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Regulation



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



Published: Sun, 20 Aug 2017 00:00:00 -0400

Last Build Date: Sun, 20 Aug 2017 07:30:55 -0400

 



Trump vs. The Business Community

Sun, 20 Aug 2017 00:00:00 -0400

Most business executives fumed and groused for the eight years Barack Obama was in the White House. He was a former community organizer who had never met a payroll, and those in the corporate boardrooms thought he was no friend of free enterprise. In 2010, New York real estate and media tycoon Mortimer Zuckerman said Obama's "demonization of business" was discouraging investment, sapping job growth and generally creating an "economic Katrina." Gary Shapiro, head of the Consumer Technology Association, called Obama "the most anti-business president" in his lifetime. Former General Electric Chairman Jack Welch implored the president, "Stop it. You can't go industry by industry ... through intimidation, business by business by business." As ordeals go, though, theirs was notably mild. The stock market soared; corporate profits nearly tripled; and the unemployment rate declined from 7.8 percent to 4.8 percent. From the depths of the Great Recession, the economy began what is now the third-longest expansion on record. When it came to the economy, the Obama years looked more like Mardi Gras than Hurricane Katrina. Now, instead of a liberal lawyer in the White House, CEOs have one of their own. And they're finding it's not everything they hoped. The stock market and other economic indicators look about the same as they did before Donald Trump took office. In Obama's final six months, the economy added an average of nearly 181,000 jobs per month. In Trump's first six months, it added 179,000 per month. GDP growth has even slowed a bit. More troublesome at the moment is Trump's insistence on defending Confederate monuments and stoking white racial resentments. In recent days, so many CEOs resigned from the president's two business advisory councils that Trump closed them down. Some of the executives no doubt were genuinely upset at the president's coddling of bigots and his inability to behave with a dignity befitting his office. Some were fearful of alienating customers who find Trump toxic. Other business executives are edging away from the president as though he were an erratic panhandler, and for the same reason: Best not to be close to him if he flips out. You don't want to have to stand there in silent mortification, as White House chief of staff John Kelly had to do the other day, while the president makes a fool of himself on national TV. It would not be good for your company or your career. But even before Trump's Charlottesville debacle, he was not covering himself with capitalist glory. His January travel order put him at odds with some 100 tech firms that sued to block it, arguing, "It disrupts ongoing business operations. And it threatens companies' ability to attract talent, business, and investment to the United States." His decision to pull out of the Paris climate accord didn't go down well with many big companies, 25 of which had signed a letter urging him to stay in. Even oil giants Exxon Mobil and ConocoPhillips opposed the withdrawal. In abandoning the Trans-Pacific Partnership trade deal, Trump spurned the recommendation of the U.S. Chamber of Commerce. His insistence on renegotiating NAFTA has the Big Three automakers worried about their supply chains. A lot of executives applaud Trump's war on federal regulation. But what else has he done for them? His failures on Obamacare have generated uncertainty among insurance companies and health care providers. His sour relations with Congress make tax reform less plausible every day. Infrastructure is what he was supposed to focus on Tuesday when he appeared before reporters at Trump Tower. But he buried that issue by venting about Charlottesville. Perhaps worst of all, he has been the arrogant bully that Jack Welch and others accused Obama of being. Trump slammed Boeing over the cost of Air Force One. He blasted Ford over a planned factory in Mexico. He has repeatedly attacked Amazon.com CEO Jeff Bezos, who also owns The Washington Post. He went after Nordstrom for dropping his daughter's products. When Merck's Kenneth Frazier quit his manufacturing advisory grou[...]



