COMPETITIVE ENTERPRISE INSTITUTE

VOL. 28, NO. 4 | FALL 2015

FEATURED ARTICLES

As Time Passes, CEI Carries On

6 I n the opening of Dylan Thomas’s verbally

illustrative play “Under Milk Wood,” the
First Voice repeats, “Time passes. Listen.
Time passes.” Time has passed indeed.
IAIN MURRAY And I am out of time as leader of the
Why Liberals Secretly Love Competitive Enterprise Institute. I was not
Corporations the first and I will not be the last leader of
this merry band of warriors. And to whom-
ever is next, whether wearing pants or
skirts (or both!) I say welcome and enjoy
it. You inherit a genuinely unique group of
thinkers and doers.
10 To put ideas into action, CEI has always
been more than “just a think tank.” We take
BILL FREZZA a full-service approach to public policy—
combining rigorous policy work with an
New Zealand’s Free Market activist’s ability to market, educate, and
Triumph propagate our research findings and prin-
ciples. We are always willing to explain,
to anyone who will listen why economic
liberty make us all better off. But we do not
stop there. We engage with policy makers,
build coalitions, file Freedom of Information
Act disclosure requests, broadcast our mes-
sage near and far, and, when necessary,
sue to ensure our economic future remains
grounded in these timeless principles.
The past decades have seen the unique
and powerful institution that is CEI grow
into the major policy player it is today. It
has proved it can operate effectively, with
limited resources, and punch above its
weight. So keep on trucking, CEI. This too
is just another season. Your next president
will arrive already knowing what you are
capable of.
—Lawson Bader

12 Wayne Crews’s Essay Recognized as Part of Atlas Network’s

2015 Sir Antony Fisher International Memorial Award
FRED L. SMITH, JR. AND MARC SCRIBNER
Lessons for Business Lead-
ers from the Near-Death and
collection of essays on
the economic chal-
What America’s Decline
in Economic Freedom Means for
Entrepreneurship and Prosperity

lenges facing the United

edited by Donald J. Boudreaux
A CEI Vice President for Policy Wayne
Crews contributed the essay, “One Nation,
Ungovernable? Confronting the Modern
Revival of America’s Railroads States, What America’s Regulatory State” to the book. In his
Decline in Economic chapter, Crews provides a roadmap for
Freedom Means for how to assess and rein in federal regulation
ALSO IN THIS ISSUE
Fraser Institute
Mercatus Center at George Mason University
2015

Entrepreneurship and by highlighting the tools available to policy

Obamacare vs. Beer,
by Michelle Minton. . . . . . . . . . . . . . . . . . . 5
Undermining Encryption,
by Ryan Radia. . . . . . . . . . . . . . . . . . . . . . . 8
Taxpayer-Funded Anti-BPA Activism Is the
Real Danger,
by Angela Logomasini. . . . . . . . . . . . . . . . 9
The Good, the Bad, and the Ugly. . . . . . 14
Media Mentions. . . . . . . . . . . . . . . . . . . . 15
End Notes . . . . . . . . . . . . . . . . . . . . . . . . . 16
Prosperity, published by Canada’s Fraser
Institute and edited by George Mason
University economics professor Donald
Boudreaux, has been named winner of the
Atlas Network’s 2015 Sir Antony Fisher
International Memorial Award, which “rec-
ognizes the organization that published
a book, magazine, report, monograph,
or study that, in the opinion of a panel of
external judges, has had demonstrable
impact and made the greatest contribution
to public understanding of the free society.”
makers to bring about regulatory reform.
He also explains the consequences of too
much executive branch power. Capturing
both data and analysis to provide a snap-
shot of the ever-growing regulatory state,
Crews offers practical steps to dial back
America’s regulatory burden and restore
constitutional constraints on government.
Atlas awarded the winning organization
a $10,000 prize and recognized it at the
Liberty Forum and Freedom Dinner in New
York City, November 11-12, 2015.
 CEI Looks Ahead to 2016
by Gregory Conko
F our years ago, I had the privilege—and the
daunting task—of searching for a new president
to lead CEI, when founder Fred Smith decided it was
time for him to step down. Our six-person search
committee set out to find an intelligent and char-
ismatic leader with a positive vision for defending
individual liberty and free enterprise, and the focus
FROM THE ACTING PRESIDENT
to lead us toward achieving those goals. We pored
over scores of resumes, held dozens of interviews
with many highly qualified candidates, and eventu-
ally selected Lawson Bader as our unanimous choice
to be the next CEI president.
Following an organization’s founder as president
is a formidable job. But Lawson rose to the chal-
lenge, and he proudly led CEI in some of its most
important battles: fighting the Obama administra-
tion’s energy rationing policies, the National Labor
Relations Board’s onerous employment rules, the
Treasury Department and Securities and Exchange
Commission’s assault on America’s banking and
finance industries, and many other expansions of
federal power. Under Lawson’s leadership, CEI took
our Obamacare legal challenge all the way to the
Supreme Court. And Lawson laid out an ambitious
vision for a bigger, more effective CEI as we negoti-
ated, and recently completed, a successful merger
with the Center for Class Action Fairness, a move
that will make CEI’s litigation program even more
effective.
In November, we said a fond farewell to Lawson,
as he rose to yet another challenge: replacing his
dear friend Whitney Ball as the head of DonorsTrust.
We, of course, will miss Lawson. But my colleagues
and I are also eager to turn the page on a new
chapter in CEI’s future, as our work continues. And
we mean to be every bit as feisty and aggressive as
CEI has been for the past three decades.
We will continue to implement our strategic plan
to derail implementation of the EPA’s destructive and
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
unconstitutional power plant emissions rules. We
will continue to expose and push back against the
Obama administration’s lawless Operation Choke
Point, which uses threats of harassment by bank
regulators to shut down legal but politically unpopu-
lar businesses, such as small dollar lenders, pawn
shops, and gun dealers. We will continue to battle
the Transportation Security Administration’s intrusive
and ineffective airline passenger screening practices.
And in time, we expect our legal challenge to the
constitutionality of the Consumer Financial Protection
Bureau to land CEI back in the Supreme Court.
We are working closely with House and Senate
leaders from both political parties, and with state
and local government officials, on a raft of reform
measures to roll back aggressive regulatory poli-
cies. In the current Congress alone, more than half a
dozen pieces of legislation to rein in the regulatory
state and make federal agencies more accountable
to the American people incorporate ideas devel-
oped and promoted by CEI scholars. Our devoted
and capable staff will not rest until regulatory reform
proposals like these are enacted into law and we
succeed in our mission of removing government-
created barriers to free enterprise, innovation, and
prosperity.
In short, we at CEI have an ambitious agenda,
and we are eager to get on with the business of
implementing it. In my 21 years at CEI, I have never
before seen the organization more focused or more
eager to bring about positive change. Sure, we may
have to look for a new president. But we won’t let
that slow us down. We are determined to find a can-
didate who will challenge us to work even harder,
and who will lead CEI in many more of the important
battles to lift the heavy burden of government from
the shoulders of America’s consumers and producers.
Stay tuned.
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
 CEI Merges with CCAF
by Ted Frank

