COMPETITIVE ENTERPRISE INSTITUTE

VOL. 31, NO. 1 | WINTER 2018

FEATURED ARTICLES

No, the Internet Is Not

About to Be Destroyed
4
BY MARC SCRIBNER BY JESSICA MELUGIN
The Right Kind of Stimulus

T he headlines regarding the Federal

Communications Commission’s (FCC)
upcoming vote on “net neutrality” regulations
suggest impending doom. “FCC Is Revving Up
to Destroy the Internet as We Know It,” blares

7 a Popular Mechanics headline. “The Free and

Open Internet Is About to Become Less Free,
Less Open,” declares a St. Louis Post-Dispatch
BY FRED L. SMITH JR.
editorial. Yet, despite the considerable media
Does a Market Economy
coverage of net neutrality, the issue remains
Encourage Altruism?
obscure for many consumers. And unfortu-
nately, much of the coverage has shed more under the same restraint. They have every
heat than light. incentive to offer their customers maximum
So what does net neutrality actually do? access to the Internet’s sites and services.
To answer that question, we need to con- Some net neutrality proponents oppose

12 sider how the three principal elements of net

neutrality regulations—bans on blocking,
throttling, and paid prioritization—would be
BY CLYDE WAYNE CREWS applied to some older “offline” industries.
One Year Post-Election: First, net neutrality would ban Internet
Grate Again, Great Again providers from blocking any legal content.
The reasoning for such a ban is dubious.
After all, broadband companies own their
ALSO IN THIS ISSUE private lines and should be able to choose
what goes over them. Which raises the
Supreme Court Could Hand Down Game- question: Do consumers really need the
Changing Ruling for Sports Betting. . . . . . . . . 5
government dictating a no-blocking policy
Supreme Court Can End Forced that so tramples on Internet service providers’
Union Dues . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
property rights?
Congress Can Protect the Working Poor’s
Access to Credit by Blocking the CFPB’s
Consider one familiar, long-established
Payday Loan Rule. . . . . . . . . . . . . . . . . . . . . . . 8 industry. What if the federal government
Is It Unreasonable to Expect Cellphone forced grocery stores to carry every conceiv-
Privacy?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 able food item?
How Trump Could Exit the Paris Climate Grocery stores have strong incentive to
Agreement Right Now. . . . . . . . . . . . . . . . . 10 give their shoppers as many choices as pos-
CEI and Friends Take the Liberty Message sible. If a store chooses not to sell a product, it
to Key West. . . . . . . . . . . . . . . . . . . . . . . . . . . 11 risks losing customers to competitors that carry
The Good, the Bad, and the Ugly. . . . . . . . . 14 that product. Broadband providers operate
Media Mentions. . . . . . . . . . . . . . . . . . . . . . . 15
End Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
allowing broadband companies to develop
and then favor their own content, even
though this is akin to supermarkets giving
their own store-brand products valuable shelf
space alongside recognized national brands.
American consumers experience vast
and expanding choice at their grocery stores
without federal mandates. There’s no reason
to believe market forces wouldn’t deliver the
same results online.
Second, there’s throttling, the inten-
tional limiting of available bandwidth. It
slows Internet connections to help decrease
congestion due to high-use times or sites or
services that use large amounts of data, such
as streaming services. Throttling can happen
at various points of connection. Both content
providers and broadband providers are
capable of throttling, but current net neutrality
regulations only outlaw broadband providers
from engaging in the practice.
Bandwidth is a finite resource and its
owners need ways to control its use and
(continued on page 3)
 Disrupting for Liberty
by Kent Lassman
W e hear much about “disruption” these days.
We have entrepreneurs and innovators
upending much of what we are used to. The old
way of doing things is constantly being replaced
by something new. And unlike in government, in the
private sphere, disruption works—we can count on
that new thing being consistently upgraded.
Now, not everything changes, of course. As it
FROM THE PRESIDENT
was at its founding, CEI’s unique combination of
strong legal and economic analysis and strategic
messaging has helped disrupt various debates to tilt
them toward principle, toward liberty, and toward
consumers. And when measured by impact and to
successes across a wide breadth of issues, 2017
may be one of CEI’s most successful years yet.
A year ago, we ran headfirst into the policy
playing field with a land-rush mentality. We set out
to capture as much ground as quickly as possible.
The approach paid dividends. The Wall Street
Journal recently ran a news story that relied on
work by CEI’s Wayne Crews to itemize all the sig-
nificant changes to regulatory policy in the first year
of the administration.
The Journal identified 37 major deregulatory
efforts. CEI led on more than half of them—net
neutrality, privacy, the Clean Power Plan, methane
emissions, energy exploration on federal lands, and
the Waters of the United States Rule.
We were there with the papers, briefings,
and support to agency staff as they unwound the
Obama administration’s final regulatory surge. In
all, that land rush worked. The total output of the
regulatory apparatus is back to early Reagan-
era levels. Congress finally rediscovered the
Publisher
Kent Lassman
Editor
Richard Morrison
Ph (202) 331-1010
Fax (202) 331-0640 Editorial Director
info@cei.org Ivan G. Osorio
ISSN#: 1086-3036
2 CEI.ORG
Congressional Review Act, a long-ignored tool to
check the executive branch agencies, and suc-
cessfully wielded it to cancel several burdensome
regulations.
Looking ahead, we have the capability to
look beyond the next campaign cycle. Whatever
changes occur in Washington this election year,
CEI will continue to seek and support allies wher-
ever we find them. CEI will continue to propose
solutions that can be turned into legislative propos-
als. Regardless of whether a red team or a blue
team appears to be in charge, we must pursue an
agenda that allows free people to arrange their
affairs voluntarily. We must do so at multiple levels
of government, across all three branches.
What we do now will determine what policy
goals are achievable going forward and what sort
of life is attainable for tens of millions of people. For
there is a type of disruption we’d like to see less of.
Today, the cost of government regulation is
about 45 percent as large as all the spending and
borrowing done by the federal government. It is
largely hidden. It is poorly understood. It is a drag
on every aspect of how we live, work, play, and
organize activities with one another.
Some day, I see an America where entre-
preneurs and innovators work freely to disrupt
their respective fields by offering better products,
services, and choices to all of us, without burden-
some regulations getting in the way. We’re not
there yet. But, there is plenty of work that can be
done, that we are ready to do, and is necessary to
move us toward that vision. We hope you can join
us in that effort.
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.
COMPETITIVE ENTERPRISE INSTITUTE
 Internet, continued
manage congestion. Offering consum-
ers different price points that include
some throttling in exchange for lower
fees and others that avoid any throt-
tling in exchange for pricier data plans
is similar to hotels charging more for
rooms during busy travel seasons.
Dynamic pricing offers consum-
ers more choices. The rules of supply
and demand still hold in the world of
telecommunications.
Yet, it’s the federal government that
seems most inclined to block or filter
content, through such misguided mea-
sures as the Communications Decency
Act (and related lawsuits against
broadcasters), library filtering, social
networking regulation, and privacy
regulations. Given that, is there any
reason not to expect the FCC to apply
its restriction on business practices it
doesn’t like to content and apps next?
Finally, net neutrality would prevent
broadband companies from accept-
ing payment from content providers
in exchange for moving their data
across the network more quickly. But
shouldn’t paying more get you more?
Think of Netflix content as a
passenger on Broadband Airlines.
Exposing Washington State’s Climate Secrets
C EI Senior Fellow Chris Horner
recently discovered questionable
payments between environmental
activists and government officials in
Washington State. Through Freedom of
Information Act requests, Horner found
emails that show special interests are
paying staffers’ salaries in Governor
Jay Inslee’s office, who is fighting
President Trump’s decision to withdraw
from the Paris Climate Agreement.
One of these arrangements
includes an environmental advocacy
group, the World Resources Institute,
hiring the State of Washington as a
contractor. The Wall Street Journal
reported:
COMPETITIVE ENTERPRISE INSTITUTE
Without the net neutrality ban, Netflix
could pay more for a “direct flight,”
getting the content passenger to its
destination faster. That benefits the
loved one waiting in the destina-
tion city—or, in our case, a home
subscriber binge watching “The
Unbreakable Kimmy Schmidt.”
Federal entities routinely use paid
prioritization to better deliver ser-
vices—including overnight and priority
mail, expedited passport renewal, and
airline security pre-check.
Consumers benefit from more
options at different price points.
Broadband service is no exception.
Regulations that are unnecessary,
deter investment, and limit innovation
are especially harmful in industries as
fast-moving as telecommunications. As
the above examples show, net neutral-
ity regulations would do little to help
broadband consumers.
Jessica Melugin (jessica.melugin@cei.
org) is associate director of the Center
for Technology and Innovation at CEI.
A version of this article was originally
published in USA Today.
Under this remarkable arrange-
ment, the state agreed to perform
a “scope of work” for the nonprofit
that includes “activities and deliver-
ables” to advance a green agenda.
The special-interest tail is officially
wagging the democratic dog, given
that the contract provides the job
framework for Mr. Inslee’s senior
policy adviser for climate and sus-
tainability, Reed Schuler.
CEI will continue to shine a light on
unaccountable practices like this. We
have to look around the country and
ask, who else is partaking in similar
green cronyism?
C E I . O R G 3
Help the Competitive
Enterprise Institute carry
on its work for generations
by joining the Legacy
of Liberty Society
Thanks to the generous support of our friends,
the Competitive Enterprise Institute has
remained a successful advocate for liberty for
nearly 35 years. The Legacy of Liberty Society
recognizes the faithful support of any donor
who desires to advance the principles of free
enterprise and limited government through
his or her will, trust, life income gift, retirement
plan, life insurance dedication, or another
planned giving instrument.
Contributions to CEI are tax deductible. We
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through one of CEI’s giving societies,