Chicago Mandates Security Guards, Cameras on Party Buses

Wed, 16 Aug 2017 16:00:00 -0400

Chicago is cracking down on what one alderman outrageously referred to as "potential rolling cemeteries"—otherwise known as party buses—with a new ordinance requiring expensive security cameras and a licensed guard on trips where alcohol is involved. Over the past two years 11 shootings connected to party bus passengers resulted in three killings (in a city with 762 homicides in 2016). The new ordinance kicked in this June and applies to vehicles that can hold 10 or more people and only provide pre-arranged transportation (called charter and sightseeing vehicles). It is city officials' latest attempt to rein in what they claim are dangerous party buses because, as stated by License Committee Chairwoman and Ward 37 Alderman Emma Mitts, "sometimes fatal violence can break out at a moment's notice thanks to the potent mix of guns and alcohol." Most of the new rules are meant to target the bigger charter and sightseeing vehicles that can carry 15 or more passengers. For bigger buses where alcohol will be consumed on the vehicle or during trip stops, it must be outfitted with a security camera, have a licensed security guard present, all passengers must be informed of the prohibited acts, and the driver must take "affirmative steps" to ensure that no prohibited acts are taking place. Those prohibited acts include underage drinking, disorderly conduct, possessing drug paraphernalia or drugs, unlawful possession or discharging a firearm, throwing items from the vehicle, indecent exposure, and littering. Igor Vulicevic, owner of ChiTown LimoBus told Reason that bus shootings are isolated incidents. "Watch the ten o'clock news. How many were killed on a daily basis in Chicago?" Vulicevic said. "I don't think that the buses are the problem." According to Vulicevic, the ordinance is "very poorly defined," and bus companies have been fined for not having security guards or cameras on trips with fewer than 15 passengers. A press release from the mayor's office states that that these rules apply to "[b]uses that have 15 or more passengers" which makes it sound like the city is targeting large, rowdy parties. However, the ordinance is actually based on the bus carrying capacity. If there are only five people on the bus, the regulations still apply. "Things like this are absolutely mindboggling… ," Vulicevic said. "This is just a simple example so you can see how semantics can actually cost somebody a thousand dollars." Additionally, the city now requires all vehicles that are rated for 15 or more passengers (regardless of alcohol consumption) keep a full itinerary of the trip, and all charter and sightseeing vehicles registered by the city (even those which carry fewer than 15 passengers) must have their city vehicle number printed on the side of the bus. Vulicevic said that it cost his business $4,000 upfront to get each bus up to code—$16,000 for his four buses. He expressed concern that increasing costs of business could actually make roadways more dangerous for consumers. "I think it [the ordinance] will put lots of people at risk. … We provide safe and reliable transportation to the citizens and the residents of this city… ," Vulicevic said. "The rates have already gone up. We simply cannot afford paying for all of this. ... So who has to pay? The consumer has to pay. And if the consumer cannot afford it then they will have to drive on their own and it will bring the risk of drinking and driving." The mayor's office also advertised the ordinance as a way to "help police officers more easily identify unlicensed party buses so they can be stopped." Fines for noncompliance with city regulations can range from $100 to $10,000. The Department of Business Affairs and Consumer Protection and Chicago Police conducted an investigation for illegal vehicles at the end of July and sent cease-and-desist letters to 17 companies who they claim were not following the new rules. But some of those companies say they actually are in compliance with the rules and are threatening to sue the city. Dan Cosma, own[...]



