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Entrepreneurial & Regulatory Freedom

How Advocates of ‘Corporate Social Responsibility’ Distort Shareholder Power

By pressuring companies to put ‘sustainability’ before profit, they hurt pensioners, small investors, and all those who depend on a robust economy.

By ANDREW STUTTAFORDNational Review

Many years ago now, Milton Friedman explained something that should never have needed explaining, when, writing for the New York Times Magazine, he reminded his readers what —and whom — a company is meant to be for:

In a free-enterprise, private-property system, a corporate executive is an employee of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to [the] basic rules of . . . society, both those embodied in law and those embodied in ethical custom. . . .

What does it mean to say that the corporate executive has a “social responsibility” in his capacity as businessman? If this statement is not pure rhetoric, it must mean that he is to act in some way that is not in the interest of his employers.

The executives who retool a company’s mission to suit a particular conception of “social responsibility” are spending shareholders’ money on a moral agenda unrelated to company objectives, an affront that’s only made worse if their crusade depresses returns, share price, or both.

Friedman was writing in 1971. Since then, like so many bad ideas, corporate social responsibility has become institutionalized. To take a recent example, in 2017 JP Morgan Chase gave $500,000 to the Southern Poverty Law Center, an organization that, sadly, has strayed far from its original ideals. Had they learned of it, this gift would probably have irritated a good many shareholders. The employee who had to justify it was — you guessed it — the bank’s “head of corporate responsibility,” a title that signifies how deep the rot has gone.

It’s been a long time since companies’ supposed social responsibility could be discharged by a handout or two, but the pressure on them to toe some outsider’s line has, in recent years, been stepped up. Often repackaged as a demand that corporations be measured by the extent to which they match arbitrary and ever-tightening E (environmental), S (social), and G (governance) standards, it is now a way of corralling private enterprise without the bother of legislation. The G, which can cover such issues as transparency and compliance, is relatively uncontroversial, but so far as many shareholders are concerned, insisting on the E and, to a lesser degree, the S, which can range from the benign (worker safety) to the malign (stipulating what legal products a company may or may not sell), is a form of expropriation.

It is a mark of just how ingrained the ideas behind ESG have become that the Financial Times, mistakenly thought by the old-fashioned to be the house journal of capitalism, now has a section presumptuously called “Moral Money,” billed as “the trusted destination for news and analysis about the fast-expanding world of socially responsible business, sustainable finance, impact investing, [ESG] trends, and the UN’s Sustainable Development Goals” — a rebarbative combination for which those running the FT clearly believe there is an audience.

If Davos is any indicator, they are right. Here’s an extract from the World Economic Forum’s “Manifesto for 2020”:

A company serves society at large through its activities, supports the communities in which it works, and pays its fair share of taxes. It ensures the safe, ethical and efficient use of data. It acts as a steward of the environmental and material universe for future generations. It consciously protects our biosphere and champions a circular, shared and regenerative economy. It continuously expands the frontiers of knowledge, innovation and technology to improve people’s well-being. . . .

A company is more than an economic unit generating wealth. It fulfils human and societal aspirations as part of the broader social system. Performance must be measured not only on the return to shareholders, but also on how it achieves its environmental, social and good governance objectives.

Unfortunately, what goes on in Davos does not stay in Davos.

The existence of the FT’s “Moral Money” section is yet more evidence of this larger trend. In a recent edition, we could read about how a Bank of America analyst examined the environmental implications (at least as seen from the perspective of climate warriors) of bringing supply chains closer to home in the wake of COVID-19. The author’s conclusion that doing so would reduce emissions would, in happier times, not have concerned investors — their interest would only have been in the financial consequences of such a change. But we do not live in those times.

Banks are not charities. They would not write research reports of this type unless there was a market for them, and there is. ESG investing is becoming big business. Thus, as one of the “Moral Money” team reports:

According to research from Sustainable Research and Analysis, an independent research shop based in New York, the total assets held in sustainable mutual funds and ETFs hit $1.6tn in 2019, growing from a base of just $400bn at the end of 2018. Even with the coronavirus outbreak sending markets into a tailspin, ESG funds added a further $500bn in assets through Q1 2020.

Reading on, there is a glimmer of hope:

But only a small portion came from net new money. In 2019, investment managers rebranded 475 existing funds to incorporate ESG factors, which accounted for more than $1tn, or 86 per cent of the total “new” ESG assets.

So Wall Street is behaving with its customary cynicism, and in the moral universe of “Moral Money” that will not do:

On the face of it, this seems troubling and sends up red flags for greenwashing.

It would take a heart of stone not to laugh here, but one would be laughing too soon:

Henry Shilling, director of research at Sustainable Research and Analysis, says most asset managers are not just slapping an ESG label on their funds and calling it a day. “Most of the rebranded funds have adopted ESG integration strategies,” he said, explaining that they had explicitly changed their prospectus documents to include ESG as a part of their investment process and were engaging with portfolio companies on ESG issues.

“Engaging with,” however, can mean sending a token memo or doing something more substantive. So it’s time for some more pearl-clutching:

Even with all of the companies making public commitments to cut emissions and look out for stakeholder interests, a shocking minority have gone so far as to tie executive pay to any sort of ESG metric. In fact, new research from Sustainalytics shows just 9 per cent of all companies in the FTSE AW index have done so. And on top of that, the vast majority of those that have done so have only targeted occupational health and safety.

“Only” is doing a lot of work there.

It’s worth pausing to note the citations of Sustainanalytics, which describes itself as “the leading independent global provider of ESG and corporate governance research and ratings to investors,” and of Sustainable Research and Analysis, a firm that serves “as a source for sustainable investment management information, research, opinions and sustainable fund ratings.” Both are part of the flourishing (and profitable) ecosystem that ESG investing has created. It encompasses consultancies, advocacy organizations, “chief sustainability officers,” and many, many more rent-seekers besides. ESG is bad news for investors, but it is not a bad way of filling the wallets of those that feed off it.

None of this is to deny that there is room for ESG-based investment strategies. If investors want to base their stock selection in whole or in part on ESG criteria, that is, of course, up to them, and if investment companies wish to market ESG-compliant funds, that’s fine. Funds that will not invest in companies that, say, sell guns or alcohol have been around for a long time. ESG-compliant funds are simply an extension of the entirely reasonable idea that investors should not be forced to choose between their principles and smart investment. The more choice that such investors have the better.

But choice is the key word here. Much of the pressure for companies to raise their ESG game comes either directly from state or other governmental pension funds, which are not exactly free from political pressure and ideological bias, or from the investment companies that wish to sell to them. Thus “Moral Money” reports on a number of proxy fights over ESG issues brewing at companies such as ExxonMobil and the British bank Barclays. Among those named as leading the charge in these battles are Brunel Pension Partnership, which manages the pension funds for ten local British governments, the Liverpool-based Merseyside pension fund (also for local government employees), and — this is far from just a British thing — the New York State Common Retirement Fund.

Turn to Brunel’s website, and you find that:

[Brunel’s] investment team [has] the ability to clearly think in 10 to 20-year timeframes. As such, environment and social risk considerations, along with good governance and stewardship, are integrated into [its] decision making processes. . . .

The key objective of our climate policy is to systematically change the investment industry to ensure that it is fit for purpose for a world where temperature rise needs to be kept to well below 2°C compared to pre-industrial levels.

Pension funds ought to be trying to deliver the best possible economic returns for their pensioners, who are, in a sense, captive clients. Equally, where such pensions are funded or, in the case of defined-benefit schemes, underwritten in whole or in part by taxpayers, there is — or there ought to be — a duty owed to those who may end up on the hook for them. But for Brunel, other objectives now seem to have come into play.

A still bigger problem may yet come from investment groups such as BlackRock. As the FT notes, the firm is currently coming under fire from ESG activists, despite the stance taken by its chairman and CEO, Larry Fink, who claimed in a letter earlier this year that “climate change has become a defining factor in companies’ long-term prospects,” and went on to explain how:

BlackRock [has] announced a number of initiatives to place sustainability at the center of our investment approach, including: making sustainability integral to portfolio construction and risk management; exiting investments that present a high sustainability-related risk, such as thermal coal producers; launching new investment products that screen fossil fuels; and strengthening our commitment to sustainability and transparency in our investment stewardship activities.

More details were set out in a letter to clients:

We have been working to improve access for several years — for example, by building the industry’s largest suite of ESG ETFs, which has allowed many more individuals to more easily invest sustainably. . . . We intend to double our offerings of ESG ETFs over the next few years (to 150), including sustainable versions of flagship index products, so that clients have more choice for how to invest their money.

Some of this merely reflected BlackRock’s self-interest — and there’s nothing wrong with that. As noted above, extending investor choice is to be welcomed. But there is also the fact that:

Every active investment team at BlackRock considers ESG factors in its investment process and has articulated how it integrates ESG in its investment processes. By the end of 2020, all active portfolios and advisory strategies will be fully ESG integrated — meaning that, at the portfolio level, our portfolio managers will be accountable for appropriately managing exposure to ESG risks and documenting how those considerations have affected investment decisions.

