1970s. More than 40 years ago, the announcement that researchers were able to splice together genes taken from different organisms provoked handwringing over scary scenarios in which infectious cancers break out from biotech labs and activist screeds railing against "unbridled scientific and technological progress" and creeping "corporate hegemony." No epidemics of biotech-generated infectious cancers have occurred, and the global biotech industry now consists of an estimated 77,000 companies with $400 billion in annual sales. Regulators seem to be learning from that earlier overreaction. This month the U.S. Department of Agriculture announced that it would for the most part not regulate new crops created with CRISPR. That decision opens the way for development of a vibrant new biotech crop and seed industry. University of Pennsylvania bioethicist Jonathan Moreno and Amy Gutman, former head of President Obama's Commission for the Study of Bioethical Issues, make the case for regulatory restraint in a recent Foreign Affairs article. Gutman and Moreno avoid the usual fatuous call for "democratic" decisions about whether and how to deploy new technologies, instead offering sensible proposals for how to proceed safely with CRISPR-based research. They conclude that regulators should stay out of the way for now. One example Gutman and Moreno consider is gene drives, CRISPR-assisted interventions than can, say, make a population of mosquitoes immune to the malaria parasite or cause the extinction of a noxious rat species by favoring the birth of males. Gutman and Moreno reject the demand by some activists for a total ban on gene drives: In lieu of formal regulations on gene drives, scientists could agree to build safety measures into gene-drive systems, such as alterations that would cancel out previous drives or gene modifications designed to grow less frequent over time, so that successive generations would express the gene less and less once the original problem has been sufficiently ameliorated. Researchers will also need to be transparent about their work and consult local communities to gain consent before introducing gene drives into the wild. Gutman and Moreno say existing regulations for biomedical research should be adequate to address CRISPR-based treatments. (Let's set aside for now the question of whether even that much is needed for current therapeutic compounds and techniques.) But lots of folks worry that CRISPR might be used to correct genetic flaws in human embryos. The supposed bioethical horror of using CRISPR to fix genetic mutations is that it would interfere with the "human germline"; that is, children who are born with corrected genes will no longer be able to pass along to their own progeny the genetic disease that had previously afflicted their family. Gutman and Moreno observe that "in 2017, the U.S. National Academies of Sciences, Engineering, and Medicine recommended that researchers exercise caution when it comes to efforts to prevent disease transmission through gene editing but said that such work should be allowed to go forward, albeit under 'stringent oversight.'" In other words, no ban. "At some point," Gutman and Moreno write, "governments may have to pass laws to prevent unscrupulous researchers from abusing gene editing. For now, however, the science is nowhere near advanced enough for policymakers to know what kinds of measures would work." Gutman and Moreno suggest that "governments should follow the principle of regulatory parsim[...]

Trump's Regulatory Slowdown Is Real

Thu, 19 Apr 2018 10:55:00 -0400

(image) President Donald Trump's first year in office saw the creation of fewer new federal regulations than any year since the National Archives started tracking regulatory rules in 1976. Even so, the administration created more than 3,200 new rules during 2017. That's 34 new regulations for every single bill passed by Congress.

That sort of dichotomy permeates a report published today by the Competitive Enterprise Institute, a D.C.-based free market think tank.

On one hand, there is no doubt that the Trump administration has made slashing federal regulations a key policy goal. During his presidential campaign, Trump promised to remove two regulations from the books for every new one added. That atmosphere has reduced red tape and slowed the creation of new rules, says Clyde Wayne Crews, vice president for policy at the Competitive Enterprise Institute and the author of "10,000 Commandments," an annual assessment of the size of the federal regulatory state.

According to the new edition of "10,000 Commandments," the Trump administration delayed or repealed more than 1,500 regulations passed by the Obama administration. Congress helped out by using the Congressional Review Act to eliminate 15 Obama-era rules during 2017. The results include a rollback of the feds' role in land use decisions and an end to the Social Security Administration's attempt to regulate guns.

On the other hand, the federal regulatory state remains a massive entity that sucks $1.9 trillion out of the economy each year. And Trump's efforts to shrink it are under threat from his other, often countervailing, impulses.

"These are good things, but there are warning signs," Crews says. "President Trump's own apparent affinity for strong antitrust enforcement and protectionist trade policies threaten to undermine the economic gains from his regulatory reform efforts."

You can literally see how Trump stacks up against previous presidents by printing out the full length of the Federal Register, that annual behemoth that publishes every new rule issued by a federal department or agency. In 2016, Obama's final year in office, the register ran to a record length of 95,000 pages—far ahead of the previous record, set just one year before, of 80,000 pages. Thirteen of the 15 longest registers in American history were authored by Trump's two immediate predecessors.

Trump's 2017 register? A mere 61,308 pages, the lowest count since 1993.

While Trump delivered on his promise to cut two regulations for every new one added, there are worrying signs that federal rulemaking might increase in coming years. Agencies have three times as many regulatory actions as deregulatory actions in the pipeline, Crews says.

And only Congress can truly return the administrative state to a more limited role. As Matt Welch detailed in Reason last year, the growth of federal regulations is largely the result of Congress handing over too much rulemaking authority to federal agencies—and failing to hold agencies accountable for the rules they create.

"Ultimately, permanent regulatory streamlining will require Congress to act," says Crews.