O n October 1, the Competitive Enterprise Institute completed a merger

with the Center for Class Action Fairness (CCAF), a public interest law
firm, which I founded in 2009 to challenge abusive class action litigation
practices that harm consumers and shareholders.
The merger combines CEI’s and CCAF’s proven track records in promot-
ing free markets and challenging overregulation, creating a unique legal
program dedicated to protecting the rule of law and supporting economic
freedom, prosperity, and innovation.
Founded in 1984, CEI has grown into an effective advocate for free-
dom on a wide range of policy issues, including energy and environment,
business and finance, technology, telecommunications, and food and drug R.M.
regulation. CEI has long fought cronyism, rent-seeking, and other abuses of
government power.
Under the supervision of General Counsel Sam Kazman, CEI’s litiga-
FREEDMAN
tion program has a long history of success, including establishing major
new precedents for combating regulations that restrict consumer choice,
SOCI ET Y
stifle innovation, and limit competition. From its constitutional chal-
lenges to Sarbanes-Oxley, the Big Tobacco Deal, and lethal federal fuel
economy standards, CEI continues to develop new approaches to fight Help the Competitive
overregulation. Enterprise Institute
CCAF has won tens of millions of dollars for consumers and sharehold-
ers in fighting class action abuse. This work fits right in with CEI’s mission.
carry on its work for
By winning some precedent-setting cases, we seek to drastically reduce generations by joining the
trial lawyers’ incentives for bringing abusive class action suits that yield no R.M. Freedman society.
real benefit to the plaintiffs on whose behalf they’re supposedly filed and
for structuring settlements in ways that benefit attorneys at the expense of
their clients. In 2013, CEI established the R.M. Freedman
For example, we won an important Sixth Circuit appeal in 2013 in the Society in honor of Robert M. Freedman,
case In re Dry Max Pampers Litig. The proposed class action settlement, a business owner from West Bloomfield,
over alleged defects in a new line of diapers, would have paid attorneys Michigan, who placed CEI in his estate
$2.7 million, while the plaintiffs only got the opportunity for a refund—if and, in 2009, sadly passed on and gave
they had not already received a refund and had retained the receipt and CEI its first legacy gift. We named the
bar code from a years-old purchase of diapers. CCAF’s successful objec- society in appreciation of his generosity.
tion led the trial lawyers to drop their meritless litigation and walk away Many of CEI’s extended family choose to
with nothing. include CEI in their estate plans through:
Moreover, the court established a precedent that attorneys should not • Bequests,
be the “primary beneficiary” of class action settlements, a principle we
have fought for since our founding and successfully applied to many other • Charitable Remainder Trusts,
cases. • Charitable Lead Trusts, or as a
Now the merger will give CCAF the freedom to take on many cases we • Life insurance beneficiary.
couldn’t have litigated otherwise, and we look forward to our renewed
focus. I will continue to lead the CCAF team and its pro bono advocacy If you make the decision to include CEI in
against unfair class action procedures and settlements. When plaintiff your estate plans, please reach out and let
classes receive tiny sums or worthless discount coupons while their attor- us know.
neys reap multi-million dollar windfalls, CCAF intervenes to fight for fair-
ness and against such exploitation.
While these sorts of decisions should be
undertaken with the help of an estate
Ted Frank (ted.frank@cei.org­­) is Director of CEI’s Center for Class Action planner, Lauren Avey and Al Canata of
Fairness. CEI can be a resource to you. You can
reach them anytime at 202-331-1010.