Investors are free not to invest with BlackRock, but because BlackRock is so large, that doesn’t eliminate the problem that this new policy could pose. Before the coronavirus crisis began, BlackRock had over $7 trillion under management. If a company doesn’t play by BlackRock’s ESG rules, it risks shutting itself off from a potentially substantial source of capital and/or support for its share price. If a company’s management decides that it doesn’t want to run that risk, it may have to adopt policies that damage the business’s long-term prospects. That might help the share price, at least for a while, but it is hardly a desirable outcome.

Even if a company has no interest in having BlackRock as a shareholder, BlackRock may have an interest in it. Once BlackRock takes a stake in a company, the chances are that it will apply pressure on management, as any shareholder has the right to do. Most shareholders only do so to increase their return, but BlackRock, whatever its claims about the connection between “sustainability” and longer-term profitability, has other targets in mind:

We have engaged with companies on sustainability-related questions for several years, urging management teams to make progress while also deliberately giving companies time to build the foundations for disclosure consistent with the Sustainability Accounting Standards Board (SASB) and TCFD. We are asking companies to publish SASB- and TCFD-aligned disclosures, and as expressed by the TCFD guidelines, this should include the company’s plan for operating under a scenario where the Paris Agreement’s goal of limiting global warming to less than two degrees is fully realized. Given the groundwork we have already laid and the growing investment risks surrounding sustainability, we will be increasingly disposed to vote against management when companies have not made sufficient progress. [Emphasis added.]

SASB and TCFD are two other creatures in the ESG ecosystem. The former was once chaired by Michael Bloomberg, while the latter still is. SASB says that it is on a “mission . . . to help businesses around the world identify, manage and report on the sustainability topics that,” it claims boldly, if inaccurately, “matter most to their investors.” Meanwhile, TCFD, the Task Force on Climate-related Financial Disclosures, says it aims to “develop voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers, and other stakeholders,” an objective with a clever twist: If companies do not go along with these “voluntary” disclosures, their banks and insurers — part of a sector unusually susceptible to political pressure — may turn the screws.4

As a shareholder, BlackRock has every right to insist that the managements of the companies in which it invests comply with its diktats. Equally, other shareholders are free to insist that BlackRock be told to take a hike, at which point the whole thing can be thrashed out at a general meeting. But many of the other shareholders will also be institutional investors. Even if they do not agree with BlackRock’s agenda, they may feel compelled by commercial pressures of the type that I have mentioned above to go along.

In effect, therefore, many companies — and not just those that are publicly listed — will be forced to change the way they do business as they try to keep up with ever-more-stringent rules set not by democratically elected legislators but by the unaccountable, the ambitious, the greedy, and the fanatical. Milton Friedman would have been appalled (if not altogether surprised) that activists such as these ESG vigilantes could exercise such a power through their ownership of shares. Today’s small investors, pensioners, and, for that matter, anyone else who depends on a robustly growing economy ought to be angrier still.


Can America Achieve a “Future Without Waste”?

By Peter RoffAmerican Action News

America used to be the place where, as Emerson is said to have observed, the person building the better mousetrap could be assured the world would beat a path to their door. We were driven by an entrepreneurial spirit that led to an increase in global living standards and produced some of the great advances of mankind.

Nowadays the pathway to prosperity is blocked by plaintiffs’ lawyers, federal and state regulators, crusading consumers advocates, environmental activists and others who believe the only institution on which we can rely to solve the really big problems is government.

That’s a shame because the spirit of free enterprise problem-solving is still alive and well. Everyone who realizes there’s profit to be made coming up with solutions are hard at work doing what so many of the so-called smart people say is impossible.

“We are a nation that knows how to solve big problems when we set our minds to it,” says Nate Morris, the CEO of Rubicon, a technology company at the leading edge of 21st century waste management. “Waste is a big problem, and we should not wait for someone else to try to solve it. We should do the work, we should use innovation and free markets to drive transformation, and we should build a stronger, more resilient economy in the process.”

The numbers alone are scary. According to some estimates over the next ten years nearly 95 million metric tons of plastic waste the United States once sent to China for permanent disposal will have to go put elsewhere thanks to import restrictions.

Whether or not it can be done, an effort must be made to try. Right now there are two approaches: one, as typified by Rubicon’s efforts, relies on innovation, investment, and consumer-driven demand to creates a new infrastructure relying more on the use of recycled goods to manage waste and prevent the build-up of discarded plastics and other items the American shopper depends upon. The other approach, the one government regulators, social justice warriors, and those like them prefer is to the use and manufacture of certain items no matter how expensive, inconvenient, or comparably unsafe the alternatives might be.

On Wednesday Rubicon issued a report, Toward a Future Without Waste, that shows how technology-based solutions can increase the proliferation of sustainable products The evidence comes from its experiences delivering results for its customers, with plenty of examples demonstrating the market-based approach to waste and emissions reductions works. The company found, for example, that local governments could generate significant cost savings while sending fewer materials to landfills through the making better use of technology.

Using the RUBICON SmartCity technology suite “helped the city of Atlanta save up to $783,453 annually while reducing the recyclables going to landfill by 83 percent by adjusting the city’s solid waste service schedule,” according to the report. As one estimate has it, it has the potential to save US cities up to $208 million over the next 10 years through reduced disposal costs, optimized fleets, and other metrics. For cash strapped urban centers like Atlanta, that’s money that can instead be channeled into childhood conservation education and other environmental stewardship projects that can create a pathway to the clean air, water, and environment everyone wants but is so often too expensive to get, we’re told by experts, without draconian changes to the way we live our lives.

Advances in technology have also made it easier to dispose of products that are hard to recycle. The fast-food chain Chipotle partnered with Rubicon to create a mail-back pilot program at 25 of its locations to keep single-use gloves out of landfills. From April 2019 through December 2019, the report says, more than 625,000 gloves were recycled, giving the company plenty of incentive to expand the program to all its stores.

“There are currently two ways to make money from waste. One is by setting up the equivalent of a utility, where big corporations and big government agree to a one-size-fits-all approach, charging businesses and households to haul away their waste and bury it,” Morris says. “The other is a free market-based, dynamic approach: cooperate with others and innovate to help people reduce or reuse more of their waste— and inspire a new generation to build on our progress to bring about the end of waste as we know it.”

This is the kind of private sector, technology-based innovation that can change the planet for the better while adding favorably to the corporate bottom line. It requires no government regulation, no special licenses, and no additional fees to bureaucratic institutions that “feed the beast” while giving us all a cleaner world to live in.


Even the Washington Post Agrees that a USPS Bailout Makes No Sense. So What’s Next to Fix the Post Office?

By George LandrithFrontiers of Freedom

As pressure mounts on Congress to bail out the U.S. Postal Service to the tune of $85 billion in total relief, the USPS needs to show its hand and prove to America whether or not COVID-19 is the true source of its financial troubles. 

Many influential voices— including the Washington Post Editorial Board— have pointed to the fiscal deterioration of the USPS ($69 billion lost in recent years) and questioned how responsible it would be for Congress to write a check without first requesting some operational changes to achieve “a more permanent fix.”  But first the Postal Service must prove itself deserving of the funds by showing a clear correlation between USPS’ projected COVID-19 impact and its bailout demands.  Especially now that the Administration is pushing to combine the agency’s $10 billion credit line extension with key postal reforms, no bailout money should be awarded until USPS exercises complete fiscal transparency and produces the data to back up its dire claims. 

With this blitz for systemic change gaining momentum in Washington, here are three more specific pragmatic elements of the USPS to address:

Refurbish internal operational inefficiencies 

Consistent with The Post’s guidance, there are options to reorient the Postal Service into a leaner operation on its own— without the government stepping in. This includes looking at closing or consolidating underutilized postal facilities and potentially developing new products, provided that they pass muster through robust screening to ensure that the fiscal benefits outweigh the costs. 

Further items include repairing protocols and compliance for postal management of contractors, use of scheduler tools, equipment purchasing, postage reselling, and more. Endeavors like these, which the USPS can implement on its own, are projected to save at least $3.2 billion annually. With a litany of internal elements to correct, it is a certifiable a myth by doomsayers that privatization would be on the horizon for the USPS. Simply ensuring that leadership’s guidance is applied throughout the organization, while also rooting out waste and abuse are instrumental to keeping it thriving as an independent entity. 

Determine the truth about competitive products and packages: Drain or Gain?

The USPS has continually considered package delivery to be a ‘bright spot’, but it is essential for lawmakers, the Administration, and the public to know exactly what this means as the agency reports an increase in parcel delivery (1.6 million in volume, and $7 million in revenue) in recent troubling periods. 

Under package profitability assumptions by the USPS, it must be determined how $13 billion of pandemic-induced losses would occur in the midst of a package surge. Per USPS reports, packages show an operating ratio of 65% – translating to 35 cents in profit per dollar of revenue. Thus, assumptions show that any losses elsewhere in the postal system should be covered by gains in packages.

