COMPETITIVE ENTERPRISE INSTITUTE

VOL. 29, NO. 1 | WINTER 2016

FEATURED ARTICLES

Why and How Congress Should

Fight the Presidents Paris Climate
5 Treaty Power Grab
FRED L. SMITH, JR.
The Chipotle Effect BY MARLO LEWIS, JR.

P resident Obama claims the recently

adopted Paris Agreement on climate
change is not a treaty but rather an executive
agreementa pact he can approve on his
sole authority, with the stroke of a pen. Why
6 is he doing this? Because if he were to follow
the constitutional treaty-making process,
BY RYAN YOUNG and submit the agreement to the Senate for
its advice and consent, the treaty would be
The Improvisational Fed and
dead on arrival.
Unpredictable Regulations In fact, as I explain in a new CEI policy
paper, the Paris Agreement is a treaty. That
is the only reasonable conclusion based
on U.S. historic practice, the Agreements
potential costs and risks, its prescriptiveness
and ambition compared to predecessor
climate treaties, and international protocol

10 including recent instructions from the United

Nations Climate Change Secretariat to
the Conference of the Parties of the United
BY JOHN BERLAU
Nations Framework Convention on Climate
How George Washington Change (UNFCCC).
Propelled Steamboats President Obama claims the Paris
Agreement is not a treaty because Americas
emission-reduction commitments under it are
ALSO IN THIS ISSUE non-binding. That is a non sequitur. Our
emission-reduction commitments under the
A Federal Salt Experiment on Kids . . . . . . 4 UNFCCC are also non-binding, yet no one
disputes that the UNFCCC is a treaty.
CEI Remembers Justice Antonin Scalia. . . 5
The administration points out that only
The Trouble with the NLRB . . . . . . . . . . . . 12 the Agreements procedural (reporting and
Putting the Brakes on Driverless Cars . . . 13 monitoring) commitments are binding, not the
The Good, the Bad, and the Ugly. . . . . . 14 substantive (emission-reduction and climate
finance) commitments. But for the United
Media Mentions. . . . . . . . . . . . . . . . . . . . 15 States, that is a distinction without a differ-
End Notes . . . . . . . . . . . . . . . . . . . . . . . . . 16 ence. Americans expect their government
to keep all solemn promises, whether or not
those are deemed legally binding. Under the
Paris Agreement, nations honor their non-
binding promises by turning them into bind-
ing domestic laws and regulations.
Some in Congress, including some
conservative lawmakers, may be tempted to
dismiss the Paris Agreement as a paper tiger
because it imposes no penalties for non-
compliance. By doing so, they overlook what
chiefly determines climate and energy policy:
politics.
Far from being toothless, the Paris
Agreement is the framework for a multi-
decade global campaign of political pres-
sure directed chiefly against Republicans,
Red State voters, and the fossil fuel industry.
(continued on page 3)
 Washingtons Dark Matter Regulations
by Clyde Wayne Crews, Jr.
I n a recent Gallup poll, Americans named the
government as the top problem facing our nation
for the second year in a rowgovernment beat out
FROM THE VICE PRESIDENT FOR POLICY
the economy, immigration, unemployment, and even
terrorism. The public is frustrated with everyone, from
the President to Congress to politicians in general.
This isnt surprising, considering that 2015 was
a banner year for government interference in
Americans lives without their assent. The Obama
administration issued 39 regulations for every law
approved by Congress. That wasnt a fluke. The
average ratio of regulations to laws under George
W. Bush was 17:1, less than half of Obamas 35:1
record. Annually, federal regulations now cost the
economy about $1.9 trillion.
The president hasnt been shy about his willing-
ness to use his pen and phone when Congress
wont pass the laws he wants. But formal regulations
and executive orders are just part of his strategy. In
addition, as I detail in a new CEI report, his admin-
istration has often worked through what I call dark
matter: proclamations in the form of guidance docu-
ments, memoranda, bulletins, manuals, circulars, and
even blog posts.
Under the Administrative Procedure Act, most fed-
eral regulatory agencies must follow guidelines for
proposing and establishing regulations. This includes
public notice of a proposed rulemaking and a period
for the public to submit comments. The APA also
created a process for federal courts to review these
agencies actions and decisions.
But when the executive branch uses dark matter,
federal agencies circumvent Congress, the American
people, the courts, and essentially all oversight. Such
proclamations are not supposed to be legally bind-
ing, but if youre a small businessperson awaiting a
permit or approval, theyre hard to ignoreassuming
you can find where they are published.
Publisher
Lawson Bader
Editor
Marc Scribner
Editorial Director
Ph (202) 331-1010
Ivan G. Osorio
Fax (202) 331-0640
info@cei.org Contributing Editor
Keara Vickers
ISSN#: 1086-3036
2 CEI.ORG
According to White House data, there have been
222 executive orders since 2008, but 472 execu-
tive memoranda ranging from the mundane to the
weighty. Other dark-matter items, including guidance
documents and other notices from the hundreds of
federal agencies, are much more slippery. No one
even knows how many federal regulatory agencies
there are, who works for them, or what they cost
American taxpayers. Agencies public presentations
of guidance and their effects are all over the place.
Agencies have voluntarily acknowledged at
least 580 significant guidance memosthose with
impacts of at least $100 million annually. Perhaps
the most shocking volume of dark matter comes in the
form of public notices that have appeared in the
Federal Register: a whopping 524,251 since 1994,
dwarfing the 777 executive orders published during
that time. Most public notices may be trivial, but
policy makers really dont know whats all in there.
Not all guidance documents or other dark matter
appear in the Federal Register.
Congress needs to get a handle on the extent
of regulatory dark matter and what it costs us. At
the root of the problem of regulatory overreach is
Congress dereliction of its constitutional legislative
power. To address this, Congress should require a
vote on all costly and controversial agency rules
including dark matterbefore they become binding
on you and me.
At the very least, Congress and future presidents
need to assert that all decrees by federal agencies
matter, not just those acknowledged and published
as real rules. Dark matter needs to receive at least
the same administrative scrutiny as ordinary rules
which themselves could use greater oversight.
The Constitution isnt perfect, but its better than a
pen and phone.
The CEI Planet is produced by the Competitive Enterprise
Institute, a pro-market public interest group dedicated to
free enterprise and limited government.
CEI is a non-partisan, non-profit organization incorporated in the
District of Columbia and is classified by the IRS as a 501 (c)(3)
charity. CEI relies upon contributions from foundations, corporations
and individuals for its support. Articles may be reprinted provided
they are attributed to CEI.
COMPETIVE ENTERPRISE INSTITUTE
 Power Grab, continued
Specifically, the treaty is designed
to advance three political objectives:
1) Deter the next president,
future Congresses, and even courts
from overturning the Environmental
Protection Agencys (EPA) so-called
Clean Power Plan (CPP) and other
climate regulations, including some
not yet proposed, by rebranding
those policies as promises America
has made to the world.
2) Pressure future U.S. policy
makers to make increasingly
ambitious emission-reduction
pledgesknown as Intended
Nationally Determined Contributions
(INDCs)every five years starting in
2020, implement those pledges via
ever-more stringent regulations, and
pony up untold billions in climate
financeforeign aid to subsidize
green energy ventures in develop-
ing countries.
3) Make U.S. energy and climate
policy increasingly unaccountable
to Congress and to the American
people, and increasingly beholden
to the demands of foreign leaders,
multilateral bureaucrats, international
pressure groups, and their media
allies.
To safeguard Americas economic
future and capacity for self-govern-
ment, congressional leaders must
expose President Obamas climate
diplomacy as an end-run around the
Constitutions treaty-making process.
They should do so before the presi-
dent signs the Agreement on Earth
Day, April 22, at a United Nations
ceremony in New York.
The centerpiece of this coun-
teroffensive should be a Sense of
Congress resolution emphasizing a
clear and simple message: The Paris
Agreement is a treaty, and therefore,
Marlo Lewis, Jr. (marlo.lewis@cei.org) is a senior fellow at CEI. He is author of
the new CEI policy paper, The Paris Climate Agreement Is a Treaty Requiring
Senate Review.
COMPETIVE ENTERPRISE INSTITUTE
under Article II, Section 2 of the U.S.
Constitution, the United States is not
a party or bound to its terms unless
the Senate ratifies it. Absent Senate
approval, President Obamas climate
pledges to the United Nations are just
administration proposals, not commit-
ments of the United States.
Congressional conservatives can
ill-afford to duck this fight. The Paris
Agreement is central to President
R.M.
Obamas agenda to transform the
political landscape. To comply with
agreements demand for increas-
ingly ambitious emission-reduction
commitments, all states would have
FREEDMAN
to adopt carbon-reduction schemes,
and federal policy makers would
SOCI ET Y
have to impose keep it in the
ground restrictions on fossil-energy
production. Just as politics drive Help the Competitive
policy, so policy constrains politics.
Why elect Red State politicians if We
Enterprise Institute
the People are only allowed to have carry on its work for
Blue State policies? generations by joining the
The sooner the counteroffensive
begins, the better. Blowback from the
R.M. Freedman society.
global warming movement will be
fierce regardless of when congres- In 2013, CEI established the R.M. Freedman
sional conservatives make a stand. Society in honor of Robert M. Freedman,
But if they wait until after the next a business owner from West Bloomfield,
president takes office, it may be too Michigan, who placed CEI in his estate
late. By then, they could be accused and, in 2009, sadly passed on and gave
of blindsiding Americas treaty part- CEI its first legacy gift. We named the
ners, undermining an extant agree- society in appreciation of his generosity.