Canadians Can Eat Genetically Enhanced Salmon; Americans Can't

Wed, 16 Aug 2017 10:25:00 -0400

Our neighors to the north can now enjoy salmon genetically enhanced to grow faster and eat less feed. Thanks to absurd overregulation, Americans can't. The Atlantic salmon are enhanced using a Chinook salmon gene that enables them to grow much faster using less feed. Nature News reports that AquaBounty Technologies, which developed the fish, has now sold nearly five tons of it to customers in Canada. The company applied to the Food and Drug Administration (FDA) to get approval for its genetically enhanced salmon back in 1995; it took the agency til 2015 to rule that AquAdvantage salmon, as the product is known, "is as safe to eat as any non-genetically engineered (GE) Atlantic salmon, and also as nutritious." Health Canada approved it for sale six months later. But you still can't buy it here in the U.S. The usual claque of anti-science activists are suing the FDA in an effort to block the company from marketing the fish. And Alaska Sen. Lisa Murkowski, aiming to protect her state's salmon fishers from competition, has inserted a rider in the agriculture spending bill that bans the sale of enhanced salmon until the the FDA publishes its final labeling guidelines. Murkowski claims that Americans must be warned that AquAdvantage salmon are "frankenfish." As a general regulatory principle, genetically enhanced foods do not have to be labeled unless they are nutritionally different than their conventional versions. Canada sensibly does not require special labels on AquAdvantage salmon. AquaBounty is currently raising its sterile triploid salmon in an onshore facility in Panama. In June the company announced that it will expand a Prince Edward Island production facility and has acquired a fish farm in Indiana, where it plans to begin raising its enhanced fish for the U.S. market. Aquabounty sold its fish at wholesale for $5.30 per pound in Canada. In comparison, Tradex Foods reports that the current price on fresh atlantic salmon (farmed) in Miami for trimmed fillets is $4.25-$4.30 per pound. In any case, Alaskan fishers should rest easy. The Aquabounty facility in Indiana would produce about 1,200 tons of Atlantic salmon annually. Americans annually consume about 180,000 tons of Atlantic salmon, of which 170,000 tons are imported. Only 2,000 tons of Atlantic salmon are wild-caught. Most of the 105,000 tons of Pacific salmon is wild and is caught in domestic waters. Congress has tied the FDA's hands with respect to the AquAdvantage salmon, but the agency could do a great deal of good by withdrawing the scientifically ridiculous draft regulations meant to govern genomically improved livestock, which the Obama administration issued on its way out of the door in January. Personally, I dislike the flavor of salmon. But I plan to eat an AquAdvantage fillet as soon as I can legally lay hands on one.[...]



The Government Is Here to Make Sure Your Fidget Spinner Doesn't Kill Everybody

Fri, 11 Aug 2017 15:45:00 -0400

(image) The fidget spinner: harmless fad that suffered a cultural backlash almost as soon as we became aware they existed? Or deadly killer?

It's a harmless fad, but months after we've all grown tired of even thinking about the things, the federal government is here to make sure you don't kill yourself, kill everyone around you, and burn down your neighborhood with a small spinning toy.

Guys, there's a Fidget Spinner Safety Information Center. The United States Consumer Products Safety Commission (CPSC) has a new "guidance" out with a page explaining how to safely spin a toy.

The commission's acting chair, Anne Marie Buerkle, even put out a press release encouraging people to let them know about unsafe fidget spinners and "help our agency stay on top of this emerging hazard."

The agency's efforts have prompted a CNN piece about the not-terribly-hidden dangers of the toy. Primarily, fidget spinners have small parts that children can choke on. That's a consumer product warning so typical that it's almost meaningless. There was one notable choking incident in May that resulted in a 10-year-old having to get surgery to remove part of a spinner. As CNN notes, manufacturers already warn that the spinners are potentially a choking hazard.

Some fidget spinners also have batteries in them to operate little lights, so if you have one of those, go make sure your smoke detectors are in working order right this minute! I'm not exaggerating: One of the CPSC's safety tips is to check that you have working smoke detectors if you have fidget spinners with batteries in your house. And don't charge it overnight while you're sleeping!

Disappointingly, the CPSC does not warn against attempting to sharpen the edges of the fidget spinner so it becomes a ninja star. That seems like the kind of thing certain types of kids would try to do.

The CPSC also warns that there are all sorts of regulations fidget spinner manufacturers must adhere to in order to legally sell their product in the market.