Forcing Restaurants to Pay Servers More Will Cost Everyone

Thu, 19 Apr 2018 08:00:00 -0400

You don't often hear someone arguing against a pay raise. But that's exactly what many servers and bartenders across the country are saying: They'd rather keep their current hourly wage than do without their tips. Come June, servers in Washington, D.C., might be out of luck if Initiative 77—a proposal that aims to eliminate the tip credit—passes at the ballot box. Restaurant owners in the district currently pay waitstaff $3.33 an hour, well below the minimum wage, with the expectation that they will earn the rest (and sometimes much, much more) in tips. If gratuities fall short, existing law dictates that employers must make up the difference. Even so, the initiative would require D.C. restauranteurs to increase base pay to the prevailing $15 minimum wage. Who doesn't love a 350 percent raise? Sounds great on paper, but in the wise words of The Notorious B.I.G., "more money, more problems." While restaurant profit margins have grown in recent years, they are still notoriously small, settling around 6 percent on average. Forced to implement a steep hike in pay, employers inevitably respond by upping menu prices and whittling down staff. Manhattan's Union Square Café, for instance, eliminated tipping in late 2015 to become a full-fledged "hospitality-included" establishment. To cover the cost of this, prices on the already-expensive menu rose by 25 percent. Servers are now compensated via a revenue-share system, which is a bummer, as business has declined. If Initiative 77 passes on June 19, Washington restaurants may meet a similar fate. It's impossible to calculate the precise impact the law would have on prices in D.C., but imagine if they followed Union Square Café's tenuous lead. Want to grab your favorite $12 cocktail after a long day? That'll be $15 now. What about a $16 burger, fries, and Coke? That'll be closer to $20. And the $50 steak you get when you want to treat yourself? That might feel more like an investment than a splurge. Consumers will have to loosen their purse strings to enjoy a halfway-decent meal. But servers and bartenders—the people this measure purports to help—stand to lose the most. "Our jobs, should they still exist, will be completely changed for the worse," says Joshua Chaisson, vice president of the Restaurant Workers of America, an advocacy organization dedicated to preserving the tipped wage system across the country. The data agree with him. States that upped the minimum wage in recent years have disproportionately disadvantaged low-wage workers, with employers forced to cut hours or eliminate those jobs entirely. "We like working for tips. We earn a great living working for tips. The idea that we need to be saved or helped is completely disingenuous at best and a bold-faced lie at worst," says Chaisson, who earns $28 an hour on average. To be fair, restaurants in D.C. would still include an option for tipping, unlike Union Square Café in New York. So those servers fortunate enough to stay employed would have the potential to earn gratuity on top of an increased wage. But not for long. Just ask Dan Swenson-Klatt, who owns a bakery in Minneapolis. He is also a member of RAISE, a restaurant organization that in his words yearns for "a restaurant industry that doesn't need to have tipping as a way to pay people." "Removing that [tip] credit is their first line of importance in getting to no tips," he recently told MinnPost. RAISE is an offshoot of the Restaurant Opportunities Centers United, which is spearheading the national fight against the tip credit. Although ROC did not respond for comment, Diana Ramirez, director for the D.C. region, has told the Washington Business Journal that the organization hopes its efforts have a "professionalizing and stabilizing" effect on restaurant work. At the core of this argument is the idea that the tipped wage system lends itself to sexual harassment, as it gives sleazy patrons an opening to engage in a perverse form of blackmail. That may be true, but in the #MeToo era, restaurants can[...]

Regulating Self-Driving Cars Like Pharmaceuticals Is a Really Stupid Idea

Wed, 18 Apr 2018 16:15:00 -0400

After Elaine Herzberg became the first person killed by a self-driving car, the proponents of government control quickly urged greater federal regulation of the nascent industry. But such regulation would not enhance safety. Most likely, it would kill more people, by delaying the deployment of safer automotive technology. One of the stupidest ideas for regulating self-driving vehicles has been put forth by Jack Stilgoe, a lecturer at University College London, in the current Issues in Science and Technology. Stilgoe suggests that we adopt "a regulatory mechanism analogous to the Food and Drug Administration. New technologies would be systematically tested before release and continually monitored once they are out in the wild." He adds: Demanding regulatory approval before these technologies hit the market would be a big shift. It would also force governments to rediscover skills that have been allowed to atrophy, such as those of technology assessment. If these technologies are as new and exciting as their proponents say they are, then we should ask what new rules are needed to ensure that they are safe, broadly accessible, and free from problematic unintended consequences. First, let's just say that the government's record of skillful technological assessment is spotty. Second, a 2014 report from the Brookings Institution argues compellingly that the current liability system is quite capable of resolving any issues that arise from the deployment of autonomous vehicles. Uber, I'll note, has apparently already settled with Herzberg's family. Concerning accessibility, Stilgoe asserts that "self-driving car technology is set to benefit the same people who have benefitted most from past technological change—people who are already well-off." This amounts to arguing that no one should have a Tesla until everyone can have one. In fact, Stilgoe gets it exactly backwards. Uber, Waymo, and Lyft are not developing autonomous vehicles that will sit 23 hours per day in their owners' driveways. They are aiming to create fleets of robo-taxis that will dramatically reduce the costs of transportation for most folks living in metropolitan areas. A team of researchers led by Lawrence D. Burns, director of the Program on Sustainable Mobility at Columbia University, estimates that fleets of shared self-driving vehicles could cut a family's transportation costs by as much as 75 percent. Such a steep drop would greatly benefit families in the bottom third of the income distribution, who spend about 16 percent of their earnings on transportation. (Folks in the top third, by contrast, spend just over 8 percent of theirs on getting around.) Children, the disabled, and the elderly would also especially benefit from access to autonomous vehicles. Stilgoe makes clear what worries him about robocars when he describes the horrors created by conventional automobiles: The technology brought huge benefits from increased mobility, but also enormous risks. In addition to what the author J.G. Ballard called the "pandemic cataclysm" of road deaths, the nation's enthusiasm for cars also made it harder to support alternative modes of transport. The conveniences of cars trumped other concerns and allowed for the reshaping of landscapes. Vast freeways and flyovers were built right into the hearts of cities, while the network of passenger railroads was allowed to wither. Around the cities' edges, sprawl made possible by two-car families leaked outwards. By the 1950s, the United States—and much of the world—had been reshaped in the car's image. Basically, Stilgoe is worried that people will do things that he doesn't think that they should want or be allowed to do. Stilgoe's rather absurd implication is that an FDA-like Automobile Regulatory Administration around 1900 would have been able to anticipate and plan for stop lights, divided highways, turn signals, shopping malls, suburban homes, automobile dealerships, mechanic training and repair garages, speed limits, long dist[...]