please contact CEI’s Philanthropy
team at (202) 331-1010 for more
information.
Andy Yuan
Philanthropy Department
andy.yuan@cei.org | (202) 331-1010
 The Right Kind of Stimulus
BY MARC SCRIBNER
A sk any politician about infrastruc-
ture, and they’ll tell you they’re
for it. And why wouldn’t they be? Most
politicians view infrastructure spend-
ing as a means to provide economic
stimulus and bring home the bacon. As
a result, public infrastructure invest-
ments are often poorly prioritized and
needlessly costly.
Infrastructure investment is essen-
tial to economic prosperity. To invest
smartly, public officials must recognize
important differences between asset
classes, project types, and questions of
who is paying and how. That requires
abandoning the urge to use infrastruc-
ture spending to boost growth and
more deliberate decision making.
Economists are divided on the
proper level of public infrastructure
spending. Research indicates that
while the impact of public infrastructure
investment on aggregate output may
be positive, the effect is much smaller
than previously believed. It is likely
even lower, as many studies conflate
public investment with infrastructure
generally, including privately provided
infrastructure, as OECD economists
have noted. In emerging economies,
poorly implemented public infrastruc-
ture investments can actually depress
total investment and reduce growth,
according to International Monetary
Fund research.
Wealthy countries have been
burned by overzealous infrastruc-
ture spending, too. To jumpstart its
stalled economy in the early 1990s,
the Japanese government spent more
than $6 trillion on public construction
projects over two decades. That failed
to increase economic growth, but it
did send Japan’s gross debt soaring
up to 245 percent of GDP by 2015,
with debt-service payments account-
ing for a quarter of total government
expenditures.
4 CEI.ORG
Massive infrastructure spending
doesn’t do much for employment,
either. A recent evaluation of the
Obama-era infrastructure stimulus
legislation, the American Recovery and
Reinvestment Act (ARRA), found that
additional highway spending had no
impact on employment in the coun-
ties where projects were built. Another
study found that protectionist “Buy
America” steel policies alone drove up
ARRA infrastructure costs by $6 billion.
The large development effects
claimed by megaproject boosters
rarely materialize or are otherwise
undetectable. Oxford University
economic geographer Bent Flyvbjerg
has found that operational viability is
generally overstated, cost overruns
of 50 to 100 percent are the norm,
and customer demand forecasts are
frequently off by 20 to 70 percent.
What can be done to improve infra-
structure policy?
First, lawmakers should prioritize the
highest-value infrastructure investments
that are needed in their communities
and eschew the next shiny object. For
example, mass transit, particularly rail,
is ill-suited to Nashville’s auto-oriented
urban layout. Meanwhile, private
cellular carriers’ plans to bring 5G to
the Nashville metro area will gener-
ate far greater economic returns with
trivial public investment—and may even
enable the self-driving cars of the future
that could render mass transit obsolete.
Second, federal lawmakers should
incentivize local governments to invest
in maintaining their surface streets,
mass transit systems, and water and
wastewater networks. If there is an
infrastructure crisis in America, it is
the failure to maintain existing infra-
structure. Maintenance backlogs
total hundreds of billions of dollars
nationwide. Unfortunately, federal
infrastructure funding generally focuses
on initial capital investment rather than
operations and maintenance, where
most costs are incurred throughout
a project’s life cycle. This has led to
COMPETITIVE ENTERPRISE INSTITUTE
gold-plated overbuilding on the federal
dime and state and local neglect when
maintenance bills come due. Allowing
states to devote more federal capital
spending to operations and mainte-
nance would likely reduce incentives to
build bigger rather than better.
Third, government leaders should
remove barriers to credit for infrastruc-
ture projects, like the unfair tax advan-
tage given to public infrastructure
investment. Instead of pouring more
money into the same funding channels,
the federal government should try to
attract the private sector into shoulder-
ing more public-purpose project risk
and eliminate duplicative permitting
requirements and other unnecessary
regulations. Public-private partner-
ships using private activity bonds and
other debt instruments would lower
costs and speed delivery of highway,
airport, inland waterway, and water
and wastewater projects. Traditional
government grant funding should only
go to projects the private sector is
unlikely to back.
Finally, governments at all levels
should learn from private infrastruc-
ture providers. Nearly all investment
in telecommunications, railroads, and
electricity infrastructure comes from
private sources. These three sectors
invest more than $100 billion in private
capital annually. Businesses don’t view
infrastructure spending as a tool to
increase national output. They evaluate
projects on a case-by-case basis to
maximize their investment returns, while
offering consumers better services and
lower prices. Smart public infrastructure
policy will involve careful cash infu-
sions, not a broad stimulus.
Marc Scribner (marc.scribner@cei.org)
is a senior fellow at CEI and author
of the paper, “Modernizing Federal
Motor Vehicle Safety Standards.”
A version of this article was origi-
nally published in U.S. News & World
Report.
 Supreme Court Could Hand Down Game-
Changing Ruling for Sports Betting
BY MICHELLE MINTON
L ast December, the U.S. Supreme
Court heard arguments in a case
that could have a big impact on
Americans. While ostensibly a fight
between New Jersey, whose citizens
and lawmakers want to legalize sports
gambling, and the nation’s major sports
leagues, who argue such authorization
is prohibited by federal law, the true
fight in Christie v. NCAA is who gets to
set state law: the states or the federal
government.
Much of the post-argument analysis
has been optimistic that the justices will
rule that New Jersey’s partial repeal
of its own sports betting ban does not
violate the Professional and Amateur
Sports Protection Act (PASPA), a 1992
law that prohibits states from authoriz-
ing or promoting sports gambling.
The leagues, led by the National
Collegiate Athletics Association
(NCAA), argued that by partially
repealing its own state ban on the
activity, New Jersey was implicitly
authorizing sports betting in violation of
PASPA. For its part, New Jersey argued
that by constraining state legislatures in
this way, the law constitutes a violation
of the Constitution’s anti-commandeer-
ing principle, which protects states
from being forced to enact or enforce
federal policies against their will.
From my view at the back of the
courtroom, I’d say the optimism for
New Jersey’s chances is well-placed.
While the justices’ questions don’t
always reveal their true feelings, based
on some of their statements, I think a
majority of the justices recognize that
even if PASPA doesn’t impose a posi-
tive requirement on the states to enforce
federal law, it at least commandeers
them in effect.
The justices seemed keen on making
a distinction between commandeer-
ing and preemption. Justice Kagan
COMPETITIVE ENTERPRISE INSTITUTE
asked, “Why, if the Constitution allows
federal law to supersede conflicting
state laws, should PASPA be consider-
ing commandeering instead of a simple
preemption?”
Ted Olson, a former U.S. solici-
tor general and attorney representing
New Jersey, argued that preemption
applies when there’s a federal policy
and the preemption is only intended
to prevent state law from conflicting
with federal statutes. When it comes
to sports betting, however, the gov-
ernment has no policy other than to
prevent the states from regulating the
activity.
Justice Ginsburg noted that federal
policy is generally only considered
“commandeering” when it forces state
authorities to enact, administer, or
enforce federal policies. PASPA, she
argued, does not appear to compel
the states to do anything other than to
avoid regulating sports betting.
Justice Alito asked Paul Clement, the
lawyer representing the sports leagues,
why Congress hadn’t simply prohibited
gambling instead of forcing the states
to enforce a federal ban. Clement
responded that rather than forcing the
states to enact a “one-size-fits-all”
prohibition, PASPA actually preserves
federalism by allowing states to decide
how much of a priority enforcing the
ban ought to be.
Chief Justice Roberts didn’t seem to
find Clement’s position very compel-
ling. If the goal of the law was to create
a national prohibition, Congress could
have made it illegal for individuals to
offer sports betting without constraining
the states and raising commandeering
concerns. “That would be the federal
government regulating this area,”
Roberts reasoned. “And then it has
what is the normal preemption clause.”
U.S. Deputy Solicitor General Jeff
Wall, a Trump appointee, argued that
PASPA does not commandeer the states
since they can choose to ignore the
C E I . O R G 5
federal policy by refusing to enact a
ban or by repealing all existing bans
on the activity. Roberts asked Wall,
“You have no problem if there’s no
prohibition at all?”
Wall insisted he was serious: Had
New Jersey repealed all its laws
regarding sports betting, rather than
the partial repeal it attempted, the
state wouldn’t have violated PASPA.
Roberts seemed to recognize the
inherent danger in this interpretation of
PASPA—the so-called choice of either
a total ban or a complete absence of
any controls on the activity. Roberts
responded, “[W]hen you put the state
in a position that that’s the only thing
they can do, that’s not a real choice.”
Justices Breyer, Gorsuch, Kennedy,
and Alito seemed to share Roberts’s
opinion to a certain extent. Justices
Sotomayor and Ginsburg expressed a
measure of skepticism toward the gov-
ernment’s and the leagues’ arguments.
Justice Thomas remained silent through-
out the arguments, as usual. However,
he conferred several times with Justice
Breyer, so it’s possible that some of
Breyer’s statements may have reflected
Thomas’s thinking on this case.
We will likely have to wait until
spring or summer to know the ruling,
but Congress should not let the Court
gamble with these important structural
questions. If the justices ultimately rule
that PASPA does not constitute com-
mandeering, allowing PASPA to remain
on the books would be loophole
through which Congress could force
countless policies on states against
the will of the legislatures and their
constituents. That’s an outcome no one
should want.
Michelle Minton (michelle.minton@cei.
org) is a senior fellow at CEI. A version
of this article was originally published
at OpenMarket.org.
 Supreme Court Can End Forced Union Dues
the precedent permitting forced union Enterprise Institute pointed out in a brief
BY TREY KOVACS dues was wrongly decided. In Abood v. in support of plaintiff Mark Janus, unions
Detroit Board of Education, the Supreme often use forced union dues to pay for