Well, at least they actually get to sell their wares on the marketplace. Readers may recall the fate of small magnet toys like Buckyballs and Zen Magnets, which the CPSC intimidated out of the market out of exaggerated fear of their risks. Watch ReasonTV on Buckballs vs. the CPSC back in 2012 below. Buckyballs are, by the way, back for sale! (And Zen Magnets are available here.)

src="https://www.youtube.com/embed/KONkQx0wm1c" allowfullscreen="allowfullscreen" width="560" height="340" frameborder="0">




How Freedom Made Us Rich

Wed, 09 Aug 2017 13:00:00 -0400

"In [1492], if you were going to bet on who was going to have a 'Great Enrichment,'" says University of Illinois at Chicago economist Deirdre McCloskey, "you would have been crazy not to bet on China because China had the most advanced commercial institutions, the most advanced ship building technology, [and] the most advanced machinery all together." But it didn't work out that way. "My claim," McCloskey says, "is that liberty was the key to modern economic growth." In her new book, Bourgeois Equality: How Ideas, Not Capital or Institutions, Enriched the World, the third volume in a trilogy, McCloskey argues that our vast accumulation of wealth over the past two hundred years— which she's dubbed "The Great Enrichment"—was the result of "massively better ideas in technology and institutions." Where did they arise from? &tag=reasonmagazineA"A new liberty and dignity for commoners," she argues, "expressed as the ideology of European liberalism." McCloskey sat down with Nick Gillespie at Freedom Fest, the annual convention for libertarians in Las Vegas, for a wide-ranging conversation on topics including the roots of "The Great Enrichment," why her gender reassignment surgery was an "expression of [her] libertarianism", and the importance of advocating policies that "actually help the poor" instead of just "making people feel good about helping the poor. McCloskey is also a Reason columnist. Her archive is here. Edited by Todd Krainin. Cameras by Meredith Bragg and Justin Monticello. Subscribe to our YouTube channel. Like us on Facebook. Follow us on Twitter. Subscribe to our podcast at iTunes. This is a rush transcript—check all quotes against the audio for accuracy. Nick Gillespie: Hi, I'm Nick Gillespie with Reason and today we are sitting down with Deirdre McCloskey. She's an Emeritus Professor of Economics, History, English, and Communication at the University of Illinois at Chicago and the author most recently of Bourgeois Equality: How Ideas, Not Capital or Institutions, Enriched the World. She's also a columnist for Reason Magazine. Deirdre, thanks so much for talking with us. Long time contributing editor to Reason as well. McCloskey: I'm extremely pleased to be here and ... Gillespie: Well, your latest column, because I think this puts us right into a lot of current discussions, is titled The Myth of Technological Unemployment. McCloskey: Yeah. Gillespie: The subhead is, if the nightmare of technological unemployment were true, it would have already happened repeatedly and massively. In it, you take issue with a lot of libertarian or free-market economists who are talking about how we've reached the end of technological innovation or productivity growth and yeah, we're going to have to find something to do for people who are replaced by robots. McCloskey: Yeah. Gillespie: What's wrong with that? McCloskey: I think it's just completely wrong. My friend, Tyler Cowen, my friends at George Mason think maybe it's time for an intervention and Tyler, we think maybe we should send him to dry out somewhere because he seems to have gone crazy on this and he's not alone. I mean, there are people like Bob Gordon wrote a book last year, which was very successful. Gillespie: Which argued that basically say goodbye to 2%, ... McCloskey: Exactly. Gillespie: ... even 2% economic growth. McCloskey: Exactly. Innovation in the United States is finished and we've invented all the window screens and drop ceilings we're ever going to invent. There are a whole bunch of things wrong with it. One is that it doesn't make a lot of quantitative sense. In Tyler's book, which is called Average is Over, he's got a chart, which he says, "Summarizes my point." It's terrible. See the falling share of labor in national income. You look closely at the chart, which is one of these Time Magazine charts, it goes down like that. It turns out it's gone from 63% to 61%, talking about 2%. Now, come on Tyler. Please. Then, Bob likewise, and lot[...]