A decline in First-Class Mail volume is extraneous to the equation as it is consistently the Postal Service’s most profitable base of products with revenues exceeding costs by a 2 to 1 margin. For USPS to deliver less mail in the current period only means a reduction in available revenue for USPS to financially support (cross-subsidize) other Postal products – like competitive items and parcels with ballooning systemic losses as a result of excessive costs.  

The Postal Service cannot claim fiscal pandemic damage on one hand, and then also tout positive impact of parcels. For these reasons, a sensible solution is for lawmakers and Administration to pursue an ‘open book’ approach with full accounting transparency in which it is entirely clear how competitive costs are defrayed in the system.

Adapt to Evolution in Technology and Consumer Demand 

Further leaning on recommendations of The Post, the post office could prepare for phasing out mandatory Saturday mail delivery, which USPS claims could save $2 billion per year. For many years the Postal Service has struggled to meet its own objectives in timeliness for First-Class Mail despite the ongoing concerns raised by its regulator.

Reducing the extent of weekend delivery would help the Postal Service to finally achieve the savings that it expected to accrue in recent years after eliminating single-piece overnight FCM service and shifting some mail from a 2-day to a 3-day service standard. During this initiative, the USPS only realized 5.6 percent of the projected savings of $1.61 billion for both years. Oversight of the Postal Service has also sought to accelerate the formation of strategies designed to mitigate threats to volume and to engage with the newly dominant digital communications industry in order to help to protect First-Class correspondence mail and make it relevant once again for future generations.


Coronavirus Authoritarianism Is Getting Out of Hand

We should be preserving our laws and our freedom in times of crisis.

By DAVID HARSANYINational Review

It’s reasonable to assume that the vast majority of Americans process news and data, and calculate that self-quarantining, wearing masks, and social distancing make sense for themselves, their families, and the country. Free people act out of self-preservation, but they shouldn’t be coerced to act through the authoritarian whims of the state. Yet this is exactly what’s happening.

There has been lots of pounding of keyboards over the power grabs of authoritarians in Central and Eastern Europe. Rightly so. Yet right here, politicians act as if a health crisis gives them license to lord over the most private activities of America people in ways that are wholly inconsistent with the spirit and letter of the Constitution.

I’m not even talking about national political and media elites who, after fueling years of hysteria over the coming Republican dictatorship, now demand Donald Trump dominate state actions. I’m talking about local governments.

Under what imperious conception of governance does Michigan governor Gretchen Whitmer believe it is within her power to unilaterally ban garden stores from selling fruit or vegetable plants and seeds? What business is it of Vermont or Howard County, Ind., to dictate that Walmart, Costco, or Target stop selling “non-essential” items, such as electronics or clothing? Vermont has 628 cases of coronavirus as of this writing. Is that the magic number authorizing the governor to ban people from buying seeds for their gardens?

Maybe a family needs new pajamas for their young kids because they’re stuck a new town. Or maybe mom needs a remote hard drive to help her work remotely. Or maybe dad just likes apples. Whatever the case, it’s absolutely none of your mayor’s business.

It makes sense for places like Washington, D.C., Virginia, and Maryland to ban large, avoidable gatherings. But it is an astonishing abuse of power to issue stay-at-home orders, enforced by criminal law, empowering police to harass and fine individuals for nothing more than taking a walk.

The criminalization of movement ends with ten Philly cops dragging a passenger off a bus for not wearing a face mask. It ends with local Brighton, Colo., cops handcuffing a father in front of his family for playing T-ball with his daughter in an empty park. It ends with three Massachusetts men being arrested, and facing the possibility of 90 days in jail, for crossing state lines and golfing — a sport built for social distancing — in Rhode Island.

There is no reason to close “public” parks, where Americans can maintain social distance while getting some air or space for their mental and physical well-being — or maybe see a grandchild from afar. In California, surfers, who stay far away from each other, are banned from going in the water. Elsewhere, hikers are banned from roaming the millions of acres in national parks. Millions of lower-income and urban-dwelling Americans don’t have the luxury of backyards, and there is absolutely no reason to inhibit their movement, either.

Two days before Easter, Louisville, Ky., mayor Greg Fischer attempted to unilaterally ban drive-in church services for the most holy day in Christianity. It’s one thing if people are purposely and openly undermining public health. The constitutional right to assemble peacefully and protest or practice your religion, however, is not inoperable in presence of a viral pandemic.

Would-be petty tyrants, such as Dallas judge Clay Jenkins, who implores residences to rat out neighbors who sell cigarettes for “putting profits over public health,” forgets that we are not ruled by him, and that he is merely our temporary servant.

But it’s important and necessary, say the experts. Great. Convince us. Most polls show that 80-something percent of Americans will stay home for the rest of this month even if lockdowns are lifted.

The question of how many lives would be lost if we didn’t shut down economy is a vital one, but it is not the only one. There is an array of factors that goes into these decisions. One of them should be preserving our laws and our freedom in times of crisis.

“Reality check,” writes Bethany Allen-Ebrahimian in Axios, “Citywide quarantines, travel restrictions and obsessive public health checks aren’t authoritarian. They’re the kind of total mobilization that happens during major national crises such as war, regardless of the system of government.”

This position, often repeated, is utter nonsense. For one thing, we aren’t at “war.” There are no coronavirus spies and no coronavirus sabotage. Affixing “war” to societal problems — the war on drugs being the most obvious example— is typically a justification for expanding state power. Also, authoritarianism isn’t defined as “strict obedience to authority at the expense of personal freedom except when there is a pandemic.” Your declarative sentences and forceful feelings do not transform the meaning of either authoritarianism or freedom. Though if we dump our principles every time there’s a crisis, they might as well.


The Dems and climate change: a ship of fools!

They want to fix a false problem with solutions that don’t work!

By Dr. Larry FedewaDr. Larry Online

One of the pillars of the internationalist world view that is solemnly proclaimed by the establishment is the dogma of climate change – what it is and how to fix it.

This view is accepted aa a fixture by such institutions as the United Nations and many national governments, including until recently, the United States government. We can thank President Trump for rejecting this nonsense. He withdrew the USA from the Paris Accord (which was negotiated by the Obama Administration, but never submitted to the Senate and therefore not ratified by the USA).

Most Democrat presidential candidates want to eliminate fossil fuels in 10 years although the entire world depends on fossil fuels for survival, and there is no comparable substitute for fossil fuels. Windmills are not only inconsistent, but they also create new environmental hazards. Solar panels seem to have a place for supplementary energy production, but they are not transportable or suitable for transportation.

Even their statement of the problem is out of date. Nobody can look at the violent weather we have been experiencing and doubt that the climate is changing. But when has it ever not been changing? As far back as records go there have been changes in the climate. Remember the Ice Age?

Yesterday the scientists were telling us that there is global warming and the polar ice cap is melting. If that were true, battery-driven cars wouldn’t help us much. The first thing to do would be to move all the seaside structures to higher ground (as Andrew Yang has recommended). But we see large numbers of people who won’t even move their towns away from flood plains after being flooded out every other year. How are we going to move New York City or Los Angeles inland?

Luckily. more recent data are showing that the ice cap isn’t melting anymore. Not only that, but after the Club of Rome’s first two reports (1972 & 1976) scared us all with the idea that pollution is the common enemy of all mankind but was controllable by human carbon emissions, the more sober climatologists have begun to assert that human intervention is vastly overrated. In fact, humans can’t change the weather; that’s just common sense. (In 1996, The Club of Rome admitted that “pollution” was actually used in their early reports as merely an intellectual construct aimed at uniting nations to rally to their cause).

It is true that air, water and food pollution are dramatically affected by human waste and therefore controllable by humans. But most of the damage in today’s world is done by the thickening of the world’s ozone layer (between the sun and the earth’s surface) which in turn is exacerbated by increased emissions of carbon dioxide. These emissions apparently are affected by the burning of fossil fuels like coal and petroleum products such as gasoline and fuel oil.

The most prolific producers of these pollutants are developing nations which were not even included in the Paris Accords’ quotas. It was basically an agreement by which the USA would pay for as much of the world pollution as India and China wanted cleaned up. Every Democrat running for the presidency vows to reinstate the Paris Accord.

The actual situation in the USA and the world was summarized in a press release from the UN’s International Energy Agency (IEA) as follows:

“Despite media reports predicting the contrary, U.S. energy-related carbon dioxide emissions fell 2.9 percent last year, according to a report published Tuesday.

In fact, the International Energy Agency (IEA) found that the U.S. decrease in emissions was the largest total of any country, at 140 million tons. It also noted that over the last 20 years, U.S. emissions have decreased nearly one gigaton (1 billion metric tons).

