Beyond Parody
This represents such an entirely different vision of the role of the state from mine that it is hard to believe we are even talking about the same thing.
Dispatches from District 48
Archive for the ‘Regulation’ Category.
This represents such an entirely different vision of the role of the state from mine that it is hard to believe we are even talking about the same thing.
It is amazing the number of goofy ideas folks have generated to try to substitute for prices in matching supply and demand. And none of them ever work. David Zetland has a good example in the world of water, where politicians are willing to jump through just about any hoop to avoid matching water supply and demand via prices.
One of the complexities of analyzing causes of the financial crash was that there were two simultaneous leveraging events. Clearly, financial firms were over-leveraging securitized mortgages and their derivatives. But at the same time, home buyers were over-leveraging their real estate assets:
In 1989, only 1 in 230 homebuyers bought a house with a down payment of 3% or less. In 2003, the ratio was 1 in 7. By 2007, it was 1 in 3.
These charts make the case that government policy had a lot to do with this change.
I have been reading of late some histories of Germany in the 1930's, with a particular emphasis on racial laws and policy. Over time the expanding bans on Jewish participation in the economy and society as well as preferences given to non-Jews for government jobs led to some practical problems, including:
It would be nice to think we put this kind of thing to bed, but here we are in the 21st century running around trying to answer the exact same questions
This story reminded me of the 1980s case of the twin red-haired Boston firefighters who claimed to be black, based on a photo of a great-grandmother and alleged oral history. While I remembered that they had gotten fired for their alleged fraud, I didn’t remember this detail:
Under current rules, said [general counsel to the state personnel office] Ms. Dale, candidates who say they are members of minority groups are judged by appearance, documented personal history and identification with a minority community. Disputes over claims of minority status are resolved by the Department of Personnel Administration.
And indeed, there eventually was a two-day administrative hearing, in which the hearing officer determined that the twins failed all three criteria, and thus were not black. A judge upheld the ruling, finding that the twins had claimed minority status in bad faith.I have to admit being under the impression until now that as a legal matter, minority status was an in issue of self-reporting. But at least in the Massachusetts Civil Service system, one can get fired for “racial fraud.”
Self-identification is the preferred method of identifying the race and ethnic information necessary for the EEO-1 report. Employers are required to attempt to allow employees to use self-identification to complete the EEO-1 report. If an employee declines to self-identify, employment records or observer identification may be used.
Where records are maintained, it is recommended that they be kept separately from the employees basic personnel file or other records available to those responsible for personnel decisions.
Race and ethnic designations as used by the Equal Employment Opportunity Commission do not denote scientific definitions of anthropological origins.
I am told we are trying to create a society free of racism, but the results sure look a lot like racism to me.
From California State contract language I am reviewing:
During the performance of this Contract, Concessionaire and its employees shall not unlawfully discriminate, harass, or allow harassment against any employee, applicant for employment, or any member of the public because of sex, sexual orientation, race, color, religious creed, marital status, need for family and medical care leave, ancestry, national origin, medical condition (cancer/genetic characteristics), age (40 and above), disability (mental and physical) including HIV and AIDS, need for pregnancy disability leave, or need for reasonable accommodation.
This is at least double the length of such passages in contracts I saw 8 years ago. I wonder what the list will look like in another 10 years?
This used to be simple -- treat everyone equally. But this is no longer sufficient to conform. New groups added to the list require accommodations of one sort or another. Non-discrimination requirements have morphed for us from "treat everyone the same" to "here is a list of groups with special privileges." Generally, it's not that hard at present to fulfill but who knows how onerous it will be in a decade or two?
Walter Olson has been writing a lot about Wal-Mart and FCPA. I don't have a lot to add except my own experience working for a large corporation in third world countries.
I worked for a manufacturer of industrial equipment for years. In most countries in Europe and North America, part of our strategy was a dedicated in-house sales force that could provide a high level of technical support. But we went away from that strategy when we went into third world countries, just the place where we needed more rather than less technical support for our customers.
