CEI Planet - November-December 2012

7/29/2019 CEI Planet - November-December 2012

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COMPETITIVE ENTERPRISE INSTITUTE VOLUME 25, NUMBER 6 NOVEMBER/DECEMBER 2012

ALSO INSIDE:

CEI Announces New President: Lawson

by Fred L. Smith, Jr.. . . . . . . . . . . . . .

Commodities Trader Places His Bets on

Markets and CEI, by Mark OKeefe . .

The Good, the Bad, and the Ugly . . .

Media Mentions . . . . . . . . . . . . . . . .

End Notes . . . . . . . . . . . . . . . . . . . . .

SZWARC: A BIG SETBACKFOR SCIENCE BY PRESSRELEASE

>>page 7>>page 4

BY MARLO LEWIS

On November 16, the U.S.Environmental Protection Agency(EPA) rejected petitions from the governorsof Arkansas, Delaware, Georgia, Maryland,New Mexico, North Carolina, and Texas to

suspend the biofuel blending requirementsestablished by the federal renewable fuelstandard (RFS) program.

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increasing quantities of biofuelmostlycorn ethanolinto the nations motor fuelsupply. The 2012 target is to blend 13.2billion gallons of biofuel into our gasoline,to be ratcheted up to 13.8 billion gallons in2013. This year, about 4.7 billion bushels,or 40 percent of the nations corn crop, willbe consumed by ethanol manufacturing.

The governors contend that the RFS

program, combined with the worst droughtin 50 years, pushed corn prices to recordhighs, harming their states poultry, beef,pork, and dairy producers, who use corn asanimal feed. The Clean Air Act authorizesEPA Administrator Lisa Jackson to waivethe RFS targets for one year if thoserequirements would severely harm theeconomy of a state, a region, or the UnitedStates as a whole. She has declined to do so.

The RFS program guarantees thatthe gas we buy contains up to 10 percentethanol and may soon contain up to 15

percent. In a competitive market, hardlyanyone would buy ethanol as motor fuel,because the substance has one-third lessenergy than gasoline and does not make upthe difference in price. To the contrary, thehigher the ethanol blend, the more moneyyou spend on each mile driven. At current

prices, it would cost the average driver $500a year to switch to E85, a fuel that is 85percent ethanol, according tofueleconomy.gov, a website jointlyadministered by the EPA and the U.S.Department of Transportation.

Democratic Arkansas GovernorMike Beebes petition conciselyexplained why Jackson shouldhave granted the waiver.Virtually all of Arkansasis suffering from severe,extreme, or exceptional

drought conditions, andaccelerating corn pricesare having a severeeconomic impact onthe states livestockproducers. Whilethe drought may havetriggered the pricespike in corn, the fuelstandards exacerbatedthe problemthe policyhas boosted corn prices193 percent since 2005.

Agriculture accounts for nearly one-quarter of the states economic activity,and livestock sectors hit hard by rising coprices represent nearly half of Arkansasfarm sales.

However, the EPA stacked the decksagainst petitioners, establishing a burden

proof that was virtually impossible to meeIndeed, the agencys August 30 Request fComment telegraphed the decision Jackso

(continued on page

The EPA vs. State Economies

MURRAY: HURRICANESANDY AND THEINVISIBLE HAND OFRECOVERY

CIANDELLA: THEENDURING LESSON OFI, PENCIL

>>page 9

FEATUREDARTICLES


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CEI THECOMPETITIVEENTERPRISEINSTITUTE

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CEIPLAN

PublisheFred L. Smit

EditorMarc Scrib

Editorial DireIvan Oso

Contributing Nicole Cian

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Enterprise Insa pro-market

interest grodedicated toenterprise a

limited govern

CEI is a nopartisan, n

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the DistrictColumbia aclassified by

IRS as a 501 charity. CEI upon contribufrom foundatcorporationsindividuals fsupport. Artmay be reprprovided theattributed to

Phone:(202) 331-1

Fax:(202) 331-0

E-mail:[email protected]

ISSN#: 1086-3

CEIPLAN

PublisheFred L. Smit

EditorMarc Scrib

Editorial DireIvan Oso

Contributing Nicole Cian

The CEI Plais producedthe Compet

Enterprise Insa pro-market

interest grodedicated toenterprise a

limited govern

CEI is a nopartisan, n

profit organiz

incorporated District of Coland is classifithe IRS as a 5

(3) charity. CEupon contribufrom foundatcorporationsindividuals fsupport. Artmay be reprprovided theattributed to

Phone:(202) 331-1

Fax:(202) 331-0

E-mail:[email protected]

ISSN#: 1086-3


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Iam pleased to announcethat the CompetitiveEnterprise Institutes Board of Directors, after anintensive six-month selection process, has unanimouslyselected Lawson Bader as the next President of CEI.Lawson comes to CEI from the Mercatus Center atGeorge Mason University, where he is currently VicePresident. He has a mix of skills that will complement

and augment our strengths, as well as the criticalcommitment to free-market principles that are thefoundation of CEI.