A landmark case before the U.S.

Supreme Court could free millions of
public-sector workers from paying fees
to a union as a condition of employ-
ment. The lawsuit challenges, on First
Amendment grounds, the validity of
“agency fees,” or forced union dues,
which require non-union public employ-
ees to pay fees to an exclusive repre-
sentative—the union. The plaintiffs argue
that laws forcing public employees to
subsidize the speech of a third-party
union to speak and contract with govern-
ment over work conditions, pay, and
benefits infringes on public employees’
First Amendment rights of free speech.
The case now before the Court,
Janus v. AFSCME Council 31, builds
on another recent Supreme Court case,
Harris v. Quinn, which determined that
forcing home care providers and similar
workers to pay dues was a violation of
the First Amendment. In that case, Justice
Samuel Alito wrote that it is a “bedrock
principle that, except perhaps in the
rarest of circumstances, no person in this
country may be compelled to subsidize
speech by a third party that he or she
does not wish to support.”
Forcing public-sector workers to pay
a union they do not support is not one
of those rare circumstances. Foremost,
Court glossed over the differences
between public and private sector
unions. And the differences are vast.
Most important to the case at hand,
public-sector unions are inherently
political. Bargaining with the government
constitutes political speech, as it involves
public policy decisions.
In Harris v. Quinn, Justice Alito
points out the difficulty of drawing a line
between government union politics and
representation activities:
Abood failed to appreciate the
conceptual difficulty of distinguish-
ing in public-sector cases between
union expenditures that are made for
collective-bargaining purposes and
those that are made to achieve politi-
cal ends. In the private sector, the line
is easier to see. Collective bargaining
concerns the union’s dealings with
the employer; political advocacy and
lobbying are directed at the govern-
ment. But in the public sector, both
collective bargaining and political
advocacy and lobbying are directed
at the government.
Beyond the difficulties in drawing that
line, government unions frequently cross
that line and funnel forced union dues to
direct political activity, despite restrictions
against doing so. As the Competitive
union conferences and conventions,
where many activities are political in
nature. Political advocacy at these con-
ferences has included “speech promot-
ing severe gun control laws, pro-Hillary
Clinton rallies, a ‘direct action’ protest
march against a Trump hotel, and even
advocacy for the United States to adopt
the metric system and for public funding
for Planned Parenthood.”
Ultimately, this case is about worker
freedom. No worker should be forced
to fund an organization they do not wish
to support. Further, ending the union
privilege to compel workers to pay dues
may improve union services. Without
the power to compel dues payments,
labor organizations could become more
receptive to member needs.
By this time next year, hopefully,
public employees will be free from
forced union dues and only financially
assist labor unions because they value
union representation.
Trey Kovacs (trey.kovacs@cei.org) is a
policy analyst at CEI and the author of
the paper, “Supreme Court Can Strike a
Victory for Worker Freedom: Janus Case
Presents Opportunity to End Compulsory
Dues from Public Employees.”

