Competitive Enterprise Institute Archives - Shopfloor

Good Question on EPA Regulation of CO2, but President’s Answer…

By | Energy, Global Warming, Regulations | No Comments

The Wall Street Journal’s Laura Meckler’s posed an excellent question at Wednesday’s news conference by President Obama. From the transcript

You said earlier that it was clear that Congress was rejecting the idea of a cap-and-trade program, and that you wouldn’t be able to move forward with that. Looking ahead, do you feel the same way about EPA regulating carbon emissions?  Would you be open to them doing essentially the same thing through an administrative action, or is that off the table, as well?   

The President’s answer included a claim that is just not true

The EPA is under a court order that says greenhouse gases are a pollutant that fall under their jurisdiction. And I think one of the things that’s very important for me is not to have us ignore the science, but rather to find ways that we can solve these problems that don’t hurt the economy, that encourage the development of clean energy in this country, that, in fact, may give us opportunities to create entire new industries and create jobs that — and that put us in a competitive posture around the world. 

Chris Horner of the Competitive Enterprise Institute refutes the President’s contention in a post at the American Spectator’s blog:

The 5-4 majority in Massachusetts v. EPA — and we know how the Left feel about 5-4 majorities effectively making decisions assigned to the political branches or process (coughBushvGorecough) — held that EPA could determine greenhouse gases are ‘pollutants’ if it chooses to but must ground any such decision in the statute.  Read More

Julian Simon, Lithium, Afghanistan

By | Economy | One Comment

The New York Times prompted a flurry of speculative stories with its recent report, “U.S. Identifies Vast Mineral Riches in Afghanistan“:

WASHINGTON — The United States has discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, far beyond any previously known reserves and enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself, according to senior American government officials.

The previously unknown deposits — including huge veins of iron, copper, cobalt, gold and critical industrial metals like lithium — are so big and include so many minerals that are essential to modern industry that Afghanistan could eventually be transformed into one of the most important mining centers in the world…

Other media outlets rushed to replicate the story, e.g., Associated Press, “Afghan mineral wealth may be at least $3 trillion,” and NPR, “Afghan Mineral Wealth Could Top $1 Trillion.” (Somewhere in that $1 trillion to $3 trillion range.) And the Times looks like it’s going to be riding the story for a while, as in the subsequent report, “Afghanistan Moves Quickly to Tap Newfound Mineral Reserves.”

Except, well, newfound? As Wired reported, “No, the U.S. Didn’t Just ‘Discover’ a $1T Afghan Motherlode

[The] military (and observers of the military) have known about Afghanistan’s mineral riches for years. The U.S. Geological Survey and the Navy concluded in a 2007 report that “Afghanistan has significant amounts of undiscovered nonfuel mineral resources,” including ”large quantities of accessible iron and copper [and] abundant deposits of colored stones and gemstones, including emerald, ruby [and] sapphire.”

Not to mention that the $1 trillion figure is — at best — a guesstimate.

Whether it’s new news or old, Afghanistan’s mineral wealth seems to hold so much promise — but only promise, potential and possiblities if the “vast” wealth cannot be developed. Congo’s tremendous resources haven’t done that country much good.

At its annual dinner last night, the Competitive Enterprise Institute honored two Canadians, Stephen McIntyre and Ross McKitrick, for their diligence in revealing the scientific shortcuts and fraud promoted by global warming researcher-activists — such things as the “hockey stick” claims about warming and later the details in the Climategate e-mail scandals.  The two received the Julian Simon Memorial Award, named after the late economist.

In his acceptance speech, McKitrick, professor of economics at the University of Guelph in Ontario, paid tribute to Simon’s ideas in comments that are directly relevant to Afghanistan’s potential.