That commitment has been demonstrated by his16 years of work at Mercatus, which along with CEI,has long given primary emphasis to regulationtheless honest form of socialist economic intervention.

That experience gives Lawson the skills he will needas CEIs chief executive: an in-depth knowledge ofthe regulatory state, extensive fundraising experience,managerial capability, and the public presence torepresent CEI on many free market policy issues.

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for CEIs unique culture. He likes the fact that we areoften characterized as both feisty and substantive,recognizes the value of our vertical issue managementapproach, and appreciates our identity as a band ofhappy warriorshaving fun while challenging thestatists. After all, how many policy leaders wear kiltsor work Hayeks name into their license plate? (NowI wish Id asked for a Schumpeter custom plate, buttheres not enough letter-space!)

Im sure that once youve had a chance to talk withLawson and get to know him, youll recognize that hisskills, principles, commitment, and personality will goa long way toward expanding CEIs network of friends

and supporters.As some of you know, I have long admired and

taken inspiration from J.R.R. TolkiensLord of theRings, and would like to relate one exchange. Gandalf,the heroic leader of the opposition to Sauronthepower-hungry despot threatening civilizationmeetswith Denethor, the embattled steward of Gondor, one

of the last states resisting Saurons onslaught, to offerhis aid. Denethor sees the goal of protecting Gondorbut, alas, not civilization itself.

Denethor: [T]he Lord of Gondor is not to bemade the tool of other mens purposes, howeverworthy. there is no purpose higher in theworld than the good of Gondor...

Gandalf: In that task, you shall have all the aidthat you are pleased to ask for. But, I will say this:the rule of no realm is mine, neither of Gondornor any other, great or small. But all worthythings that are in peril as the world now stands,these are my care.

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to preserve a very worthy thing that has long been inperileconomic liberty. Now, as America faces a cuspSRLQWLQWKDWJKWWKHUHDUHUHDVRQVIRUSHVVLPLVP%XW

there have been dark days before and CEI has neverretreated. Though Gondor may fall, freedom lives on.

Lawson Bader will assume that stewardship roleKHUHDW&(,RQ-DQXDU\,KDYHHYHU\FRQGHQFHWKDW

he will lead our efforts in that struggle brilliantly.As for myself, while I am stepping down as

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Director of the Center for Advancing Capitalism, I willseek to take CEIs advocacy and strategies to the global

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that have been deserts until recently. Ensuring thatthose thrive is a worthwhile goal.

To that end, I will hold a series of talks and forumsthroughout the world to build an international pro-freedom alliance that brings together participants from

not only the academic and public policy worlds, butalso from business and the mediaa Davos in Exile.And I look forward to launching this new effort in theknowledge that CEI is in good hands.

CEI Announces New President

Lawson BaderBy Fred L. Smith, Jr.

>>AMESSAGE FROMTHE PRESIDENT


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CADVANCING LIBERTYFROM THE ECONOMY TO ECOLOGY

reached. The agency stated petitionerswould have to show that the RFS itselfwas the cause of severe harm, not merelya contributing factor. In addition,

petitioners would have to show thatwaiving the RFS would be a remedy forthe hardship facing livestock producers.

These criteria are ridiculous. TheClean Air Act does not require the EPA todon analytical blinkers and ignore otherfactors that, in combination with the RFS,cause severe harm, nor does it say that anywaiver granted must be a silver bullet.

Severe distress in any state, region, orthe nation as a whole typically results froma combination of factors, not a single one.A fuel standard that causes little economic

harm when unemployment rates are low,corn production is booming, corn stocksare high, and Chinas demand for U.S. corn

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when the opposite conditions obtainasthey do today.

The EPAs requirement that the waiverprovide a cure for high corn prices is the

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EPA may grant a waiver for only one yearat a time. So even if a multi-year waiverwould provide a complete remedy, theEPA could reject each successive one-yearwaiver on the grounds that it would notsolve the problem by itself.

It is true that a one-year waiver mayhave little impact on the price of corn,given that the market would expect the

fuel requirements not only to return, butto continue to rise in a years time. Inaddition, much of the ethanol blendedinto regular gasoline is used as an octane

ERRVWHU,WFDQQRWEHUHPRYHGXQWLOUHQHUVdevelop a workable substitute, which isunlikely to happen in less than a year.7KHVXEVWDQFHUHQHUVXVHGDVDQRFWDQH

booster before ethanol has been banned inmost states.)