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6 CEI.ORG COMPETITIVE ENTERPRISE INSTITUTE

 Does a Market Economy Encourage Altruism?
BY FRED L. SMITH, JR.
D oes a market economy encourage
altruism? I thought of that ques-
tion after attending a recent confer-
ence, cosponsored by the American
Enterprise Institute (AEI) and the Duke
University and University of Virginia
law schools. The conferees gathered to
discuss how “altruism, community, and
self-interest are (and could be) har-
nessed to create and distribute goods
and services.” The goal, the announce-
ment suggested, was to find ways “to
overcome deficits in altruism that limit
the supply of bone marrow, blood
products, and transplantable organs.”
AEI’s Sally Satel, who hosted the
event, focused on restrictions on markets
for kidney transplants. Under current
law, kidneys can be donated in various
ways but may not be bought and sold.
Much of the discussion focused on the
fact that the current non-compensated
donation regime fails to meet the
demand for kidneys. Thousands die as
a result. A compensated organ transfer
system would reduce that deficit.
That utilitarian argument is power-
ful, but it is really only half the picture,
because markets themselves enable
altruistic behavior. Markets enhance the
moral cooperative aspects of society.
Yes, they have quantifiable benefits, but
they also increase links between people,
making the world a more cooperative
place. Markets encourage altruistic
behavior by bringing strangers together,
breaking down tribal barriers, and fos-
tering cooperation between groups.
That altruistic aspect of markets is
not well understood, even though it was
the second element of Adam Smith’s
argument. In The Wealth of Nations, he
made the utilitarian, economic case for
markets—how markets are compatible
with the evolved trait of self-interest.
But in his Theory of Moral
Sentiments, he made the cooperative,
altruistic case—how markets encourage,
COMPETITIVE ENTERPRISE INSTITUTE
indeed require, that people come to
understand and value each other. Smith
understood that humanity was both self-
interested, which is critical for survival,
but also other-regarding and altruistic.
Humans, Smith recognized, are social
animals.
Markets for organ sales are opposed
for various reasons. Harvard philoso-
pher Michael Sandel, author of What
Money Can’t Buy, argues that in a world
of income inequality, markets are often
coercive. He also argues that allowing
items to enter the marketplace changes
their inherent value. In effect, Sandel
argues that the poor aren’t really “free”
to choose and that certain goods and
ends by forcing a disparate array of
activities are degraded when they enter
individuals and institutions to cooper-
the market.
ate toward mutually agreeable goals. It
Still, he does concede that neither
enhances the self-interest of donors as
argument necessitates a prohibition
well as recipients, as it requires negotia-
against marketing the item. His coercion
tions that necessitate other-regarding
argument merely leads to the conclu-
empathy. It requires asking, “What do
sion that markets must be restricted until
they value, how can I provide that, and
such a time as wealth and knowledge
what can they offer— money or recogni-
are more adequately distributed. Yet that
tion or something else?”
misses the key point—that markets create
Absent a market, we push demand
wealth and thus move the whole world
underground, into black markets where
toward that egalitarian outcome.
consumers and producers lack legal
Are donations “more” altruistic than
protection and unscrupulous actors
compensated transfers? Depending on
often operate with impunity. Witness
the purpose to which the donor places
the underground market in cultural
the compensation, they may be more
antiquities.
altruistic—such as for example, when
Markets expanding into areas where
used to save an ailing but impoverished
transfers were once considered impos-
friend.
sible can alleviate shortages, including
But more fundamentally, market
of something as sensitive as kidneys.
transfers are inherently moral because
To gain a greater understanding of that
they’re voluntary and mutual. The
reality, advocates of this reform should
donor is free to decide within his or her
craft a series of narratives about the
range of welfare-enhancing options.
beneficiaries of such exchanges and the
The arranger of the donation must get
more healthful life they can enjoy.
a good read on the potential donor’s
values—what would it take for them
to agree? Markets involve interactions
Fred L. Smith, Jr. (fred.smith@cei.org)
between buyers and sellers, requiring
is the founder of CEI. A version of this
each to “read each other” better; they
article was originally published at
bring parties together into a mutual win/
Forbes.com.
win outcome.
Bringing an item—including kid-
neys—into the market increases altruistic
C E I . O R G 7
 Congress Can Protect the Working Poor’s Access to
Credit by Blocking the CFPB’s Payday Loan Rule
BY DANIEL PRESS
B ig things are happening at the
Consumer Financial Protection
Bureau (CFPB), an unusually power-
ful government agency. The Bureau
recently announced that it would
reopen an Obama-era rule that effec-
tively blocks access to small dollar loans
for millions of consumers.
It’s one of the most detrimental
regulations the Bureau has issued.
If left intact, the rule will deprive too
many people of access to credit
when they need it most. But the rule
cannot be easily or quickly undone.
A new rulemaking is governed by the
Administrative Procedure Act, which
requires the Bureau to go through
a similar process to repeal as it did
to issue it. The original rule took the
Bureau five years to finalize.
There’s a simpler, more effec-
tive way of stopping the current rule.
Congress can vote it down, but a big
deadline is looming. The Congressional
Review Act (CRA) gives lawmak-
ers 60 legislative days to overturn
major regulations; a simple majority
vote by both chambers is all that is
required. A resolution of this kind was
recently introduced by Rep. Dennis
Ross (R-Fla.), with the Democrats and
two Republicans cosponsoring the
measure.
By repealing the rule via a CRA
resolution vote, Congress can help
preserve vulnerable Americans’ access
to credit. Small-dollar loans provide
a means for the unbanked to join
the financial mainstream, at a time
when two-thirds of all Americans lack
sufficient savings to cover an emer-
gency expense. As long as someone
has a job, a checking account, and
a valid form of identification, small-
dollar loans allow a person to borrow
8 CEI.ORG
between $100 and $500 over a
two-week period, for an average 15
percent fee.
Because the loans act as a finan-
cial safety net, 95 percent of small
dollar loan users say they value having
the option to take out a loan, even
though they are relatively expensive.
Nearly 90 percent of all borrowers
report they were satisfied with their last
transaction.
But the new regulation would drive
many lenders out of business. In fact,
it could render up to 80 percent of
the industry unprofitable, eliminating
almost $11 billion of consumer credit.
It’s hard to see how eliminating
choices will make individuals who
need access to credit better off. These
consumers will still need financial
services after these loans are no more,
and the new rule doesn’t provide any
better alternatives. At best, consum-
ers will have to resort to second-best
options, such as defaulting on other
loans or working a second job. At
worst, they will be forced to pursue
illegal or unregulated sources, perhaps
even loan sharks.
There are other problems with the
rule. To date, the CFPB has not pro-
vided adequate evidence to justify
its regulation. Instead of conducting
a thorough cost-benefit analysis, the
Bureau merely assumed that because
payday loans are expensive and
frequently used, they must be harmful.
Yet the academic literature shows that
payday loans have a neutral effect on
net, and may even have a slight gen-
eral-welfare benefit. This is because
borrowers typically use payday loans
to avoid incurring more expensive
fees, like for overdrawing a checking
account. Indeed, less than 2 percent of
the consumer complaints submitted to
the CFPB are related to payday loans.
The rule also oversteps on state
jurisdiction. All 50 states and the
COMPETITIVE ENTERPRISE INSTITUTE
District of Columbia extensively regu-
late payday loans, and 18 states effec-
tively prohibit them. There is substantial
evidence that households in those 18
states have bounced more checks, filed
more complaints about loan sharks
and debt collectors, and filed for
bankruptcy at much higher rates than
in the states where consumers retained
a measure of choice.
Taking away people’s choices is
not consumer protection. Regardless
of federal regulators’ preferences,
small-dollar loans provide an impor-
tant source of finance for millions
of consumers. The last thing anyone
should want is a prohibition that pushes
people on the financial fringe into
the arms of black market lenders. By
using the Congressional Review Act,
Congress can preserve vulnerable
consumers’ access to credit and protect
them from their biggest threat—the
Consumer Financial Protection Bureau.
Daniel Press (daniel.press@cei.org) is a
policy analyst at CEI and author of the
paper, “How the Consumer Financial
Protection Bureau’s Payday Loan Rule
Hurts the Working Poor.” A version of
this article was originally published in
The Hill.
 Is It Unreasonable to Expect Cellphone Privacy?
BY JIM HARPER
A case now before the Supreme
Court may erode or solidify Justice
Antonin Scalia’s legacy. How the jus-
tices decide in Carpenter v. U.S. won’t
matter as much as how they reason. If
they use the “reasonable expectation of
privacy” test to decide whether the gov-
ernment can access cell phone users’
location data without a warrant, Scalia’s
contributions to Fourth Amendment juris-
prudence will be negated. But if the high
court recognizes that data is owned
in part by cell phone users, Scalia’s
legacy will be secured, along with the
Constitution’s safeguards against unrea-
sonable search and seizure.
The plaintiff, Timothy Ivory
Carpenter, was convicted in 2014 of
participating in a string of armed rob-
beries in the Detroit area and sen-
tenced to 116 years in federal prison.
Investigators obtained court orders
netting 127 days of Carpenter’s cell-
phone records, showing that his phone
was in communication with cell towers
near the sites of four robberies. The
court will decide whether investigators
should have gained access to that data
under a relatively low statutory standard
requiring that the information be “rel-
evant” to an ongoing investigation, or
whether they should have asked a court
for a warrant based on probable cause.
Since 1963, the dominant approach
to the Fourth Amendment has been