What [Simon] taught us was that the abundance of resources in a nation is not just an accident of geography or history. Resources are not simply found, they must be developed and put to productive uses through the application of human ingenuity and creativity. Nations that enjoy the benefits of plentiful resources are those that preserve freedom, support entrepreneurship, encourage risk-taking and allow citizens to enjoy the fruits of their own work. In other words, the abundance of resources is a consequence of the ideas a nation lives by.

Afghanistan’s resources may well be vast, its potential great. The question is: Will it preserve freedom, support entrepreneurship, encourage risk-taking and allow citizens to enjoy the fruits of their own work? Will Afghanistan gain the rule of law? If so, more than vast resources, the country may achieve vast wealth — and vast freedom.

Financial Regulation, Helpfully Focused

By | Economy, General, Regulations | No Comments

The Senate last week agreed to an amendment to the financial regulation bill, S. 3217, sponsored by Sen. David Vitter (D-LA) and Sen. Mark Pryor (D-AR). As The Wall Street Journal explained:

The measure restricts the Fed’s regulation to companies “predominantly engaged” in financial services, defined as those where at least 85% of annual revenue or consolidated assets come from activities related to finance.

The Journal chose the angle that the amendment exempted GE Capital Services, but the measure has value for other larger manufacturing companies that have developed their own financial opreations. Sen. Vitter issued a statement that makes the point:

“The Fed should not be regulating firms outside of its area of expertise, which is a practice that would only weaken our financial system. Sen. Pryor shared my concerns that previous language of the bill gave the federal government far too much power to grab control of the economy, and we’re pleased that our Senate colleagues agreed to adopt our amendment to focus this legislation on truly financial companies,” said Vitter.

Before the bipartisan Vitter-Pryor amendment, the language of the financial reform bill would have allowed virtually any large company engaged in broadly defined “financial activities” to be designated by the council for enhanced supervision by the Federal Reserve. That language would create an opening for the council to designate non-bank financial companies for enhanced supervision so they could be charged assessments to pay for future banking crises.

Sen. Pryor also issued a statement, in which he said:

Under this bill, we need to fix what’s broken, and leave manufacturing companies, retailers and other non-financial companies alone. They were not part of the problem and should not be subject to enhanced supervision by the Federal Reserve. Our amendment simply clarifies that banks and financial companies deserve a higher threshold of review, while companies like Home Depot, Sears, Wal-Mart or Dillards don’t.

Writing at BigGovernment.com, John Berlau at the Competitive Enterprise Institute describes the political dynamic that helped win passage of the Vitter amendment. No matter the real target, the “progressives” will attack big business, he warns, but the attacks can be warded off. Read More

The Legislature is the Policymaking Branch of Government

By | Energy, Global Warming, Regulations | One Comment

On the federal level, that’s Congress.

From Forbes.com, from former Sen. George Allen (R-VA) and Marlo Lewis of the Competitive Enterprise Institute, “The EPA’s Shocking Power Grab“:

The U.S. Environmental Protection Agency is carrying out one of the biggest power grabs in American history. The agency has positioned itself to regulate fuel economy, set climate policy for the nation and amend the Clean Air Act–powers never delegated to it by Congress. It has done this by declaring greenhouse gas emissions a danger to public health and welfare, in a proceeding known as the “endangerment finding.”

On Tuesday the U.S. Senate will debate and vote on Alaska Sen. Lisa Murkowski’s resolution of disapproval to overturn the endangerment finding. The resolution is absolutely necessary to restore democratic accountability in climate policymaking.

During my days in North Dakota, I was always impressed by the state Senators who resisted the encroachment on their constitutional authority by the executive branch. The lawmakers didn’t have to mention Montesquieu or the Founding Fathers to evoke the separation of powers in making such clear statements of principle as, “The Legislature is the policymaking branch of government.”

You would hope members of Congress would just as jealously guard their own constitutional role in our republic.