The EPA takes an entirely differenttack when the issue is not whether togrant regulatory relief but whether toimpose additional regulatory burdens. Insuch cases, even small contributions toDQDOOHJHGKDUPDUHFRQVLGHUHGVXIFLHQW

grounds for regulation, and even minute

regulatory contributions to the hoped-forVROXWLRQDUHGHHPHGIXOO\MXVWLHG

Consider the EPAs greenhouse-gasemission standards for heavy-duty trucks,which will go into effect for model-year 20142018 vehicles. The agencyestimates that these standards will reduceatmospheric carbon dioxide (CO2)concentrations by 0.732 parts per million,which in turn will avert an estimated0.002 to 0.004 degrees Celsius of globalwarming and 0.012 to 0.048 centimetersof sea-level rise by the year 2100. Suchchanges would be too small for scientiststo distinguish from statistical noise in theclimate data. The EPA acknowledges noobligation to demonstrate either that heavy-truck greenhouse gas emissions alone harm

public health and welfare or that regulatinWKHVHWUXFNVZRXOGWDNHYHULDEOHELWHVRX

of global temperatures and sea-level rise.For sheer results-be-damned regulation

however, nothing beats the EPAs proposeCO2 emission standards for fossil-fuelpower plants. The agency does notanticipate any notable CO2 emissionschanges resulting from the standards andthus, concludes that, there are no directPRQHWL]HGFOLPDWHEHQHWVLQWHUPVRI&2

emission reductions associated with thisrulemaking. In short, the standards wouldnot even make a negligible contributionto a solutionyet the EPA proposes themanyway.

Such glaring inconsistency is a

reminder (if any is needed) that agenciesare not impartial umpires but interestedparties in the rules they administer.

This cloud may yet have a silver liningJacksons rejection of the waiver petitionsexposes the RFS program as an arbitrary,LQH[LEOHV\VWHPWKDWSURYLGHVFRUSRUDWH

welfare to corn farmers at the expenseof livestock producers, consumers, andhungry people in developing countries. ThEPAs decision may very well build suppofor RFS reformor repeal.

Marlo Lewis ([email protected])is a SenioFellow at CEIs Center for Energy andEnvironment. A version of this article wasoriginally published on National ReviewOnline.

EPA vs. States, continued from page 1


4/12


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My gcy

I need to provide for my loved

ones. But like my family, I wan

CEI to carry on for generations

to come. What can I do?

Its easy to do both. Talk to usabout your options, like

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Want to learn more?Contact Al Canata at [email protected]

or (202) 331-1010

the study for being inconsistent with the overwhelmingERG\RIVFLHQWLFHYLGHQFHRQWKHVDIHW\RIGLHWVRGDDQG

aspartame. The U.S. Food and Drug Administration (FDA)released a statement saying aspartame has been approvedfor food use since 1981 and in general use since 1996,and that the agency based its conclusions on aspartames

safety on more than 100 toxicological and clinical studies,FRQWLQXHVWRPRQLWRUUHVHDUFKDQGQGVQRUHDVRQWRDOWHU

its previous conclusion about the safety of aspartame.Aspartame is one of the most comprehensively studied

food ingredients in our food supply, with literally hundredsof studies and multiple expert reviews going back somethree decades, all concluding that aspartame is safe andQGLQJQRHYLGHQFHWRVXSSRUWDQ\DVVRFLDWLRQEHWZHHQ

aspartame and cancer in any tissue or any serious healtheffects.

Faced with the facts, Harvard was compelled toretract the press release on the morning the study wasto be published. Harvard Medical Schools Brigham

and Womens Hospital Senior Vice President ofCommunications and Public Affairs issued a statementWRUHSRUWHUVVD\LQJ8SRQUHYLHZRIWKHQGLQJVWKH

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The study authors wrote that the relative risks they reportedcould be due entirely to chance. They also admitted theunreliability of the self-reported data and aspartame intakeestimates in the database used in their research.

These admissions were momentous, but the statementblamed the media department for prematurely issuingWKHSUHVVUHOHDVHEHIRUHVFLHQWLFOHDGHUVDVVRFLDWHG

with Harvard had had a chance to review the studysQGLQJV7KDWPLJKWVRXQGFUHGLEOHLIQRWIRUWKHIDFWWKDW

the aspartame study was coauthored by Walter Willett,who is Chairman of the Departments of Nutrition andEpidemiology at Harvards School of Public Health andlead investigator of both the NHS and HPFS. Dr. Willettalso serves on the Editorial Board of theAmerican J ournalof Clinical Nutrition. Harvard press releases also ofteninclude quotes from studies lead authors, which showstheir involvement in the development of press releasesprior to publication.