Innovation Drives the Small Manufacturing Boom—If It Can Survive Regulatory Meddling

Tue, 08 Aug 2017 00:01:00 -0400

Contrary to the claims of certain politicians, lots of stuff is still made in the United States. Enough stuff that it hit a new peak in output as of the first quarter of this year, in fact. Even more surprising is that, despite the automation that reduces costs and makes much domestic production possible, there's even some growth in manufacturing jobs (though the numbers remain far below their past heights). That small resurgence in jobs may be because of the recent boom in small, urban-based manufacturers. It's an encouraging trend, but don't get too attached to those new businesses and their employees. Regulators are busy trying to kill them off. "The renewal of manufacturing is not an abstract economic issue: It is very much an urban issue," the Massachusetts Institute of Technology trumpeted in 2014. "Because of changes in technology and consumer tastes, smaller-scale manufacturing is making a comeback in urban areas around the country," NPR's Marketplace added just a few weeks ago. Technologies like 3D-printing allow companies to produce small runs of automotive parts, custom truck bodies, and the like. Crowdfunding lets small businesses simultaneously raise capital and reduce costs to produce American-made clothing and gear at reasonable prices. And targeted production makes it possible to serve niche markets that might have gone overlooked in years past. It's innovation across the board, generally based in cities that had been losing old-style industry, but which still offer easy access to people, transportation, and resources. But warning signs of trouble to come were already there in the 2014 MIT article. "Can new manufacturing fit in with the ongoing evolution of cities, and if so, how?" it asked. The problem—and it's a big problem—is that cities are centers of creativity not just in generating new ideas for serving markets, but also in developing shackles for hobbling economic activity. The entrepreneurs creating new manufacturing businesses work in close proximity to people "evolving" the cities in which they live in more highly regulated directions that raise costs, impose hurdles, and choke off opportunities for creating jobs and prosperity. "The biggest single drag on U.S. manufacturing has been the decades-long encroachment of the regulatory state—with an army today of 300,000 regulators and an annual budget of $60 billion," Mark P. Mills of Northwestern University's McCormick School of Engineering and Applied Science noted in a report issued in June of this year by the Manhattan Institute. "Complying with regulations costs manufacturers an average of $20,000 per employee per year, twice as great a burden as for other businesses. For the smallest manufacturers (i.e., those with fewer than 50 employees), that annual cost is $35,000 per employee per year. In surveys, America's manufacturers routinely rank regulatory burdens as the top impediment to growth; a large majority also say that regulatory burdens are higher in America than in other nations." Mills refers to regulatory challenges that are daunting to manufacturers doing business anywhere in the United States. So long as they're in place, keeping the manufacturing sector healthy, let alone growing it, will be an uphill battle for American entrepreneurs. But matters are even worse for the small manufacturers who have been fighting to bring jobs and innovation to American cities. Janet Adamy and Paul Overberg examined the recent decline in American mobility for a Wall Street Journal article. They found that the bitter urban-rural cultural divide and unwillingness to leave behind support networks and social services play a role, as does occupational licensing, but another major problem is found in high housing costs resulting from restrictive regulations. "While small-town home prices have only modestly recovered from the housing market meltdown, years of restrictive land-use regulations have driven up prices in [...]