Why? A big reason was the FCPA. There are many countries where it is simply impossible to do business without paying bribes. Bribes are absolutely wired into the regulatory process. In Nigeria, public officials are paid less with the expectation they will make it up on bribes, similar to the way we pay waiters who get tips. The only way to legally work in these countries is to work through third party resellers and distributors and other such partners, and then tightly close your eyes to how they get things done.
What always ticks me off about these cases is the fake attitude of naivite in the press that seems to be constantly amazed that corporations might have to pay bribes to do basic things we take for granted here, like get the water turned on or have your goods put on a ship. But in fact reporters can't be this naive, as they almost certainly have to deal with many of the same things in their business. I would love to see an accounting of the grease payments the NY Times pays in a year in foreign countries.
I think most people when they hear these foreign bribery cases assume corporations were paying to get a special advantage or to escape some sort of fundamental regulation. And this is possibly the case with Wal-Mart, but more likely they were simply paying because that is what you have to do just to function at all.
Do you ever wonder exactly what problem this Administration is trying to fix, beyond their bureaucrats' concerns that there is some corner of the economy over which they don't have authority?
A proposal from the Obama administration to prevent children from doing farm chores has drawn plenty of criticism from rural-district members of Congress. But now it’s attracting barbs from farm kids themselves.
The Department of Labor is poised to put the finishing touches on a rule that would apply child-labor laws to children working on family farms, prohibiting them from performing a list of jobs on their own families’ land. ...
The new regulations, first proposed August 31 by Labor Secretary Hilda Solis, would also revoke the government’s approval of safety training and certification taught by independent groups like 4-H and FFA, replacing them instead with a 90-hour federal government training course.
Change: We won't satisfied until every single American reaches voting age without a bit of work experience.
I am increasingly convinced that contradictory regulations that make it impossible even for people of goodwill to be in compliance are a feature, not a bug of the current system.
â¦Common sense dictates that any medication that carries with it a warning that it âmay cause drowsinessâ or that the patient should âuse cautionâ if operating machinery may pose a risk in the workplace. It is for this reason that many employers adopt a policy requiring employees to self report the use of prescription pain killers. This is especially important in potentially dangerous workplaces such as manufacturing and construction.
In a recent action that defies common sense, the Equal Employment Opportunity Commission has taken the position that such policies are unlawful under the Americans With Disabilities Act. The ADA prohibits an employer from conducting âmedical inquiriesâ without a business reason to do so. In EEOC v. Product Fabricators, Inc., an action in federal court in Minnesota, the EEOC required a manufacturing employer to abandon its policy of encouraging employees to inform supervisors if they are under the influence of narcotic pain killers such as Vicodin. The EEOC took the position that an employer cannot ask about prescription pain killer usage unless it has âobjectiveâ evidence that an employee is impaired on the job.
This places employers in a very difficult positionâ¦.
Walter Olson also has comments at the link.
Here is Kevin Drum, where he quotes from an Op/Ed about a new Southern California "Regional Transportation Plan/Sustainable Communities Strategy"
The plan includes expansion of housing near public transit by 60%....and projections of more than 4 million new jobs — with public transit within half a mile of most of them. Amanda Eaken of the Natural Resources Defense Council praised it as "the strongest transportation plan" in the history of "car-loving Southern California."
.... SCAG's new plan is born of the realization that as a region, we have to grow up, not out. That doesn't mean Hong Kong skyscrapers in Whittier and Redlands. It does mean more apartments near light-rail stations and more vibrant mixed-use areas like the ones in downtown Pasadena, Ventura and Brea. It doesn't mean wresting the car keys from suburban commuters. It does mean making jobs and housing accessible via foot, bike, bus and rail.
Here is his comment on this:
In theory, a plan like this should have almost unanimous support. Developers like it because they can put up denser buildings. Environmentalists like it because it's more sustainable. Urbanists like it because it creates more walkable communities. City governments like it because it creates a stronger tax base.
There's really only one constituency that doesn't like it much: every single person who already lives in these communities and hates the idea of dense, high-rise construction near their homes. So there's going to be fireworks. It'll be interesting to see how the NIMBY bloc gets bought off.
Can you spot which group of people whose preferences have been left out? He considers the preferences of planners, developers, environmentalists, urbanists, and current community residents. That's everyone, right?