derived from a solo concurrence in
Katz v. U.S., setting out the reasonable-
expectation-of-privacy test. That test
defines a search as having occurred
any time a government agent violates a
defendant’s reasonable privacy expec-
tations. It has often operated as a one-
way ratchet against Fourth Amendment
protection, using curious logic.
Because possession of drugs and
other contraband is illegal, conceal-
ing them is unreasonable. Thus, courts
have held that whatever government
action turns up such contraband is not
COMPETITIVE ENTERPRISE INSTITUTE
a search. Actions that most would
consider searches, such as direct-
ing drug-sniffing dogs at people
and flying planes low over suspects’
houses, are treated as non-searches
that don’t require warrants.
Smith v. Maryland (1979) is
the premier precedent supporting
government access to telecommunica-
tions data. In Smith, government agents
acting without a warrant persuaded a
Baltimore telephone company to place
a pen register on the phone line of a
burglary-and-stalking suspect. The
device captured the numbers of his out-
going calls, showing that he had dialed
the victim’s home number. The Supreme
Court found there was no reasonable
expectation of privacy and thus no
seizure or search.
Today the government interprets
Smith as providing warrantless access
to troves of data about the locations
and movements of every cellphone
user, subject to that statutory relevance
standard. That data can reveal sensitive
information, such as when people seek
medical or psychological treatment,
where they go to church, their relation-
ships and business dealings, attendance
at political events, and more. The
appeals court in Carpenter adopted
Smith’s reasoning.
For years, Scalia pointedly avoided
the reasonable-expectation-of-privacy
test. His 2001 decision in Kyllo v. U.S.,
for example, addressed the use of
a thermal imaging device to detect
heat patterns emanating from a home
thought to contain a marijuana-growing
operation. Scalia didn’t refer to privacy
expectations in his argument. Rather, he
claimed that when government agents
use an exotic device “to explore the
details of the home that would previ-
ously have been unknowable without
physical intrusion, the surveillance is a
‘search’ and is presumptively unreason-
able without a warrant.”
In 2012, another major Scalia deci-
sion again steered around the potholed
logic of “reasonable expectations.” In
C E I . O R G 9
U.S. v. Jones, Scalia’s majority opin-
ion found that attaching a Global
Positioning System (GPS) device to a
car without a warrant and using that
device to monitor the vehicle’s move-
ments constitutes a search. In 2015, the
Second U.S. Circuit Court of Appeals
in New York polished Scalia’s logic.
Attachment of the GPS device was “a
technical trespass on the defendant’s
vehicle”—a small but important seizure
that put the car to the government’s
purposes.
Gauzy appeals to privacy expecta-
tions only complicate what ought to be
straightforward: Searching is searching;
seizing is seizing.
Cell phone privacy policies give
consumers many rights to control their
telecommunications data. Essentially,
these are property rights, which on their
own should require that the government
obtain a warrant before searching and
seizing digital records. In Carpenter,
the court may find that such contracts
help create an “expectation of privacy.”
Or it may find there isn’t a reasonable
privacy expectation. Seizing data and
examining its contents would become
neither seizure nor search, giving gov-
ernment agents a free hand.
That kind of illogic would be a loss
for Justice Scalia’s legacy. The court
should find that telecommunications
data are owned in part by cell phone
users. A warrant is required for the
government to take such property and
examine it.
Jim Harper (jim.harper@cei.org) is ex-
ecutive vice president of CEI. A version of
this article was originally published in The
Wall Street Journal.
 How Trump Could Exit the Paris Climate
Agreement Right Now
BY MARLO LEWIS, JR.
L ast June, President Trump announced
he would withdraw the U.S. from
the Paris climate treaty. It was a bold
move, defying legions of foreign lead-
ers, U.S. politicians, corporate CEOs,
media pundits, and activist groups.
But there is a faster way to do it than
he has chosen—and he should take it.
Remaining in the treaty endangers the
U.S. economy, the Constitution’s treaty
process, and the nation’s political
independence.
The bad effects stem from the fact
that President Obama, aware that the
Senate was unlikely to approve the
treaty, bypassed the constitutional rati-
fication process and declared it to be
an “executive agreement” instead.
Trump is correct that Obama nego-
tiated a bad deal. Obama’s pledge to
reduce U.S. greenhouse gas emissions
by 26 to 28 per cent below 2005
levels by 2025—the U.S. “nationally
determined contribution” (NDC) in
U.N. parlance—would have significant
adverse impacts on U.S. jobs, house-
hold income, and economic growth.
In contrast, China and India’s NDCs
essentially “commit” those countries to
follow their current emissions trajectory.
Even if all 195 signatory nations
implement their NDCs, the agree-
ment will have no discernible effect on
climate change. For America, the Paris
Agreement is great pain for no gain.
The exit option President Trump
selected comes from the Paris
Agreement itself and takes four years
to complete. His decision was also
provisional, meaning America will with-
draw—unless he can negotiate a “better
deal.” In effect, Trump invited pro-Paris
10 CEI.ORG
advocates to try to change his mind,
and gave them lots of time to do it.
To be sure, other governments may
be willing to accept drill-baby-drill
so long as America pays them bil-
lions in “climate finance” foreign aid.
Nonetheless, staying in the agreement
would imperil vital U.S. interests.
First, it would validate President
Obama’s evasion of the Constitution’s
treaty process—his approval of the
pact without obtaining the Senate’s
advice and consent.
The Paris Agreement is a treaty by
virtue of its potential costs to the nation
as a whole, dependence on subse-
quent legislation by Congress, and
other traditional treaty criteria.
It is telling that virtually all other
parties, including non-democratic
regimes like China, ratified the
agreement through their legislatures.
Obama’s collusion with foreign elites to
adopt an unpopular treaty by deeming
it not a treaty becomes a constitution-
ally damaging precedent unless Trump
overturns it.
Second, NDC promises are “non-
binding” under international law, but
that would make them harmless only if
elected officials were immune to politi-
cal pressure—a laughable idea—or
balked at the harm they would cause.
Governments honor their non-
binding NDCs by turning them into
binding laws and regulations. The Paris
Agreement is designed to mobilize a
permanent, global campaign to “name
and shame” policy makers who fail to
rig energy markets against fossil fuels.
The agreement effectively demands
the suppression of America’s surging oil
and gas production—a major source
of new jobs, geopolitical strength,
consumer savings, and competitive
advantage. Why would any sensible
COMPETITIVE ENTERPRISE INSTITUTE
person stay in a club organized to
browbeat them into acting against their
best interests and better judgment?
Moreover, even non-binding com-
mitments can create legal liabilities, as
the Netherlands government discov-
ered. Citing the government’s endorse-
ment of non-binding declarations at
previous U.N. climate conferences, the
Hague District Court ordered Dutch
policy makers to match deeds with
words and adopt tough new emis-
sion controls. Further, membership in
the Paris Agreement fuels regulatory
and tort litigation on behalf of alleged
climate victims.
In short, no revisions of Obama’s
NDC can make the Paris Agreement
safe for the U.S. Merely following the
agreement’s four-year withdrawal pro-
cedure would allow a new president
to rejoin in 2021 and pick up where
Obama left off. It would also do noth-
ing to repair Obama’s breach of the
treaty process.
Trump should instead send the
agreement to the Senate for a ratifi-
cation vote, with a recommendation
that it be rejected. There is virtually no
chance the requisite “two-thirds of the
Senators present” would approve the
treaty.
After the agreement dies in the
Senate, it is exceedingly unlikely a
future executive would try to rejoin it
unilaterally on the pretense that the
“most ambitious” climate pact in his-
tory is not a treaty.
So don’t follow the treaty’s rules,
Mr. President. Follow the Constitution.
Marc Scribner (marc.scribner@cei.org)
is a senior fellow at CEI. A version of
this article was originally published in
The Washington Examiner.
CEI and Friends Take the Liberty Message to Key West
I n January, CEI hosted a policy summit in Key West, Florida. The
event, held during January 21-23 at the historic Casa Marina
resort, provided an opportunity for friends and supporters of CEI
The Captain of
the Appledore
II, Kent Lassman,
to get together with members of CEI’s policy team and offer feed- and Melissa
back about some of our key programs. Holyoak on a
Our speakers focused on the theme, Disruption v. Distortion, sailing excursion
and discussed how we can encourage innovative shakeups in
business and politics and limit government’s power to manipu-
late the economy.
CEI’s Ted Frank, Sam Kazman, Angela Logomasini,
Melissa Holyak, Jessica Melugin, Michelle Minton, and
Iain Murray discussed innovative approaches for overturning
corrupt class action settlements, repealing “sindustry” prohibi-
tions, and liberalizing the sharing economy, among other topics.
The conference also featured two special guests.
Dr. Bassem Youssef—
known as the “Jon Stewart
of Egypt”—shared the story
of his valiant defense of free
speech, during a dinner recep-
tion at the Truman Little White
House. The host of a wildly suc-
cessful political satire show, he
and his family fled the country
Left to right: Sam Kazman, Angela Logomasini,
after terminating his show due
Gordon Cummings, and Max Pappas touring the
to overwhelming political pres-
Ernest Hemingway house
Bassem Youssef (left) and Kent sure to censor its content and
Lassman at the Casa Marina threats of physical and legal
violence.
Education entrepreneur Rick O’Donnell, the founder and
CEO of Skills Fund, gave the keynote speech at dinner on the
beach. O’Donnell is turning traditional higher education on its
head with a student financing platform that provides financial
services to employers and outcomes-based boot camp pro-
grams to students.
And of course, our guests enjoyed sailing, biking, and tour-
ing around historic Key West.
This is the second in our new CEI Summit series, open to our
closest allies and supporters. We hope you can join us in our Michelle Minton (left) and Angela Logomasini
future adventures.