Globally, emissions flatlined in 2019. After two years of growth, global emissions remained unchanged at 33 gigatons in 2019, even as the world economy grew by 2.9 percent.” (Fox News story, 2/11/2019)

The distribution of global activity is in the IEA release:

“A significant decrease in emissions in advanced economies in 2019 offset continued growth elsewhere. Emission in the European Union fell by 160 million tons, or five percent, driven by reductions in the power sector. For the first time ever, natural gas produced more electricity than coal and wind-powered electricity nearly caught up with coal-fired electricity. Japan’s emissions fell by 45 million tons, or around 4 percent, as output from newly restarted nuclear reactors upticked this year. Emissions in most of the rest of the world grew by nearly 400 million tons in 2019, with almost 80 percent coming from countries in Asia where coal-fired power generation continued to rise.” (IEA, 2/11/2019)

Thus, not only is the USA already doing its part to alleviate the effects of ozone pollution, but so are many other countries. The “existential crisis” of which Bernie Sanders so often speaks does not exist.

This is not to say that nothing more should be done about ozone pollution. The old saying applies: “Because you can’t do everything doesn’t mean you should so nothing.” We can and should do what we can to affect this problem. But our efforts are necessarily limited. For example, we can’t stop volcanoes from releasing more pollution in a day than humans can in weeks if not years. Our ancestors successfully adapted to continuous, sometimes drastic, weather changes. So can we.

I have argued elsewhere that a new set of ethical standards with respect to the world around us should be formed. Traditional Western religion teaches us that all other creatures exist for use by humans. I believe that modern science has given us another view of the complexities of the world. We must learn to treat this world with more respect and more consideration.

Appreciation for the beauty and brilliance of the world God has given us is a good first step. Crying WOLF! WOLF! is not.


A California-style Brexit

Freelancers are rising up in opposition to the state’s new law regulating “gig workers.”

By Erica SandbergCity Journal

Are California Democrats—responsible for the state’s new anti-gig-worker law, AB5—so out of touch that they’re not aware of the growing anger of their constituents? It appears so.

Since AB5 took effect on January 1, hundreds of thousands of Californians are finding their businesses in tatters. Musicians can’t join bands for a one-night gig, chefs can’t join forces with caterers, nurses can’t work at various hospitals, and writers must cap their submissions per media outlet to 35 per year. Under the law, these freelancers can no longer conduct the same business-to-business transactions they have for years or even decades. Clients with whom they fostered valuable relationships are gone—as are their successful careers and incomes. An overwhelming majority of professionals in fields affected by AB5 identify as liberals and have generally voted along the blue line. Today, however, many are so disillusioned with their representatives that they’re changing political loyalties.

When Gloria Rivera, a San Diego-based, Peruvian-born translator and interpreter, achieved U.S. citizenship, the first thing she did was register as a Democrat. “Now I’m seeing a lot of people like me who are either going Independent or Republican,” she says, “myself included. The Democrats are not listening to us.”

Lorena Gonzalez, the San Diego assembly member who authored AB5, faces public condemnation wherever she goes. Online and in person, independent contractors are confronting Gonzalez and demanding a repeal of the law. Her condescending response: independent contractors need the protection of union-driven labor laws. In a damning KUSI news interview, Gonzalez denied that AB5 has resulted in widespread income loss. Her dismissive attitude has fueled outrage against Democrats. “Lorena Gonzalez is doing a great job turning everybody red,” says Rivera.

Gonzalez deserves much of the blame for the AB5 train wreck, but she had plenty of support from her party: nearly every assembly member who approved AB5 is a Democrat, including Governor Gavin Newsom. Those opposed: Republicans and Independents. Senator Patricia Bates, a Republican state senator representing parts of Orange and San Diego counties, has been hearing from constituents who had no idea that they were swept up in the AB5 net. “They’re asking, ‘Who did this to me?’” says Bates. “I don’t like to make it partisan, but I have to tell them the majority party that runs the show did it. There’s a new awareness about the anti-business environment and how it affects their right to work, to be free.”

Independent contractors are entering new territory. Suddenly, a more conservative approach seems more attractive. “My entire political mindset has changed drastically following the enactment of AB5,” says Cathy Hertz, a freelance copyeditor of STM (science-technology-medicine) books, from Loma Linda. Hertz campaigned for Barack Obama cross-country at her own expense in 2008; she campaigned for him locally, in Los Angeles, in 2012. “Now I feel that the rights of entrepreneurs are being stifled, trampled upon, violated,” she says. “Free enterprise is one of the main pillars of modern democracy.”

Apparently oblivious to the reaction in California, congressional Democrats have passed HR 2474, a national version of AB5, known as the “Protecting the Right to Organize” or “PRO Act.” The PRO Act, designed to boost union membership, will put 57 million independent contractors across the country out of work if it becomes law. These enterprising professionals will be forced into low-paying jobs—if they can find them—with none of the autonomy, flexibility, or opportunity that they currently enjoy. When the Trump administration denounced the bill, people who normally hiss at mention of the president’s name found themselves in a peculiar position: feeling grateful.

As for Gonzalez, she’s up for reelection this year and is aiming for secretary of state in 2022. Her campaigns will be tougher than she likely imagines. The movement against her is ramping up.

“I see a revolution on the horizon,” says David Mills, a musician from Lake Elsinore who created the Facebook group Freelancers against PRO Act. “This may be the final straw that breaks the camel’s back. But I think it’s leading to something good. The American people on all sides are waking up. We’ve gotten too caught up in partisan support. Now we’re paying attention. There is a huge uprising. People had to lose their jobs to find out what it was.”

Kevin Kiley, a Republican assembly member representing a large swath of Sacramento and a vocal ally of independent contractors, agrees. In January, he led a rally on the steps of the state capitol against AB5 and introduced a bill to repeal it. “We have a capital that’s controlled by special interests, and the public good isn’t even considered,” says Kiley. “That disconnect is stark. I’m more motivated to change this law than anything I’ve ever worked on because it has such a direct and negative impact on peoples’ lives. I believe very deeply in economic freedom, the right to pursue your calling. AB5 is a grave moral offense. So if there’s a silver lining to all this, it’s giving a diverse range of people a window into the dysfunctional nature of politics in Sacramento. For those who are disenchanted with the political majority, there is now an opportunity for alternatives.”

Such alternatives are popping up around the state. Evan Wecksell, a comedian and tutor by trade, is running for state senate as a write-in candidate for District 25, which encompasses parts of Los Angeles and San Bernardino county. He was registered as a Democrat until recently. Today, he’s a Libertarian.

“I definitely sense a change,” says Wecksell. “People who swore they would never vote for a Republican are doing it. We were not up to speed with knowing what was going on in Sacramento, but AB5 was a lesson and we’re learning from it. They’re taking away our natural human rights.”

Independent contractors are a unique bunch. Deeply committed to individual liberty, they’re becoming a unified group of fighters in California. They come from all walks of life and political persuasions, and if voting differently means that they can continue to run their businesses as they see fit, then so be it. Unless Democrats change course, the AB5 revolt may be the Brexit that the U.S. never saw coming. California certainly didn’t.


Bipartisan health care fix misses mark

By Peter RoffSanta Cruz Sentinel

America’s health care system is still a mess. The Affordable Care Act, Barack Obama’s signature legislative achievement, has sparked continued increases in premiums and deductibles while failing to bend the health care cost curve down as promised.

That’s just one of the assurances ACA supporters made about the new law it failed to keep. Obama was badly misinformed when he promised people could keep the coverage they had, if they liked it, once the ACA became law. Some suggest he knew at the time this was a lie, but he’s not saying, one way or another.

Yes, there are more people insured than ever before, but many of those people still can’t afford to use that insurance because the deductibles are so high. Plans in the individual markets are canceled from one year to the next, forcing people to re-enroll in something similar or find new insurance altogether.

That’s not the way it was supposed to be. Efforts at repeal collapsed thanks to the Senate Democrats’ procedural instance any plan to replace it be adopted with 60 votes or more. So much for what the people want.

The idea getting the most attention, the Medicare-for-All proposal first put forward by Vermont Sen. Bernie Sanders and embraced by other Democrats running for the party’s presidential nomination, is a non-starter. The non-partisan Committee for a Responsible Federal Budget estimates the Sanders’ plan “has a gross cost of $30.6 trillion and, incorporating offsets, would add $13.4 trillion to deficits over ten years under our central estimate.” The plans floated by former Vice President Joe Biden, Massachusetts Sen. Elizabeth Warren, former South Bend, Indiana Mayor Pete Buttigieg, and others also don’t come close to paying for themselves.

Obamacare was supposed to increase transparency for consumers, allowing them to make better decisions about the care they received and what it would cost. That hasn’t happened either, and though President Donald Trump is pushing for action from Congress to pass laws putting price tags on all kinds of care, nothing spectacular has happened in that area either – largely because the health insurance companies are still driving the train.

They helped write the ACA and are now employing armies of lobbyists to make sure they don’t go under because of it. They’re pursuing new laws and regulations to insulate them from their responsibilities to their customers, to protect them from liability, and to avoid paying for services using a variety of what can best be called coverage loopholes.