ment, and upsetting expectations on Many of CEIs extended family choose to
which multi-billion dollar investments include CEI in their estate plans through:
depend.
To foil President Obamas cli- Bequests,
mate coup, congressional leaders Charitable Remainder Trusts,
must call out his end-run around Charitable Lead Trusts, or as a
the Constitution. They should do so
before the president signs the agree- Life insurance beneficiary.
ment and declares U.S. participation
to be a done deal. If you make the decision to include CEI in
your estate plans, please reach out and let
us know.
While these sorts of decisions should be
undertaken with the help of an estate
planner, Lauren Avey and Al Canata of
CEI can be a resource to you. You can
reach them anytime at 202-331-1010.
C E I . O R G 3
 Bipartisan Bill Allows Government to
Continue Salt Experiment on Kids
BY MICHELLE MINTON
I n the scientific community, it is a
breach of professional ethics to con-
duct research on people without their
informed consent. But not for the federal
government, it seems.
In February, a Senate panel
approved a bipartisan bill to continue a
decade-long experiment in the nations
public schools. The Healthy Hunger-
Free Kids Act, which has the laudable
goals of providing meals for underprivi-
leged students and fighting childhood
obesity, forces schools to adhere to
scientifically dubious nutritional guide-
lines. In particular, the Acts require-
ment for schools to limit sodium in meals
is unproven to improve health, and may
actually cause harm.
Humans crave salt because its
essential for the function of our bodies.
But government health agencies have
convinced people that we eat far too
much of it. Problem is, the science on
this issue is not settled. For over three
decades, researchers have been
engaged in what has been called one
of the longest, most vituperative battles
in medicine.
While the theory of sodium-induced
hypertension (chronic high blood
pressure) made sense, research is
beginning to show that the relation-
ship between blood pressure and salt
is complex. It is not as simple as more
sodium bad, less sodium good.
A landmark 2013 study commis-
sioned by the federal Centers for
Disease Control and Prevention (CDC)
and performed by the Institute of
Medicine found that reducing sodium
intake below 2,300 milligrams a day
the maximum amount recommended by
the CDC and other U.S. health agen-
cieshad no benefit, and that going
below 1,500 milligrams a daythe limit
recommended by the American Heart
4 CEI.ORG
Associationincreased risk of death.
Similarly, two studies published in
2014, one of which looked at urine
samples of 101,945 people in 17
countries, and a Danish meta-analysis,
found the risk of death was lowest
among people with an average sodium
consumption level between 3,000 and
6,000 milligrams a day. Guess what?
Thats how much sodium about 95
percent of the human population has
consistently consumed for at least the
last 50 years.
On the question of blood pressure,
the research isnt clear. Multiple stud-
ies show a wide variation in reactions
to altering sodium in the diet, which
suggests other factors might connect
sodium to blood pressure. Certainly, for
somepeople who are deemed salt-
sensitiveincreasing sodium consump-
tion will increase their blood pressure.
But for others, it has no effect or can
even lower blood pressureeven when
increasing sodium levels 12-fold. The
cause of this individual variation isnt
known, but theories range from other
dietary elements, like potassium intake,
which has been shown to lower blood
pressure, to genetics and gut microbes.
Targeting these other factors may
more effectively lower blood pressure
and cardiovascular risk without the
unintended consequences of severe
sodium restriction. Trials conducted by
the National Institutes of healthknown
as DASH, for Dietary Approaches to
Stop Hypertensionfound that people
who cut out as much as 1,000 mil-
ligrams of sodium a day saw only a
one- or two-point drop in blood pres-
sure, while simply switching to a diet
higher in fruits and vegetables reduced
it by three to six points.
You might think the government
would let up on efforts to get Americans
to halve our salt consumption, in light
of this research, but no. The school
lunch program is just one more tactic to
cajole us into following Washingtons
one-size-fits-all guidelines.
Without the sodium restriction, the
school lunch program might have had
some positive effect on childhood obe-
sity. Schools in the program are serving
healthier foods, according to the
CDC. But kids are also throwing away
56 percent more food, according to
researchers at the University of Vermont.
Serving more fruits and veggies
doesnt mean kids are eating more of
them. As a result, the program seems
to have had no effect on obesity rates.
Rates fell in some age brackets and
rose in others, but the shifts merely con-
tinue trends already under way. Had
lunch workers been able to add salt (or
butter or cheese) to vegetable dishes,
they may have ended up in kids stom-
achs instead of the trash bin.
A major problem for advocates of
sodium restriction is that humans are
unconsciously driven to consume a
certain amount of salt. If kids arent get-
ting the desired level of sodium in their
school meals, they are likely seek it out
in other foods, either at home or in vend-
ing machines, and may actually end up
eating more calories in an attempt to
satisfy their bodys salt appetite.
Its time to end this ill-conceived
government experiment. The bipartisan
bill that funds the Healthy Hunger-
Free Kids Act for an additional five
years delays implementation of the
sodium restriction until 2019. Until then,
Congress should consider how kids in
the real world respond to the programs
restrictions, both in and out of school.
At the very least, lawmakers should
ditch the programs scientifically
questionable salt restriction and give
parents the opportunity to opt out of
the experiment.
Michelle Minton (michelle.minton@cei.org)
is a fellow at CEI. A version of this
article originally appeared on Inside
Sources.
COMPETIVE ENTERPRISE INSTITUTE
 CEI Remembers Justice Antonin Scalia
CEI general counsel Sam Kazman on meeting Justice
Scalia a few years ago:
I met Justice Scalia only once. It was a brief
encounter at a reception a few years ago. I intro-
duced myself and mentioned how much Id enjoyed
his footnote in Massachusetts v. EPA, the 2007
decision in which the Supreme Court held, 5-4, that
the agency could regulate carbon dioxide under the
Clean Air Act. In his dissent Scalia wrote that, by the
majoritys logic, everything airborne, from Frisbees
to flatulence, qualifies as an air pollutant.
Then I took a CEI Durbin Dollar out my wallet.
Its a knockoff of a $5 bill with Lincolns face
replaced by that of Senator Dick Durbin, whose sup-
posedly pro-consumer Durbin Amendment almost
killed off free checking. Scalia got the joke immedi-
ately. Handing him the dollar, I mentioned that Id
always dreamed of being photographed bribing a
Supreme Court justice. Scalia put his arm around my
shoulder, smiled and said, Im all yours.
CEI senior attorney Hans Bader on the passing of
Justice Scalia in a letter to The Washington Post:
Im saddened by the passing of Supreme Court
Justice Antonin Scalia. He applied the law faithfully,
as written, rather than twisting it to cater to special-
interest groups, and that obviously made him many
enemies.
Mr. Scalias death dims the hope that the
Supreme Court will act as an impartial interpreter of
the law rather than making the law up to suit ideo-
logical fads.
In a U.S. Supreme Court case decided last June,
King v. Burwell, CEI challenged an IRS regulation
imposed under the Affordable Care Act that allows
subsidies on both state and federally established
health insurance exchanges. In CEIs opinion, the IRS
COMPETIVE ENTERPRISE INSTITUTE C E I . O R G 5
violated the law enacted by Congress, which gave
states the choice to either set up such exchanges
themselves or stay out of the program. Although, ulti-
mately the court decided against us, we took solace
in Justice Scalias scathing dissent in the plaintiffs
favor:
This case requires us to decide whether someone
who buys insurance on an Exchange estab-
lished by the Secretary gets tax credits. You
would think the answer would be obviousso
obvious there would hardly be a need for the
Supreme Court to hear a case about it. In order
to receive any money under 36B, an indi-
vidual must enroll in an insurance plan through
an Exchange established by the State. The
Secretary of Health and Human Services is not
a State. So an Exchange established by the
Secretary is not an Exchange established by
the Statewhich means people who buy health
insurance through such an Exchange get no
money under 36B.
Under all the usual rules of interpretation, in
short, the Government should lose this case. But
normal rules of interpretation seem always to
yield to the overriding principle of the present
Court: The Affordable Care Act must be saved.
Ordinary connotation does not always prevail,
but the more unnatural the proposed interpreta-
tion of a law, the more compelling the contex-
tual evidence must be to show that it is correct.
Todays interpretation is not merely unnatural;
it is unheard of. Who would ever have dreamt
that Exchange established by the State means
Exchange established by the State or the
Federal Government?
 The Improvisational Fed and
Unpredictable Regulations
BY RYAN YOUNG
I mprovisation can be a wonderful
thing when performed by talented
handsthink Charlie Parker or Miles
Davis. The Federal Reserve, especially
for the past several weeks, has fancied
itself an improvisational talent on that
level. But like most humans, Janet Yellen
is no Charlie Parker. The Fed should
consider a return to the Paul Volcker/
early Alan Greenspan adherence to a
defined rule. But that isnt the end of the
story. Any substantive Fed reform will
fail unless it is coupled with a thorough
program of regulatory reform reaching
through the entire executive branch.
More complexity and an ever-
increasing stock of rules means less
predictability and more uncertainty for
businesses, investors, and consumers.
6 CEI.ORG
Agencies increasing tendency to
regulate through non-transparent dark
matter only makes the problem worse.
As far as the Fed goes, the point is
not so much which rule a central bank
should adopt, but that it must have a
rule in the first place, and follow it con-
sistently. Here are three possibilities.
One is the Taylor rule, which the
U.S. Federal Reserve followed for the
better part of the 1980s and 1990s,