Regulations: From the Early, Early Morning to the Early, Early Night

By | Regulations | No Comments

A couple of weeks back we reproved groups that complained about the Environmental Protection Agency’s contest calling for videos to urge the public to become involved in the regulatory process. (Video Contest? This Time, Let’s Give the EPA a Break) The EPA wasn’t asking for the best propaganda video extolling regulations, it was seeking videos that illustrated bout how regulations affect the individual.

And Regulations.gov is a good site, too!

Our conclusion: “To those of our friends roughing up the EPA, better to go after the regulatory excesses than this unobjectionable contest. Our suggestion: Make the video, make the case.”

And that’s exactly what the Competitive Enterprise Institute did, entertainingly so. Excellent job.

Corporate Governance Land Mines in Financial Regulation Bill

By | Briefly Legal, Regulations | No Comments

Free-market and conservative think tanks have joined a letter objecting to the financial regulation bill, S.3217, Restoring American Financial Stability Act of 2010.

John Berlau of the Competitive Enterprise Institute posts about and reprints the letter at National Review’s The Corner, “Dodd Bill: Bailouts, Taxes, and Overregulation.” This paragraph from the letter is worthy of note:

“Proxy access” and corporate governance provisions would take power from states and empower progressive interest groups — from unions to animal rights: Even though they have little justification in preventing the next financial crisis, the bill contains “proxy access” provisions that would empower union pension funds and other progressives by forcing companies to fund their Saul Alinsky-style campaigns for a company’s board of directors. Combined with other items federalizing incorporation law — like a mandated majority instead of plurality standard for director votes — this could enable special interest activists to harm the interests of ordinary shareholders and encourage corporate directors to cut deals with them on things like card check, cap-and-trade, and kicking conservative media personalities off the air.

The National Association of Manufacturers and other major business groups joined in a letter earlier this month criticizing the corporate governance provisions as well. Excerpt:
Read More

From the Latin: We’re Going to Regulate Every Aspect of Life

By | Regulations | One Comment

Washington Post, “FDA plans to limit amount of salt allowed in processed foods for health reasons“:

The Food and Drug Administration is planning an unprecedented effort to gradually reduce the salt consumed each day by Americans, saying that less sodium in everything from soup to nuts would prevent thousands of deaths from hypertension and heart disease. The initiative, to be launched this year, would eventually lead to the first legal limits on the amount of salt allowed in food products.

Food manufacturers are undertaking serious, voluntary efforts to reduce the salt content in their products.

Voluntary? Hah!

“We can’t just rely on the individual to do something,” says Cheryl Anderson, an epidemiologist at the Johns Hopkins Bloomberg School of Public Health.

Here’s an idea. Salt is one of the most important commodities and even currencies in the history of man. The word “salary” comes from the Latin “salarium,” meaning money paid to soldiers to buy salt.

So, why not just wrap salt regulation in under the financial regulation bill in the Senate? As John Berlau of the Competitive Enterprise Institute argues, the financial regulation bill defines large (non-banking) sectors of the economy as banks in order to regulate them. If you sell salt or use it in your products, you’re a bank!

In other salt-related news, Mark Kurlansky, author of Salt, has a new book out, “Eastern Stars,” about the great baseball players from San Pedro, the Dominican Republic. He speaks Wednesday evening at the DC bookstore, Politics & Prose. Salt is a very entertaining, commodity-oriented history of the world. We were hoping Zinc was next.

UPDATE (10:10 a.m.): Walter Olson comments at Overlawyered.com:

We’ve been warning of such developments for a while, and they come as little surprise given President Obama’s pick of hyper-regulator Margaret Hamburg as FDA commissioner.

P.S. Perhaps we should invite comment from the New York Times journalist who sternly admonished an interview subject recently: “You shouldn’t trivialize issues of health and safety by calling them nanny issues.”