Yeah, except for the freaking people who are moving in and actually shopping for a home. Apparently if you are looking for a place to live in California, everyone except for you has a say in what living choices you will find. Want a suburban home on an acre of land -- you are out of luck (unless you get an existing one that is grandfathered in, but those are really, really expensive because they are what everyone really wants but no one in power in California will allow to be built). Your chosen lifestyle has not been approved by your betters.
Today, Aaron Carroll tells us the story of TriCor, aka fenofibrate, a cholesterol drug licensed by Abbott Labs in 1998. Unfortunately, TriCor's patent was due to run out in 2000 and a maker of generic drugs was all set to produce a generic version. So Abbott sued, which delayed the generic version by 30 months:
In the interim, Abbott sought and obtained FDA approval for Tricor-2. That drug was nothing more than a branded reformulation of Tricor-1.Tricor-1 came in 67-mg, 134-mg, and 200-mg capsules; Tricor-2 came in 54-mg and 160-mg tablets. No new trials involving Tricor-2 were submitted to the FDA. But Tricor-2 came out while the generic company was still waiting to make Tricor-1, and thus Tricor-2 began selling with no direct competition.
Six months later, Tricor-2 evidently accounted for 97% of all fenofibrate prescriptions. By the time the generic copies of Tricor-1 came out, no one was taking it anymore, and they couldnât penetrate the market.
Wash, rinse, repeat. The generic companies petitioned to make generic Tricor-2. Abbott filed a patent infringement suit buying them a 30 month delay. They got to work on Tricor-3. That tablet came in 48-mg and 145-mg doses. No new studies. They got approval. Evidently, 70 days after Tricor-3 was introduced, 70% of users were switched to the new branded drug. By the time the other companies got generic Tricor-2 out, Tricor-3 had 96% of the market.
Apparently, the entire moral blame for this accrues to Abbott, though he admits maybe physicians have some culpability for never prescribing the generic.
Really? I have no particular desire to defend serial rent-seekers like Abbott, but the farce here seems to be in the regulatory system where small changes in what is essentially the packaging size allow companies to protect a government-enforced monopoly for their product. Given the enormous difference in earnings between a monopoly product and one with a generic competitor, it is no surprise that Abbott is going to react to these incentives and use the system as presented to it. In fact, if it did not, its executives would be making a huge ethical lapse in failing in their fiduciary responsibilities.
If you really think this is a corporate greed problem, then why is it that Apple doesn't keep competitors out of the smartphone market by making tiny tweaks to the screen size of the iPhone. Wait, you say, screen size changes don't act as a barrier to competition? Of course not. But then why do changes in capsule size for a given chemical compound? Because of the involvement of the government.
No, the problem here is not Abbott, the problem is a broken government regulatory system. And you can pretty much count on Drum and his allies responding to anyone who actually tries to initiate a reform by streamlining this craziness by screaming that they just want to kill people by relaxing government regulations.
I often write about the large hassles we have to deal with from the government. Here is an example of the myriad of smaller ones:
We have our campground workers in Florida living in their RV on site. As one of the amenities we offer them, we have a 120 gallon propane tank on each employee RV site they can use for their cooking and heating. Unfortunately, the State of Florida has banned connecting propane tanks of this size to a "non-stationary" dwelling. We were grandfathered for a while, but now we have to get rid of all the tanks. Our employees can still have little 5 gallon tanks, but instead of having a truck come by once a year to fill all the large tanks, each of our employees must now drive 20 miles into town dozens of times to fill their little 5 gallon tanks.
Thanks state of Florida -- getting rid of a 120 gallon tank at the price of about a thousand extra miles of driving and two or three full man-days of extra time sure seems like a smart legislative choice to me.
My Forbes article is up this week and uses my company's vendors to compare the power of markets vs. government regulation. A small excerpt:
I am assuming that many readers will have already spotted what these three vendors have in common: all are either highly-regulated government-enforced monopolies (in the case of liquor wholesaling and electric power) or government agencies themselves. As a consumer, I get the worst deal from my vendors in direct proportion to how heavily regulated they are.