COMPETITIVE ENTERPRISE INSTITUTE C E I . O R G 3

 CEI’s John Berlau Speaks on the Future of Finance
CEI Senior Fellow John
Berlau recently spoke at
three events where he got to
interact with flesh-and-blood
innovators and entrepreneurs,
learn about their revolutionary
new products and services and
the frustrating regulations that
get in their way.
Photo courtesy of Money 2020 Money20/20 is the world’s
premier payments technology
exhibition. Held this year October 25-28 in Las Vegas, it
featured technologies from mobile wallets to cryptocurrency
to clothing embedded with “Internet of things” payment
chips. Berlau spoke on the panel, “Dodd-Frank: Five Years
Later.” He discussed the threat to innovation from Dodd-
Frank and its spawn, the Consumer Financial Protection
Bureau (though some audience members had some horror
stories of their own).
The AltFi Global Regulatory Forum 2015, held on
November 4 in Washington, D.C., featured perspectives
CEI’s Marc Scribner on the Future of Transportation
On November 6, CEI Fellow Marc Scribner presented
at the Preserving the American Dream Conference in
Austin, Texas. The annual conference, organized by the
American Dream Coalition, focuses on transportation and
land-use policy from a free market perspective. Scribner
discussed state legislative and regulatory activity with
CEI’s Ryan Radia Discusses the Future of Music
On December 8, CEI
Associate Director of Technology
Studies Ryan Radia participated
in a panel discussion on Capitol
Hill of U.S. copyright law as it
applies to the music industry,
along with other policy experts
and industry representatives. The
panelists discussed options for updating laws in ways that
will benefit consumers and artists alike. In a keynote speech
to kick off the event, Rep. Blake Farenthold (R-TX) explained
why Congress should pay attention to this issue. With the
music industry changing rapidly as it seeks to adapt to
4 CEI.ORG
from entrepreneurs and government officials from around
the world on the growth of crowdfunding and peer-to-peer
lending. Berlau appeared on panel on U.S. regulation. As
he noted, the equity crowdfunding liberalization provisions
of the Jumpstart our Startups (JOBS) Act of 2012 are a
good first step, and are finally being implemented by the
Securities and Exchange Commission. However, many rules
remain too burdensome for entrepreneurs and investors,
which calls for further deregulation in a JOBS Act 2.0.
On November 18, the Financial Services Innovation
Coalition held a forum on Capitol Hill on the new online
options available to small business borrowers. As Berlau
noted, new online lending platforms provide better
options for entrepreneurs than high-cost alternatives like
financing a new business through credit cards (which many
entrepreneurs, including Google’s founders, have done).
Berlau pointed out that these lenders are already regulated
by numerous federal and state bodies, and cautioned about
new regulations that would shackle financial innovation that
has proven beneficial to small entrepreneurs.
respect to self-driving cars, and potential threats facing
this emerging technology. Scholars from the Cato Institute,
Reason Foundation, Heritage Foundation, and other free
market think tanks also spoke at the conference. Rep. Blake
Farenthold (R-Tex.) delivered the keynote address.
emerging technologies and new broadcasting platforms,
outdated policies need to be reexamined.
Several panelists agreed that Congress should revisit the
existing disparity in how recording artists are paid based
on the type of medium. For instance, when a song is played
by either a radio station or through an online streaming
service, both the songwriter and the recording artist are
paid a royalty, but different broadcasting media—terrestrial
radio, satellite radio, and online streaming—pay different
fees for the same content. As the panelists noted, Congress
can promote innovation and creation in the music industry
by enacting laws that ensure musicians can charge market-
based rates for their work.
COMPETITIVE ENTERPRISE INSTITUTE
 Obamacare vs. Beer
BY MICHELLE MINTON
P resident Obama likes beer. He
drinks it, he brews it, and he’s been
named the presidential candidate
people would most like to have a drink
with. However, his signature health
care law might change how we can
enjoy a cold one when ordering at a
restaurant.
A little-known provision within the
Affordable Care Act (“Obamacare”)
requires chain restaurants with 20 or
more locations to list calorie infor-
mation for “standard menu items,”
including each available beer, by
December 2016. Testing the nutritional
content of a single beer could cost as
much as $1,000, according to the Beer
Institute, a trade association represent-
ing brewers.
Very large brewers producing
millions of barrels of the same few
brands each year can easily absorb
that cost. But smaller brewers with
large selections could see costs quickly
add up. And it isn’t just calories. Other
nutritional information, including total
carbohydrates, sugars, and proteins,
must be made available in writing upon
a customer’s request.
That means many craft brewers will
miss out on an important opportunity to
grow their business. For a craft brewer,
getting a beer onto the menu of a
major chain restaurant like TGI Fridays
is a huge boost. However, it doesn’t
make sense for them to test every
variety of beer they make, spending
many thousands of dollars before they
even make it onto a chain restaurant’s
menu. Restaurants interested in carry-
ing a craft beer may not want to wait
for testing to be done and will move on
to beers that already have nutritional
information.
In addition to the cost and lost
opportunity for smaller brewers, the
ACA labeling requirement threatens
to exacerbate regulatory overlap and
COMPETITIVE ENTERPRISE INSTITUTE
sow confusion, Paul
Gatza, director of the
Brewers Association,
which represents smaller
brewers, told me. The
Alcohol and Tobacco
Tax and Trade Bureau
(TTB) is the agency that
normally handles regula-
tion of beer, including
labeling, but the ACA
menu-labeling rules
bring brewers under the
authority of the U.S. Food
and Drug Administration
(FDA). “We would like to
see a harmonization of
the differences between
FDA and TTB in how they
handle calories,” Gatza
said.
The Brewers brewers can calculate the approximate
Association, along with a coalition of calories, carbs, sugars, etc., based on
other alcohol trade organizations, is the alcohol content of any particular
asking the FDA for clearer guidance beer. This would allow the Brewers
on the new rules. “The FDA allows an Association to create a database of
exact number of calories for menus and ranges for brewers to use for each beer
menu boards when the calorie number style, without the need to go through
is on the label, but only allows round- costly nutritional testing for every beer
ing to the nearest 10-calorie increment they make. According to Gatza, “that
if not,” said Gatza. This is different from would be a solution that wouldn’t
the TTB’s requirement, which allows for expose the smallest brewers to large
rounding to the nearest calorie incre- expense, tough decisions about
ment. For example, if a restaurant has whether to stay in chains, or providing
a beer with 167 calories, they have inaccurate information.”
to list it as having 170 under FDA’s Unless the FDA provides greater
menu-labeling law. However, some flexibility within the new rules, all of
brewers already have calories listed this may add up to increased risks and
elsewhere, using the TTB’s method of costs to small brewers. While consum-
rounding to the nearest calorie. While ers at chain restaurants will certainly
Gatza admits that the risk is minimal, see more information on their menu
there is “an opening for these multiple as a result of the new rule, but they
calorie counts for a specific beer and might also notice fewer options when it
serving size to cause confusion and, comes to the selection of beer.
theoretically, exposure to a nuisance
suit,” he said.
The Brewers Association is hoping Michelle Minton
to work with the FDA to allow for (michelle.minton@cei.org) is a Fellow at
“reasonable tolerances,” which func- CEI. A version of this article originally
tionally means allowing the numbers appeared at RealClearPolicy.
to fall within a certain range so that
C E I . O R G 5
 Why Liberals Secretly Love Corporations
BY IAIN MURRAY
I f there is one bugbear that stands
as paramount for American pro-
gressives, it is the corporation.
Corporations are viewed as amoral
at best, immoral at worst, exploitative
of their workers, dismissive of environ-
mental or social concerns, and existing
purely in the name of profit. They are
routinely blamed for the great reces-
sion, global warming, and income
inequality. So why are progressives
and President Obama’s Department of
Labor pursuing policies that will lead
to the creation of more and bigger cor-
porations? Because the political Left’s
paymaster, organized labor, needs
corporations to exist and thrive.
Corporations grew up because
entrepreneurs need to find investors
to help finance their businesses. That
in turn, requires them to keep transac-
tion costs low, which requires them to
hire employees rather than contract
for each individual routine transaction.
6 CEI.ORG
That’s the foundation of the corporate
structure of owners, management, and
workers.
For the past century, this structure
has been under attack by progressive
activists, who have long viewed corpo-
rations as ideological battlegrounds,
with management arrayed against
workers. In fact, much of the Naderite
attack on corporations was based on
the idea that management did not act
in the owners’ interest.
Ironically, the National Labor
Relations Act and similar Depression-
era laws supported by progressives set
this structure in stone, in the name of
“protecting” workers against manage-
ment. Certain aspects of the employ-
ment relationship were guaranteed by
government enforcement—including
overtime, unemployment insurance,
paid time off, opportunity for union
representation, and other requirements
on employers.
Before the modern corporation,
economies were characterized by
what Adam Smith called “the system of
COMPETITIVE ENTERPRISE INSTITUTE
natural liberty,” where businesses were
small in scale and owners invested
their personal assets into the venture
and freely contracted with other busi-
nesses and individuals for services.
This model lost out to the corporation
because of the transaction costs related
to identifying and contracting with
other businesses to perform a service
for you. It was far easier, and more
reliable, to directly employ someone
to do the job, even when required to
offer the protections imposed by law.
That’s why the corporation survived
for most of the last century despite the
increased costs of hiring.
Corporations also reduced transac-
tion costs within their own organiza-
tions—and the prospect of internal
strife among workers—by devising
innovative new business arrangements.
The franchising business model turned
many workers into potential owners.
New management models turned other
workers into junior managers. The
“us versus them” model that created
labor strife broke down, and union