Left to right: Christiane Gruffat, Karen Parker, and Jessica Melugin, CEI Board Member Richard
Bassem Youssef at the Truman Little White House Tren, and other guests tour Key West

COMPETITIVE ENTERPRISE INSTITUTE C E I . O R G 11

 One Year Post-Election: Grate Again, Great Again
required net new costs of zero. Trump’s There is a bipartisan disinclination
BY CLYDE WAYNE CREWS one-in, two-out program has a biparti- to regulate new technologies like Uber,
san pedigree, as well as a healthy track Airbnb, drones, and self-driving cars, all

I t’s now one year since the election

of Donald J. Trump as our nation’s
president. Is America “great again”?
The election certainly did make America
“grate.” I’ve never seen people so much
at one another’s throats, especially on
social media. But great? Yes and no.
The giddy stock market signals are
unmistakable and job numbers look
better, with unemployment down to 4.1
percent, albeit too many remain out of
work and drop off the statistical radar.
What role does a U.S. president
play in this? As a limited government
guy, I want that answer to be “almost
none.” But government spends your tax
dollars and it regulates your business,
neither of which started in 2017. Yet,
the president does sets an agenda, and
therefore a tone, that can fuel or under-
mine greatness.
Government spending is worrisome
and could derail the good just noted.
Future debt limit battles potentially loom;
health insurance markets remain a
shambles. There’s a lot of uncertainty.
But on cutting red tape in the econ-
omy, things are trending well—even
though no regulatory reform legislation
has made it to Trump’s desk. Less regu-
lation can mean more jobs and income
for those who may not be sharing in the
record overseas to learn from. So while
the administration and Congress debate
legislation, at least costs aren’t growing.
We can see the results in the size of
the Federal Register, the daily deposi-
tory of agencies’ proposed and final
rules. Its all-time record was set last
year under President Obama, when it
reached 97,110 pages. In November
2017, the Federal Register stood at
51,752 pages. (Interestingly, the Federal
Register stood at 78,700 pages on
Election Day 2016.)
So even without regulatory reform
legislation, the 2017 regulatory rule-
book is 34 percent less hefty than that
of 2016. Similarly, the numbers of final
and proposed rules and regulations
from the Trump administration are far
below those of Obama. In terms of
cutting red tape to promote prosper-
ity, good things are happening, even
without congressional action.
of which could create many new jobs
and industries. Sentiments like these can
serve as a bridge for bipartisan efforts
for cutting red tape. Meanwhile, the
prominent bipartisan Problem Solvers
Caucus—its House co-chairs are Reps.
Josh Gottheimer (D-N.J.) and Tom Reed
(R-N.Y.)—has set its sights on regulation,
too.
Obama used to talk of going it
alone if Congress didn’t act on a wide
range of issues. Sure, “greatness” can
be sought unilaterally, but even greater
might be some bipartisanship on cut-
ting red tape—and fixing that budget,
besides.
Wayne Crews (wayne.crews@cei.
org) is vice president for policy at CEI.
A version of this article was originally
published in InsideSources.