A Cap on Nicotine in Cigarettes Would Be Hazardous to Health

Wed, 02 Aug 2017 15:20:00 -0400

Robert Proctor, the historian of science who wrote the fascinating 1999 book The Nazi War on Cancer, loves the Food and Drug Administration's idea of "reducing the nicotine in cigarettes to a nonaddictive level." Writing in The New York Times, Proctor, now a professor at Stanford, calls the FDA's proposal "exceptionally good news for tobacco control, and for human health." In fact, he says, "a legal cap on the nicotine in cigarettes could be one of the most important interventions in human health history." I don't think this intervention would work out the way Proctor imagines. His op-ed piece is an excellent example of expecting good intentions to ensure good outcomes, even when experience tells us the policy is bound to backfire. "Cigarettes with nonaddictive nicotine levels would be radically different from what used to be known as 'low tar' or 'light' cigarettes, marketing gimmicks now barred by law," Proctor assures us. "Those cigarettes were advertised as delivering less nicotine and tar into the lungs, even though there was no actual reduction." Although it is by no means clear that "there was no actual reduction," it's true that "light" cigarettes were at best only slightly less harmful than regular cigarettes. But the reason for that casts doubt on the logic of the proposal Proctor is championing. It turned out that smokers who switched to "light" cigarettes tended to engage in "compensatory behavior" that boosted nicotine delivery and moved them closer to their usual dose. They smoked more cigarettes, took more puffs from each one, took bigger puffs, or held the smoke deeper and longer. They even subconsciously covered the tiny filter holes that helped reduce a cigarette's machine-measured tar and nicotine yields. The upshot is that "light" cigarettes did not offer anything like the health advantage implied by those official, government-certified numbers. The problem was that tobacco companies reduced nicotine along with tar, when what they should have done was reduce tar while keeping nicotine the same. E-cigarettes embody the latter approach taken to its logical conclusion: They deliver nicotine with no tar at all, since they do not contain tobacco and do not rely on combustion. To its credit, the FDA has finally begun to recognize the huge potential health benefit of reducing the toxins and carcinogens that smokers absorb along with nicotine. In the case of conventional cigarettes, however, the agency is considering the opposite approach: forcing smokers to absorb more toxins and carcinogens for any given dose of nicotine. The aim, as Proctor says, is to "make addiction virtually impossible," so that "kids might start smoking, but they wouldn't have trouble quitting." But what about the 30 million or so Americans who already smoke cigarettes? Deliberately increasing their exposure to the dangerous compounds generated by burning tobacco is neither ethical nor sensible, even (or especially) from a "public health" perspective. There are other problems with the FDA's proposal, aside from its health-damaging paternalism. Proctor notes that "sales were disappointing" when Philip Morris introduced three brands of nicotine-free cigarettes in the 1980s, "in part because high-nicotine cigarettes remained on the market." But forcing cigarette manufacturers to dramatically reduce nicotine levels would stimulate a black market supplied by smuggled imports and illicitly manufactured smokes. Smokers could dodge the cap on nicotine by turning to the black market, spiking their cigarettes with liquid nicotine, or rolling their own using full-strength tobacco. As longtime British anti-smoking activist Clive Bates notes, it is not even clear that the FDA has the authority to mandate the nearly complete removal of nicotine from cigarettes. The Family Smoking Prevention and Tobacco Control Act bars the agency from "banning all cigarettes" or "requiring the reduction o[...]



The FDA Warms to Vaping

Wed, 02 Aug 2017 00:01:00 -0400

On the face of it, the decision that the Food and Drug Administration (FDA) announced on Friday, extending by four years a crucial deadline for e-cigarette manufacturers to seek approval of their products, was no more than a stay of execution. But the FDA also signaled a new receptiveness to vaping as a harm-reducing alternative to smoking, which suggests this reprieve could turn into a commutation. That would be good news for smokers who want to quit and for anyone sincerely interested in helping them. For too long American public health officials have been unreasonably hostile to e-cigarettes, which are far less hazardous than the conventional kind and offer a closer simulation of the real thing than nicotine gum or patches do. Scott Gottlieb, the new FDA commissioner, seems to appreciate the public health potential of this innovation. "The overwhelming amount of death and disease attributable to tobacco is caused by addiction to cigarettes," he says. "Envisioning a world where cigarettes would no longer create or sustain addiction, and where adults who still need or want nicotine could get it from alternative and less harmful sources, needs to be the cornerstone of our efforts—and we believe it's vital that we pursue this common ground." Gottlieb's vision of nonaddictive cigarettes involves mandating a gradual reduction in nicotine content, which would increase the risks that smokers face by forcing them to absorb more toxins and carcinogens for the same dose of nicotine. But his interest in less dangerous alternatives to cigarettes is encouraging. The FDA says "a key piece" of its new approach is "demonstrating a greater awareness that nicotine—while highly addictive—is delivered through products that represent a continuum of risk and is most harmful when delivered through smoke particles in combustible cigarettes." The agency wants to strike "an appropriate balance between regulation and encouraging development of innovative tobacco products that may be less dangerous than cigarettes." Toward that end, the FDA is giving e-cigarette companies until August 8, 2022, to apply for permission to keep their products on the market under regulations published last year, rather than the original deadline of November 8, 2018. The agency says it will use the extra time to seek additional public comment and develop clearer guidance for the industry. The 2016 regulations require manufacturers of vaping equipment and e-liquids to demonstrate that approval of their products "would be appropriate for the protection of the public health." It is not clear what that means in practice, but the FDA projected that applications would cost hundreds of thousands of dollars per product, and many observers thought that was an underestimate. To give you a sense of how expensive and burdensome the process was expected to be, the FDA anticipated that it would receive applications for just a tiny percentage of existing products. The implication was that the regulations would drive the vast majority of companies out of business. If the FDA is serious about making "less harmful sources" of nicotine "the cornerstone of our efforts," it will develop transparent, straightforward, and practical criteria for approval of current and new vaping products. Standing between smokers and products that can save their lives is surely not "appropriate for the protection of the public health." Nor is making those products less appealing by arbitrarily restricting flavors. Since supposedly "kid-friendly" e-liquids are very popular among adults who switch from smoking to vaping, it's a bit worrisome that the FDA plans to solicit public comment on regulation of flavors, which it acknowledges may be "helping some smokers switch to potentially less harmful forms of nicotine delivery." A recent BMJ study suggests that e-cigarettes have accelerated the downward trend in smoking[...]