The dues paid by
employees for union
representation—
which they may not
even want—makes
large corporations
a huge source of
funds for political
campaigns.
representation in the private sector
plummeted.
However, in recent years the costs
of contracting with another party have
been coming down. Corporations
are being replaced by networks or
platforms that enable two-sided mar-
kets, where the purchaser of a service
can buy it from a small-scale supplier
rather than a large corporation. The
most famous example is Uber, which
provides a network matching riders to
drivers, without having to go through a
taxicab firm. That’s why Uber, despite
having some corporate features, is a
very different animal from a taxicab
company.
One might think that given the
Left’s hatred of corporations, progres-
sives would cheer this development.
Not so. Instead, many view Uber
COMPETITIVE ENTERPRISE INSTITUTE
as exploitative, perhaps even more
so than a 1930s-era corporation,
because it deprives workers of New
Deal-era legal protections.
The Obama administration agrees.
In response, it is quietly working to
replace the long-established legal defi-
nition of what makes an independent
contractor with a new one, announced
by blog post over the summer.
Previously, workers who set their
own hours and had significant con-
trol over the way they worked were
regarded as independent contractors,
free from the requirements of much
employment law. Now, however,
the Department of Labor (DOL) has
lowered the bar for a test of employ-
ment to simply getting a majority of
your income from one source. So the
woman who drives passengers through
a ride-sharing app to earn some extra
income while caring for a sick relative
is arguably no longer a contractor, but
an employee of the app firm.
Meanwhile, the administration
is also bent on reinforcing the old
management-worker divide. New DOL
overtime rules are likely to eliminate
huge swathes of junior-management
positions, harming aspirational young
workers, as employers cut back on or
even eliminate overtime opportunities.
The National Labor Relations Board
likely will rule soon that franchisor
companies are “joint employers” of
their franchisees’ workers, making them
responsible for day-to-day matters like
individual workplace conditions and
working hours, a burden that would
Support I, Whiskey on Indiegogo
Campaign launching Monday, July 13th
www.indiegogo.com
C E I . O R G 7
make franchising a much less attractive
business model for companies seeking
to expand.
In the end, this suite of regulatory
actions actually reinforces the old cor-
porate structure that was set in place
in the 1930s. The result is more large
corporations based on an “us versus
them” paradigm that pits manage-
ment against workers—in other words,
exactly the corporate structure the Left
claims to hate.
There are two reasons why the Left
wants to see this structure continue.
First, it gives government agencies
immense power over employment
conditions. Second, large corporations
are easier to unionize than smaller
companies. And the dues paid by
employees for union representation—
which they may not even want—makes
large corporations a huge source of
funds for political campaigns.
It is the small company and the
aspiring entrepreneur that will be most
hurt the most by the administration’s
actions. If the administration persists, it
will end some magnificent opportuni-
ties for innovation, cost reduction, and
consumer protection in the American
economy (such as network apps’ feed-
back mechanisms). And it will do so
by propping up its supposed biggest
enemy, the 1930s-style corporation.
Iain Murray (iain.murray@cei.org) is Vice
President for Strategy at CEI. A version
of this article originally appeared in
National Review.
 Undermining Encryption
BY RYAN RADIA
F or most Americans, communicat-
ing over the Internet has become
routine. We now correspond elec-
tronically with colleagues, loved ones,
friends, and even doctors on platforms
ranging from email to Snapchat. But
criminals have followed us online,
and cyber attacks are reported almost
daily. Efforts to safeguard our digital
data from bad actors can seem futile.
Fortunately, technology can
dramatically reduce the risks we
face from hackers, identity thieves,
and even foreign spies. But some top
government officials want to under-
mine a crucial security technology:
encryption.
Encryption translates valuable
information into seemingly meaning-
less gibberish that can be decrypted
only with a private key. E-commerce
websites have long used encryption
to prevent criminals from swiping
their customers’ credit-card informa-
tion as it travels between computers.
More recently, an encryption protocol
called HTTPS has taken off, making it
much harder to snoop on our brows-
ing habits.
Encryption does more than protect
information as it traverses the Internet;
it protects it on the devices we use
every day. A typical smartphone now
contains powerful processors that can
quickly encrypt and decrypt data.
Losing a phone or laptop no longer
means worrying about who might
misuse the private information stored
on it — assuming the device was prop-
erly encrypted, meaning users must
enter a passcode before each use.
However, some government
officials claim that encryption helps
criminals break the law with impunity.
In a world of ubiquitous encryption,
the argument goes, police will no
longer be able to quickly search a
suspected drug dealer’s smartphone
8 CEI.ORG
to find the identity of his sup-
plier. Instead, police may need
a passcode before they can
access information on the device.
A similar challenge exists on the
Internet, where a growing number
of “zero-knowledge” services host
encrypted data that cannot be
decrypted without the user’s key.
Federal Bureau of Investigation
Director James Comey is per-
haps the nation’s leading critic of
encryption. In numerous speeches
and hearings, he has argued that
when the police encounter encrypted
data on a suspect’s smartphone or
online account, they often can’t get
the information they need to prevent
crimes or catch criminals. Therefore,
Comey has implored companies such
as Apple and Google to design their
platforms to ensure law enforcement
can access a user’s data even if she
won’t divulge her passcode.
So far, major tech companies
have resisted these demands—for
good reason. Today, an encrypted
iPhone or Android device is typically
accessible only with the user’s pass-
code; neither the company behind the
platform nor the wireless carrier holds
the key. Introduce a mechanism for law
enforcement to get around encryption,
however, and it’s all but certain that
hackers, criminals, and spies will soon
figure out how to exploit the same
mechanism.
Instead of pressuring companies
to “voluntarily” redesign their devices
and platforms, the administration
should welcome the adoption of strong
encryption—especially within govern-
ment agencies, many of which have yet
to encrypt sensitive files. Even a modest
flaw can render a form of encryp-
tion practically useless, as the Allies
proved during World War II when
they cracked Nazi Germany’s Enigma
machine codes. Given the mounting
cybersecurity threats we face, is this
really a tradeoff worth making?
COMPETITIVE ENTERPRISE INSTITUTE
Aside from a handful of anecdotes,
law-enforcement officials have shown
scant empirical evidence that encryp-
tion is meaningfully frustrating criminal
investigations. Even if encryption
were to become a serious roadblock,
there are alternatives to weakening
encryption. For example, Congress
could consider criminalizing a per-
son’s “willful refusal to comply with a
decryption order,” as law professor
Orin Kerr has suggested.
Thankfully, encryption sup-
porters have pushed back on this
issue with some degree of success.
As The Washington Post recently
reported, the Obama administra-
tion has declined to push for a law
to force companies to decrypt user
data—for now. Yet the administration
will continue its “conversations with
industry,” according to Comey—so
the prospect that officials will continue
to strong-arm companies to weaken
their encryption behind closed doors
remains likely.
Instead of imagining a worst-case
scenario where criminals can wreak
havoc with impunity, law enforcement
should use the myriad tools it already
possesses to investigate and prosecute
criminals. Meanwhile, the government
should leave encryption alone.
Ryan Radia (ryan.radia@cei.org) is
Associate Director for Technology
Studies at CEI. A version of this article
originally appeared at RealClearPolicy.
 Taxpayer-Funded Anti-BPA Activism Is the Real Danger
BY ANGELA LOGOMASINI
A larmist claims about the chemical
Bisphenol A (BPA) have reached
an absurd level. According to the
website Treehugger.com, a new study
shows that exposure to BPA can make