A Free-Market Perspective on Manufacturing, R&D

By | General, Innovation | No Comments

Worthwhile column in The Washington Times from Wayne Crews, vice president for policy at the free-market-oriented Competitive Enterprise Institute, “More government means less manufacturing“:

The need to deregulate this economy shouts at us: It’s on fire and Rollerblading naked through the Capitol, but Congress doesn’t seem to see it. Basically, you don’t need to tell the grass to grow; you just take the rock off of it.

One big rock on a growing American economy is politically driven research and development (R&D).

Federal science fosters too many conflicts: over public access to data; over the merits of basic versus applied research, government versus industry science; over assignment of intellectual property; and more. For another, politics has trouble balancing trade-offs: When to subsidize nanotechnology? Or biotech? Or fuel cells and the hydrogen economy? Or robotics? Or bioengineered gills so we can live in the oceans? Congress can’t fund them all.

Meanwhile, the science not created by the political reassignment of taxpayer resources remains unseen. It wasn’t the power of tax and dispense that made the United States leapfrog the world’s economies in 100 years.

Crews is skeptical of the America Competes Act, which the National Association of Manufacturers supports.

It’s a useful point of view to consider and serves as a counterpoint to the testimony at last week’s hearing by the House Science Committee, “Science Agencies Can Help Manufacturers Innovate to Remain Competitive, Committee Hears.” The verb “to help” sometimes serves as a euphemism for “to subsidize.”

EPA’s Administrator Musters a Breathtaking Army of Straw Men

By | Energy, Global Warming, Regulations | No Comments

Lisa Jackson, Environmental Protection Agency administrator, speaking at the National Press Club Monday criticized citizens who disagree with the power grab(s) being undertaken by the agency to regulate greenhouse gases. Jackson sends an army of straw-men arguments marching into a very important debate about science, our economy, and the authority of an executive branch agency to set policy.

As you might expect, we’re running into the same old tired arguments.

Once again industry and lobbyists are trying to convince us that changes will be absolutely impossible. Once again alarmists are claiming this will be the death knell of our economy. Once again they are telling us we have to choose: Economy? Or environment?

Most drastically, we are seeing efforts to further delay EPA action to reduce greenhouse gases.

This is happening despite the overwhelming science on the dangers of climate change…despite the Supreme Court’s 2007 decision that EPA must use the Clean Air Act to reduce the proven threat of greenhouse gases…and despite the fact that leaving this problem for our children to solve is an act of breathtaking negligence.

Yeah, breathtaking. We get it.

Let’s take a look at Jackson’s claims.

1. “Once again industry and lobbyists are trying to convince us that changes will be absolutely impossible.” Really? Who’s arguing that? Here is a paragraph from the National Association of Manufacturers’ policy on climate change:

The NAM understands the fundamental importance of protecting the environment. Our member companies are committed to greater environmental sustainability, including energy efficiency and conservation and reducing greenhouse gas emissions associated with global climate change. We know we cannot solve the climate change issue alone. The U.S. Congress must engage in a thorough and transparent deliberative process for establishing federal climate change policies to reduce greenhouse gas emissions, while maintaining a competitive level playing field for U.S. companies in the global marketplace.

The policy then lists a set of principles for federal action on climate, stating that policies must be equitable and economywide in scope, include all sectors and recognize the different competitive environments and abilities of sectors. The EPA does not have the authority to accomplish this balancing under the Clean Air Act.

2. “Once again alarmists are claiming this will be the death knell of our economy. Once again they are telling us we have to choose: Economy? Or environment?” Ah, alarmists. Because with unemployment near 10 percent amid inconsistent signs of a recovery, and the United States competing in a global economy, anyone who expresses concerns about a vast new regulatory regime imposing new costs on the energy sector, manufacturers, and transportation is an “alarmist.” Here is a link to a study conducted for the National Association of Manufacturers and the American Council for Capital Formation on the effects of the Waxman-Markey legislation, including a loss of $2 trillion to $3 trillion in economic growth and two million jobs over the 18 years of the bill.