with good results. The Taylor rule raises
interest rates when growth and inflation
are high, and lowers interest rates when
growth and inflation are low. In other
words, if the economy looks like it might
be overheating, the Fed automatically
touches the brakes a bit. If it looks slug-
gish, the Fed pushes the gas pedal, by
predictable, predefined amounts.
The Taylor rule can even be sum-
marized in a single equation, making
it easy for central bankers to know
how they should react to a given set of
economic conditions. It worked pretty
well when the Fed was following it, but
its attempts at managing the business
cycle are wrongheadedhubris at
worst, spitting into the wind at best.
Another possibility that doesnt
have those problems is Nominal Gross
Domestic Product (NGDP) targeting,
most famously advocated for by Scott
Sumner. Instead of interest rates, NGDP
targeting directly targets the money
supply itself. If NGDP goes up by 5
percent, so does the money supply, in
lockstep. It attempts to keep each dollar
describing the same amount of wealth,
which should result in stable, predict-
able prices. Some central bankers
prefer having, say, a 2 percent inflation
rate in perpetuity. Why someone would
prefer such a thing is beyond me, but
COMPETIVE ENTERPRISE INSTITUTE
 the NGDP targeting equation can easily
be modified to build in a small inflation
or deflation as bankers wish. Again, the
important thing is not what the inflation
level is, but that it is steady, and the Fed
sticks to principle, even during a crisis.
There are significant measurement
problems with finding out exactly what
GDP is at any given time, but an NGDP
targeting rule is still far preferable to the
Feds whim on any given day.
A third possibility is the Friedman
rule, named for Milton Friedman. The
Friedman rule deflates the currency at
the same rate as the prevailing interest
rate on government bonds. The goal
is to make people indifferent about
keeping money in their wallet, versus
a savings account. This means people
will make those allocation decisions
based on economic efficiency, not
the vagaries of inflation. Deflation is
unsustainable in the long run, and cen-
tral bankers are hyper-wary of defla-
tion in general, ironically because of
Friedmans own work. He, along with
Anna J. Schwartz, convincingly argued
that rapid deflation was the Great
Depressions single largest cause.
Each of these rulesand there are
othershas its own advantages and
drawbacks. The larger point is that the
Fed needs to follow some kind of rule,
and stick to it. Its free-jazz improvisa-
tional approach makes entrepreneurs
and investors skittish, and results in far
Learn more at RealClearRadio.org.
COMPETIVE ENTERPRISE INSTITUTE
less long-term investment.
Regulatory agencies have simi-
lar problems. Would you invest in a
30-year project if you had no idea if
the EPA would confiscate your land
or finds some obscure rule to kill your
project? Thats why regulations to be
simple and predictable.
Fortunately, a number of reforms
are now winding their way through
Congress. The Regulations from the
Executive in Need of Scrutiny (REINS)
Act would require Congress to vote on
all executive branch regulations with
annual costs of more than $100 million.
The Searching for and Cutting
Regulations that are Unnecessarily
Burdensome (SCRUB) Act could save
nearly $300 billion per year if it works
as planned. It would set up an inde-
pendent commission to comb through
all federal regulations, and send
Congress a repeal package for an
up-or-down vote, with the goal of trim-
ming at least 15 percent from annual
compliance costs, currently estimated
at $1.9 trillion.
The All Economic Regulations are
Transparent (ALERT) Act would estab-
lish a one-in-one-out rule similar to
what Canada has had for several
years. If an agency wants to issue a
new rule, it must first get rid of a similar
dollar amount of old rules.
The Sunshine Act would rein in a
practice called sue-and-settle, under
C E I . O R G 7
which activist groups sue agencies
for missing deadlines or not enforcing
rules strictly enough. Since the agen-
cies are often on the same side, and
may in some cases collaborate behind
the scenes, they are only too happy
to reach a settlement expanding the
agencys power and authority.
Other options include a regulatory
budget, similar to the spending budget
the federal government is supposed to
issue each year. Each agency would
have a budget of regulatory costs it is
allowed to impose, and must priori-
tize its rule enforcement so it doesnt
exceed its cap.
Finally, automatic sunsets for new
regulations would automatically
scrub old rules from the books unless
Congress sees fit to renew them. This
would prevent obsolete or harmful rules
from becoming immortal.
The Feds improvisational approach
does no favors to entrepreneurs, inves-
tors, or consumers. Nor does many
regulatory agencies increasingly
arbitrary and capricious approach.
Just as the Fed should bind itself to a
predictable and stable rule, so should
agencies embrace reform to keep their
regulations as simple and predictable
as possible.
Ryan Young (ryan.young@cei.org) is a
fellow at CEI.
Realclear Radio offers listeners a
fresh perspective on political and
social issues of the day through
informative interviews and dis-
cussions. Brought to you by the
Competitive Enterprise Institute
and RealClearPolitics, and hosted
by CEI Fellow Bill Frezza.
 The Chipotle Effect: When Companies
Believe Their Own Hype
BY FRED L. SMITH, JR.
I n late January, the federal Centers for
Disease Control and Prevention finally
closed the books on the investigation of
the E. coli outbreaks at multiple Chipotle
locations last December. The news of
dozens (at one point thought to be hun-
dreds) of customers getting sick made
headlines nationwide and drove the
burrito purveyor into a frenzy of apolo-
gies and promises of improved safety.
Other than telling us that people
have stopped getting sick, though,
government investigators dont seem to
be providing us with much information
on what caused the outbreaks. Chipotle
CEO Steve Ells attempted to reassure
customers and investors alike that due
to the companys increased emphasis
on food safety, the risk of another infec-
tious outbreak was near zero.
Yet, whether it was the carnitas or
the cilantro-lime rice, theres good
reason to think it could happen again.
The problem with Chipotle is much
bigger than rules about which head
of lettuce is washed in which sink. Its
about what happens when corporate
marketing becomes more important
that the product itself. That problem can
only be addressed by business leaders
understanding what a company like
Chipotle exists to accomplish in the first
place.
Instead of focusing on actual food
quality, the company seems to have
been distracted by lifestyle trends
and politically popular marketing
gimmicks. Last April, the company
announced it had fully eliminated from
its menu any ingredients that had been
improved with genetic engineering.
Despite agreement among food safety
experts that genetically modified foods
face no novel health risks, Chipotle
invested a large amount of time and
8 CEI.ORG
effort attempting to eliminate all GM
ingredients from its supply chain. By
September, however, the companys
lawyers were responding to a lawsuit
alleging that they had failed, and had
misled customers with that claim.
On the flipside, the company
has been unable to obtain steady
supplies of some of the ingredients
that do meet their requirements, like
non-conventionally raised pork. They
even warned investors in 2014 that the
effects of global climate change might
cause them to stop serving guacamole,
although The Washington Post quickly
responded by reassuring readers that
Chipotles guacamole isnt going
anywhere (for now).
All of this puts additional burdens
on the employees who are just trying to
make sure that customers get ade-
quately served. First, the more specific
a corporate buyers requirements, the
more brittle the supply chain becomes.
A lot of suppliers will be able to sell
you romaine lettuce and pork shoulder,
but if you can only use lettuce that is
locally grown and organic and pork
that meets a laundry list of sustainability
requirements, that can lead to a series
of cascading shortages and delays if
operations at any of those suppliers
slow down.
The second concern is one of man-
agement focus. If the message filtering
through the company grapevine is that
sustainable initiatives and PR oppor-
tunities with environmental groups are
the most important aspects of corporate
culture, those will be the top priorities
for every aspiring senior manager in
the company. The more attention that is
lavished on non-core tasks, the fewer
eyeballs will be watching out for the
non-glamorous but far more important
goals of food quality and sanitation.
Who wants to stay at home filling out
reports on soil microbes when the rest
of the executive team is expensing a
trip to Switzerland to dazzle a confer-
ence of fellow business leaders?
The final burden is the problem of
a CEO who doesnt seem to be 100
percent behind his own product. Too
many corporate leaders seem to spend
more time rehearsing their TED talks
than studying quarterly reports, but at
least they are generally passionate pro-
moters of their own products. Steve Ells,
Chipotles founder and co-CEO, has
often given off the aura of a corporate
titan who is vaguely embarrassed to be
in business at all.
Ells, a Culinary Institute of America
graduate, originally aspired to a career
in fine dining. As food writer Julie
Gunlock recently mused, Ells comes off
like an art school graduate who takes
a desk job to pay the bills and regrets
scarring Americas landscape with
yet another massive fast food fran-
chise. Hardly the profile of a confident
corporate leader. If it is true, as he
told the Huffington Post, that over the
years he felt a little guilty every time
another Chipotle opened, it is perhaps
no surprise the company has attempted
to locate its moral center in everything
but the humble practice of selling good
food at a reasonable price.
In fairness, there is nothing neces-
sarily wrong with a marketing strategy
that includes fluff or caters to trendy
consumer obsessionsif you deliver
what you promise. To the extent that
Chipotles corporate culture has caused
it to ignore critical operations, how-
ever, it has wandered into dangerous
territory.
Fred L. Smith, Jr. (fred.smith@cei.org)
is founder of CEI and director of CEIs
Center for Advancing Capitalism. A
version of this article originally ap-
peared in Forbes.
COMPETIVE ENTERPRISE INSTITUTE
 C E I E V E NT S UP DAT E