humans lazy and eventually obese
from lack of exercise. Such claims con-
tinue to populate the Internet thanks to
taxpayer funded junk-science studies
about this chemical.
BPA has been used safely for more
than five decades to make hard clear
plastics (polycarbonate plastics) and
epoxy resins that line the inside of steel
and aluminum cans. There are no veri-
fied cases of anyone suffering ill effects
from BPA exposure from consumer
products, and numerous comprehen-
sive scientific reviews have found BPA
safe at current typical exposure levels.
For example, the U.S. Food and
Drug Administration concluded earlier
this year that “BPA is safe at the current
levels occurring in foods,” and the
European Food Safety Authority “con-
cluded that BPA poses no health risk to
consumers of any age group (including
unborn children, infants, and adoles-
cents) at current exposure levels.”
Yet activists keep an alarmist anti-
BPA drumbeat alive by trumping up
small and often poorly designed stud-
ies that allege potential health effects
based on questionable data. Many
of these studies simply report weak
and largely meaningless associa-
tions—which do not demonstrate cause
and effect—between BPA and various
health ailments.
Other studies are based on dosing
rodents with massive amounts of BPA—
levels that are not relevant to human
exposures—to trigger health effects.
Moreover, unlike rodents, humans
quickly metabolize BPA and pass it
out of the body before it can have any
effects. The recent study highlighted by
COMPETITIVE ENTERPRISE INSTITUTE
Treehugger is another example of one
of these irrelevant rodent studies.
These studies continue to pour
into the news cycle, thanks in part to
funding by the National Environmental
Institute Health Sciences, a division
of the National Institutes of Health.
Between 2010 and 2012, NIEHS
doled out at least $172 million on
BPA research, according to a Citizens
Against Government Waste tally.
“The impetus” for this funding,
according to NIEHS director Linda
Birnbaum, was a “workshop” involv-
ing 38 “experts” in BPA science,
sponsored by NIEHS, several other
federal agencies, and the left-of-center
group Commonweal. These research-
ers met in Chapel Hill, North Carolina,
in 2007, where they developed what
has become known as the “Chapel
Hill Consensus Statement,” which calls
for more funding of BPA research.
Birnbaum attended as an employee of
the Environmental Protection Agency
before she was appointed to NIEHS in
2009.
The meeting didn’t offer an objec-
tive review of the issue, but instead
brought together like-minded research-
ers seeking to advance a political
agenda. One of those researchers,
Frederick vom Saal, has built his career
making a host of health claims about
BPA using questionable techniques and
exaggerating the results.
In fact, vom Saal, who was on the
workshop’s organizing committee, has
advocated for a BPA ban, and is on “a
quest to get endocrine disrupters, such
as BPA, out of daily use,” according
to a profile of him in a University of
Missouri-affiliated newspaper.
Perhaps not coincidentally, at
least 21 of the Chapel Hill Consensus
contributors have worked on NIEHS-
funded studies addressing BPA risk,
including vom Saal, who has coau-
thored at least 14 such studies. There is
an apparent conflict of interest among
the Chapel Hill Consensus scientists
C E I . O R G 9
who stood to gain financially by exag-
gerating BPA risks in order to build
momentum for government support.
In addition to wasting tax dollars,
this activist-driven research affects
markets and regulation. For example,
Target, Walmart and other retailers
have introduced programs to pressure
suppliers to phase out BPA and other
chemicals from consumer products.
Similarly, in 2104, Sen. Edward
Markey (D-Mass.) and Rep. Lois
Capps (D-Calif.) introduced the Ban
Poisonous Additives Act (S. 2572, H.R.
5033), which would ban BPA resins for
good packaging.
Calls to ban or phase out BPA
ignore these products’ benefits. For
example, steel cans were once lined
with tin. But tin lining can corrode,
compromising the packaging and
eventually letting in air and poten-
tially dangerous pathogens such as
Clostridium botulinum, which produces
deadly toxins.
BPA resins solved this problem in
the 1960s, when it was used to coat
cans to prevent food contamination
from bacteria and rust. This also helped
reduce food spoilage, while main-
taining food flavor and quality and
extending shelf life. Today, unless seri-
ous dents perforate a seam and let in
air, the risk of contamination in canned
foods is very low. In fact, during the
past 30 years, there have been no
cases of foodborne illness outbreaks
related to the failure of can packaging.
It’s time to differentiate between
science and activist-funded agendas.
We can learn from science, but will
become victims of bad public policy
if we continue to allow government-
funded activism.
Angela Logomasini, Ph.D. (angela.
logomasini@cei.org) is a Senior Fellow at
CEI. A version of this article originally ap-
peared in The Washington Examiner.
 New Zealand’s Free Market Triumph
BY BILL FREZZA
A mong stories of economic suc-
cess, New Zealand stands out.
Two decades ago, it dramatically
transformed itself from a welfare state
saddled with crushing public debt,
rampant inflation, and a closed and
moribund economy, to become one of
the freest, most prosperous, and open
countries in the world today. How did
they do it?
Our journey begins in 1981, when
economic crisis opened up a window
for dramatic change. Two individuals
stand out in the struggle for reform: Sir
Roger Douglas and Ruth Richardson.
Though members of Parliament from
opposing parties, the two made
common cause, often against their
own party leaders, and dominated
New Zealand politics for years. Today,
Roger and Ruth are widely respected
elder statesmen, but I was able to track
them down and pick their brains for a
few hours.
Historically, the majority of New
Zealand’s trade had been with the
United Kingdom, but that ended
after 1973, when the UK joined the
European Economic Community, the
European Union’s predecessor. That
required the UK to abandon its favored
trade relations, which dealt New
Zealand a terrible economic shock.
The political response was disastrous:
increased protectionism, expanded
entitlement benefits, wage and price
controls, out-of-control deficit spend-
ing, and lots of money printing by
the central bank. New Zealand was
headed toward bankruptcy.
In 1975, Ruth Richardson’s
National Party came to power, with
Robert Muldoon elected Prime Minister
in a landslide. Critics described his
campaign platform as a “denial of
economic reality accompanied by
bribery of the voters.” His actions once
in office confirmed that assessment.
10 CEI.ORG
Under Muldoon’s leadership per-
capita income dropped to the lowest
among all developed nations.
In the 1981 election, the National
Party clung to its parliamentary
majority by one seat—won by Ruth
Richardson, then a political rookie.
Not long after she arrived, all hell
broke loose. “I was the majority.
And I went in with the reputation of
being a fiery free market advocate,
so I was regarded as a nuisance
from day one,” she said. “So I sat
in the front row of the caucus and I
looked Muldoon in the eye, and he
said to me, ‘What have you come to
Parliament to do, girlie?’ … I said, ‘I’ve
come to defeat inflation.’”
New Zealand’s government
finances were completely opaque
and held under lock and key. Ruth
demanded to see the country’s books,
giving Muldoon an ultimatum: “You
show me the books or I don’t vote
for you.” With his majority at stake,
Muldoon caved.
Still, despite Ruth’s best efforts,
the situation kept spiraling down,
with inflation peaking at 18 percent.
Treasury and Reserve Bank officials,
COMPETITIVE ENTERPRISE INSTITUTE
fearing financial collapse, consulted
with senior Labour Party opposition
leaders, most notably Roger Douglas,
who was then finance minister-in-wait-
ing, to frame an economic recovery
platform.
The 1984 elections were a disas-
ter for the National Party. The Labour
Party, under leader David Lange,
swept into power, publicly pledged to
Roger Douglas’s reform platform.
The government immediately deval-
ued the propped-up currency, floated
the New Zealand dollar, and removed
all capital controls. The currency,
priced at its real value, helped boost
agricultural exports. Farm subsidies
were slashed, boosting productivity
and efficiency in agriculture.
Roger launched an all-out assault
on the bloated state sector, and
eventually privatized most state-owned
enterprises. Top income tax rates,
which had peaked at 66 percent, were
slashed down to 30 percent, roughly
where they remain today.
Ruth handily won reelection in her
district, despite her party’s defeat.
She then used her position to egg
on Roger’s reforms, and set to work