Unfortunately, Harvard has a long history of launchingunfounded health scares by issuing releases that publicizeH[DJJHUDWHGDQGXQWHQDEOHQGLQJV

Hopefully, the media have not missed the big newsin this story. Maybe, Harvards latest admission of the

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data, methodology, and reported relative risks, will leadreporters and publications to stop giving these studiesundue attention. Maybe, just maybe, they will startreporting real science.

Sandy Szwarc, BSN, RN, is a food and health writer,researcher, and editor with 30 years experience inFRPPXQLFDWLRQVDQGWKHKHDOWKFDUHHOG


6/12

C om m odities T rader P l aces

H is B ets on F ree M arkets and C E I

BY MARK OKEEFE

In his passion to extend humanlife through advances in science,commodities trader Paul F. Glenn spendssubstantial annual funds on research in thebiology of aging. In his passion to advancethe free market system, Glenn also givesgenerously to the Competitive EnterpriseInstitute.

Glenn sees a link between CEI, theeconomy, and his philanthropy. WhenCEI advances the principles of limitedgovernment, free enterprise, and individualliberty, it empowers citizens like him to beprosperous and generous.

CEI is trying to maintain the mostsuccessful system in the world at a timewhen there is serious opposition in thiscountry by those who think governmentalways knows best, says Glenn, 82, aCEI donor since 1989. I know what CEIhas done in the past to advance the cause

of capitalism and thats exactly what Imlooking for.

Glenn lives and works in SantaBarbara, California, where his venture

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investment opportunities, and his charity,the Glenn Foundation for MedicalResearch, funds exploration of themechanisms of biological aging. TheFoundation assists individual scientists andacademic institutions with grants.

Glenns focus on aging began whenhe watched what happened to hisgrandparents. Their health deterioratedwith alarming speed as they lost theirvision, hearing, and eventually their lives.Glenn was 20.

After their death, Glenn, a studentat Princeton, heard about the idea,emerging from some leading biologistsand physicians, that the negative effects ofaging could be prevented or slowed at themolecular level. I place a great deal ofvalue on every minute of healthy human

life, said Glenn. I want to extend healthyhuman life. When I heard that there maybe no biological ceiling on human life thatreally hit me.

Mark R. Collins, president and directorof the Glenn foundation, has worked withGlenn for 26 years. He has chosen tofocus much his philanthropy on medicalresearch and aging, said Collins. But itshis passion for the free market system thathas allowed him to do this philanthropy. Itprecedes his philanthropy.

The way Glenn looks at it, capitalismhas made the United States the mostprosperous and generous country in theworld. This system has survived becauseit works the best, said Glenn. Look atEurope, look at Asia, look at Africa andthen look at what we have here. We are thecenter of capitalism and the results speakfor themselves.

In commodities trading andphilanthropy, past performance is noguarantee of future results. But it canbe a strong indicator. Thats why Glennplans to continue to give to CEI as FredL. Smith, Jr., CEIs founder, leaves hisrole as president to lead CEIs Center forAdvancing Capitalism. Lawson Bader,a veteran of the free-market movement,will take over as CEIs new president in

January 2013.Fred has done a great job and at the

seat of power where he can get into anyFRQJUHVVPDQVRIFH+HJRHVH\HEDOOWR

eyeball with very big people there, saidGlenn. If Fred has picked a new guy hewill be a competent fellow.

Mark OKeefe is a veteran journalist andthe owner of Assist Communications.


WWW.CEI.ORG


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BY NICOLE CIANDELLA

As President Obama embarkson his second term, well haveto see whether he conjures up thespecters of his controversial campaignmoments. Recall his insistencethat, [I]f you have a business, youdidnt build that. That upset a lot

of people. But heres the thing aboutthat memorable line: If you have abusiness, there is a sense in whichyou didnt build it all on your own.

Obama was rightbut for thewrong reasons.

The President implied businessowners are dependent on governmentlargesse and infrastructure, as well ascommunity goodwill. In fact, businessowners rely on a much bigger andmore sustainable resource: themillions of self-interested individuals

who engage in market activity aroundthe globe. Had this been what Obamatried to imply, we might be on ourway to a quick recovery.

In his 1958 essay, I, Pencil,Foundation for Economic EducationFounder Leonard E. Read explainshow an ordinary wooden pencilis made. Its a long, complicatedprocess, from the harvesting of cedartrees for the pencil body to the mixingof clay for the eraser. No man onEarth can make a pencil by himself,

Read says, because the seeminglysimple pencil is the end product of acomplex chain of human activity.