The biggest of these has come to be known as “surprise billing,” an issue the president has taken to heart. No one likes to get a bill they didn’t expect, especially when they thought they were covered for the expense. Yet let an in-network doctor perform a procedure at an in-network hospital using an out-of-network anesthesiologist and send tissue out for analysis to a pathology lab at a nearby, affiliated and out-of-network hospital, and that’s precisely what happens.

In that case, as I recently experienced for myself, the insurance suddenly doesn’t count because you went out-of-network. That you didn’t know it and that you asked ahead of time that everything to be done “in-network” doesn’t matter so you must pay for the out-of-network services performed. It doesn’t seem fair, but it’s legal.

Congress, led by Tennessee Republican Lamar Alexander, has crafted a bill to change that. The problem with the Alexander approach is that it relies on price controls. The track record of price controls creating adverse consequences is long and storied.

The bipartisan Alexander bill requires insurers to pay the surprise bills when they arise based on the average price for the services provided. This is called “benchmarking” and it’s a bad idea because it empowers the government to make further intrusions into the health care marketplace and gets the country all that much closer to a Medicare-for-All style system.
“Price controls” and “government rate-setting” are a large part of what helped wreck the U.S. health care system in the first place. Insurers need to own their responsibilities to their customers and level the playing field on their own.


Three issues the Dems own: Wealth Gap, Health Care, and Climate Change

There are free market solutions for these issues waiting for GOP support

By Dr. Larry Fedewadrlarryonline.com

On most of the issues highlighting the 2020 campaign, the Republicans have a great story, especially the economy, law enforcement, foreign policy (including trade), national security, energy, and job creation. The Democrats have concentrated on three critical issues, however, which are nearly ignored by most Republicans: the wealth gap, health care, and climate change

These issues are currently owned by the Democrat candidates; they have not even been addressed directly by the Republicans. This silence is a tragic mistake because current polls show that these three issues are of critical importance to significant numbers of the American electorate. If Republican candidates continue to ignore these two issues, they will suffer in the only polls that really count – the votes in November.

Today’s topic is the wealth gap, with discussions of health care and climate change to follow in succeeding columns. I use the term, “wealth gap” in preference to “wage gap” and “income inequality” because “wealth” includes assets which are relatively long range as opposed to “wages” or “income” which may fluctuate from time to time.

The Republican response to the wealth gap is the “trickle-down” economic theory: prosperity for the wealthy means incremental income to the entire workforce because the wealthy will of necessity invest in an expanding economy thus benefiting the workers who actually produce new goods and services by which the economy is actually expanded. This is the argument prominently featured by President Trump in his famous rallies.

And, measured by present and past metrics, it is true. A flourishing economy does indeed raise wages and job opportunities. When applied to a stagnant employment environment, the chief beneficiaries on a percentage basis are the lower wage workers – i.e. when a person goes from unemployed to employed, the percentage of improvement is 100%. This is, of course, a valuable trend.

The next step, however, poses an altogether different problem: in a tight labor market – which America is rapidly approaching – how does an employer retain an experienced worker? And an ancillary problem: how does the country avoid a steady inflation, as wages rise, and senior employees can seek and find ever higher wages?

There are free market solutions to both these questions. My answer may be considered by traditional economics a radical solution, namely profit-sharing. There are various ways to implement the concept of profit-sharing – e.g. stock grants or options, profit-based bonuses, or employee stock option plans (ESOP), among others.

The basic hedge against inflation is the fact that increases in income to the workers comes from profits rather than expenses, so prices do not have to increase. The operational result is that workers who have a stake in the performance of the company tend to work harder and more efficiently, and greater income leads to higher job satisfaction and loyalty.

There are other reasons to advocate profit-sharing, namely, redressing the imbalance in asset ownership in America, which currently shows that at least 80% of America’s wealth is controlled by 1% of the population. This is a frightening situation for a democracy which is founded on a prosperous middle class. Oligarchs are waiting to rule the nation (e.g. already three billionaires are running for president).

There is also a moral reason for profit-sharing which can be summarized as follows:

1) The increase in national wealth over the past 200 years is due primarily to increases in productivity, which in turn is due to new technologies.

2) The implementation of technological innovations involves a number of stakeholders – inventors, investors, managers, implementers and buyers.

3) The benefits of the new technologies are currently heavily weighted toward all the stakeholders expect the implementers – the workers who bring into actual being the ideas of the inventor – i.e. they design and build the machinery which produces the product, fabricate it, market and sell it, repair it and teach users. Without the implementors, there would be no technology – only ideas on paper.

4) All of the stakeholders should be rewarded when the product is sold; it is only fair, therefore, that each be rewarded in proportion to the value of their contribution to the success (or failure) of the product. This is called “profit-sharing”.

This idea is not as novel nor as radical as it may seem to traditionalists. In the first place, the entire history of free-market capitalism shows it ever evolving towards more and more recognition of the value of labor in the forward march of progress.

It is also true that the chief proponents of this march have historically been the organized labor movement – at least until the 1970’s. Since then American unions have shifted from ever advancing workers’ rights in the marketplace to attempting to achieve progress through government intervention, which has meant in practice an alliance with the Democrat Party and a slippery slope toward socialism.

The results have not been encouraging. We have seen the denuding of America’s manufacturing base, the disheartening imbalance of income between management and labor, and the gradual slipping of much of America’s middle class into poverty and desperation. The bureaucracy of American Labor has failed miserably in protecting and advancing the cause of America’s workers.

The most impressive advocacy for profit-sharing in today’s marketplace is called “Conscious Capitalism”. This is a rapidly growing group of companies who represent a new generation of free market businesses. It is both a movement and an organization.

As an organization, Conscious Capitalism, Inc. now numbers thousands of companies, millions of employees, with chapters in 41 countries, and a number of large firms including Federal Express, Southwest Airlines and Costco among others. (For more information, see www.ConsciousCapitalism.org). 

As a movement, it counts Amazon as one of its colleagues along with many other companies, both large and small. While this group is not particularly fond of organized labor, I believe there is a place for Labor in this movement, unions which work with and not against management and represent workers who are both employees and recipients of prorated profits from their work.

The time for advancing workers’ rights is now – in the 2020 election campaign. To win back the workers of America, the GOP must move “Onward and Upward!”


USPS Neglects Its Priorities and Starts Off 2020 with Another Massive Loss


Frontiers of Freedom expressed great alarm this week over the U.S. Postal Service’s (USPS) latest financial results which showed $748 million in losses during the first quarter of FY 2020. 

George Landrith, President of Frontiers of Freedom, said: 

“The U.S. Postal Service is hemorrhaging money!  In the first quarter of FY 2020, they have already reported $748 million in losses.  And it isn’t like 2019 was a good year.  Last year, they lost an unbelievable $8.8 billion in FY2019.  To put that into perspective, the Postal Service has posted 13 consecutive years with a net loss of a billion dollars or more, and its unfunded liabilities and debt now total more than $143 billion. It is extraordinarily difficult to lose that kind of money when you are operating a government-granted monopoly like the Postal Service has on First Class Mail.”

Frontiers of Freedom President George Landrith also called out the agency over its negligence and financials, stating: 

“It is readily apparent that the current USPS business model is failing.  It is up to Congress, the Postal Regulatory Commission, and the new heads of the USPS Board of Governors to address the ongoing challenges.  This includes ending nonsensical postal subsidies, trimming down the agency’s excessive costs, and complying with new laws impacting the USPS.”

Frontiers of Freedom previously hailed the work of Congress and President Trump to address some of USPS’ major systemic flaws with the enactment of the Synthetics Trafficking and Overdose Prevention (STOP) Act in 2018.  This bill was an essential step in requiring the Postal Service to meet industry standards in data collection and monitoring practices of packages that enter the U.S. from abroad.

Despite the required protocols to protect our communities from hazardous and criminal items, the Government Accountability Office reports that USPS continues to fall short on its requirements to provide Customs and Border Protection (CBP) with advanced electronic data (AED).

Failing to keep up with the directives of the STOP Act prompts further troublesome questions as the Department of Homeland Security embarks on robust initiatives to impede the flow of counterfeit and pirated goods. However, in assessing the Postal Service, DHS finds a “significant gap in the information CBP receives,” among numerous critiques and findings. Landrith remarked, “Ultimately, the work to intercept illicit drugs and contraband is an immense challenge, and there is simply no excuse for USPS to not do its part.”  

On the USPS’ array of responsibilities, Landrith concluded:

“Americans should be greatly concerned about the USPS procrastinating on its priorities. Looking ahead, it is crucial for the board to install a new Postmaster General with well-qualified business expertise. The demands of stakeholders, legislators and citizens continue to go unanswered. The path to reform will be wide-ranging, and USPS leaders and lawmakers will need to act with urgency.” 


Hollywood Fiction Isn’t a Good Basis for Legislation or Regulation

By George LandrithTownhall

Mark Ruffalo may be most famous for his fictional portrayal of Dr. Robert Bruce Banner and his alter ego “The Hulk” in Marvel’s Avengers series, but he has recently been grabbing headlines for other reasons. Last month, Ruffalo made the news by submitting testimony in Congress based on his recent role in a largely fictionalized movie — Dark Waters — that is being portrayed as a “true story.” 