H.L Mencken once
said: “Every election
is a sort of advance
auction sale of
stolen goods.”
reforming her own party. “So, in the
first three years of Rogernomics, Roger
pretty had a free run,” said Ruth. “I
was virtually the only one in the caucus
who was saying, ‘this is the right thing
to do.’”
The economy began to show signs
of life, but still had a long way to go.
With the 1987 elections coming up, the
National Party fatally miscalculated
voter sentiment, believing most people
would rebel against Rogernomics.
“Labour were reelected with an even
greater majority than they had in
1984,” said Ruth. “That for us was the
moment of truth.” Ruth moved up to
become opposition finance minister-
in-waiting. Old guard National Party
stalwarts who remained opponents of
reform were sacked.
But just as the National Party came
around to supporting more aggres-
sive market reforms, Labour began to
backslide. Yet, Roger still managed to
pass three major bills that cemented his
legacy: the State Sector Act of 1988
and the Public Finance and Reserve
Bank Acts of 1989.
The State Sector Act completely
reformed the civil service. All civil
service employees were moved from
job-for-life union contracts with senior-
ity-based advancement to individual
employment contracts and merit-based
compensation and promotion.
The Public Finance Act of 1989
transitioned all government accounting
from an ad hoc cash accrual basis to
the same generally accepted account-
ing principles (GAAP) required by
businesses.
Finally, the Reserve Bank Act of
1989 ended the practice of goosing
COMPETITIVE ENTERPRISE INSTITUTE
monetary policy before an election to
create a temporary illusion of prosper-
ity. The Act directs the New Zealand
central bank to serve only one man-
date: price stability—unlike the U.S.
Federal Reserve, which serves the
con¬flicting mandates of price stability
and full employment.
Despite these accomplishments,
Roger Douglas and Prime Minister
David Lange set to fighting, and Roger
resigned his cabinet position. The
Labour Party’s poll ratings plummeted.
Roger, worn out by the infighting,
chose not to stand for reelection in
1990.
This handed the National Party an
opening to push for more market-ori-
ented reforms, including deregulation
of the labor market, public spending
cuts, and welfare reform. An electoral
landslide that put the National Party
in power gave it a clear mandate to
continue.
Within six weeks of assuming her
new position as finance minister, Ruth
began slashing government spending.
But economic turnarounds take time,
so the government still had to borrow
money in order to operate, even as the
financial climate had darkened.
Facing a downgrade, she and her
colleagues traveled to New York for
a meeting with Standard & Poor’s. “I
was basically facing them down and
saying, ‘How dare you downgrade
a country that’s done a lot of reform
already, a new government that’s
taken the really tough calls?’” said
Ruth. “We got on the plane; we didn’t
know what the result was … When we
landed, we were advised we had a
single downgrade.”
Emboldened by her success, Ruth
pushed on to reform the private labor
market. Her Employment Contracts Act
of 1991 ended government support
for compulsory union membership
and multi-employer labor agreements.
Every worker and every employer was
given the right to negotiate individual
employment contracts. Union member-
ship plummeted, with a concurrent
rise in productivity, flexibility, and
competitiveness.
C E I . O R G 11
Ruth then introduced the first
national budget in full compliance
with GAAP standards, a practice that
remains sacrosanct in New Zealand to
this day. No more lying with numbers,
no more obfuscation of long-term
liabilities, no more kicking the can
down the road.
The National Party won the 1993
elections by one seat, putting Ruth right
back where she began her political
journey. She helped pass the Fiscal
Responsibility Act of 1994, which
codified a set of transparent budgeting
protocols.
A few days after it passed
Parliament, Ruth resigned and left
political office forever, tired but proud
of what she and Roger had accom-
plished. “The idea was: As I was leav-
ing the kitchen, to bang up the rules
for fiscal cooking on the kitchen wall,
so that anyone who would replace me
would be subject to those disciplines.”
In 1994, New Zealand had the
highest rate of job growth in the OECD.
Twenty years have passed since
this political drama played itself out,
and the results speak for themselves.
The 2014 Index of Economic Freedom
ranks New Zealand fifth in the world,
with ratings of 90 percent or higher for
rule of law, freedom from corruption,
business freedom, and labor freedom.
H.L Mencken once said: “Every
election is a sort of advance auction
sale of stolen goods.” It’s a trap nearly
every democracy has fallen into. New
Zealand could have easily ended up
like Greece. Thanks to Roger Douglas,
Ruth Richardson, and the wise people
of people of New Zealand they
avoided that fate. The question now is:
Which path will we choose?
Bill Frezza (bill.frezza@cei.org) is host
of the RealClear Radio Hour (RCRH)
and the author of “New Zealand’s
Far-Reaching Reforms: A Case Study on
How to Save Democracy from Itself,”
published by the Antigua Forum. This
article is based on RCRH’s 100th show.
 Lessons for Business Leaders from the Near-
Death and Revival of America’s Railroads
BY FRED L. SMITH, JR. AND
MARC SCRIBNER
B usiness executives deal with the
spiraling cost of complying with
government regulations every day.
This burden has become so large and
pervasive that many have come to
accept it as inevitable. Business leaders
can’t imagine—and certainly don’t
make plans for—a future when that
burden is lifted. The history of the U.S.
railroad industry, however, suggests
that fighting to lift the weight of govern-
ment restrictions is possible—and can
be profitable.
The heavy regulation that besets
America’s economy is a legacy of
the Progressive era, when the view
that civic-minded bureaucrats could
effectively regulate our economy
became dominant. Congress increas-
ingly approached legislation as a way
to set aspirational goals, while delegat-
ing the detailed edicts of policy to the
executive branch. Independent agen-
cies—supposedly immune to political
influence—accrued massive powers
to design and implement regulations,
which have become the most important
source of lawmaking in modern times.
Progressives rode the populist wave
that arose in response to the emergence
of the nation’s first large, nationwide
firms, in order to push through an
array of regulatory initiatives—railroad
regulation, then antitrust regulation.
Railroads were the first major sector of
the economy to experience this new
federal intervention. In 1887, Congress
enacted the Interstate Commerce Act,
which created the Interstate Commerce
Commission (ICC), with broad support
from politicians from both major parties,
as well as from a number of railroad
industry executives.
However, few understood the com-
plex pricing and operational policies
12 CEI.ORG
of the emerging industries
of the time. And, as Nobel
Laureate economist Ronald
Coase noted, that which policy
makers do not understand will
often be attributed to anti-
consumer, anti-competitive
practices. Pro-regulation
railroad executives, having
grown weary of “rate war”
competition and their inabil-
ity to sustain private cartels,
welcomed and harnessed this
ignorance to push for inter-
ventions they believed would
benefit their firms. But as Henry Varnum
Poor, founder of the company that
became Standard & Poor’s, warned at
an 1886 Senate hearing:
Our governments, state and
national, have very little genius
or faculty for the supervision of
railroads. They can provide that
reports be made which shall give
an adequate idea of the condition
of railroad companies and of the
manner in which they are con-
ducted; that done, public opinion
must do the rest.
The nascent ICC was forced to rely
on rail industry leaders, as few at the
newly created agency had any exper-
tise in rail transport. This led to what left-
ist historian Gabriel Kolko and others
called “regulatory capture”—the notion
that regulations actually benefited the
regulated firms, rather than consum-
ers. Legislation in 1910 established
the United States Commerce Court to
adjudicate ICC disputes. However, the
Commerce Court was abolished only
three years later, after one of its judges
was impeached for accepting bribes
from representatives from the railroads
and the coal industry.
Following the Commerce Court’s
dissolution, the ICC took a more
aggressive approach to regulating the
As Nobel Laureate
economist Ronald Coase
noted, that which policy
makers do not understand
will often be attributed
to anti-consumer, anti-
competitive practices.
railroad industry. In addition, during
the early decades of the 20th century,
Congress significantly expanded the
ICC’s regulatory jurisdiction to encom-
pass pipelines, telecommunications,
motor carriers, and domestic water-
borne carriers.
Rail pricing strategies became
rigid over the following decades. The
ICC became more interested in setting
prices to minimize competition between
firms—and between transportation
modes—than in policing alleged anti-
competitive behavior. As a result, the
railroads went on to experience what
became known in the industry as a
century-long going out of business sale.
By the 1970s, the railroads faced
imminent collapse. Much of the
Northeast’s rail network had been
nationalized following the bankrupt-
cies of the Penn Central and six other
railroads—a fate that then seemed
likely for the rest of the nation’s private
rail system. Policy makers saw no other
alternative than liberalization, driven
by an unusual confluence of economic
and intellectual forces, including liber-
alization in other industries.
Deregulation efforts were already
under way for airlines and truck-
ing, and there were even some early
steps in communications and banking.
Future Treasury Secretary John Snow,
COMPETITIVE ENTERPRISE INSTITUTE
 Civil Aeronautics Board Chairman
Alfred Kahn, and others within the
bureaucracy sought to liberalize these
industries. Yet, it was not until railroad
executives lent their support to these
efforts that deregulation become a
reality.
Those efforts led to Congress’
enactment of the Staggers Rail Act of
1980, which largely freed the railroads
from ICC oversight and gave them the
freedom to introduce flexible rates. The
Act helped return America’s railroads
to profitability by allowing them to