Not even the CEO of a pencilcompany possesses the knowledgenecessary to make a pencil. TheCEO relies on loggers, truckers,miners, and factory workers; andthese workers in turn rely on the menand women who manufacture saws,trucks, equipment, and machines. All

of these individuals contribute littlebits of know-how to the productionof an ordinary pencil, and they do soin pursuit of their own interests. Theirvoluntary cooperation makes thepencil possible.

Every single modern businessowner, like the CEO of a pencilcompany, must depend in part on

the knowledge and labor of others.Its interdependence. Even a smallbusiness owner working out of herhome relies on others to developsoftware tools and other services sheneeds. She is not relying on otherscharity, goodwill, or civic duty. Sheis relying on the fact that theyllbe looking for rewards for servingher well. This is not to argue thatcharity, goodwill, or civic duty areunimportant. Its that these cantmake a pencil.

Contrary to myth, entrepreneursare not islands unto themselves.Nobody acting in markets is self-VXIFLHQW0DUNHWVE\WKHLUQDWXUH

incentivize cooperation among allsorts of people. Indeed, markets pullindividuals to arrange themselves intointeractive patterns of connectivity,trade, and production that go beyondtraditional, cultural, and nationalboundaries. In pursuit of theirindividual interests, people whoare strangers to each otherwhomight even hate each other if theyever metunwittingly work incollaboration. This collaborationmakes possible products that wouldotherwise be impossible. And everyday, new interactions create newmarkets worldwide.

Yet people take this incrediblecooperation for granted. PresidentObamas comments about businessowners and the immediate backlash

both fell into a strange set of falsenarratives that pit community valuesagainst market values. In truth,markets are connecting forces,aligning individual interests so thatpeople are helping people theyllnever meet.

In the words of Leonard Read,the lesson ofI, Pencil is: Leave all

creative energies uninhibited. Todayfederal regulations cost Americans$1.75 trillion annually, accordingto my CEI colleague WayneCrews. Many of these regulationsVLJQLFDQWO\DQGXQGXO\FXUEFUHDWLY

economic activity, preventing thefounding of new businesses or thegrowth of existing ones. High taxesDQGIHHVVXIIRFDWHHGJOLQJPDUNHWV

tariffs thwart trade across our borderand strict immigration laws restrictcollaboration with talented people

born in other countries.As our leaders begin to deal with

the serious economic challengesthat confront us, theyd do well toacknowledge the best economicstimulus would be to help unleashReads creative energies. Voluntaryactivitiescoordinated largely byprices and property rightshavegiven rise to the everyday wondersof our modern world. Its throughHQWUHSUHQHXULDOUHSURGXFWLYLW\DQG

free exchange that well eventuallygrow our way out of our troublingeconomic conditions. In fact, its theonly way.

Nicole Ciandella ([email protected] Media Coordinator at CEI andscreenwriter of CEIsI, Pencil: TheMovie, which can be viewed at IPencilMovie.org. A version of this articoriginally appeared inThe Freeman

The En d ur in g Lesso n

o f I, Pen c il


8/12

BY IAIN MURRAY

Once again, a terrible natural disasterstrikes, and Americans from the

Carolinas to New England are doing theirbest to sort through the wreckage and gettheir lives back to normal. Already, some,includingThe New York Times, have saidnatural disasters prove the need for biggovernment. In fact, disaster responseprovides an excellent example of howthe invisible hand of the market works toalleviate suffering and bring quick reliefto those in need.

I will add one caveat. Large amounts

RIIHGHUDOPRQH\ZLOORZWRWKHGLVDVWHUareas. To accept it is not to concedegovernment is more important thanprivate efforts. We live in a federal nationand, as part of the federal compact,fortunate states (right or wrong) helpthose in need. What is objectionable is biggovernment, for reasons I shall come to.

So what happens when a disasterstrikes? First, we hear how many peoplehave lost power. Restoring power is

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energy is fundamental to the reconstructionprocess. And getting the lights back on is

the prime responsibility of utilities, notgovernment. In Maryland, for instance,the utility PEPCO, reacting to criticism ofits slow response following last summers'HUHFKRVWRUPPDGHVXUHLWKDGVXIFLHQW

manpower to restore power quickly.For local transportation system

managers, inspecting and ensuringthe structural integrity of standinginfrastructure is the top priority following

a disaster. As facilities deemed structurallysound reopen, damage is assessed and

managers begin the process of acquiringthe necessary funds for repair.

These decisions require specializedlocal knowledge, often from theprivate sector. Coordination amonglocal responders is critical. The federalgovernment often doles out funding toDIIHFWHGDUHDVEXWLWLVORFDORIFLDOVZKR

manage transportation systems before,during, and after disasters occur.