As I mentioned the other day, I sometimes have this fantasy that we have some sort of libertarian streak in the Arizona Republican party. The Goldwater Institute and Jeff Flake give me hope. But then the Arizona legislature gets to work and my hopes are dashed.
A big national Republican issue is the excessive power Congress has delegated to the EPA and FDA to regulate and ban substances, from BPA to CO2. So what do the Republicans do in AZ? They propose a law to give an un-elected bureaucracy the power to willy nilly ban substances without a bit of legislative oversight.
The legislature had previously outlawed 30 chemicals that could be used to make the "bath salts"-type mixtures, and dropped another eight substances on the bill Governor Jan Brewer signed last month.
As Boca Raton Florida-based attorney Thomas Wright III told New Times shortly before Brewer signed the legislation, "To suggest they're putting a ban on bath salts is dumbing down the general public."
Republican state Senator Linda Gray is now explaining this to everyone, as she's proposed a new method to attempt banning "bath salts."
House Bill 2388 is the new hope, which would allow the state's Board of Pharmacy and the Department of Public Safety to ban the sales of chemical substances at their pleasure.
According to a Senate fact sheet, the pharmacy board "must make a formal finding that the chemical composition defined by the Board has a potential for abuse and submit the finding to DPS."
The pharmacy board then has to "consult" with DPS about its proposed rule, and that's that. The board just has to let the governor and the legislature know once a year which chemicals it's decided to ban.
So after all the concern about regulation voiced by Republicans about the EPA, they are giving even more sweeping powers to... the Board of Pharmacy and the Department of Public Safety? This should be all the proof you need that the Coke and Pepsi party have equivalent authoritarian streaks. As many other libertarians have observed, the Republicans have a healthy distrust of government, except when it comes to anyone such as the DPS or military that carries a gun, and then they are willing to hand over infinite trust and authority.
In many ways, this law is exactly like the environmental laws Republicans hate that require detailed analyses of potential harms but no counterveiling analysis of benefits. In this case, the Pharmacy board is required to analyze the potential for abuse of chemicals but there is absolutely no language requiring any consideration of the benefits of the substance's use or legality. By the language of the law, if there is a potential for abuse, it must be banned no matter how otherwise useful the product is or could be.
This is just amazing -- Bloomberg has become too nutty even to caricature. From CBS NY via Overlawyered
Mayor Michael Bloomberg’s food police have struck again!
Outlawed are food donations to homeless shelters because the city can’t assess their salt, fat and fiber content, reports CBS 2’s Marcia Kramer.
Glenn Richter arrived at a West Side synagogue on Monday to collect surplus bagels — fresh nutritious bagels — to donate to the poor. However, under a new edict fromBloomberg’s food police he can no longer donate the food to city homeless shelters.
It’s the “no bagels for you” edict.
“I can’t give you something that’s a supplement to the food you already have? Sorry that’s wrong,” Richter said.
Richter has been collecting food from places like the Ohav Zedek synagogue and bringing it to homeless shelters for more than 20 years, but recently his donation, including a “cholent” or carrot stew, was turned away because the Bloomberg administration wants to monitor the salt, fat and fiber eaten by the homeless.
Women have wrinkles, pores and curves. And there's a movement across the world to make sure advertisers can no longer pretend otherwise.
Now, that movement has come to Arizona.
House Bill 2793, proposed by Rep. Katie Hobbs, D-Phoenix, would require advertisers who alter or enhance a photo to put a disclaimer on that ad alerting customers that "Postproduction techniques were made to alter the appearance in this advertisement. When using this product, similar results may not be achieved."
Really? You mean my wife isn't going to suddenly look like Demi Moore if she uses Dove soap? Next you are going to tell me that drinking Miller Lite does not cause me to suddenly be surrounded by hot women.
Update: Apprarently this is about empowering women by treating them like moronic rubes
"As an organization, we are all about empowering women and eliminating discrimination," Richard said. "We want to make sure that young women get a better start and better self-image."
He said girls need to understand that these photos aren't all real. Someone has airbrushed out the model's wrinkles and pores, or put a woman's head on top of a computer-generated perfect body.
"You need to disclose that so our young women don't grow up thinking a poreless face is possible," he said. "That's not the way that I think anyone wants to raise their daughters."