gain traffic back from other modes of
transportation, such as trucking. Those
profits allowed private rail firms to
renovate their deteriorated infrastruc-
ture. That private network investment
has totaled more than half a trillion
dollars since 1980.
The railroads’ experience provides
valuable lessons for those seeking to
address the excesses of regulation.
• Regulations create costs by deny-
ing firms the flexibility to operate
in a highly competitive world that
demands swift, creative responses to
emerging, unforeseen challenges.
• Alleged “market failures” tend to be
less costly than government failures.
Regulations, usually intended to
address perceived market failures,
all too often fail to live up to their
expected gains. Instead, they often
increase costs while the benefits
rarely materialize.
• Businesses, like railroads a cen-
tury ago, too often take a fatalistic
Learn more at RealClearRadio.org.
COMPETITIVE ENTERPRISE INSTITUTE
approach to regulation and seek
accommodation. For example, they
may endorse one national regulator
as less burdensome than mul-
tiple state regulators, even though
competition among the states could
result in the less burdensome regula-
tors emerging as dominant.
Fatalism does little to encourage
businesses from resisting overregula-
tion. It also doesn’t help in making
the moral, intellectual, and economic
case for competitive free markets. If
the pervasive Progressive Zeitgeist is
to be resisted, it will take much more
than rolling back a few regulations or
making them somewhat more favorable
to certain firms and sectors. Current
policies have resulted in a century of
ever more restrictive regulations and an
ever-increasing burden on the entrepre-
neurial sector of the economy.
Business surveys routinely recog-
nize regulations as one of the most
serious impediments to innovation
and growth. Yet, to date, business
leaders have mounted little serious
resistance. Instead, they often choose
appeasement of their critics, much
like the railroads did in the late 19th
century and the decades following.
While some might gain some short-term
benefits from such tweaking, businesses
in general find their wealth-creating
capabilities limited.
In part, these failures illustrate the
tendency of business to go it alone,
rarely reaching out to truly pro-market
activist and academic allies. Groups
C E I . O R G 13
favoring an expanded role for govern-
ment have been more entrepreneurial,
creating effective alliances between
moral-intellectual and economic forces.
For example, trial lawyers and environ-
mentalists work closely to advance their
common policy goals, as do unions
and consumerist groups. Such “Baptist
and Bootlegger” alliances address the
reality that policy change in market
democracies requires moral and intel-
lectual, as well as political and eco-
nomic support.
Railroads sought economic lib-
eralization after almost a century of
struggling under an ever more restrictive
regulatory regime that left them facing
ruin. They succeeded in impressive
manner—a once-moribund industry
recovered rapidly and is now again a
vibrant part of the American economy.
The rail industry’s 11th-hour investment
in promoting economic freedom may be
one of the most profitable investments
of the last few decades. Shouldn’t more
American businesses explore similar
investments in liberalization?
Fred Smith (fred.smith@cei.org) is
founder of CEI and Director of CEI’s
Center for Advancing Capitalism. Marc
Scribner (marc.scribner@cei.org) is a
Fellow at CEI. They are authors of the
new CEI study, Reviving Capitalism:
Lessons from the Near-Death and
Rebirth of American Railroads.
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
GOOD
CEI Prevails in Court
against Illegal TSA
Body Scanner Policy
For several years, CEI has been
attempting to force the Transportation
Security Administration (TSA) to
comply with federal law and a court
order related to the agency’s unlawful
deployment of airport body scanners.
In July, CEI filed suit in the U.S. Court
of Appeals for the D.C. Circuit asking
the court to compel the agency to
produce a final rule governing the
use of the scanners. In October,
the court sided with CEI. “We are
pleased the court agreed with our
petition that the TSA has taken far
too long to comply with the basic
rulemaking process that all agencies
must follow,” said CEI Fellow Marc
Scribner. “We look forward to exam-
ining the final rule to see how the TSA
considered the thousands of public
comments on how, why, and where
the TSA can use body scanners.”
Members of Congress were outraged
after a leaked inspector general
report in June found that the agency’s
airport screening failed to detect
fake bombs and weapons brought
through by undercover auditors 96
percent of the time.
14 CEI.ORG
THE
BAD
President Obama
Missouri Right-to-Work Rejects Keystone XL
Bill Vetoed Pipeline
In September, legislators in Missouri
had an opportunity to bring worker
freedom to their state. They passed
an historic right-to-work law, which
would have reduced unions’ privilege
and blunted their intimidation tac-
tics against workers. Unfortunately,
Governor Jay Nixon (D) vetoed the
bill and an attempt to override Nixon’s
veto fell short. “In failing to override
the governor’s veto, Missouri lawmak-
ers lost a chance to make history and
dealt a devastating blow to worker
freedom in favor of special interests
and Big Labor,” said CEI Policy
Analyst Trey Kovacs. Kovacs previ-
ously authored a study for CEI on
right-to-work in Missouri highlighting
that not having a right-to-work law
from 1977 to 2012 led to an estimated
$3,040 in lost per capita income, for
a total loss of $18.3 billion.
COMPETITIVE ENTERPRISE INSTITUTE
THE
UGLY
In November, President Obama
rejected the proposed Keystone XL
pipeline, dealing a blow to economic
growth and commonsense environ-
mental policy. Myron Ebell, direc-
tor of CEI’s Center for Energy and
Environment, blasted the president for
pandering to far-left environmental
activists. “President Obama’s deci-
sion to deny the necessary permit for
the Keystone XL Pipeline adds to his
shameful record of policies to constrict
domestic energy production and raise
energy prices for American consum-
ers,” said Ebell. “It comes after six
years of foot dragging by his adminis-
tration designed to delay the pipeline
to death and just before the U.N.
climate conference in Paris, where
the President hopes to cap his anti-
affordable energy record by signing a
new climate treaty. While his timing is
politically clever, the decision is con-
trary to America’s economic interests
and harms our relations with Canada,
our closest ally and largest trading
partner.””
 MediaMENTIONS
USA Today reports on the FAA’s
new drone regulations and
quotes CEI Fellow Marc Scribner
on the final rule.
Marc Scribner, a transportation
expert at the Competitive Enterprise
Institute, an advocacy group for limited
government, said the FAA should have
allowed public notice and comment
about the final rule for the registry,
which will be published Tuesday in
the Federal Register. Ignoring those
requirements means government
officials “are practically demanding
litigation,” Scribner said.
–DECEMBER 14,
USA Today
Fox Business reports on Vice
President for Policy Wayne
Crews’s latest study on the
“regulatory dark matter” cre-
ated by federal agencies and its
economic costs.
The rules hit all levels of American
life, health care, retirement, the work-
place, education, and the Internet,
says Clyde Crews, Jr., a top researcher
and respected author with the liber-
tarian-leaning Competitive Enterprise
Institute, in his new report, “Mapping
Washington’s Lawlessness 2016.”
According to Crews’s estimation
of the “regulatory dark matter,” the
federal government has published
524,251 “public notices” describing
federal rules that affect the economy
in the Federal Register since 1994.
Federal agencies issued 3,554 rules
and regulations in 2014, versus the
224 bills Congress passed and the
president signed into law last year.
“The average has been 26 rules for
every law over the past decade,”
Crews says.
—DECEMBER 10,
Fox Business
COMPETITIVE ENTERPRISE INSTITUTE
The Huffington Post quotes
the response by Myron Ebell,
Director of CEI’s Center for
Energy and Environment, to the
“Wanted” posters targeting him,
CEI senior fellow Chris Horner,
and other climate skeptics at the
Paris Climate Conference.
“The vilification of me and several
other climate realists during a meeting
of tens of thousands of alarmists sug-
gests these alarmists are worried that
a handful of people speaking the truth
threatens the so-called consensus that
global warming is a crisis,” Ebell said
in a statement.
—DECEMBER 7,
Huffington Post
Pittsburgh’s Tribune-Review
interviews Senior Fellow John
Berlau on the dangers of the
Department of Labor’s proposed
“fiduciary rule.”
Q: What damage do you believe
the rule could cause?
A: The rule would severely restrict
investment choices in savings plans
such as 401(k)s and IRAs, especially
for poor and middle-class investors,
by forcing investment professionals
to adhere to a one-size-fits all defini-
tion of “best interest” for assets and
investment strategies. [If the rule goes
into effect,] predictions are that many
brokers will stop serving households
with less than $50,000 in assets.
—OCTOBER 30,
Tribune-Review
C E I . O R G 15
The Wall Street
Journal cites
Director of
CEI’s Center for
Class Action
Fairness Ted
Frank on recent
class action
settlements.
Litigator and
class-action activist Ted Frank raised
similar concerns last year when he
objected to a settlement of allegations
that Gillette Co.’s Duracell unit misled
consumers about the battery life of a
premium battery line.
While approving the settlement,
the federal trial court judge in Florida
questioned the plaintiffs’ assertion that
their request for a $5-plus million fee
was more than reasonable. The law-
yers said it was only 10 percent of the
estimated value of the settlement. “[T]
he $50 million calculation is somewhat
illusory, because the parties never
expected that Gillette would actually
pay anything close to that amount,”
wrote Judge Gregory A. Presnell.
Mr. Frank told Law Blog that
inflated estimates of settlement value
are common in class actions and
help plaintiffs’ lawyers make their fee
requests “seem more reasonable.”
He said he’s hoping the U.S. Supreme
Court will take up the issue, saying he
plans to ask the justices to review the
battery settlement, which was affirmed
by a federal appeals court.
—OCTOBER 22,
The Wall Street Journal