Then there are the responsesby insurance companies and otherQDQFLDOLQVWLWXWLRQV$OOP\QDQFLDO

providers already have contacted me tooffer emergency assistance. Insurance

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information about how to submit claims.These companies provide the liquidity toget households and communities up andrunning again.

Of course, the vast majority of disasterresponses occur at the individual level.People need emergency supplieswater,canned goods, generators, and the like.In most cases, they do not wait for the

The only lifeline inKenner was the Walmart

stores. We didnt havelooting on a mass scale

because Walmart showedup with food and water soour people could survive.

Hurricane Sandyand the

Invisible Handof Recovery


WWW.CEI.ORG


9/12

Red Cross or a government agency; theygo out and get them themselves. Thatswhere the often derided big box storessuch as Walmart and Target provide a vitalservice. They have procedures to ensuretheir supply chains respond effectivelyto disasters, and thus generally have thenecessary goods in stock.

Big box stores also dont merely sit andZDLW7KH\JHWRXWUVWDQGKHOSSHRSOH$V

St. Lawrence University Professor SteveHorwitz points out, Walmart was on thescene following Hurricane Katrina longbefore the bureaucracies. He quotes PhillipCapitano, mayor of the New Orleanssuburb of Kenner, saying, [T]he onlylifeline in Kenner was the Walmart stores.We didnt have looting on a mass scale

because Walmart showed up with food andwater so our people could survive. It willbe interesting to see whether the lack of bigbox stores in Manhattan has any effect onthe speed of the recovery there. Mom-and-pop stores simply cant do what big storescan in these circumstances.

Big government, on the other hand,can get in the way. Local environmentalordinances routinely prevent utilities fromtrimming trees that can threaten powerlines during storms. The cleanup processmight be hindered by pro-union rules such

as the Davis-Bacon Act, which increasesthe cost of federally funded constructionprojects.

Anti-fraud rules can hinder banks andinsurers getting funds to their customers,and the federal National Flood InsuranceProgram undermines the insurance processDQGHQFRXUDJHVEXLOGLQJLQRRGSURQH

areas. Anti-price gouging rules can causeshortages by preventing price signals fromhelping the market allocate resources.

Finally, union lobbies and NIMBYconcerns chase away big box stores.

And what about FEMA? This agencyis there to help the transfer process, but itsbureaucracy and empire-building get in theway. After Hurricane Katrina, for instance,it made a variety of errors, such as:

It was ill-prepared to conduct themassive search-and-rescue function.Its federally coordinated buildingsearch teams found spray-paintedsymbols indicating state teamsalready had looked through thebuildings.

Its tracking of supplies was sadlylacking. Some FEMA and stateworkers said they had to order twice

as many supplies to get half of whatthey needed, primarily because theyKDGQRFRQGHQFHLQWKHV\VWHP

$JHQF\RIFLDOVGLVUXSWHGVXSSO\

lines, turned away diesel fuelprovided by the Coast Guard andWKUHHWUDLOHUWUXFNVOOHGZLWKZDWHU

provided by Walmart.

There is probably a role for a small,

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dedicated to disaster relief, and inparticular to provide temporary respite

from federal regulations such as Davis-Bacon. Yet for the most part, disasterrecovery is a local, private matter. As afree people, we should recognizeandcelebratethat fact.

Iain Murray([email protected]) is VicePresident for Strategy and Director ofCEIs Center for Economic Freedom. Aversion of this article originally appearedon Forbes.com.

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10/12


WWW.CEI.ORG

THE BAD

FCC Broadband TestMay Enable Warrantless

Snooping

Consumers who test theirbroadband connections on agovernment website may beturning over information that couldallow law enforcement agenciesto review their Internet activitywithout due process or judicialscrutiny. A diverse coalition ofpublic interest groups sent aletter on October 10 to FederalCommunications CommissionChairman Julius Genachowski toexpress strong concerns about the

practice. Information collected[rma^m^lmlbg\en]^lnl^klBIaddresses, street addresses, mobilehandset latitude/ longitude dataZg]ngbjn^aZg]l^mb]^gmb\Zmbhgnumbers. The potential for`ho^kgf^gmmhZ[nl^\bmbs^glpersonal information posesa unique threat to individualfreedom, said CEI AssociateDirector of Technology StudiesRyan Radia. Therefore, federalagencies bear a unique burden

of justifying, disclosing, andminimizing their collection and useh_i^klhgZe]ZmZ'Ma^\hZebmbhglletter urges the FCC to carefullyevaluate the privacy implications ofits broadband testing program andimplement measures to enhanceprivacy.