While the media, Ruffalo, trial attorneys, and some politicians pretend that Dark Waters is a dramatization of a true story, its marketing materials merely claim it is “inspired by true events.” But it gets so many facts wrong, even that claim is hard to stand by. 

Whether the movie is entertaining is a matter of personal preference. But whether the movie is an accurate portrayal of fact is not a matter of opinion. A movie is either factual and accurate, or it is not. The Avengers‘ movies are in my estimation entertaining. But they are not factual and shouldn’t be the basis of congressional action. Neither do we need the Hulk testifying in Congress. Dark Waters is not nearly as entertaining as the Avengers movies, but it is about as factual, so we really don’t need Mark Ruffalo testifying either.  

The basic plot line of Dark Waters is that an evil, dark corporation knowingly and purposefully pollutes the water in a local community and an activist heroic trial attorney played by Ruffalo comes to the community’s rescue to force the evil corporation to take responsibility. The thrust of the movie is that corporate greed led to horrible excesses. Yet the movie itself appears to be an exercise in greed and excess. A network of well-financed trial attorneys, political activists and Hollywood nitwits have fabricated a story designed to support their political agenda, encourage ever more litigation, and make their greed appear altruistic and heroic. Trial lawyers and Hollywood shouldn’t be lecturing anyone about greed. 

The movie portrays the Ohio River communities in West Virginia and Ohio in ways that promote false “hillbilly” stereotypes of locals being simple-minded and uneducated with rotting teeth. The fact is that the region is a manufacturing powerhouse and has a diverse economy with hundreds of thousands of proud, healthy, hardworking people.  

Folks are not merely offended by the portrayals of locals as simpleton hillbillies with blackened and rotting teeth. Local legislators, people who would know the facts, have criticized the movie saying, “The film’s portrayal of Parkersburg does not reflect reality.” But it goes deeper than just that the film isn’t based in fact. Local legislators are concerned that Dark Waters will do “real damage to our economy and the hard-working people of the Mountain State.” 

The movie falsely suggests that PFAS chemicals lead to deteriorated oral health and cause cancer. PFAS chemicals are used in firefighting foam and consumer products like non-stick cookware and waterproof clothing. Science does not establish that this is a cancer-causing agent. Nor has it found that it harms teeth. But asserting these things as if they were established fact, does make the movie more dramatic — just like the Hulk’s fictionalized strength makes the Avengers movies better.

Ruffalo’s trial lawyer character claims that “DuPont is knowingly poisoning 70,000 local residents.” This hysterical claim may make for a dramatic scene in a movie, but local leaders doubt its veracity. But it is useful to tell such lies when you’re trying to promote a political agenda and you’re committed to grotesque oversimplification of complex matters in hopes of creating a fact-free political narrative. 

The movie is defended as an effort to educate and motivate Americans to take action and as a way to require accountability. But wouldn’t an accurate, fact-based portrayal be a better way to educate? How does one effectively educate with falsehoods?  

Ohio River basin locals have asked “that those who profit off of fear-mongering and stereo typing [i.e. Ruffalo and other Hollywood nitwits and trial lawyers] be held accountable.” But that isn’t the sort of accountability that Ruffalo or trial attorney’s support.  

No rational human being would suggest using the Avengers movies as the basis for congressional hearings. That’s why Tony Stark, Captain America, and Thor are not invited to testify. But sadly, ignorant Hollywood activists and trial attorneys — who see themselves as more intelligent and altruistic than other Americans — hope to use the mostly fictional Dark Waters movie to advance their fact-free political agenda, and shape and mold a more supportive public.

Hollywood is an entertainment industry. Ruffalo and other Hollywood activists seek to merge their political agendas with entertainment. The outcome is agenda motivated entertainment that creates distorted policy demands based in fantasy and an American public that is less informed and even misinformed because the agenda driven entertainment is such a distorted, largely fictionalized account. This is no way to make public policy.


The Trump Justice Department Probes Hollywood

By George LandrithRed State

Will the Trump administration ensure Hollywood remains driven by market principles?

Past harsh, critical comments from both President Trump and William Barr, his attorney general, demonstrate that the White House accepts the entertainment industry for what it is: a leftist, anti-capitalist blob that seeks not only to distort the culture war and remove Republicans from office, but also to rig the competitive market system to artificially increase its power and influence.

However, the question becomes how does the White House address its abuse in a free market way?

It’s a delicate balancing act, to be sure. While Hollywood often acts anti-competitively for personal gain – see: Steven Spielberg’s attempt to kill Netflix films’ ability to compete for Oscars – like every other industry, it also suffers from big-government edicts that unfairly harm their businesses. And, for all of the donating to Hillary Clinton they just made a few years ago, the movie and music industries have sounded alarm bells with the administration that the latter is a major concern to them.

Despite all the flack that the current White House gets for being rash and careless, the Trump administration is working tirelessly to ensure it treats its Hollywood detractors fairly and in line with the conservative principles it preaches.

Through a sweeping antitrust consent decree review, the Department of Justice is trying to successfully achieve this balance. Since April of last year, it has been examining the antitrust judgements that have been on DoJ’s books for generations. Its objective is to determine which are still needed to protect consumers against anti-competitive behavior, and which, at this point, act more as pointless red tape than anything else.

Seemingly as a result of multiple advocacy pushes, the clear focus of this effort quickly became those governing the entertainment industry. Namely, the Paramount consent decrees, which restrain the movie industry, and the ASCAP/BMI decrees, which created guidelines for the Big Music monopolies to follow.

On Nov. 18, the DoJ came to terms with its first major decision, announcing that it will ask the court to phase out the Paramount movie consent decrees. They prohibit the big five movie studios of the 1940s from harming small theaters by making exclusive deals with regional theaters (“circuit dealing”) and mandating that small theaters purchase their films in bundles (“block booking”).

DoJ made the right move. While at the time these decrees were necessary, modern-day innovation has made them obsolete and harmful to market competition.

Today, the Big Five studios from the 1940s are still far from angels, but there are plenty of new distributors that have taken their power away. Just look at Netflix, which plans to release over 50 films this year – more than Paramount, Disney, and Warner Bros. combined. Unlike in the 1940s, there are plenty of other studios with which theaters can do business should MGM, Warner Bros., RKO, Paramount, and 20th Century Fox – the five companies restrained by the decrees – provide terms to small theaters that are not agreeable. In fact, only two of those companies are still even in the Top 5 for market share.

If the DoJ let the decrees continue to restrict these studios while leaving their major competitors that have risen over the last 70 years unchecked, it would distort the marketplace by picking winners and losers. That would work to the detriment of, not the benefit to, consumer choice.

While the DOJ’s decision on Paramount was the right one for the free market, Barr’s department needs to be extra cautious on its next entertainment industry review – the ASCAP/BMI music consent decrees.

ASCAP and BMI – monopolies that control the rights to music licenses for public performance – are pushing for the DoJ to terminate or modify these antitrust guardrails. In an open letter to DOJ, they claimed that doing so would open the free market, which “would create a more productive, efficient and level playing field for everyone involved.” However, a dozen free market groups, including Frontiers of Freedom, have cautioned the DoJ that, contrary to what those monopolies are saying, doing so would run the free marketplace in the music industry to the ground.

The reason the ASCAP and BMI decrees went into place in the first place was to prevent ASCAP and BMI from enacting predatory pricing on small businesses. After all, the two monopolies’ very existence is emblematic of everything that Washington created antitrust law to prevent.

Both ASCAP and BMI are comprised of otherwise competing songwriters and publishers that banded together into these two groups to set prices for a joint product at a joint price. Both institutions were created with the explicit purpose of working together to increase prices. Put simply, there is nothing competitive or free market about them.

For the relaxation or removal of its decrees, ASCAP and BMI would have to prove that price-fixing is no longer a fundamental concern. As alluded to already, that is going to be hard to do when considering that the whole reason for their creation was to price-fix. It is going to be especially be hard to prove when considering how, unlike in the movie industry, their combined market share has barely moved at all since the 1940s – remaining at 90-percent of all performing rights. The fact that ASCAP had to settle a civil contempt charge with the DoJ for violating its decree just three years ago for nearly $2 million shouldn’t help its case either.

By giving everyone – including its political opponents, like the major entertainment industry conglomerates – the benefit of the doubt and the courtesy of a thorough review of present-day regulations, the Trump administration is yet again proving how serious it is about its deregulatory agenda. It is not governing on partisan or electoral grounds, but rather out of a desire to see fairness and accountability restored for everyone – even its enemies.

The White House is off to a good start, but for the sake of the free market and the consumers who depend on the fair playing field it creates, here’s hoping that it finishes strong.