Regular Cars Didn't Need Federal Regulation; Neither Do Driverless Vehicles

Mon, 31 Jul 2017 14:15:00 -0400

A senator once asked the head of Google's self-driving vehicle program what sort of legislation was needed to help his industry. "What we have found in most places is that the best action is to take no action," he replied, adding that "in general the technology can be safely tested today on roads in many states." Last week a congressional committee ignored that advice and took action. In a bipartisan vote of 54–0, the House Energy and Commerce Committee has now forwarded the SELF DRIVE Act* for consideration by the full House of Representatives. (The Senate is working on similar legislation.) The bill's goal is to set up a national regulatory framework to encourage the development and deployment of autonomous passenger vehicles. But why does Congress need to get involved with autonomous vehicle development at all? After all, between 1900 and 1965 automakers managed to put tens of millions of non-self-driving vehicles on the road - some 90 million by the mid-1960s - with essentially no interference from the federal government. The federal government didn't really get into the automobile regulation business until Congress created the National Highway Transportation Safety Administration (NHTSA) in 1966. The immediate impetus behind the push to create the new federal automobile safety agency was the publication of Ralph Nader's Unsafe At Any Speed: The Designed Dangers of the American Automobile, which claimed that GM's Corvair had a tendency to roll and therefore was a "one-car accident." In 1972, the very agency that Nader's alarmism conjured into existence issued a report finding that the "Corvair compares favorably with contemporary vehicles used in the tests...the handling and stability performance of the 1960–63 Corvair does not result in an abnormal potential for loss of control or rollover, and it is at least as good as the performance of some contemporary vehicles both foreign and domestic." In other words, federal automobile regulation was founded on activist misinformation. Prior to 1966, automobiles somehow got fitted with such safety equipment as windshield wipers, headlights, and turn signals without federal intervention. (In 1939, Buick became the first U.S. automaker to offer factory-installed flashing turn signals.) Industry standards were generally devised not by bureaucrats but by the Society of Automotive Engineers. On the postive side, the SELF DRIVE Act would preempt states from adopting their own rules for regulating "highly automated vehicles, automated driving systems, or components of automated driving systems." A year ago, the California Department of Motor Vehicles proposed a draft regulation that would require all self-driving cars to have steering wheels, pedals, and a licensed, specially trained driver in the front seat. Fortunately, the agency recently backed off those requirements. Nevertheless, 20 states have passed legislation related to autonomous vehicles and 33 states have introduced yet more such legislation this year. But that's not all the bill would do. Among other things, it directs the secretary of transportation to issue within 24 months a final rule requiring autonomous vehicle manufacturers to submit safety assessment certifications; creates a Highly Automated Vehicle Advisory Council to undertake information-gathering activities, develop technical advice, and present best practices or recommendations to the Transportation Secretary; requires manufacturers to devise and submit cybersecurity plans; and prohibits manufacturers from selling highly automated vehicles until they have developed privacy plans with respect to the collection, use, sharing, and storage of information about vehicle owners and occupants. Perplexingly, the bill also protects state automobile dealer franchise laws that ban direct sales of cars. Since most autonomous vehicles will likely be[...]