THE UGLY

CFTC Takes Aim at Intrade

Ik^]b\mbhgfZkd^mBgmkZ]^received a lot of attention inthe 2012 elections as a more

accurate tool than standardpublic polling. However, onNovember 26, Intrade alertedU.S. participants that they wouldno longer be able to make betson the Irish-based exchange.

The reason? The CommodityFutures Trading Commission(CFTC) sued Intrade, accusingit of being in violation of the


11/12WWW.CEI.ORG


MediaMENTIONS

Associate Director of Technology StudiesRyan Radiaargues that federal agencies

are wrong to attack companies likeGoogle for monopolistic practices:The Internet market is notoriously

dynamic. Its giants rise and fall far fasterthan their brick-and-mortar counterparts.

This dynamism perplexes and worriesmanyespecially regulators inWashington, D.C.

Perhaps no Internet leader faces asmuch scrutiny from government as Google,which has been the subject of a Federal

Trade Commission antitrust probe for overa year. As this investigation comes to a

close, the government is reportedly leaningtoward suing Google before years end.Naturally, its rivals are lobbying the feds tocome down hard on the search giant.

Yet Googles critics havent put forwarda serious legal case against the company.7KHZRUOGVWRSVHDUFKUPPD\EHPDQ\

thingssome of which arent prettybutan illegal monopoly, it is not. If the fedshaul Google to court, theyll send SiliconValley a powerful message: Washingtonis open for business and happy to meddlewith the Internet economy.

-October 25, CNET

Land-use and Transportation StudiesFellowMarc Scribner criticizes proposedDistrict of Columbia legislation thatwould regulate driverless cars:

At a hearing on the bill in October,[D.C. Councilmember Mary] Cheh gushedabout a test ride she took in GooglesSelf-Driving Car in May: I found it tobe absolutely amazing. I didnt knowwe had advanced that far. I, too, foundmy May test ride impressive and am

thrilled that a technology that can greatlyLPSURYHWUDIFVDIHW\RIIHUGLVDEOHG

people an unprecedented level of personalmobility, and fundamentally change theway we travel is so close. But no oneknows precisely how autonomous vehicletechnology will develop or be adopted byconsumers. Chehs bill presumes to predictand understand these future complexitiesand then imposes a regulatory straitjacketbased on those assumptions.

Its good that the District seeks to

embrace innovationwith this law. If

passed withoutVLJQLFDQWFKDQJHV

however, Chehsbill will undulyrestrict manypromising vehicle features, prevent thewider voluntary adoption of this promisingtechnology through foolish green-government paternalism, and create a newtax system without proper consideration.She should withdraw this bill and go backto the drawing board.

-November 2, The Washington Post

Associate Director of the Center forEnergy and Environment William

Yeatman presents the case againstColorados new energy economy:

Over the last few months, theCentennial States green energy industry,which the new energy economy wassupposed to kick start, has been beset by aseries of setbacks. Loveland-based AboundSolar went bankrupt; Vestas Wind Systemslaid off almost 200 workers at its Windsorblade plant; and General Electric pulled

the plug on a planned solar manufacturingplant in Aurora.

The troubles of renewable energycompanies are not unique to Colorado;they extend nationwide. U.S. taxpayersponied up $60 billion for green energyinvestments as part of the AmericanRecovery and Reinvestment Act of 2009,better known as the stimulus bill. The resultsare only coming in only now, and they arenot good. The list of stimulosersofwhich Solyndra is only the most famousexampleis long and growing. It includes

Beacon Power, Evergreen Solar, Amonix,A123 Systems, Nevada Geothermal Power,and many others.

These green industries are in trouble fora simple reason. They are running out ofsubsidies.

-November 11,The Denver Post

Warren Brookes J ournalism FellowMatthew Melchiorreencourages U.S.ODZPDNHUVWROHDUQIURP(XURSHVVFDO

mistakes:

Beginning next year, $136 billion ofspending cuts are scheduled to take placeaccording to the Congressional Budget2IFH&%27KHVHLQFOXGHWKHPDQGDWR

sequestration of defense and discretionarspending resulting from the failure of lasyears bipartisan supercomittee to agre

on a 10-year plan to cut the federal budgby $1.5 trillion. They also include the end

RIXQHPSOR\PHQWEHQHWH[WHQVLRQVDQG

reductions in Medicare reimbursementrates. Keep in mind these arent real cutsoverall government spending, but merelyreductions in its rate of growth.

They are also trivial compared to the$532 billion of scheduled tax increases thCBO also reports. Most of this comes froincome tax rates reverting back to pre-2001 levels and the alternative minimumtax expanding deeply into middle-classhouseholds. Thats roughly four dollarsof tax increases for every one dollar ofso-called spending cuts.