Sanders vs. Warren

In the general election, Bernie would be more competitive

By LUKE THOMPSONNational Review

Former New York City mayor Michael Bloomberg and former Massachusetts governor Deval Patrick recently jumped into an already crowded race for the Democratic nomination. Politically, they hope to appeal to center-left voters rightly worried about Joe Biden’s flagging early-state poll numbers. Ideologically, they have cast their candidacies as efforts to save a fading breed of centrist Democrat. Neither Bloomberg nor Patrick is likely to win. Instead, for the first time in recent memory, two leftist candidates stand a good chance of seizing the party’s nomination: Senator Bernie Sanders of Vermont, and Senator Elizabeth Warren of Massachusetts. 

To many observers, Sanders and Warren closely resemble each other. They represent solidly blue New England states, advocate the nationalization of large parts of the economy, and believe that the ills afflicting society result from a political process hijacked by the wealthy few. Yet Sanders and Warren are hardly interchangeable. Despite shared policy goals, they differ in their coalitions, diagnoses of what ails America, theories of change, and, ultimately, prospects in the general election next November.

The Democratic primary electorate is sharply divided by race, age, and gender. The left wing of the party — younger, whiter, and more female — is overrepresented in the Iowa caucuses. Indeed, while national polling suggests that Sanders has a more racially diverse coalition, and that he does well among younger men, Warren is stronger among women of all ages and college-educated white liberals. 

Iowa is a do-or-die test for Warren and Sanders; should either win the Hawkeye State, he or she will be the odds-on favorite to win in New Hampshire, where both enjoy a home-field advantage as New England senators. Organizationally, the Iowa caucuses are a monster. Caucuses take place in the dead of Iowa’s notoriously severe winter and feature runoff voting at each of the state’s 1,681 precincts. A viable campaign needs representatives ready to speak at each caucus and trained to court supporters of candidates who fail to hit the 15 percent viability threshold in the first round. The state, and therefore the nomination, may hinge on whose caucus leaders are better trained. 

Warren has lately given Sanders a chance to highlight their ideological differences. On Medicare for All, Sanders has bluntly and repeatedly promised to raise taxes to pay for universal coverage. Taxes will go up, he contends, but costs will go down and Americans will no longer have to worry about losing coverage or wading through a morass of paperwork. Warren, by contrast, has promised to give free health care to every American without raising taxes on the middle class. 

Setting aside whether any Medicare for All plan is realistic, Warren’s no-tax promise suggests to many on the left that she lacks the resolve to force through a politically difficult reform and would cave to conventional wisdom. Indeed, leftists have reasons to doubt her commitment. She refuses the label “socialist,” was a Republican earlier in life, and has generally tacked closer to the Democratic mainstream than Sanders has. Some of her struggles with candor raise questions about her character. Warren has never satisfactorily accounted for her multi-decade deployment of imagined Native American heritage for personal and professional gain, for instance. Making an obviously false but politically expedient promise — free health care with no middle-class tax increases — reinforces the impression that Warren is not trustworthy. 

Warren’s no-tax plan also undermines her credibility with the press, which has heretofore dutifully relayed her self-presentation as a sophisticated thinker, policy wonk, and technocrat with a plethora of Ivy League–certified schemes. Many of her lower-profile plans will not hold up to scrutiny. If the press comes to see her as a phony, she might have to deal with a running series of bad stories about the unviability of her white papers. Sanders, whose messaging has always been high-level and simple (even simplistic), has not offered much in terms of specifics, but as a result he has a minimal paper trail to defend. 

Yet these differences go beyond taxes and messaging. They go to a fundamental tension on the American left. Warren comes from the progressive tradition of the Left, whereas Sanders is a legatee of its populist tendencies. Being a progressive first, Warren prefers the technocratic approach. For her, simmering left-wing populism can be used best to attack entrenched power, by electing a president who will fill the bureaucracy with like-minded experts and pass campaign-finance reform to limit corporate influence. In other words, personnel is policy.

Sanders believes that American government is fundamentally broken. In a divided constitutional system, elected officials and regulators alike will be corrupted by special interests and will default to the status quo unless compelled to act otherwise. Control of the bureaucracy is not enough. Rather, for his “political revolution” to succeed, Sanders needs a movement that will last beyond Election Day and exert political pressure on the elected officials and regulators. Absent a confluence of movement, party, and administration, special interests will prevent the passage of sweeping structural reforms. 

Put simply: Warren wants to regulate, Sanders wants to legislate.

Whether that distinction will matter electorally come November is unknowable today. However, we have some evidence on which to hazard a guess. First, the national demographic polls mentioned above, irrelevant in a staggered presidential-primary process, come to bear once the parties have picked their nominees. There are very few prospective Elizabeth Warren voters who did not pull the lever for Hillary Clinton in 2016. A replay of the last presidential election might be enough for Warren to win in 2020, especially given heightened Democratic turnout in elections since 2016. However, Democrats suffered from low minority and youth turnout in the Upper Midwest in 2016, and it cost them the presidency. 

Sanders does well with precisely the voters who stayed home when Hillary Clinton topped the Democratic ticket. Younger and more diverse voters were essential to his victory in the Michigan primary, for instance, and while primaries are not the same as general elections, they serve as decent indicators if Democrats need elevated turnout to win. Sanders would get more non-voters to the polls than Warren would, and there are few voters who would vote for Warren but not Sanders.

Sanders has overperformed the Democrats’ partisan vote-share in Vermont, whereas Warren has generally undershot other Democrats in Massachusetts in polling and at the ballot box. Admittedly, Warren represents a state many, many times the size of Vermont. Nonetheless, her underwhelming approval ratings at home suggest that she lacks crossover appeal to independent voters. This is especially true in western Massachusetts, which, like many parts of Vermont, resembles the rural and exurban parts of the Upper Midwest that turned out heavily for Trump and doomed Clinton’s candidacy. 

Neither Sanders nor Warren would enter a general election without baggage, and both would have to face a messaging onslaught from President Trump. Incumbent presidents tend to get reelected. Combine that with good economic performance, peace abroad, and wage growth, and Trump, despite his unpopularity, stands a good chance of winning a second term, provided there are no major changes in the next twelve months. However, 2016 was won on the narrowest of margins. When we look at only those states that were decisive, Sanders appears as a bigger threat to Trump than Warren does.


Extending, expanding or enlarging the electric vehicle tax credit is bad policy and robs the taxpayers

By George LandrithFrontiers of Freedom

Any extension, expansion or enlargement of the electric vehicle tax credit is a profoundly bad idea and essentially robs the taxpayers to pad the pockets of the wealthy who can afford the best lobbyists money can buy. 

When the original legislation giving tax credits and subsidies for electrical vehicles passed more than a decade ago, its sponsors promised that it would be temporary and were only designed to help new technologies gain a foothold in the marketplace.  Now more than a dozen years later, some irresponsible legislators are ready to move away from temporary, limited subsidies and are headed towards a permanent and almost unlimited subsidies. 

This is both bad policy, and dangerous. Government’s power to tax should not be used to transfer wealth to those who can afford the best lobbyists. Single parents working two jobs to make ends meet should not be forced to take an extra shift so that they can support this sort of wasteful spending.  If rich car purchasers want to buy new expensive electric sports cars, they should be free to do so. But the idea that they should be able to reach into the wallet of the single parent struggling to make ends meet is unconscionable! 

Virtually 80 cents of every dollar spent on subsidies went to households with more than $100,000 of income.  And, of course, all of the taxpayer provided cash benefits wealthy and profitable car companies — like Tesla and its billionaire founder Elon Musk. It is revealing that almost 1/2 of all the subsidies for electric vehicles go to just one state — California. 

This is a wealth transfer from the working poor and middle class to the wealthy.  And it is a wealth transfer from 49 states to 1 state.  Before anyone votes for these wealth transfers, they must provide an explanation. Why is this good for America? Why is this good for taxpayers? I know it is good for Mr. Musk and Tesla. But why is it good for that single parent who is working so hard to provide her children with a better life? 

There is no need to extend, expand or continue subsidies for electric vehicles.  Sales of electric cars have been on the increase for years. The original rationale was that the temporary aide would help them get established and build economies of scale that would drive prices down.  Twelve years is more than enough time. 

Some argue that the subsidies are justified because electric cars are “zero emission” vehicles. But that is a lie. Electric cars are plugged into the power grid to recharge and whatever emissions were created while generating the electricity needed to recharge the car are the car’s emissions.  Nationally, that won’t be anything close to zero. Moreover, recent studies indicate that full life-cycle emissions from electrical vehicles may exceed those from new internal combustion engines. So it is unlikely that electric vehicles provide the environmental benefits promised. 

Since there is no longer any plausible or rational reason for the subsidies, the real reason is laid bare — car companies want more taxpayer cash and they’ve lobbied Congress hard to get it. Mr. Musk and Tesla and others who receive the benefits of this taxpayer provided subsidy would love to extend and expand it. But that isn’t a good reason to give them more taxpayer cash or to reach into a single parent’s wallet so that some rich guy can get some help to buy that very cool electric car.  

Moreover, the public doesn’t support the idea of taxpayers helping people buy expensive and trendy electrical cars. By landslide proportions, 2 in 3 Americans oppose these subsidies, and with good reason. 