Trey Kovacs Speaks on Capitol Hill on New Economy Labor Threats

On February 9, CEI hosted a Capitol Hill briefing on regulatory threats to flexible
work arrangements, job security, and entrepreneurial opportunities. CEI policy
analyst Trey Kovacs moderated the panel discussion, Regulatory Threats to Flexible
Employment and Worker Freedom: What Can Congress Do? Panelists discussed
what is at stake and what lawmakers can do to protect entrepreneurs, small business
owners, and their employees from burdensome regulations, from the National Labor
Relations Boards new joint employer standard to the Department of Labors new
overtime rule. Joining Kovacs on the panel were Eli Dourado of the Mercatus Center
at George Mason University; Bob Dorfman, owner and operatorWorld of Beer
franchises in Northern Virginia; and Angelo I. Amador, senior vice president and
regulatory counsel at theNational Restaurant Association.

Myron Ebell Discusses Impact of EPAs Clean Power Plan in Denver

On February 16, Myron Ebell, director of CEIs Center for Energy and
Environment, participated in a panel in Denver, co-hosted by CEI and
the Colorado-based Independence Institute, on thelatest developments
in implementation of the EPAs so-called Clean Power Plan ruleand
in our efforts to stop it. If implemented, the rule would shut down critical
sources of electricity, reduce consumer choice, eliminate states abili-
ties to determine their own energy futures, and endanger our strug-
gling economy. More than 150 organizations, including CEI and the
Independence Institute, and 27 states have filed lawsuits challenging the
rule, which is now winding its way through the courts. Also participating
in the panel was Raymond Gifford, a partner at the law firm Wilkinson, Barker, Knauer, LLP and a leading expert in public
utilities law,who provided in-depth analysis of what the Clean Power Plan means for Colorado.

Bill Frezza and Iain Murray at CPAC

On March 3, Bill Frezza,host ofRealClear Radio Hour and a
fellow at the Competitive Enterprise Institute, moderated a panel
at the 2016 Conservative Political Action Conference (CPAC)
on the growing problem of cronyism in the American economy.
From regulatory barriers that stifle new competitors to subsidies
that transfer wealth to preferred businesses, policies that benefit
certain businesses do so at the expense of economic freedom
and the entrepreneurship it makes possible. Joining Frezza on
the panel were Washington Examinercolumnist and American
Enterprise Institute visiting fellow Tim Carney,Alison Fraser of the Charles Koch Institute, Matthew Mitchell of the Mercatus
Center, and Government Accountability Institute President Peter Schweizer. The panel, hosted by the Charles Koch Institute,
was recorded and broadcast onRealClear Radio Hour with Bill Frezza.
Iain Murray spoke on free trade on March 5, on the CPAC panel, How Free is the TPP? What should Congress do
about trade? He outlined the benefits of free trade and how trade agreements since NAFTA had moved toward being trade
management rather than free trade deals. Murray also noted that the Trans-Pacific Partnership excludes from its protections
one politically disfavored industrythe tobacco industry. Congress, Murray noted, should take a careful look at whether
the benefits of tariff reduction are outweighed by increasing regulation of non-trade matters. He was joined on the panel by
Bryan Riley of the Heritage Foundation and Denis McShane of the U.S.-China Trade Commission.