This could have also been labelled as from the files of "anti-trust is not about consumers." Apparently, a mapmaker in France has successfully sued and won damages from Google for unfair competition, ie from providing Google Maps for free.
Just as in the Microsoft anti-trust case and just about every anti-trust case in history, companies who brought the suit are really trying to stop an up-start competitor from trashing their business model, but they have to couch this true concern in mumbled words about the consumer. Specifically, they raise that ever-popular boogeyman of jacking up prices once the monopoly is secured. The next time this happens, of course, will be the first time. Its a myth. For example, in Google's case, left unsaid is how they would jack up their prices when at least two other companies (Bing, Mapquest) also provide mapping services online for free.
When a country
The bitterly ironic part is that when these folks hit the streets in mass protests, it will likely be for more of the same that put them there in the first place.
Want to argue that such policies are hurting workers rather than helping? Good luck, at least in Italy
Pietro Ichino, a professor of labor law at the University of Milan and a senator in the Italian legislature, is known as the author of several “neoliberal” books and studies recommending that the Italian government relax its extraordinarily stringent regulation of employers’ hiring and firing decisions. As Bloomberg Business Week reports, that means that Prof. Ichino must fear for his life: “For the past 10 years, the academic and parliamentarian has lived under armed escort, traveling exclusively by armored car, and almost never without the company of two plainclothes policemen. The protection is provided by the Italian government, which has reason to believe that people want to murder Ichino for his views.”
Memo to US: Don't get cocky, you are going down the same path
Update: Interesting and sort of related from Megan McArdle
An apparent paradox that frequently puzzles journalists is that Europeans work fewer hours than workers in the United States, while in some countries, hourly productivity appears to be the same, or even higher, than that of American workers.
This is not actually a paradox at all. Much of the decline in European hours worked per-capita came in the form of unemployment. Rigid labor laws which make it hard to fire (and thus, risky to hire) shut less productive workers out of the market, particularly the young, and those who had been displaced due to disruptive industry change. So does anything that raises the cost of labor, like, er, loads of mandatory vacation and leave. When you exclude your least productive workers from the labor force, your measured hourly productivity will be higher, particularly if you use metrics like GDP per hours worked.
It used to be that the regulatory power of government agencies was delegated and specified by acts of Congress. Now, it seems, they can just give themselves broad new powers
The U.S. Environmental Protection Agency wants to change how it analyzes problems and makes decisions, in a way that would give it vastly expanded power to regulate businesses, communities and ecosystems in the name of “sustainable development,” the centerpiece of a global United Nations conference slated for Rio de Janeiro next June.
Google is starting to discover that all its smug leftish do-gooder aura is not going to stop the government from trying to take it down merely for being successful.
Sens. Herb Kohl (D-Wis.) and Mike Lee (R-Utah), the top lawmakers on the Judiciary Committee's antitrust subpanel, are urging Federal Trade Commission (FTC) Chairman Jon Leibowitz to take a hard look at whether Google is engaging in anticompetitive business practices....
"Given the scope of Google's market share in general Internet search, a key question is whether Google is using its market power to steer users to its own web products or secondary services and discriminating against other websites with which it competes," the lawmakers wrote in a letter sent Monday.
Two quick thoughts
Humans have a natural desire to innovate and exercise creativity. Unfortunately, in government bureaucracies, the only place where this creativity is channeled is into inventing new ways to expand one's or one's agency's power. Which is why life as a libertarian seems to be a constant whack-a-mole game against stupid regulatory proposals like banning even hands-free cell phones from cars.
today, in a unanimous vote, "The U.S. futures regulator approved on Monday a rule that puts tighter limits on how brokerage firms can use customer funds, a measure that the now-bankrupt MF Global had encouraged the agency to delay." In other words, while before commingling client accounts was assumed to be a clear violation of every logical fiduciary imperative, now it is set in stone. For real. The CFTC means it.