The truth is most people would love to receive a perpetual gift of cash. There’s an old saying, “A government that robs Peter to pay Paul can always count on the support of Paul.”  That’s what we have here.  Paul is in favor of Paul getting millions of dollars provided by Peter.  This is clearly just based on greed. 

Even more important, our constitutional system cannot devolve into a system in which one group gets to vote itself cash from another group.  But that’s what we have here.  Nothing more.  A vote to extend, expand, or enlarge this subsidy is a grotesque violation of the public trust.


FTC – Coalition Letter on Data Sharing Practices of Ring

Dear Chairman Simons, 

The Federal Trade Commission (“FTC” or “Commission”) should open an investigation into Ring—a subsidiary of Amazon—and its data-sharing practices with law enforcement officials. Ring’s conduct raises a number of concerns, including fears that (1) the emerging technology may result in discriminatory law enforcement activity, (2) sensitive consumer data may be jeopardized as a result of misuse by Amazon and (3) consumers may be subjected to heightened physical security risks. Given these concerns, which are outlined in greater detail below, and Amazon’s history of data mishandling, the FTC should more deeply examine the damaging effects of these practices. 

While innovative, Ring’s home security doorbell and its use of consumer data are cause for significant concern as this conduct has the potential to result in considerable consumer harm. So-called “smart home” technology, still very much in its infancy, and its misuse have the potential to cause lasting damage to consumers if the necessary precautions are not taken. 

Despite the potential benefits of “smart home” technology like the Ring “smart” doorbell, the data collected by Amazon opens consumers to exposure under the promise of additional security. As a result, not only is consumer data made more vulnerable, but their physical safety is put at unprecedented risk.  

 As the Commission is well aware, as more data is collected by Amazon, potential data breaches become more damaging. A data breach of consumers’ home security system by nefarious actors could have direct consequences on consumer physical safety. For example, should home security video footage fall into the wrong hands, consumers’ daily routines—including when they leave home and when they are alone and most vulnerable—would be easily discernible by criminals intending to cause harm. 

 According to reports, Ring has already misled consumers about its data handling practices. The Washington Post reports that Ring has partnered with over 400 police departments in the U.S., “granting them potential access to homeowners’ camera footage.”[1]  Amazon was able to secure hundreds of partnerships by capitalizing on artificially low prices funded through taxpayer resources.[2]  Making matters worse, Ring engages in these partnerships without first informing its users. This deceptive practice raises, at best, tremendous ethical concerns. 

Amazon’s record on data security is already cause for concern. Recently, two prominent senators have asked the Commission to investigate Amazon’s role in the Capital One data breach, which affected nearly 100 million customers.[3]  Given Amazon’s potential involvement in this historic breach and its reckless handling of consumer data captured through Ring, it would be unwise to allow this activity to continue without at least some examination from the Commission. 

In addition to the data security concerns, Ring’s video-sharing arrangement raises questions about the potential for profiling. In an open letter to lawmakers,[4] more than 30 civil rights action groups described the threat to civil liberties posed by Ring’s partnership with law enforcement. In the letter, the organizations explain the dangers of this arrangement:

“With no oversight and accountability, Amazon’s technology creates a seamless and easily automated experience for police to request and access footage without a warrant, and then store it indefinitely. In the absence of clear civil liberties and rights-protective policies to govern the technologies and the use of their data, once collected, stored footage can be used by law enforcement to conduct facial recognition searches, target protesters exercising their First Amendment rights, teenagers for minor drug possession, or shared with other agencies […].” 

These sentiments were echoed by another prominent senator in a letter to Amazon CEO Jeff Bezos.[5] In the letter, the lawmaker outlined the privacy and civil liberty concerns noted above. Amazon has not yet responded to this letter—a clear indication that, unless pressured by government officials, the company will only act in accordance with its own interests, rather than address the genuine threats expressed here. Because of this, it would be wise for the FTC to act before the situation spirals out of control. 

Inaction in light of these facts would subject consumers to risks that are all too dangerous. As the top “cop on the beat,” the FTC has a public responsibility to protect consumers from unfair and deceptive business practices. Given the data security and civil liberty concerns, it would be wise for the FTC to undertake a review of the partnership between Amazon and Ring and law enforcement authorities. 

This issue—that of data security and physical safety—is bipartisan in nature. In fact, it transcends politics entirely.

Thank you for your attention to this matter. 

Sincerely,

[1] Harwell, D. (2019, August 28). Doorbell-camera firm Ring has partnered with 400 police forces, extending surveillance concerns. Retrieved October 24, 2019, from https://www.washingtonpost.com/technology/2019/08/28/doorbell-camera-firm-ring-has-partnered-with-police-forces-extending-surveillance-reach/.

[2] Guariglia, M. (2019, August 30). Five Concerns about Amazon Ring’s Deals with Police. Retrieved October 24, 2019, from https://www.eff.org/deeplinks/2019/08/five-concerns-about-amazon-rings-deals-police.

[3] https://subscriber.politicopro.com/f/?id=0000016d-fde0-d909-abff-fde145f70001

[4] Fight for the Future (2019, October 7). Open letter calling on elected officials to stop Amazon’s doorbell surveillance partnerships with police. Retrieved October 24, 2019, from https://www.fightforthefuture.org/news/2019-10-07-open-letter-calling-on-elected-officials-to-stop/.

[5] https://www.markey.senate.gov/imo/media/doc/Ring%20Law%20Enforcement%202019.pdf 


Sunset The Sun Power Tax Credit Now

By Peter RoffTownhall Finance

The good times are back. The U.S. economy is performing at levels not seen in more than a decade, with unemployment at its lowest level in a lifetime.

Still, it wasn’t all that long ago when crude was selling for more than $100 a barrel and people were talking seriously about the problem of “peak oil.” The growing global demand for energy made from fossil fuels has U.S. policymakers pushing hard for subsidies intended to accelerate the development and commercialization of energy alternatives mace from agricultural products and coming from the wind and the sun.

The American faith in technology is almost never misplaced. The fracking revolution has turned the U.S. into a net energy exporter. The explosion in the use of natural gas and the development of microgrids powered by it in liquid form have made cheap power a reality once again, without the widespread adoption of renewables. Policymakers, though, have yet to come to grips with the reality and are, under pressure from special interests, trying to keep Bush/Obama-era energy policies in place that do more harm than good.

In 2005, the U.S. Congress adopted the Solar Investment Tax Credit with an eye to speeding the commercial adoption of energy from the sun as a way to heat and cool the nation’s homes and businesses. Whether it helped or not is debatable yet there are calls, even now, to ensure its renewal past its intended expiration at the end of the year.

The renewable lobby is politically powerful, especially given the nexus between those invested in and those who make generous contributions to elected officials. Remember Solyndra? And yet, despite its spectacular failure – which left taxpayers on the hook for who really knows how much – the ITC was already reauthorized in 2015 for solar PV, solar water heating, solar space heating and cooling, and solar process heat.

Right now, under current law, the industry is set to benefit from a 30 percent tax credit extended to consumers who purchase systems used in both residential and commercial properties that are under construction before 2020. Beginning in 2022 the credit decreases, dropping to 10 percent and useful only in commercial settings.

That’s what policymakers agreed to in 2015 to mollify the demands of the green groups who still believe, or at least claim they do, that the nation’s base power needs can be met by renewables without utilizing either nuclear or fossil fuels.

Science tells us that is a pipe dream and will remain one until the technology to store the energy generated by solar fields over the medium term (never mind the long) exists. Battery technology has not yet caught up to the increases the solar and wind energy industries have managed to achieve, meaning lots of generated power is left stranded and unused.

Nonetheless, the demand for another increase in the ITC as well as an expansion of what is covered is being pressed on legislators. The last extension was part of the deal that allowed for the U.S. to enter the crude export market which, while bad policy, makes it worth the price paid.

There are no such opportunities for a similar trade on the table now. The greens will never drop their opposition to energy exploration in the Arctic National Wildlife or the construction of new pipelines to move crude and natural gas produced by fracking to market. And since there’s no opportunity to trade for good policy, the ITC should be allowed to expire, especially since there’s plenty of evidence it’s no longer needed.

Solar, the web site GreenTechMedia reports, “will soon be able to out-compete gas-fired plants around the world on a levelized cost basis.” Large investments from foreign-based solar module manufacturing companies such as Hanwha Q Cells have led to the opening of manufacturing facilities in the United States. And solar energy experienced explosive growth between 2010 and 2016.

According to GTM Research, annual installations grew from just 849 MW in 2010, to more than 15,000 MW in 2016, a record-breaking year when the U.S. solar market nearly doubled its annual record for installations – while tax incentives are factored into the growth, efficiency and affordability have driven the adoption of the technology.

If the ITC worked as intended, as there’s evidence to suggest it did, it’s not needed anymore. And if it didn’t work as those who voted for and voted to extend it planned, it’s also not needed anymore. Either way, it’s time for it to be allowed to expire, if for no other reason than to show members of Congress they can allow special interest tax breaks to disappear and survive when they run for re-election.


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