COMPETIVE ENTERPRISE INSTITUTE C E I . O R G 9

 How George Washington Propelled Steamboats,
Americas First Great Disruptive Technology
BY JOHN BERLAU
I n 1787, two events changed the
course of history in Americaand the
world. And George Washington, who
two years later would become the first
U.S. president, would play an indispens-
able role in both.
One was, of course, the drafting of
the U.S. Constitution to safeguard our
liberties and create a federal govern-
ment checked by separation of powers.
The other, less well known event
concerns a mode of transportation that
would not come into fruition until the
next century: the steamboat. As we cel-
ebrate George Washingtons birthday,
his championing of a pivotal inventor
gives insight into what made the father
of our country so special.
In 1787, two steam-powered ves-
sels invented by two different men
sailed short but successful voyages on
American rivers. These voyages would
10 CEI.ORG
spur the race to create a commercially
viable passenger and freight steam-
boat that culminated in Robert Fultons
celebrated vessels some 20 years later.
More importantly, as Americas first
great invention, the steamboat ushered
in an age of American innovation that
continues to this day. But none of this
may have happened without a fate-
ful meeting in 1784 beween George
Washington and James Rumsey, a
visionary tinkerer dismissed by many as
a crackpot.
Only a few months earlier,
Washington had retired as general,
after leading the Continental Army to
victory over Great Britain. Setting an
example by peacefully ceding power,
he was eager to get back to Mount
Vernon, where Washington was less
a gentleman farmer than an agri-
cultural entrepreneur. Among other
things, he acquired vast holdings of
real estate, pioneered crop rotation,
and built a flour mill that produced
more than 200,000 pounds per year
that was sold throughout the colonies
and exported to Europe. No wonder
a new book on Washingtons business
endeavors by historian Edward Lengel
is entitled First Entrepreneur.
As a businessman engaged in
trade, as well as a citizen concerned
about the new nations economy,
Washington turned his focus after
the war to creating faster modes of
transportation for people and goods.
In the fall of 1784, he traveled more
than 600 miles from Mount Vernon,
in northern Virginia, to the western
part of the state (now West Virginia).
Washingtons purpose was to inspect
his properties and look for ways to
shorten travel time through the then-
formidable Allegheny Mountains, by
building both roads and canals. On
his first stop in the town of Bath (now
Berkeley Springs, West Virginia),
Washington became enthralled with
a local inventor who was designing a
new boat to conquer river travel.
James Rumsey, a 41-year-old
COMPETIVE ENTERPRISE INSTITUTE
 jack of all trades and home builder,
was part-owner of the inn in Bath
where Washington was staying. When
Rumsey approached him, Washington
agreed to view a demonstration of
Rumseys model boat that others had
scorned and ridiculed. As Andrea
Sutcliffe writes in Steam: The Untold
Story of Americas First Invention,
before steam technology took hold,
many citizens viewed inventors as
self-indulgent crackpots, not pioneers
of progress.
But Washington viewed inventors
as visionaries desperately needed for
Americas economy to thrive. The next
day, Rumsey placed his mini-vessel,
roughly the size of a toy boat, into a
stream that flowed into the Potomac
River. Washington was awed as the
boat propelled itself against a rapid
current.
Subsequently, Washington wrote a
letter of endorsement to help Rumsey
secure funding from investors and
patent rights from state legislatures
(there would not be a U.S. Patent
Office until after the U.S. Constitution
authorized one). Rumsey, wrote
Washington, has discovered the art of
working boats by mechanism and that
this discovery is of vast importance.
As Sutcliffe writes, Washingtons
influence was golden when Rumsey
approached the legislatures of Virginia
and other states. As then-Virginia
State Delegate James Madison would
write to fellow future President Thomas
Jefferson in 1785, when Rumsey had
approached the legislature just a year
earlier, the apparent extravagance
of his pretensions brought a ridicule
upon them, and nothing was done.
But, Madison continued, when the
legislators learned of Washingtons
endorsement, it opened the ears of
the Assembly. Rumsey was granted
a patent by Virginia, as well as
Maryland and Pennsylvania.
As his experiment progressed,
Rumsey decided to use steam to power
his boata radical notion at the time.
Benjamin Franklin, one of Americas
leading scientific minds, was skeptical
COMPETIVE ENTERPRISE INSTITUTE
that steamboats would ever be a
practical form of travel. According to
Sutcliffe, Franklin thought that steam
was not a strong enough force to move
boats upstream.
Yet, Washington kept an open
mind. He arranged for Rumsey to be
hired as superintendent of the Potomac
Navigation Company, a firm chartered
to improve Potomac River navigation
in which Washington was an investor.
Not only did Rumsey receive steady
income, he got the opportunity to test
boats in various parts of the Potomac.
When word got around of Rumseys
progress, it spurred competition to build
a passenger steamboat. Pennsylvanian
John Fitch was also able to gather
support for the steam-powered vessel
he was building. When Fitch visited
Mount Vernon to ask Washington for
an endorsement, Washington politely
declined out of loyalty to Rumsey and
warned Rumsey in a letter to speed up
on building the steam-powered boat,
as many people guessing your plan
have come very near the mark.
On August 22, 1787, Fitch dem-
onstrated his boat on the Delaware
River before the delegates attend-
ing the Constitutional Convention in
Philadelphia. He offered boat rides
to the delegates, taking them a few
hundred yards on the river and back.
Not to be outdone, Rumsey debuted
his own steamboat on December 3
of that year on the Potomac River in
Shepherdstown, Virginia (now in West
Virginia). Instead of just offering the
equivalent of carnival rides, as Fitch
had on the Delaware, Rumsey took
several of the towns leading ladies
(including Mrs. Rumsey) on a two-hour
river voyage. Though the boat traveled
just six miles, the townsfolk had never
seen anything like it. No one had.
Just as Rumsey and Washington
had envisioned, the steamboat
ultimately brought the country closer
together. And inventors were able to
apply steam power to the nations first
trains, mills, and factories.
As important, inventors in America
now had the admiration of most of
C E I . O R G 11
their fellow citizens. This elevated status
was reflected in the creation of the
U.S. Patent Office by the Patent Act
of 1790, a law championed by the
recently elected President Washington.
Throughout his life, Washington
lent a helping hand to many creators
and fellow entrepreneurs. After the
end of his presidency, Washington
would take another innovatoralso
named Jamesunder his wing. James
Anderson, Washingtons farm man-
ager at Mount Vernon, had emigrated
from Scotland and was familiar with
the great distilleries there. Anderson
thought, with the grains harvested in
its fields, Mount Vernon would be a
great spot for a whiskey distillery. He
convinced Washington, and soon the
Mount Vernon distillery would become
the largest producer of rye whiskey in
America.
Today, with major funding from the
Distilled Spirits Council of the United
States, the distillery has been recon-
structed and is open to the public.
Mount Vernon Estate and Gardens
even makes and sells whiskey based
on Washington and Andersons old
recipe. What better way to toast the
American innovation that George
Washington shepherded in.
Washingtons geniusin politics,
the military, and businesswas to see
the potential in Rumsey, Anderson, and
others and help them hone their talents
to the benefit of their fellow citizens.
In sensing and encouraging potential
in others, Washington stands as a
role model not just for political and
military leaders, but for CEOs, venture
capitalists, and angel investors. On the
federal holiday celebrating his birthday
(and on his real birthday of February
22), lets also celebrate George
Washingtons role in nurturing innova-
tion as a private citizen and protecting
the freedom to innovate in the public
policies for which he advocated.
John Berlau (john.berlau@cei.org) is a