In the past, I believed that a lot of financial regulations were honest (though often misguided) attempts to create transparent and trustworthy markets. I am increasingly being pushed to the cynical conclusion that financial regulations, like, say, licensing of funeral homes, are mainly aimed at making it impossible for small competitors to survive, while larger competitors either have the scale to pay for compliance departments, or in the case of MF Global, have the political muscle to get themselves exempted (by Administrations of both parties, I should be clear, though the current one certainly gets a hypocrisy award for standing beside OWS while handing out finance and health care law exceptions to the powerful).
MF Global is far worse in my mind than, say, Enron. In Enron's case, the management was at least mostly pursuing the activities and investments that they were supposed to be pursuing. They were making bets of the type shareholders expected, though they were likely masking the cost and risk of these bets by aggressive pushes at the margins of accounting rules.
MF Global was doing exactly what everyone supposedly knew to be an absolute no-no, ie using client funds to make leveraged bets for their own account. If Joe Schmoe in Florida did the same thing, he would already be incarcerated. In the case of MF Global, no one even seems to be interviewing Corzine and so far the bankruptcy committee has put a higher priority on repaying JP Morgan and Goldman for Corzine's bad bets than on getting investors' money back.
Apparently, it is becoming increasingly impossible to produce traditional gut strings for musical instruments, due to EU regulations designed to prevent mad cow disease in humans. Apparently, if one were to eat a few yards of a few meters of violin strings that were made from an animal with BSE (which are routinely destroyed when found rather than used for any products), he or she might get sick.
Thank God for the Left and their scientific approach to government decision making
EU bans claim that water can prevent dehydration...
EU officials concluded that, following a three-year investigation, there was no evidence to prove the previously undisputed fact.
Producers of bottled water are now forbidden by law from making the claim and will face a two-year jail sentence if they defy the edict, which comes into force in the UK next month.
For three years a group of government employees actually got paid to come to the conclusion that drinking water does not prevent dehydration. Congrats.
If you want an explanation, my guess is that this is part of the Left's war on bottled water. For some bizarre reason, bottled water has been singled out as one of the evils of modern technology that will drive us into a carbon dioxide-induced climate disaster. So I don't think the EU would have approved any label claim for water. Since this is such an absurdly obvious claim that most consumers would just chuckle at (yes, consumers can be trusted to parse product claims), I almost wonder if some water company didn't just float this to make the point that no claim could be approved in the EU system.
A small victory against the relentless march of the state regulators and licensors
Eyebrow threading to remove facial hair, a practice which has ancient roots in Eastern countries such as India and Iran, is gaining popularity around the country.
And threaders can now operate freely in the state without a cosmetology license after an October court settlement determined that the Arizona Board of Cosmetology would no longer regulate the trade.
The consent judgment resulted from a lawsuit filed in Maricopa County Superior Court by five threaders, including Gutierrez.
The threaders argued that the Board of Cosmetology was merely trying to help more traditional hair removal outfits remove a source of low-cost competition. The threaders were represented by the IJ, who do great work for economic liberty
via here, which has a lot of good data on California job losses.
If you have a service business, I can understand the desire to get access to the large and wealthy populations in these areas. I even started a service operation in the LA area about 4 years ago, though I regret it intensely (other operations we have in rural CA are difficult but much easier than in LA). But even so, why would anyone ever, ever start a manufacturing or any other business in these locations if it could be located anywhere else?
I was at a cocktail party the other night lamenting to a number of business owners (more successful folks than I) about problems I am having in CA. Usually I get sympathy, but there was none to be had. They looked at me like I was a moron, like I was the guy who went $30,000 in debt for a puppetry degree. They said they had gotten out of CA years ago, would never go back, and (essentially) if I was stupid enough to be there, it was my own damn fault.
Unfortunately, a lot of the recreation is there, and for better or for worse, we have found that we are better and more efficient at dealing with a lot of the CA-induced mess than other companies. But I often wonder if I am crazy to be there.
PS- as an example, it took us 4-1/2 years to get a permit for a 1000 gallon double wall gas tank at a marina in Ventura County. We just got it approved last month, so at last we can stop hauling truckloads of 5-gallon fuel tanks from the gas station. We are in the third year of trying to get permitting approval to replace (in kind, same size and features) a bathroom building in a campground.
Update: All the job gains are in industries, like health care and construction, where the jobs have to be near the population served. Compare that to manufacturing and tech.