Anti-Development Forces Kill Free-Market Housing Reform in California

Wed, 18 Apr 2018 14:35:00 -0400

A flawed but promising California housing reform bill died yesterday, killed by local governments and anti-development activists. Senate Bill 827—which would have deregulated housing construction near transit stops—was shot down by a 6–4 vote in California Senate's Housing and Transportation Committee. The bill, sponsored by Sen. Scott Weiner (D–San Francisco), would have overridden local zoning, density, height, and design restrictions for residential and mixed-use developments within a half-mile of most transit stops. That might sound like small potatoes, but given how often these local regulations are used to shrink, slow, or stop much-needed housing, SB 827 would have been a pretty sweeping reform in practice. For this reason, it attracted the vociferous support of the state's small but enthusiastic pro-development YIMBY movement, as well as a large number of urban planning academics and tech CEOs, who wrote letters in support of Weiner's bill. Weiner himself presented SB 827 as a way of achieving the bread-and-butter progressive goals of combating climate change and goosing up transit ridership. That helped pick up endorsements from several environmental groups, including the Natural Resources Defense Council. But in the end, the bill's deregulatory approach proved too much for the state's broad coalition of anti-development forces. While assuring anyone who will listen that the state needs more housing, they fought one of the few bills that would actually achieve that goal. "California's housing costs are unsustainable and our housing policies aren't working," Weiner said in a statement following the bill's failure. "California needs to get at the heart of our housing shortage, not just work around the edges, or we will become a hollowed-out state with no middle class." Since the initial introduction of SB 827 in January, Weiner amended it several times to make it more politically palatable. In February he added "right to remain" provisions, which required any developer demolishing renter-occupied housing under SB 827's streamlined construction process to pay relocation expenses and rent subsidies to displaced tenants. In April he watered down the bill yet again, undoing height bonuses for developments near bus stops, requiring that any new development not cause a net loss of below-market-rate housing, and delaying the law's implementation until 2021. These amendments did nothing to quiet the concerns of those whose power to veto projects was being threatened. The California League of Cities, for example, warned that "developers would be given the power to dictate building heights, exempt themselves from parking requirements and override community plans." To the governments that the league represents, that's a bad thing. Other opponents included groups like the Mission Economic Development Agency, an affordable housing nonprofit in San Francisco, which rely on labyrinthine local permitting process to kill projects or extract concessions from developers. With SB 827 dead, the state has few remaining options for digging itself out of its self-inflicted housing shortage. One idea being floated in the legislature, and endorsed by three of the state's gubernatorial candidates, is to revive the state's urban redevelopment agencies, which for decades diverted property taxes to urban renewal projects in supposedly blighted areas. These agencies were shuttered in 2011, after it was discovered that much of the money they were supposed to be spending on affordable housing was instead going to maintain luxury golf courses, pay employee salaries, and funnel improper subsidies to developers. Cities themselves are looking to tax and spend their way out of their housing woes. In 2016, Los Angeles voters approved Measure HHH, which issued $1.2 billion in bonds to finance affordable housing construction. This was followed by the passage of Measure H in 2017, which boosted sales taxes by a quarter cent to provide anot[...]

Thanks, Trump! Los Angeles Finally Legalizing Street Vendors to Protect Poor Immigrants From Crackdowns

Wed, 18 Apr 2018 13:10:00 -0400

The dude with the elote cart who shows up as school lets out in my Los Angeles neighborhood will soon be able to breathe easier. The city is moving forward and finally, after years of debate, legalizing street vending. Yesterday, the Los Angeles City Council voted 11-4 to have the city attorney draft a permitting system for street vendors so that they can sell their wares legally. And while this will come with all sorts of regulation (and in all likelihood, overregulation), the city has decided to reject a provision that would give nearby shop owners veto power over where street vendors can peddle their goods. One street vendor told the council that nearby businesses had used threats to call the police as a way to extort money from her. So the lack of veto power matters. In its place, the city will be implementing an appeals process where businesses can complain about health and safety issues connected to particular vendors. The ordinance will also restrict the number of street vendors per block and will ban street vending entirely in some busy areas like Hollywood Boulevard and Dodger Stadium. So there may still be some problems when street vendors want to sell where people actually congregate. (The street vendors in my calm residential neighborhood are in no actual danger of being shuttered by police—the residents like them and there are no storefronts nearby competing, so the cops are not getting any complaints.) At the same time that Los Angeles is finally moving forward with legalizing street vending, there is also legislation winding its way through the State Senate in Sacramento that will legalize street vending throughout California. SB 946 would allow local authorities to license and regulate—but not entirely ban—street vending. The bill would require that persons who violate street vending ordinances face only administrative fines (as opposed to potential jail time) and would require that those fines go into local government treasuries, no doubt inspired by police encounters like this one where a Berkeley police officer shut down an unlicensed hot dog vendor and seized the money out of his wallet. The bill would also allow those convicted of past misdemeanors for sidewalk vending to petition to get those convictions dismissed. That could be a big deal for the many poor immigrants in the state who are concerned that getting punished or imprisoned for something as harmless as street vending could get them picked up by immigration officials and deported. And that's partly what is pushing all this action forward after years of squabbling. The anti-immigrant nativism of President Donald Trump (he just tweeted something loathsome this morning directed toward sanctuary cities in California) and his administration have helped to turn every arrest by local police into a larger threat of deportment. We now need to figure out how to get the Trump administration to go after people who violate occupational licensing laws so that the state will start scaling those back as well. Bonus link: Check out Gustavo Arellano on L.A.'s long war against working class food choices from Reason's August/September 2015 issue.[...]