SAVE THE DATE

stock boom. You don’t write a check the
way you do for taxes, but regulation’s
costs—hidden in prices and undermin-
ing efficiency and growth—hit the typi-
cal household to the tune of $15,000
annually.
Trump had prominently declared that
70 percent of regulations “can go,” and
issued a regulatory freeze early in his
term (as did Obama). Seventy percent
hasn’t gone yet, but Trump has issued
executive orders targeting regulations.
He is requiring agencies to look for CEI’s 2018 Annual Dinner and Reception
ways to speed up permitting on large Freedom: The Greatest Show on Earth
scale-construction, pipelines, and other
infrastructure. He issued a January June 28, 2018
executive order requiring the elimination cei.org/ceidinner
of two rules for every one adopted, and

12 CEI.ORG COMPETITIVE ENTERPRISE INSTITUTE

 C E I E V E N T S A ND P UBL IC A P P E A R A NCE S

The Future of
the Internet
On November 28,
the R Street Institute
and the Lincoln
Network co-hosted
the telecom policy
forum, “The Future of
Internet Freedom.” The
afternoon featured
Left to right: Richard Morrison, Iain Murray,
speeches by Federal
Diane Katz, and Chris Edwards
Jessica Melugin Communications
Commission Chairman
Proposals for Streamlining the Executive Branch Ajit Pai, FCC Commissioners Mike O’Rielly and
On November 15, CEI hosted a policy panel on proposals for Brendan Carr, and Federal Trade Commission
reorganizing and streamlining the executive branch. The panel- acting Chairperson Maureen Ohlhausen. Following
ists considered opportunities for reducing bureaucracy presented their statements, a panel moderated by Jessica
by President Trump’s executive order, “Comprehensive Plan Melugin, Associate Director of CEI’s Center for
for Reorganizing the Executive Branch” (E.O. 13781). Panelists Technology and Innovation, addressed the audi-
included Chris Edwards of the Cato Institute, Diane Katz of the ence of representatives from industry, policy, and
Heritage Foundation, and CEI Vice President for Strategy Iain media. Topics included the reversal of the 2015
Murray. CEI Senior Editor Richard Morrison moderated the event, Open Internet Order and what to expect in 2018
at which he highlighted recent publications by Katz and Edwards, from the net neutrality debate. Panelists included
as well as the CEI paper, “Shrinking Government Bureaucracy: R Street’s Tom Struble, the Mercatus Center’s Brent
Reorganizing the Executive Branch to Boost Economic Growth Skorup, and the American Enterprise Institute’s
and Freedom.” Roslyn Layton.

CEI Takes Financial Reform

Message to Capitol Hill
On January 17, CEI hosted the
Capitol Hill briefing, “Financial
Regulations in 2018: Outlook and
Analysis.” The panel, moderated by
Washington Examiner economics
reporter Joseph Lawler, featured
Left to right: Kent Lassman, Kory Swanson, John Daniel Press CEI Senior Fellow John Berlau, CEI
Francis Trump, and Richard Morrison Policy Analyst, Daniel Press, R Street
Institute Distinguished Senior Fellow
Alex J. Pollock, and Mercatus
CEI Celebrates the End of Prohibition Center Senior Research Fellow and
On December 5, CEI and friends observed the 84th anniver- Director of the Program on Financial
sary of the end of Prohibition with a Repeal Day luncheon. Regulation Brian Knight. The panel-
The program included remarks by CEI President Kent Lassman, ists discussed the prospects for
John Locke Foundation President Kory Swanson, and John regulatory reform for the financial
Francis Trump, editor of Carolina Journal and author of Still & services industry, one of the most
Barrel: Craft Spirits in the Old North State. The panel discussed heavily regulated industries in the
the history of Prohibition, how it still influences current policies, John Berlau United States, and proposed ideas
and prospects for reform in the states. CEI’s Richard Morrison for effective financial regulatory
shared observations from his role as co-executive producer of policy that encourages choice and
the CEI documentary short film, I, Whiskey: The Human Spirit. competition.