senior fellow at CEI. A version of this
article originally appeared in Forbes.
 Obama Should Rein In the NLRB
BY TREY KOVACS
I n President Obamas State of the
Union address, he echoed a theme
that has been constant throughout his
tenure: How do we give everyone a
fair shot at opportunity and security in
this new economy?
One way he could work toward this
goal in his final year in office would be
to rein in the National Labor Relations
Board (NLRB), which has imposed
costly regulations that threaten to seri-
ously disrupt workplaces around the
nation and the greater economy.
A key example is the NLRBs recent
change to the rules governing franchise
businesses. For purposes of labor law,
a franchisor and franchiseethink
McDonalds corporate vs. the owner of
a few McDonalds restaurantswere
for decades considered two distinct
entities. This was common sense. A
franchisee is an independent small-
business owner who hires and fires
employees and creates their schedules,
and thus should be responsible for any
labor law violations.
In return for running the business
and taking responsibility for labor
relations, entrepreneurs were able to
SAVE THE DATE
A Night in Casablanca
C E I S A N N UA L D I N N E R A N D R E C E P T I O N
JUNE 2, 2016 JW MARRIOTT WASHINGTON, D.C.
12 CEI.ORG
use the franchisors brand name and
benefit from the parent companys
marketing efforts and tested business
methods.
Workers profited as well. Franchises
accounted for 10 percent of new jobs
in 2013 and 2014. Projections from
the International Franchise Association
show that the gross domestic prod-
uct (GDP) of the franchise sector will
increase by $521 billion or 5.2 percent
in 2015, an increase over the $496
billion generated in 2014.
But in August 2015, the NLRB
decided in its case, Browning-Ferris
Industries, that franchisors are joint
employers of the workers their franchi-
sees hire, and thus can be held liable for
labor violations.
Browning-Ferris could have dire
consequences for the franchising indus-
try. In the future, parent companies will
have to decide whether the additional
risk is worth it. Franchisors may choose
to operate stores themselves instead of
franchising, which will limit opportu-
nity for entrepreneurs and reduce job
creation. A new report from FRANdata,
which provides market data to fran-
chise industries, finds that at least
40,000 small businesses operating
in more than 75,000 locations are
at risk of failure because of the new
standard.
Unfortunately, we know why the
Obama administration issued the
decision: to ease union organizing
campaigns. When a union organizes
a franchises employees, the parent
company will now have to negotiate
alongside the franchisee. McDonalds
is already being charged with labor
violations as a joint employer, and the
NLRBs general counsel has admitted
that the sole reason why our agency is
involved in the McDonalds situation is
because there is a national campaign
thats called the Fight for $15 that is
being run by a fast-food workers alli-
ance that is seeking to raise wages in
the fast food industry to $15 an hour.
Wider unionization would not be
in workers best interest. For example,
an analysis by my colleagues at the
Competitive Enterprise Institute empha-
sizes that unionization causes dead-
weight loss: By raising the cost of
labor, unions decrease the number of
job opportunities in unionized industries.
That, in turn, increases the supply of
labor in the nonunion sector, thereby
driving down wages in those industries.
Further, a recent Gallup poll shows that
nonunion workers are more satisfied
than their union counterparts with vari-
ous aspects of their jobssafety condi-
tions, recognition for a job well done,
flexibility of hours, and job security.
So if President Obama truly wants
American workers to be successful
and have a fair shot, then it is time for
government to step aside and remove
harmful regulationsespecially when
the motive behind such regulations
is to prop up the special interests of
labor unions at the expense of job
opportunities.
Trey Kovacs (trey.kovacs@cei.org)
is a policy analyst at CEI. A version
of this article originally appeared at
RealClearPolicy.
COMPETIVE ENTERPRISE INSTITUTE
 Will Regulation Put the Brakes on Driverless Cars?
BY MARC SCRIBNER
F or the 1939 Worlds Fair, legend-
ary industrial designer Norman
Bel Geddes created Futurama for
General Motors. It predicted that
America would be connected by a vast
network of radio-controlled automated
highways by 1960. This was several
decades premature, but we are rapidly
approaching the reality of autonomous
vehicles, with perhaps just 10 to 15
years before self-driving cars are avail-
able to consumers.
On January 14, the Obama admin-
istration proposed spending $4 billion
on automated vehicles over the next
decade, in addition to fixing outdated
regulations. This could aid the develop-
ment and deployment of much safer,
cleaner, and more efficient automobiles,
but only if the federal government learns
from the past mistakes of states and
avoids the technocratic approaches too
often favored in Washington.
Googles 2010 announcement that
it had been quietly testing its self-driving
car prototypes on public roads captured
the imagination of the publicand poli-
ticians. Beginning in 2011 with Nevada,
states started examining ways to recog-
nize the legality of this new technology
and to regulate it. Since then, four other
states and the District of Columbia have
enacted such laws. They range from
Tennessees law that wisely prohibits
counties and municipalities from enact-
ing local automated vehicle ordinances,
to Californias detailed technical regula-
tory regime.
When California enacted its law
in 2012, Silicon Valley cheered. A
signing ceremony for Gov. Jerry Brown
was held at Googles headquarters,
with Google co-founder Sergey Brin
and bill sponsor Sen. Alex Padilla
looking on. Padilla has since become
Californias secretary of state.
COMPETIVE ENTERPRISE INSTITUTE
When the California Department
of Motor Vehicles began implement-
ing the 2012 statute, problems soon
became apparent. Padillas bill
contained a variety of misguided
mandates and restrictions, including a
provision making it extremely difficult
for the DMV to authorize the opera-
tion of automated vehicles without a
licensed driver sitting in the driver seat
ready to take immediate control.
Manufacturer testing rules that went
into effect in September 2014 forced
Google to install a steering wheel and
pedals back into its prototype, which
was engineered to operate without
either. The draft rules for licensing and
operations released in December 2015
would require that self-driving cars
must allow a driver in the driver seat
to take over at all times, effectively
outlawing autonomous taxis.
The January 2016 announce-
ment from the U.S. Department of
Transportation appears to be a good
start. By the summer, the National
Highway Traffic Safety Administration
is supposed to release voluntary best
practices for developers, as well as a
draft model bill for states to uniformly
clarify the respective roles of state
and federal governments. The admin-
istration also promises it will consider
exempting developers from outdated
safety regulations or permit alternative
methods of compliance.
Unfortunately, the same document
says the administration will continue
supporting a flawed politically selected
technology known as vehicle-to-vehicle
communications (V2V). As currently
envisioned by the Department of
Transportation, V2V would rely on a
protocol called dedicated short-range
communications (DSRC), basically Wi-Fi
for cars, which would send messages
such as hazard warnings to drivers.
V2V is wholly distinct from vehicle
automation technology, although con-
nected automated vehicles can perform
C E I . O R G 13
different functions than unconnected
autonomous cars, such as operating
platoons of automated vehiclesakin
to road trains. But these advanced
cooperative automated functions
require large infrastructure invest-
ments. Based on a recent Government
Accountability Office estimate, the
cost of installing the necessary DSRC
roadside units every 300 meters along
the 160,000-mile National Highway
System to enable automated platoon-
ing would require dedicating 10 to
20 percent of total federal highway
expenditures (depending on the
replacement rate of vehicle-to-infra-
structure devices). In an era when it is