3. “Most drastically, we are seeing efforts to further delay EPA action to reduce greenhouse gases.” Thank goodness for these “most drastic” efforts, also known as legislation. You see, it’s not only industry and lobbyists and citizens who are exercising their First Amendment rights in calling for a delay in the EPA’s unprecedented power grab. It’s Senators, like Sen. Jay Rockefeller (D-WV) and Sen. Lisa Murkowski (R-AK). And Representatives like Rep. Ike Skelton (D-MO), Rep. Collin Peterson (D-MN) and Rep. Jo Ann Emerson (R-MO).

4. “This is happening despite the overwhelming science on the dangers of climate change.” That’s a point of some contention, isn’t it? We see scandal after scandal undermining the credibility of the most prominent scientific polemicists on climate change. (From Iain Murray at the Competitive Enterprise Institute, “Climategate: This Time It’s NASA,” and “The Real Climate Confusion.”)

5. “despite the Supreme Court’s 2007 decision that EPA must use the Clean Air Act to reduce the proven threat of greenhouse gases…” Advocates  often simplify the court’s decision in Massachusett v. EPA as ordering the agency to regulate greenhouse gases. It’s not that direct. The court ruled that the EPA did have the authority under the Clean Air Act to regulate greenhouse gases and is required by the Act to base the decision on a consideration of “whether greenhouse gas emissions contribute to climate change.” In any case, that’s a statutory authority that Congress, as the policymaking branch of government, can remove or modify as it wishes.

6. “and despite the fact that leaving this problem for our children to solve is an act of breathtaking negligence.” Unlike, say, the federal debt? In any case, Administrator Jackson is using the tired political tactic of invoking “the children,” in this case on behalf of a false choice. Opposing the Obama  EPA’s power grab, arguing against the agency’s attempt remake and burden the U.S. economy over the wishes of the public and policymakers does not mean “leaving this problem for our children to solve.” It means accurately identifying the problem, relying on our elected policymakers to address the issue through the political process, avoiding Pyrrhic victories that burn down our economy, and using the best of technological advances to improve efficiency and energy conservation.

What’s breathtaking about that?

Popping Hot Air Balloons at the Senate Cap-and-Trade Hearing

By | Energy, Global Warming, Health Care, Trade | No Comments

Iain Murray of the Competitive Enterprise Institute testified Thursday at the Senate Environment and Public Works Committee’s hearing on S. 1733, Clean Energy Jobs and American Power Act, i.e., Kerry-Boxer. We commend his written statement about the proven failures of the European cap-and-trade regime, as well the issues involved with the developing world.

For an overview of his arguments and yesterday’s goings on at the Senate committee hearing, see Murray’s three posts at National Review Online’s The Corner blog:

I had two main points. The first, one that was comprehensively ignored by the Democrats on the Committee and the other witnesses, is that the only big example we have for a cap and trade program for greenhouse gases, the European Union Emissions Trading Scheme (ETS), has been an expensive failure. Indeed, the vast cost — already far more than “a postage stamp a day” for European households — has been confirmed in a new report by my colleagues at the Taxpayers’ Alliance in London.

The ETS, the report finds, cost the EU economies as much as $171 billion in 2008. The cost to individual households in the U.K. was about $200. Moreover, climate change policies now account for 14 percent of the average household’s electricity bill and 21 percent of the average industrial electricity bill.

Murray also makes a few sharp observations about the protectionism stalking the committee debate.

The other main point in my testimony was that China, India, and the other developing nations will not accept any limitations on their emissions. The other panelists went to great lengths to pretend that this doesn’t really matter, but at the same time they all argued that all nations must accept binding emissions targets. For instance, they argued that Copenhagen must not be seen as Kyoto II. But China, India, and the G77 have stated firmly and without any room for argument that the Kyoto framework must continue: Developed nations must cut emissions while developing nations can take other actions, not requiring cuts in emissions. This is a circle that cannot be squared.