COMPETITIVE ENTERPRISE INSTITUTE C E I . O R G 13

 THE
GOOD
The Good: Alaska Joins
the Domestic Energy
Revolution
As part of the Tax Cuts and Jobs Act
passed in December 2017, Congress
authorized the opening of a section
of the Arctic National Wildlife Refuge
(ANWR) in Alaska to energy explo-
ration. For over 30 years, ANWR
has been a point of contention in
debates over extractive industries and
federal lands. Green activists have
long objected to any kind of resource
development on any federal lands,
while free marketers have touted the
opportunities for responsible explora-
tion and the economic potential of
allowing greater domestic energy
production.
“ANWR has over 19 million acres,
including 8 million acres designated
as wilderness areas,” said Myron
Ebell, director of CEI’s Center for
Energy and Environment. “If U. S.
Geological Survey estimates are cor-
rect, opening 2,000 acres to oil and
gas exploration in the 1.5 million-
acre non-Wilderness coastal plain of
ANWR could produce over 10 billion
barrels of oil. That much oil would
create thousands of high-paying jobs
and add hundreds of billions of dol-
lars to the economy.”
14 CEI.ORG
THE
BAD
The Bad: Higher Prices for
Consumers on Washing
Machines, Solar Panels
President Trump managed to anger
both environmentalists and free
market advocates in January, when
he imposed new tariffs on solar panel
and washing machine imports. CEI
strongly opposed both actions in
open letters to the president.
“What makes these actions
especially obnoxious to free trade
advocates is the legal basis of the
tariffs. Under the Trade Act of 1974,
the president is authorized to impose
temporary measures, known as
global safeguards, to protect domes-
tic producers from foreign imports
that are ‘in such increased quantities
as to be a substantial cause of serious
injury, or the threat thereof, to the
domestic industry,’” said CEI Senior
Fellow Marc Scribner. “Notably,
this protectionist framework doesn’t
require any finding of unfair trade
practices. A U.S. industry can receive
trade protections from foreign firms
simply because the foreign firms offer
a superior product at a lower price
to consumers.” Because of that, sup-
porters of free trade should be push-
ing Congress to end the president’s
ability to unilaterally implement tariffs.
THE
UGLY
The Ugly: Feds Move
to Override States on
Marijuana Policy
In January, U.S. Attorney General Jeff
Sessions rescinded an Obama-era policy
curtailing federal enforcement of fed-
eral marijuana laws in states that have
legalized it within their borders. This puts
millions of Americans and thousands of
legitimate businesses into conflict with fed-
eral law, creating significant legal uncer-
tainty for a sector of the economy that has
been growing dramatically in recent years.
“This move by Attorney General Jeff
Sessions is out-of-step with public opinion
and negates the choice made by voters in
29 states on marijuana regulation,” said
CEI Senior Fellow Michelle Minton. “States
and their citizens have the constitutional
right to decide these matters for themselves
without undue federal interference. It’s
time for Congress to intervene, change our
outdated federal drug laws, and restore
choice to the American people.”
CEI has urged Congress to enact
policy directing federal law enforcement
officials to stand down from prosecuting
marijuana users and retailers in states
where marijuana is legal. Legislation
introduced by Reps. Dana Rohrabacher
(R-Calif) and Earl Blumenauer (D-Ore.)
would codify this policy in law regarding
medical uses, while a similar proposal
from Reps. Tom McClintock (R-Calif.) and
Jared Polis (D-Colo.) would extend such
protections to states that have also legal-
ized adult recreational use.
COMPETITIVE ENTERPRISE INSTITUTE
 MediaMENTIONS
Policy Analyst Daniel Press
discusses the Consumer Financial
Protection Bureau’s payday loan
rule in a new report.
Right-leaning policy groups say
the rule would do more harm than
good to low-income consumers. The
Competitive Enterprise Institute (CEI),
a libertarian nonprofit focused on
economic regulations, argued that
the cost of extending payday loans is
overblown and that banning it would
cause immense harm to consumers.
“Payday lenders provide a means
for the unbanked to join the financial
mainstream. Eliminating the already
limited choices of marginalized
Americans helps no one,” wrote CEI
fellow Daniel Press in a report released
Wednesday.
–January 17, The Hill
Executive Vice President Jim
Harper discusses the true
potential of Bitcoin after its
volatile year.
For another point of view—because
I’m all about even-handedness,
people!—I checked with Jim Harper,
executive vice president of the
Competitive Enterprise Institute. He
served on the board of the Bitcoin
Foundation and says the promise of
Bitcoin is to create a payment system
people can use anywhere in the world
with privacy and security. He says its
true value will be in commerce, not
speculation.
Well, that hasn’t happened yet;
the price is too unstable. He said
the currency will move beyond
some of the early notorious uses in
illegal commerce. As for the tulip
comparisons, he joked, “Laugh all
you want: My initial coin offering for
cryptotulips will be worth billions!”
–January 12, The New York Times
COMPETITIVE ENTERPRISE INSTITUTE
Senior Fellow Trey Kovacs
discusses the National Labor
Relations Board’s reversal of its
joint-employer standard.
“The vague and expansive joint
employer standard implemented by
the Obama administration needlessly
restricted business-to-business
relationships, hindered worker
opportunities and entrepreneurship,
and exposed tens of thousands of
employers to increased costs and
liability,” said CEI labor policy expert
Trey Kovacs. “Today’s ruling restores
the common sense definition of joint
employer.”
Mr. Kovacs said Congress now has
a duty to approve a law perpetuating
the board’s ruling.
–December 14,
The Washington Times
President Kent Lassman discusses
the common misconception of
most urban bicyclists leaning left
politically.
You’re probably not going to get
the assumptions to stop, so the best
advice is to not let it bother you. Kent
Lassman, president of the free market
Competitive Enterprise Institute, put it
best. “Bikes and cycling strip away the
unimportant stuff of life. The group I
ride with cares more about my kids or
the latest book I’ve read than what I
think of the latest political contretemps
on the front pages.”
–December 11,
Washington City Paper
Senior Fellow Marc Scribner
weighs in on the human cost
of regulatory delays to the
deployment of self-driving cars.
“That these need to be perfect
before we can allow them on the road
is a mindset that has affected a lot
of urban planners and ... the pro-
regulation set,” says Marc Scribner,
a senior fellow at the free-market
think tank the Competitive Enterprise
C E I . O R G 15
Institute. Since
the alternative to
allowing imperfect
self-driving cars on
the highways is the
status quo—100
Americans die every
day in automobile
crashes—perfection
shouldn’t be the standard.
“Delaying self-driving car
technology,” Scribner says, “means
we’re going to see additional deaths
that we simply could have avoided if
we allowed these vehicles on the road
that are not perfectly safe but safer
than the cars we have today.”
–November 6, Reason
Myron Ebell, director of
CEI’s Center for Energy and
Environment, comments on
the release of Obama-era
climate reports by the Trump
administration.
Directly contradicting much of the
Trump administration’s position on
climate change, 13 federal agencies
unveiled an exhaustive scientific
report on Friday that says humans
are the dominant cause of the global
temperature rise that has created
the warmest period in the history of
civilization.
[...]
Some critics of climate change
science attacked the report as the
product of holdovers from the Obama
administration and chastised the Trump
administration for allowing it to be
published.
“I’m saddened that they have
decided they will let the permanent
government, the civil servants, continue
down this road without supervision,”
said Myron Ebell, director of global
warming policy at the Competitive
Enterprise Institute, a libertarian
advocacy group.
–November 3,
The New York Times

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...END NOTES
A New Meaning for Fashion Police
Police in the Dutch city of Rotterdam are trying a new
approach to deterring crime—targeting crimes against
fashion. In January, the city announced that officers would
confiscate expensive clothing and jewelry from young
people who don’t look wealthy enough to afford them.
“We regularly take a Rolex from a suspect. Clothes rarely.
And that is especially a status symbol for young people,”
Rotterdam police chief Frank Paauw told Dutch newspaper
De Telegraaf. “Some young people now walk with jackets of
€1800. They do not have any income, so the question is how
they get there.”
You Ain’t from around Here, Are You?
Commuting by car can be slow and frustrating, so
many people these days use mobile apps like Waze and
Google Maps to find the fastest route from one location to
another. One Garden State town, however, is trying to stop
app-enabled drivers in their tracks. Leonia, New Jersey, is
trying to declare many of its streets off-limits to drivers using
navigation apps and fine violators $200 per infraction.
Town elders want to keep non-local drivers from using side
streets to avoid traffic jams, in the hope that companies like
Google will eventually stop indexing Leonia’s streets at all.
CBS News reports the kind of warm welcome motorists can
expect going forward. According to the town’s mayor, “The
first thing the [police] officer is going to say is, ‘Do you have
business in Leonia?’”
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Southern MD
Arrested … for Having Your Car Stolen
A Florida state representative is taking his tough-on-
crime agenda to a new level by seeking to punish … victims
of car theft. Rep. Wengay Newton (D–St. Petersburg) has
introduced a bill that would provide for up to 90 days of jail
time for car owners who leave the keys inside their car and
a juvenile offender then steals it. This new take on the legal
concept of the “attractive nuisance” is arousing controversy
among Sunshine State residents who think law enforcement
officials may have better things to do, and many police
officers seem to agree. Clearwater Police Chief Daniel
Slaughter told the Tampa Bay Times: “I don’t think it would
be appropriate to charge a victim for a crime.”
Tasty Treats, Meet Environmental Hazards
Ice cream is a classic warm weather treat that delights
children and adults alike, and Miami Beach now has an
entire Museum of Ice Cream to inform and entertain both
locals and tourists. However, local government officials have
threatened its management with large fines. The museum
offers visitors a chance to jump into a giant pit of “candy
sprinkles,” which are actually small pieces of brightly col-
ored plastic. Environmental activists claimed that the plastic
pieces could end up in city storm drains, presumably by
getting caught up in patrons’ clothing and later falling to the
ground. In response, local Miami ABC News reports that
museum staff are implementing “immense precautions to
ensure we are environmentally conscious.”
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