hard to find the funds to fill potholes,
this is a nonstarter.
Yet, the Department of
Transportation remains committed to
mandating all newly manufactured
vehicles contain V2V equipment before
the end of the decade. Automakers
support the mandate because they
realize that V2V provides zero benefits
to early adopters. Some call this a
market failure. In fact, it is the market
speaking: Consumers do not want to
pay for a technology that may only
become useful years from now, if ever.
The Obama administration has
signaled that it believes automated
vehicles will soon be upon us. This is
good news. But expressing its support
while simultaneously recommitting
itself to the V2V white elephant does
not inspire confidence given recent
experience in the states. If it wishes
to best promote automated vehicles,
the administration should focus on
examining existing legal and political
barriers, not standing up new ones
by attempting to politically shape the
technology.
Marc Scribner (marc.scribner@cei.org) is
a fellow at CEI.
 THE
GOOD
Permanent Internet
Sales Tax Ban Passes
On February 11, the Senate voted
to permanently extend the federal
prohibition on Internet sales taxes, by
sending the customs bill to President
Obama. The customs legislation
contains the Permanent Internet Tax
Freedom Act (PITFA), long champi-
oned by CEI. The passage of PITFA
is a victory for taxpayers, said CEI
Adjunct Scholar Jessica Melugin. It
means a permanent ban of discrimi-
natory taxes on Internet commerce
and access that would have other-
wise been instituted by many state
legislatures. It protects consumers
from new andif telecommunication
taxes are any indicationtypically
high taxes related to accessing the
Internet. Its permanence is a boon
for Internet users, innovators, and
investors.
14 CEI.ORG
THE
BAD
TSA Body Scanner Rule
Endangers Travelers
Over the past four years, CEI has led
the fight against the Transportation
Security Administrations (TSA) illegal
deployment of body scanners in air-
ports. The TSA deployed the scanners,
which are alleged to be ineffective
in addition to being invasive, without
following federal rulemaking require-
ments. CEI won a federal lawsuit in
2015 that led to the agency issuing
its final rule. However, the TSAs new
rule leaves much to be desired. The
agency contradicts itself by arguing
that body scanners do not increase
passenger wait times relative to metal
detectors, while relying exclusively
on metal detectors for its expedited
screening program, said CEI Fellow
Marc Scribner. The agency fails to
explain what happens to people who
are so put off by the TSAs security
inspections at airports due to perceived
delays and privacy invasions that they
drive instead of flying. Because driv-
ing is much riskier than flying, the end
result is that the TSAs procedures lead
to deaths on the highways.
THE
UGLY
Fiduciary Rule Harms
Middle Class Investors
The Department of Labor is attempting
to implement its fiduciary rule, which
will devastate middle class inves-
tors by blocking access to investment
choices and guidance for their 401(k)
s and IRAs. At the core of the Labor
Departments unprecedented move is
the presumption that American savers
are not smart enough to make good
investment decisions for their retire-
ment. The pending Obama adminis-
tration regulations could cost middle
class savers $80 billion in lost savings,
imposing big regulatory barriers for
small investment portfolios, said CEI
Senior Fellow John Berlau. Congress
should act now to block implemen-
tation of the Department of Labors
harmful fiduciary rule, which has been
dubbed Obamacare for Your IRA.
COMPETIVE ENTERPRISE INSTITUTE
 MediaMENTIONS
Vice President for Policy Wayne
Crews is cited on the growing
yearly tally of regulations:
Unofficially, Mr. Obamas
Administration has once again broken
its own record by issuing a staggering
82,036 pages of new and proposed
rules and instructions in the Federal
Register in 2015. We say unoffi-
cially because Wayne Crews of the
Competitive Enterprise Institute, who
tracks these regulations, warns that the
final number will likely come down by
a few hundred pages when the official
National Archives tally is released,
without the blank pages that sometimes
appear in daily publication.
January 1, The Wall Street Journal
Transportation policy expert
Marc Scribner highlights a
strange regulatory carve out
favored by Disney, until it threat-
ened the companys ability to fly
drones:
The technology is certainly exciting,
but the regulatory process is atrocious,
said Marc Scribner, research fellow
at the Competitive Enterprise Institute.
Justifying the flight restrictions over
Disney parks has always been laugh-
able and was always a product of
undue favoritism.
January 22, The Washington Post
Myron Ebell responds to the
U.S. Supreme Courts ruling that
the Federal Energy Regulatory
Commission overstepped its
authority to issue demand
response programs:
The Supreme Court sends a clear
message by ruling in favor of FERCs
power demand rule: Energy politics
are a game that ignores both the
rule of law and states constitutional
authority, Myron Ebell, director of the
Centerfor Energy and Environment at
the Competitive Enterprise Institute, a
libertarian group, said in a statement.
January 25, The New York Times
COMPETIVE ENTERPRISE INSTITUTE
Ted Frank, head of CEIs Center
for Class Action Fairness, dis-
cusses the Walmart DVD class-
action settlement:
Appeals court delays held up the
distribution of the booty, which is why
Mr. Frizell doesnt recall opting for
the gift card, which he did in 2011.
But the long wait aside, the settlement
raises questions about the appropriate
way to resolve such matters. For some
insights, the Haggler called Ted Frank,
a regular and vocal critic of the terms
of class-action deals and a lawyer at
the Competitive Enterprise Institute, a
Washington nonprofit organization.
Mr. Frank filed a legal objection to
this settlement, arguing that the plain-
tiffs lawyers enriched themselves to the
detriment of consumers. To begin with,
he said that claimants were steered
toward the gift card because they
could request it online. To get a check,
they had to send a snail mail letter.
So how many of those gift cards
have been cashed in? We dont know.
January 30, The New York Times
Marc Scribner discusses the
perennial problems that
plaguestreetcars on All Things
Considered:
This isnt really a mobility enhanc-
ing technology, says Marc Scribner,
a research fellow at the Competitive
Enterprise Institute in Washington, D.C.
This is a government subsidy to prop-
erty developers.
He points to other streetcar systems
around the nation that never got up to
speedincluding the D.C. Streetcar,
which is set to begin carrying passen-
gers this weekend after years of delays.
For months, empty cars have been
rolling up and down H Street in an
extended safety test. Scribner blames
the troubled rollout on poor planning
by the city.
Part of the problem is, youre
dealing with bureaucracies that really
didnt understand what all went into
C E I . O R G 15
this. And then part
of the problem is
its just inherent with
the technology,
Scribner says.
February 23,
National Public
Radio
The Wall
Street Journals subscription
news service for financial
professionals cites John Berlaus
warnings about the effects of the
Department of Labors proposed
fiduciary rule:
Early this month, the Competitive
Enterprise Institute said the rule, which
is expected to be released soon, would
apply to people who give [financial]
advice to individual callers.
John Berlau, who wrote the report
for the conservative advocacy group,
reiterated that notion in an article for
Forbes that has been viewed nearly
half a million times. That stirred up the
conservative Twitter discussion.
March 10, The Wall Street Journal Pro
Politicos Ben White highlights
the debate generated by John
Berlaus work on the DOL
fiduciary rule:
CEIs John Berlau responds to a recent
Slate piece: Slate argued that the
fiduciary rule would never censor
financial broadcasters, but maybe it
should! As I write, this pundit would be
in clear violation of any fiduciary rule
that she report the contents of a regula-
tion accurately to her readers. She
says for instance it could never be used
against Ramsey and others because lis-
teners dont pay him. Yet the rule refers
many times to compensation From any
source and direct or indirect
March 11, Politico Morning Money