Embracing Harm Reduction, FDA Gives E-Cigarette Industry a Regulatory Reprieve

Fri, 28 Jul 2017 13:15:00 -0400

Today the Food and Drug Administration (FDA) said it is giving manufacturers of electronic cigarettes until August 8, 2022, to apply for approval of their products under regulations announced last year, which were widely expected to drive most companies out of business. The original deadline was November 8, 2018, and the four-year extension is supposed to provide more time for public comment and industry guidance as part of a "comprehensive regulatory plan" that aims to strike "an appropriate balance between regulation and encouraging development of innovative tobacco products that may be less dangerous than cigarettes." The agency says "a key piece of the FDA's approach is demonstrating a greater awareness that nicotine—while highly addictive—is delivered through products that represent a continuum of risk and is most harmful when delivered through smoke particles in combustible cigarettes." That is music to the ears of harm-reduction advocates who see vaping as a life-saving alternative to smoking and viewed the original FDA rules as misguided, heavy-handed, and potentially deadly meddling that effectively gave conventional cigarettes an advantage over competing sources of nicotine that are much less dangerous. In addition to providing regulatory relief for the e-cigarette industry, the FDA will be investigating the possibility of mandating a gradual reduction in the nicotine levels of combustible cigarettes. The idea is to make cigarettes less addictive for new smokers, but the policy is apt to hurt current smokers by forcing them to absorb more toxins and carcinogens along with their usual dose of nicotine. The FDA "intends to issue an Advance Notice of Proposed Rulemaking (ANPRM) to seek input on the potential public health benefits and any possible adverse effects of lowering nicotine in cigarettes." The FDA's new commissioner, Scott Gottlieb, sees a nicotine-reduction mandate as complementing the agency's new receptivity to harm-reducing cigarette alternatives. "The overwhelming amount of death and disease attributable to tobacco is caused by addiction to cigarettes," Gottlieb says. "Envisioning a world where cigarettes would no longer create or sustain addiction, and where adults who still need or want nicotine could get it from alternative and less harmful sources, needs to be the cornerstone of our efforts—and we believe it's vital that we pursue this common ground." The FDA also seems to be contemplating flavor regulations that might favor e-cigarettes over the real thing. It says it will "seek public comment on the role that flavors (including menthol) in tobacco products play in attracting youth and may play in helping some smokers switch to potentially less harmful forms of nicotine delivery." The Family Smoking Prevention and Tobacco Control Act, the law that gave the FDA authority to regulate tobacco products, banned most "characterizing flavors" from cigarettes but made an exception for menthol, by far the most popular one (and, not coincidentally, a big moneymaker for Philip Morris, which supported the law). It sounds like the FDA might be reconsidering that exception, while at the same time recognizing that so-called kid-friendly e-cigarette flavors are in fact very popular with adults who switch from smoking to vaping. The FDA says it will use the reprieve it is giving e-cigarette companies to clarify what will be required to keep their products on the market. The agency also plans to develop product standards that address battery hazards and help keep e-cigarette liquids away from children. Over all, it looks like the FDA under Gottlieb will be taking a much more practical approach to e-cigarette regulation that recognizes the realities of the existing market and the relative hazards of different nicotine sources. Instead of wrecking an industry that se[...]



Brickbat: Wasn't This Banned by the Magna Carta?

Wed, 26 Jul 2017 04:00:00 -0400

(image) Andre Spicer's daughter set up a lemonade stand near their home in London, England. A festival was taking place nearby, so her business was brisk. But about 30 minutes after she set the stand up, four code enforcement officers confronted her and handed her a £150 fine for not having a trading permit.




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 di[...]



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[...]



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[...]