Scott Gottlieb Is Not a Free Market Firebrand

Mon, 16 Apr 2018 06:00:00 -0400

It's mid-December, and Scott Gottlieb is at the Harvard Club. The Manhattan Institute has invited a few dozen people for an intimate discussion about what's happening at the Food and Drug Administration (FDA). As they eat finger foods and sip cocktails, a relaxed Gottlieb meanders around the room sans entourage and snags the occasional pretzel stick from a platter. As a former think tanker himself—he was an American Enterprise Institute resident fellow for roughly a decade—these are his people. Everyone takes their seats. Gottlieb's old friend Peter Huber, an attorney and senior fellow at the host institute, is sitting right up front. Just a few years earlier, the two had partnered to argue the affirmative in a debate over whether "the FDA's caution is hazardous to our health." But now that Gottlieb is the head honcho at the agency, some libertarians who once considered him a fellow traveler are finding him a tough nut to crack. When the floor opens for questions, one is about his plan to require cigarette manufacturers to lower the nicotine in their products to a "minimally or non-addictive level." "You want to take the nicotine out of cigarettes," the audience member says, incredulous. "Do you also want to take the alcohol out of booze?" "The FDA does not regulate alcohol products," Gottlieb responds. "Well, thank God for that," the questioner says, before plopping into his seat. The exchange demonstrates just one of the ways in which Gottlieb is not the person many onlookers anticipated. When Trump nominated him to be FDA commissioner in March 2017, conservatives and libertarians applauded his record of advocating market-based health care reforms, while liberals bemoaned his financial ties to the pharmaceutical industry and predicted death and destruction. They were both wrong. Instead of a radical deregulator, he has turned out to be a cautious institutionalist, focused on ensuring that his agency lives up to its obligations without exceeding the limits of its authority. Yes, he is nudging the FDA toward streamlining its approval process and encouraging competition in the drug and device markets. But Gottlieb was never going to burn the FDA to the ground, and people who thought he would weren't paying attention to what he's been saying all along. Shill "Scott Gottlieb's fervor for deregulation could harm patients," warned a piece published on the health news site STAT shortly after his appointment. "Farewell to drug regulation? Trump nominates a 'bona-fide pharma shill' to head the FDA," complained a Los Angeles Times headline. Gottlieb really is a longtime critic of the agency. At the Manhattan Institute, he speaks with the same polish he's demonstrated in hearings before Congress, repeating some of his favorite mantras: The FDA needs to "think differently" when it comes to biologic therapies and medical apps; "speed vs. safety" is a false choice the FDA doesn't have to make. At times he seems to channel a seminal 2012 essay he penned for National Affairs, titled "Changing the FDA's Culture," in which he bemoaned the agency's "excessive desire for certainty" and its "mistrust of the doctors who eventually prescribe medicines and the companies that market them." Gottlieb has argued repeatedly for reforming the way the FDA handles many of its duties, in particular the approval pipeline for drugs and medical devices. His criticisms were rooted in experience: He worked for the agency twice during George W. Bush's presidency, first as a senior advisor to Commissioner Mark McClellan and then as the deputy commissioner for medical and scientific affairs under Commissioner Andrew C. von Eschenbach. And like nearly every FDA commissioner before him, he has practiced medicine, as an internist and faculty member at the New York University School of Medicine. He also has extensive experience working with the drug companies he's now tasked with regulating. The fed[...]