How is this likely to pan out? To getan idea, we can look at Europe, which hafollowed a similar strategy and has hadlittle success in reviving growth.

-November 21, USA Tod

Senior FellowChristopher C. Hornerexplains how the EPA is ducking its legresponsibility to respond to Freedom oInformation Act requests:

The Environmental ProtectionAgency is the latest Obama bureaucracyexposed for embarrassing efforts to averttransparency. Its administrator, Lisa

Jackson, has been using the email aliasRichard Windsor to conduct agencybusiness, which might allow some policyconversations to avoid scrutiny andcircumvent public records laws.

So far, the EPA has offered a two-SDUWGHIHQVHRIVXFKDFFRXQWVUVW

revealed in my new book,The Liberal

War on Transparency. First, everybodydoes it: For more than a decade, EPAadministrators have been assignedWZRRIFLDOJRYHUQPHQWLVVXHGHPDLO

accounts: a public account and an internaaccount. Second, the masses made usdo it: The overwhelming volume of mailan administrator would receive from thepublic meant she needed an account shewould actually read and write from.

Both excuses, though slight on detail,prove too much.

-November 25,The Washington Exami

Compiled byNicole Ciandella


12/12


Is the German Green EnergyStrategy Kaput?

Environmentalists have often heldup Germanys heavy subsidizationof green energy technologies suchas wind and solar as a model for theU.S. and other developed countries.Unfortunately for the eco-left, thesepolicies have had exactly the impactthat pro-market intellectuals havebeen arguing they would: higher

prices and a more unstable electricitygrid. In a wide-ranging interviewpublished inDer Spiegel, GermanEnergy Agency chief Stephan Kohlercondemned the complex subsidysystem established by the countrys Renewable Energy Act as pureinsanity and that investment in traditional fossil fuel energy will beneeded until at least 2050. Kohler was equally frank in his messageto those receiving green energy subsidies. We now have to say toHYHU\RQHZKREHQHWVIURPWKLVIHHOJRRGODZ/LVWHQSHRSOHLW

cant go on this way!

Back in Session and Facing Fiscal Cliff, Senators Debate Polar

Bear CarcassesFollowing the election, Congress has returned to work and

is tasked with some hard decisions on spending and taxes. ButZKHQWKH6HQDWHFDOOHGLWVUVWUROOFDOOYRWHVLQFH6HSWHPEHUWKH

Worlds Greatest Deliberative Body took up the looming crisis ofpolar bear carcasses. In a 92-5 vote on November 13, the Senateagreed to debate a bill that would, among other things, allow 41U.S. hunters to bring home polar bear carcasses that are currentlyin limbo due to a 2008 U.S. trophy import ban. While the bill maybe an improvement over the status quo and a win for outdoorsmen,SHUKDSV&RQJUHVVVKRXOGGHDOZLWKWKHPRUHSUHVVLQJVFDOLVVXHV

before taking up such niche legislation.

Move Over Bridge to Nowhere: AlaskanTown Now Has Unused Airport andHarbor

Akutan, Alaska, is a town on theremote Aleutian Islands with a year-roundpopulation of 75. Like much of Alaska,Akutan relies heavily on federal subsidies.

RQHZRXOGH[SHFWWKLVQDQFLDODUUDQJHPH

GRHVQRWOHQGLWVHOIWRWKHHIFLHQWXVHRI

funds. The town recently built a $77 millioairport on a nearby island, which has been

subject to much derision in the mainlandAlaskan press because it currently has noair service. Now Akutan is making thenews again, this time for $29 million offederal stimulus funding to build a new po

Unfortunately, the recently built boat harbor will also sit unused, ano road will be built to service it for at least two years.

Human Achievement: Big Thanksgiving TurkeysAs families around the country enjoyed Thanksgiving Day

feasts, most probably take for granted that the birds they are aboutto dine on are large enough to feed everyoneoften for weeksafterward. But the turkeys purchased at U.S. supermarkets bear little

resemblance to their wild ancestors. In fact, in just the last 70 years,the average domesticated turkey in the U.S. has doubled in size.Scientists associated with the Smithsonian Institution trace the modeAmerican Butterball to Mexico, where humans are thought to havebegun domesticating the birds 2,000 years ago. The Smithsonianteam has been analyzing turkey genes with the hope of discoveringthe genes that control certain characteristics, such as breast growth.

This will increase the precision of selective breedingor perhapsgenetic engineeringmeaning we will be able to enjoy even tastier

Thanksgiving meals in the future.

1899 L Street, NW, 12th FloorWashington, DC 20036

Nonprofit Org.U.S. Postage

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Washington, DC

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