...END NOTES
Police Bust Nonagenarians over Mahjong Game
In tiny Altamonte Springs, Florida, four women aged 87
to 95 were recently enjoying their weekly mahjong game
in the Escondido Condominium clubhouse when police
arrived to shut down the game, telling the women they were
engaged in illegal gambling. It is believed a “troublemaker”
resident tipped off the police. “This is ridiculous,” Zelda
King told the Heritage Florida Jewish News. “We haven’t
played in the clubhouse for weeks! We have to go to each
other’s homes to play and not everyone lives in Escondido.
It is an international game and we are being crucified!” But
apparently there was no ordinance in Altamonte Springs
prohibiting mahjong for money in the first place. “Penny-ante
games” of up to $10 are not considered crimes. The ladies
have a $4 limit.
Robert Mugabe Awarded China’s Peace Prize
Dictator Robert Mugabe, who has ruled Zimbabwe
with an iron fist for more than three decades, is notorious
for widespread human rights violations against his political
opponents, hyperinflation that led to Zimbabwean dollar
bank note denominations of up to a $100 trillion, and
widespread poverty. In October, it was announced—to
widespread confusion—that Mugabe would be awarded
the Confucius Peace Prize, China’s answer to the Nobel
Peace Prize. The Confucius Prize was established in 2010
after the Nobel Peace Prize was awarded to Liu Xiaobo, an
imprisoned Chinese dissident and literary critic. Mugabe ulti-
mately declined the prize, which included a cash award of
500,000 renminbi (nearly $80,000), or 28 million revalued
Zimbabwean dollars at the current exchange rate..
16 CEI.ORG
Nonprofit Org.
U.S. Postage
PAID
Permit 425
Southern MD
Falling Weather Balloon Device Prompts Bomb
Squad Response
In November, measurement equipment attached to a
weather balloon fell to the ground in Philadelphia, prompt-
ing the city’s bomb squad to spring into action after the
box struck a vehicle. According to Mitchell Gaines of the
National Weather Service, a balloon carrying a radio-
sonde was launched in Virginia, but high winds caused it
to drift over Philadelphia. Radiosondes measure a variety
of weather variables when they are carried high into the
atmosphere by balloons. When they reach a certain altitude,
the weather balloon pops, sending the radiosonde drifting
to the ground below by an attached parachute. The devices
are labeled with a mailing address and instruct the finders
to return them to the weather service. Usually, this occurs in
rural areas where falling radiosondes are unlikely to immedi-
ately alert anyone, let alone strike a car, home, or person
Providence’s Criminal Mayor Honored by Portrait
in City Hall
Buddy Cianci is nationally known as one of America’s
most criminally inclined local politicians, rivaling the noto-
riety of Marion Barry, the late mayor of Washington, D.C.
In November, a large portrait of Cianci was unveiled
in Providence City Hall. “It’s not the first time I’ve been
framed,” Cianci told a crowd of supporters at an event held
in his honor. Despite his criminal convictions and many more
allegations of corruption, Cianci enjoyed strong support
among some segments of the public and officials in Rhode
Island. He served 21 years as mayor, which came to an end
in 2002 when he began serving more than four years in
federal prison following a racketeering conviction. His first
term as mayor ended in 1984 after he pleaded no contest
to a felony assault charge after attacking a man with a fire-
place log, an ashtray, and a lit cigarette. He currently hosts
a popular daily radio show.
COMPETITIVE ENTERPRISE INSTITUTE