Special Interest Groups Want to Slaughter the Lab-Grown Beef Business

Sat, 14 Apr 2018 07:00:00 -0400

Earlier this week, the nation's largest lobby group for beef producers asked federal regulators to prevent the makers of lab-grown meat from calling their products, well, meat. In comments submitted to the U.S. Department of Agriculture (USDA), the National Cattlemen's Beef Association (NCBA) asked the agency to support "meaningful protection for beef nomenclature." Such support, the group argues in its comments, would require the USDA to "limit the definition of 'meat' to tissue or flesh of animals that have been harvested in the traditional manner." What exactly are they so worked up about? Lab-grown meats are made by taking cell samples from living animals and reproducing them in a lab. Animal-rights and animal-welfare supporters dig lab-grown meats because they don't require the slaughter of cows or other animals. Proponents claim these foods—just like plant-based meat imitations—are better for the people, the environment, and animals. Opponents, namely beef industry groups like the NCBA, view lab-grown meats as a growing (and misleading) threat to their livelihood. Plant-based alternatives to meat products that mimic the look and taste of those meat products—e.g., Boca Burgers—have existed for decades. But lab-grown meat is close to debuting, perhaps before the end of 2018. Some have predicted "a meatless food industry featuring lab-grown meat, seafood substitutes, and insect protein [may] be the future of food[.]" This potential future raises some important questions. How should lab-grown meats be labeled? Should the government set mandatory standards for such labeling? The NCBA petition urges the FDA and USDA "to prevent misleading marketing labels such as 'clean meat,'" a term lab-grown meat proponents use to distinguish lab-grown meat from traditional meat products. The NCBA's preferred approach, the group says, "would exclude lab-grown or cell cultured meat products" from USDA oversight (shifting oversight of such products to the FDA, which regulates most foods that don't contain beef, pork, or poultry). The NCBA submitted its comments in response to a petition submitted in February by another beef lobby, the U.S. Cattlemen's Association (USCA), that urges the USDA to take similar steps to combat what critics dub "fake meat." The NCBA opposes the USCA petition because, it argues, it doesn't go far enough to squash competitors. Not surprisingly, at least one animal-rights group has commented in opposition to the petition, arguing it goes too far. While the USDA gathers responses to the petitions, Congress is also moving on the matter. Last month, Rep. Rosa DeLauro (D-Conn.) asked the Government Accountability Office (GAO), a nonpartisan government agency that advises Congress, to "investigate what regulatory framework, if any, exists for cell-cultured food products and how this framework compares to other international approaches." I usually disagree with DeLauro on food-policy matters—she's a longtime sponsor of legislation to adopt a national soda tax, for example—but I think her call for the GAO to look into the matter is reasonable. A good analog to the lab-grown meat issue is GMO labeling. Opponents of GMOs have long argued such laws are necessary to help consumers make informed choices. But, just like beef producers are doing with the issue of labeling lab-grown meat, the reality is GMO opponents mostly just want the government to impose regulations that malign their competitors' products. But the question of how to label lab-grown meat doesn't offer a slam-dunk answer for either side. On the one hand, meat grown in a lab is undoubtedly produced using a process that differs from the traditional livestock-rearing process. The latter involves raising and killing a living animal, for example, while the former does not. On the other hand, every cell in a lab-grown meat product comes from an animal. A cell take[...]

The Zuckerberg Hearings Prove Government Shouldn't Regulate Facebook

Fri, 13 Apr 2018 00:15:00 -0400

In the year 2018, at the height of The Russia Scare, Facebook CEO Mark Zuckerberg was hauled in front of a tribunal of tech-illiterate politicians and asked to explain himself. "It was my mistake, and I'm sorry," Zuckerberg told senators who are upset about the company's exploitation (and fumbling) of user data—which, unbeknownst to them, was social media's entire business model. A number of panics have brought us to this preposterous place: the idea that Russian trolls on Facebook could swing the 2016 election and undermine our "democracy"; the idea that Facebook's leftward bias is so corrosive that we should regulate it like a utility; and, finally, the general way in which social media tends to reveal the ugly side of human nature—which is indeed scary but has little to do with any particular platform. If one could brush aside the bipartisan preening and sound bites during the Zuckerberg hearings, he would still be subjected to an infuriating mix of ignorance and arrogance. It's true that the United States is, in large part, run by a bunch of elderly politicians completely unsuited to regulate the tech industry. The obvious lesson, though, was still lost on many. Rather than trying to elect more technocrats, we should come to terms with the fact that in an increasingly complex world, politicians will be unsuited to regulate most industries, which is why they should do so sparingly. Not that ignorance has ever stopped senators from grandstanding. Republican Sen. John Kennedy, for instance, believes Facebook should be disciplined because its users erroneously assumed the service was free. "Your user agreement sucks," said Kennedy, describing a perfectly legal document that had already been subjected to an array of contractual regulations and was probably read by only a fraction of the social media giant's users. He went on to say: "The purpose of that user agreement is to cover Facebook's rear end. It's not to inform your users about their rights. ... I don't want to vote to have to regulate Facebook, but by God I will." So if a private entity follows the law but happens to upset the sensibilities of the United States Senate, it will, by God, be punished with some nannyistic intrusion or byzantine regulation? Well, not really punished, right? Because of course the rent-seeking Facebook desires more regulation. For one, it would make the state partially responsible for many of the company's problems—meting out "fairness," writing its user agreements, and policing speech—but more importantly for Zuckerberg, it would add regulatory costs that Facebook could afford but upstart competition almost certainly could not. It's a long-standing myth that corporate giants are averse to "regulations," or that those regulations always help consumers. We've already seen the hyper-regulation of health care "markets" create monopolies and undermine choice. We've seen the hyper-regulation of the banking industry inhibit competition and innovation. Politicians, often both ignorant of specifics and ideologically pliable, tend to fall sway to the largest companies, which end up dictating their own regulatory schedules. I mean, Sen. Lindsey Graham of South Carolina actually asked a compliant Zuckerberg to submit a list of government interferences he might embrace. The bigger ideological problem with the Facebook circus is that our politicians are acting as if being subjected to an opinion—or an ad—they dislike is some kind of attack on an individual's rights. Not one senator will ever tell constituents: "Hey, if you don't like the way Facebook conducts itself or you're unhappy about its political bias, then leave. No one is forcing you to open or maintain an account with Facebook, much less voluntarily hand over data. And if you're constantly falling for 'fake news,' well, that's a you problem, because the state can[...]