...END NOTES
Government Employee Skips Work for Years,
Nobody Notices
Joaqun Garca had been employed by a Spanish city
government as a water treatment engineer since 1990.
When officials decided to give Garcia an award for his
long service, they noticed a problem: Garcia had not shown
up for work in years. According to news accounts, officials
believe Garcia had not occupied his office for six to 14
years. After being confronted about his years of absence,
Garcia claimed he had been a victim of workplace bully-
ing on account of his familys radical socialist politics, but
feared to report the allegations because he had a family to
support. Instead, he cashed paychecks and did no work. A
magistrate did not accept his excuse and fined him approxi-
mately $30,000, the equivalent of one years after-tax pay.
Prominent Marine Biologist Sentenced for Being too
Close to Sea Otters
Noted California marine biologist Nancy Black has
been dealing with the absurdities of the Marine Mammal
Protection Act for the past decade. In 2014, after a seven-
year court battle, Black was sentenced to three years of pro-
bation and fined $12,500 after pleading guilty to feeding
killer whales from her boat. The prosecutor alleged Blacks
feeding risked causing orcas to mistake humans for prey,
thereby putting boaters and swimmers at risk. In March,
Black was sentenced to an additional year of probation
after being photographed in her boat near two sea otters.
One of her sentencing conditions was to remain at least 50
feet away from all marine mammals.
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Alabamas Last Dry County Legalizes Alcohol Sales
On March 1, previously bone-dry Clay County,
Alabama, began allowing limited sales of alcohol in two
municipalities, following a voter referendum. Residents
of Lineville and Ashland voted to legalize alcohol sales
in their cities, 30 years after the last attempt to turn Clay
County wet failed. Last year, restaurant owners in Ashland
wanted to hold a pizza and beer night with non-alcoholic
beer. However, the county attorney warned the couple that
near-beer still contained a small amount of alcohol and had
been purchased in a neighboring county and subject to that
countys alcohol tax, meaning serving an ODouls with
a slice in Clay County violated state law. This was the last
straw for the business community, who convinced the public
that prohibiting alcohol was driving commerce and tax rev-
enue out of the county.
TSA Stops High Heel Murder Conspiracy?
The Transportation Security Administration (TSA) rou-
tinely touts how many guns it confiscates at checkpoints from
travelers who forget to properly check their weapons. But
they are unlikely to highlight one passengers experience.
A woman attempting to fly out of Baltimore-Washington
International Thurgood Marshall Airport was stopped by
the TSA. In her carry-on bag, they found stiletto high-heeled
shoes featuring gun and bullet design elements. The agency
requires that all guns and gun replicas be checked. The
woman attempted to check her shoes, but ended up leaving
them with airport security to avoid missing her flight.
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