How We Screwed Up Nuclear Power

Thu, 12 Apr 2018 06:00:00 -0400

Half a century ago, nuclear power was on track to out-compete fossil fuels around the globe, which would have reduced the price of electricity, the amount of harmful air pollution, and greenhouse gas emissions associated with climate change. Then came a dramatic slowing of new construction and research into safer and more efficient nuclear reactors.

According to Australian National University researcher Peter Lang, the '60s and '70s saw a transition "from rapidly falling costs and accelerating deployment to rapidly rising costs and stalled deployment." Had the initial trajectory continued, he writes in the journal Energies, nuclear-generated electricity would now be around 10 percent of its current cost.

In a counterfactual scenario featuring increasing uptake of nuclear power from 1976, Lang calculates that by 2015 it would have replaced all coal-burning and three-quarters of gas-fired electric power generation. Thus, over the past 30 years we could have substituted 186,000 terawatt-hours of electricity production, avoiding up to 174 gigatons of carbon dioxide emissions and 9.5 million air pollution deaths. Cumulative global carbon dioxide emissions would be about 18 percent lower, and annual global carbon dioxide emissions would be one-third less.

The Oyster Creek Nuclear Generating Station in New Jersey opened in 1969. It cost $594 million (in 2017 dollars) and took four years to build. America's newest nuclear plant, at Watts Bar in Tennessee, opened in 2016. It cost $7 billion and took more than 10 years to complete.

What happened? Anti-nuclear activism and regulation.

The 1971 D.C. Circuit Court case Calvert Cliffs required the United States Atomic Energy Commission (AEC) to comply with a mandate to prepare environmental impact statements for proposed actions. The AEC reacted by suspending all licensing for nuclear power plants for 18 months while it devised new rules. In a 2017 essay, Carnegie Mellon historian Andrew Ramey notes that this was "the opinion which had the most far-reaching and detrimental effect on the development of nuclear power"; it is now regarded as "nuclear opponents' biggest court victory." But it wasn't the only hurdle.

The Energy Reorganization Act of 1974 abolished the AEC, handing its regulatory powers to the Nuclear Regulatory Commission. That entity's sole focus on safety resulted in lengthening construction times for plants from four to 14 years. Tightening regulations meant orders for new nuclear reactors had slowed to a trickle even before the Three Mile Island meltdown in 1979. Subsequently, plans for nearly 60 more reactors in the U.S. were scrapped.

"The benefits forgone cannot be recovered," Lang concludes, "but future benefits can be increased by amending the policies that caused the cost increases and slowed the deployment of nuclear power."

Mark Zuckerberg vs. Silicon Valley's Richard Hendricks: Why Facebook 'Welcomes' Regulation

Wed, 11 Apr 2018 15:37:00 -0400

Mark Zuckerberg is the multi-billionaire founder and CEO of Facebook. This week he testified before Congress, assuring lawmakers that his company will play nice with government regulators.

Richard Hendricks is a character on HBO's sitcom Silicon Valley, the bumbling CEO of the unfortunately named Pied Piper. His memorable moments include evacuating his bowels, vomiting, and then lunging into a glass wall in front of his workers.

One is poised when being grilled by Congress and the other can't deliver a pep talk to his staff without hurling under his desk.

But Hendricks is a better hope for the future of the internet than Zuckerberg. Here's why.

In his testimony, Zuckerberg welcomed regulation—and agreed to help craft it. He's in the same position as late-19th-century railroad tycoons. Contrary to conventional wisdom, these robber barons embraced regulation as a way to raise the barriers to entry for competitors who were eating into their profits and market share.

Still sporting a hoodie, Richard Hendricks is at an earlier stage of his career. He's trying to build a new internet in an effort to outmaneuver Hooli, a fictional amalgamation of Google and Facebook. Richard represents the next wave of innovation—the competitor who, if government stays out of it, will eventually erode Facebook's market share by offering a better product.

Even Richard's approach to disrupting Facebook is more than just TV fantasy. There's a real movement in the tech world to build a new decentralized web that would give users actual control over their own data and create open platforms that aren't controlled by any single all-powerful CEO. One reason to bet on real-life projects such as Blockstack and Ethereum to decentralize the internet is that talented engineers are beating down their doors, because working at Google and Facebook is lucrative but soul killing.

As Facebook and Congress start to write new rules for cyberspace, all of us who believe in free expression and permissionless innovation have a stake in making sure that the future of the internet remains as open as possible.

Written by Jim Epstein and Nick Gillespie, who also narrates. Produced by Todd Krainin.

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Clear the Runway: The Fight Over 'Uber for Planes' Is Coming to Congress

Wed, 11 Apr 2018 15:05:00 -0400

Long before anyone was talking about the sharing economy, private pilots across the United States were already engaging in it. They used bulletin boards at general aviation airports to advertise planned trips to prospective passengers who might want to come along for the ride and share the costs of the flight. Pilots do that because flying is an expensive hobby. The Aircraft Owners and Pilots Association warns would-be aviators to be prepared to spend more than $225 an hour when all flying costs—including fuel, insurance, and airport fees—are included. Since private pilots have to log at least three takeoffs and landings every 90 days to maintain their licenses, there aren't many viable ways to dodge those costs. So they've been sharing costs with passengers since at least the 1960s. For pilots, it's a crucial method of financing a flying habit. For passengers, it's an alternative way to reach a destination. In the age of Uber, it has the potential to be much more. But the Federal Aviation Administration (FAA) stands in the way. In 2014, the FAA shut down attempts to turn those analog billboards into digital ones, ruling that pilots who use online flight-sharing apps would be regulated as "common carriers" like commercial airlines. While that ruling doesn't directly ban those apps, no private pilot making weekend trips in a single-engine Cessna is going to subject himself or herself to the additional licensing and certification requirements (or mandatory liability insurance) necessary to be a commercial pilot in the eyes of FAA. In the wake of the agency's ruling, one of those just-launched apps, FlyteNow, took the federal regulator to court. But last year the U.S. Supreme Court declined to take the case, seemingly grounding the apps for good. Now Congress has an opportunity to overrule the FAA. "A personal operator or a flight operated by a personal operator does not constitute a common carrier," reads part of the Aviation Empowerment Act, a bill introduced today by Sen. Mike Lee (R-Utah). The legislation maintains the current prohibition on private pilots making a profit off flights offered via flight-sharing apps, but it would otherwise allow for the creation of digital billboards advertising trips. "Innovation is key to competition and accessibility," Lee told Reason. "Studies and experience with cost-sharing services have proven to be safe and effective in other countries, and it is past time we enact them in our country as well." Allowing flight-sharing is a win-win for aviation enthusiasts, whether they are pilots or just enjoy flying. And the small number of private planes and pilots, along with those rules against letting noncommercial pilots earn a profit for their services, means that flight-sharing is unlikely to disrupt commercial airlines in the same way that Uber disrupted the taxi industry. Almost everyone has a car; very few people own private aircraft. Apps like Flytenow and AirPooler launched in 2013, not long after Uber was becoming a ubiquitous part of non-airborne transportation. Naturally, the apps were often referred to as "Uber for the skies" as the subsequent regulatory and legal battled played out. But that characterization is not entirely accurate. Unlike Uber or Lyft, these flight-sharing apps intended to do nothing more than the bulletin boards in general aviation airports: They connected pilots and passengers for the purposes of sharing the cost of a flight. Unlike with the ride-sharing services, no one was earning a profit—that, they feared, would violate the FAA's rules. In other ways, the apps did resemble ride-sharing services. Pilots and passengers had individual profiles, and a ratings system provided feedback for other users. Running the current bulletin board network through an onl[...]

Affordable Housing Proponents Critical of Permit Streamlining Law Use Permit Streamlining Law to Build Critical Affordable Housing

Tue, 10 Apr 2018 15:30:00 -0400

Critics of California's SB 35, a 2017 law that created a streamlined, state-level building approval process for housing developments, are begrudgingly starting to see the benefits of the bill. Earlier this month, the Mission Economic Development Agency (MEDA)—a San Francisco nonprofit—submitted an application to use the streamlined SB 35 process to build a 100 percent affordable, 130-unit apartment building. If that application is approved, MEDA will be spared the onerous reviews required by the California Environmental Quality Act. It will also avoid the need to get approval from the San Francisco Planning Commission, which has the power to alter, shrink, and otherwise condition the approval of projects. Instead, the San Francisco Planning Department would have to issue permits for the project within 60 days, which MEDA Development Director Karoleen Feng tells The San Francisco Chronicle will cut six months to a year off the approval process. When SB 35 was first proposed, MEDA opposed it. Last July Luis Grandos, the agency's executive director, co-wrote an op-ed claiming that SB 35 would spur too much market-rate housing, in turn acting as "a short-term catalyst for displacement of low-income communities of color." Though it is now using SB 35 to build more below market-rate housing—which MEDA thinks is the key tool to limit ever-higher housing costs—the agency remains opposed to SB 35, with Feng telling the Chronicle that it's "a one-size-fits-all policy of streamlining." At the risk of sounding cynical, this criticism boils down to MEDA, which can obviously see the benefits of streamlining when it comes to its own projects, wanting to retain the power to delay and suspend projects it doesn't like. For instance, MEDA has a been a major opponent of Mission District business owner Robert Tillman's plan to turn a laundromat into a mostly market-rate 75-unit housing development. Feng herself called this development "unjust," "unconscionable," and "unfair" while demanding that Tillman make his property into 100 percent affordable housing. Members of the activist group Calle 24, despite their professed support for affordable housing, have argued that even if Tillman's project were 100 percent affordable, it would still be unacceptably large and bulky. Calle 24 and Mission anti-development activists have, through the many appeals and reviews afforded them by the San Francisco permitting process, forced Tillman to spend four years and $1 million trying to get approval for his development. Elsewhere in the city, residents have demanded that affordable housing projects be modified to accommodate "neighborhood character." In January, the Haight-Ashbury Neighborhood Council wrote a letter demanding that a 100 percent affordable housing project be shrunk by some two floors to preserve "neighborhood character." (The project would replace a reportedly crime-ridden McDonald's.) San Francisco's Discretionary Review process, which SB 35 allows developers to skip, would allow the council to demand just that through a laborious process of Planning Commission hearings and departmental reviews that can add months (and sometimes years) to a project's completion time. San Francisco needs more housing to accommodate new residents as well as the natives who wish to stay there. From 2005 to 2015, the city added three jobs for each new unit of housing. Since 2010, rents have risen 43 percent; they are now the highest of any major U.S. city. A huge impediment for building more housing is a restrictive permitting process that bogs down projects in endless quests for building approval. This is true of both below-market and market-rate housing. SB 35 is by no means a perfect solution to this problem. In September of las[...]

Don’t Be Sorry for Mark Zuckerberg. Be Worried for the Future of the Social Media.

Tue, 10 Apr 2018 11:05:00 -0400

Facebook CEO Mark Zuckerberg doesn't need our sympathy when he appears before Congress this week for his ritual humiliation at the hands of the Washington establishment. But the anti-Facebook proposals already being advanced should be cause for concern. Zuckerberg's appearance—his first on Capitol Hill—was prompted by news reports that a third-party Facebook app masquerading as a personality quiz extracted data that was sold to Cambridge Analytica, which in turn provided consulting services to Republicans. Since then, a Delete Facebook campaign has mushroomed, coupled with calls for Zuckerberg's ouster, despite the inconvenient fact that he owns over half of his company's voting shares. Complicating matters for Zuckerberg is that both major parties have joined together for a thoroughly bipartisan denunciation of his company's alleged misdeeds. Republicans see Facebook, with thousands of employees steeped in the deep blue sentiments of the San Francisco bay area, as tilting to the left. They remember the Trending Topics flap from 2016, the post-election revelation that chief operating officer Sheryl Sandberg was slated for a top job under President Hillary Clinton, and the procession of conservatives who have found their Facebook accounts abruptly yanked, including the reported suspension a few days ago of the Trump-supporting duo Diamond and Silk. Then there were the employees who wanted Facebook to do its part to "help prevent President Trump in 2017." Meanwhile, Democrats' instinctive predisposition for new regulations when a company is said to be misbehaving has escalated to a near obsession. Beyond the usual carefully manicured outrage about alleged privacy violations, they seem to view Facebook as a vehicle for Russian election ads and various still-to-be-determined skullduggery, which may or may not have helped to elect some fellow named Donald J. Trump. (The shortcomings of the Clinton campaign, and the actual views of those deplorables in swing states, tend not to be dwelt on overmuch.) For his part, Zuckerberg will apologize to Congress, according to his prepared testimony released Monday. It says that politicians "rightfully have some hard questions for me to answer," adding: "We didn't take a broad enough view of our responsibility, and that was a big mistake. It was my mistake, and I'm sorry." Members of Congress seem to view themselves more as prosecutors than interlocutors during the Senate and House of Representatives hearings that begin on Tuesday. "It's really high noon for Facebook and the tech industry," Sen. Richard Blumenthal (D–Conn.), who apparently views himself as a stouthearted town sheriff facing down an outlaw, told The Washington Post. To buttress the point, Blumenthal served up a second analogy: This is Facebook's "unsafe at any speed moment." Sen. Ed Markey (D–Mass.) used the opportunity to scale new heights of rhetorical excess, saying, "I think that this privacy spill is politically the equivalent of the oil spill in the Gulf of Mexico…. It involves our very democracy." Over the weekend, Sen. Ron Wyden (D–Ore.) casually threatened forcible corporate dismemberment. "There are going to be people who are going to say Facebook ought to be broken up." he observed. "There have been a number of proposals and ideas for doing it and I think unless [Zuckerberg] finds a way to honor the promise he made several years ago, he's gonna have a law on his hands." Wyden said he would support such a law. Sen. Lindsey Graham (R–S.C.) is worried about "manipulation by foreign governments and intelligence services…. And then you've got the fact that data can be used for political purposes, probably outside people's imaginations." When a reporter [...]

Medicare Agency Retreats From Arbitrary Limit on Pain Medication

Mon, 09 Apr 2018 13:45:00 -0400

The Centers for Medicare and Medicaid Services (CMS) has retreated from a proposed rule that would have forced many patients to choose between living in agony and shelling out thousands of dollars more every year for pain medication. Under the original proposal, Medicare generally would not have covered prescriptions for 90 or more morphine milligram equivalents (MMEs) per day. While there were exceptions for cancer and hospice patients, other Medicare beneficiaries suffering from severe chronic pain would have been out of luck unless their doctors mounted successful bureaucratic appeals. CMS reported that 1.6 million Medicare patients received daily opioid doses of 90 MME or more in 2016. Not surprisingly, the 90-MME cap provoked strong objections from patients and doctors. "The 90 MME hard edit guidance was strongly opposed by nearly all stakeholder groups for a variety of reasons," CMS reported last week. "Physician groups opposed the forcible/non-consensual dose reductions due to the risks for patients of abrupt discontinuation and rapid taper of high dose opioid use. Similarly, we received hundreds of letters from patients who have taken opioids for long periods of time and are afraid of being forced to abruptly reduce or discontinue their medication regimens with sometimes extremely adverse outcomes, including depression, loss of function, quality of life, and suicide." Furthermore, "the overall consensus was that a 90 MME-per-day hard edit threshold would have little clinical impact against opioid overuse." The final policy adopted by CMS instead requires a pharmacist who receives a prescription above the threshold to confirm it with the doctor and document the discussion. Stefan Kertesz, the University of Alabama at Birmingham internist who organized a letter in which hundreds of physicians objected to the original plan, told The Hill the revised policy is "humane and reasonable." The 90-MME cutoff was copied from the supposedly nonmandatory opioid prescribing guidelines issued by the Centers for Disease Controll and Prevention in 2016. The CDC said doctors "should avoid increasing dosage" above 90 MME per day, or at least "carefully justify a decision to titrate dosage" above that level. Critics say that threshold, which many doctors have interpreted as a hard cap, is arbitrary because patients vary widely in the way they metabolize and respond to opioids, especially if they have developed tolerance after taking pain medication for years. Thanks to the CDC's advice, patients across the country have seen their doses dramatically reduced, even when they had been responding well to opioids for years. Given that experience, it is hard to believe the CMS did not anticipate the backlash that its "hard edit guidance" would generate. Like the CDC, it seems to be pursuing the mission of reducing opioid abuse with little thought of the consequences for innocent bystanders.[...]