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COMPETITIVE ENTERPRISE INSTITUTE

VOL. 32, NO. 1 | WINTER 2019

FEATURED ARTICLES

Unfounded E-Cigarette Panic Puts


Lives at Risk
4 BY MICHELLE MINTON.
BY RYAN YOUNG

E
Lessons from the GM Layoffs: -cigarettes pose a fraction of the risk of cig-
End the Tariffs and Subsidies arette smoking, just 1 percent to 5 percent
according to authorities like the British govern-
ment. That could mean the difference between
life and death for the half million Americans
and 7 million people worldwide who die of
smoking-related illnesses every year.
6 Even if it turns out that e-cigarettes convey
small long-term risks, those products should
BY WAYNE CREWS AND RYAN YOUNG remain an option for smokers who haven’t
How to Rein in Regulatory been able to kick their more deadly habit
Dark Matter and haven’t had luck with prescription drugs,
patches, gums, or lozenges.
Why, then, do government agencies
and certain health activists focus more on
scaring people about the unknown risks of The facts on are not on the side of anti-
e-cigarettes than helping them understand vaping activists. There is no epidemic in teen

9
the relative risks of vaping compared to vaping. The latest CDC survey data only
smoking? The unfortunate truth is that many reveal any e-cigarette use in the last month,
of these groups may be letting their need for but previous data showed that fewer than 6
BY JESSICA MELUGIN headlines and fundraising interfere with their percent of teens (including 18 year olds, who
Cities Should Stop Slowing Down genuine goal of improving public health. can legally purchase e-cigarettes) vaped
America’s 5G Revolution To the general public, there seems to be habitually (20-30 days a month). That means
a consensus on the dangers of e-cigarettes. over 94 percent of teens are not regularly
Government agencies like the Food and vaping. Furthermore, CDC data do not tell us
ALSO IN THIS ISSUE Drug Administration (FDA) and the Centers how many of these teenage vapers are using
for Disease Control and Prevention (CDC) nicotine, but previous research found most
and activist groups like American Cancer of them were not. It also doesn’t say what
Tesla Shareholders, Not the Government,
Society and the Campaign for Tobacco-Free percentage of teen e-cigarette users had
Should Hold the CEO Leash . . . . . . . . . . . . . . 5
Kids have all reached the same conclusion: never smoked, a number previous research
Science Shows it’s Not Really Green
to Ban Plastic Bags. . . . . . . . . . . . . . . . . . . . . . 7 E-cigarette use is “epidemic” among puts at less than 1 percent.
Latest Bipartisan Carbon Tax Folly . . . . . . . . . 8
teenagers and this is terrible for public health. More importantly, the latest CDC data
But what most people don’t know is that reveal nothing about underage smoking,
Walking off the Job at Taxpayer Expense. . .10
these groups have worked together to hype which is the single most important data point
Will New Congress Seek Reforms to
Highway Funding?. . . . . . . . . . . . . . . . . . . . . 11
unfounded fears, promote shared policy in evaluating the harms or benefits of teenage
goals, boost each other’s clout, and pad their vaping. Since the introduction of e-cigarettes
CEI Events Update . . . . . . . . . . . . . . . . . . . . . 12
coffers. to the U.S. market, adolescent use of cigarettes
The Good, the Bad, and the Ugly. . . . . . . . . 14
Media Mentions. . . . . . . . . . . . . . . . . . . . . . . 15 (continued on page 3)
End Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Help Us Celebrate 35 Years of CEI
by Kent Lassman

S pring is coming—and a big anniversary with it.


This year, we celebrate 35 years of CEI fight-
ing for liberty. From its humble beginnings at Fred
This isn’t just a legal issue. Regulation tends to
crowd out the institutions best positioned to address
the nation’s myriad challenges. Regulatory reform,
Smith’s kitchen table to our place of prominence as an done right, can help make room for all the good
authority on regulatory policy today, this organization that comes from the institutions that are the fabric of
remains steadfast in its commitment to restrain gov- local communities, such as churches, booster clubs,
ernment, and to the value of expanding the scope of museums, scholarship funds, and food drives.
human freedom. With that in mind, I hope you can join The costs of government extend far beyond
FROM THE PRESIDENT

us on June 20, in Washington, D.C., as we celebrate what Washington taxes, borrows, and spends. The
these past 35 years—and look forward to the next low-end estimates of the federal regulatory burden
three decades—at CEI’s annual dinner and reception. are $1.9 trillion per year—or nearly $15,000 for
But first, the reason for celebrating. every household. The 116th Congress has a historic
This winter, CEI hit the ground running. We opportunity to bring to light an accounting of how
started 2019 with the launch of the new edition the government operates and what values we
of Free to Prosper: A Pro-Growth Agenda for the pursue through Washington’s edicts.
116th Congress. It offers some bold, yet practi- We have made some progress recently.
cal ideas for regulatory reform the new Congress Congress rediscovered the Congressional Review
should consider and pursue. Crucially, in a divided Act. Regulatory reform ideas proposed by CEI,
Washington, it finds some bipartisan avenues where such as a regulatory budget, have gained accep-
regulatory reform and restraint are possible. tance, if not full adoption, in Washington. We will
Such reform is crucial. Today, unaccountable keep pushing for stronger reforms, but we still have
regulatory agencies dominate how we live, work, a long way to go.
play, build, travel, prepare food, and heal one Today we find ourselves in a moment where
another. Typically, regulations do not lead the news good ideas, many with bipartisan pedigree, point
and are not an issue that will garner much attention. toward creating binding limits on the executive
Yet, virtually every aspect of our lives is subject to branch. Some seek to curtail the current administra-
regulations from Washington. Did you know it is a tion. Others would like to see fewer far-reaching
federal crime to sell chewing gum that is more that rules from unaccountable agencies that receive far
0.065 percent beeswax or to sell vegetable spa- too much deference from the courts. Taken together,
ghetti bigger than 0.11” in diameter? We have all it is time to move a regulatory reform agenda even
seen the photos of the Federal Register that look like further.
mountains of paper. How did we get there? As I noted, we have a lot of work ahead of us.
Article I of the Constitution bestows the power to But we’ll also have opportunities to celebrate and
make laws to Congress—and Congress alone. Yet, reflect on our accomplishments. Again, I hope you
for decades, Congress has delegated away much can join us on June 20 for our 35th anniversary
of its lawmaking authority to regulatory agencies. celebration.
Congress must reassert its constitutional authority
to better position itself to address issues proactively
rather than standing on the sidelines while the
executive and judicial branches of government take
the initiative.

The CEI Planet is produced by the Competitive Enterprise


Publisher Institute, a pro-market public interest group dedicated to
Kent Lassman free enterprise and limited government.
Editor
CEI is a non-partisan, non-profit organization incorporated in
Ivan Osorio
Ph (202) 331-1010 the District of Columbia and is classified by the IRS as a 501
Fax (202) 331-0640 Associate Editor (c)(3) charity. CEI relies upon contributions from foundations,
info@cei.org Richard Morrison corporations, and individuals for its support. Articles may be
reprinted provided they are attributed to CEI.
ISSN#: 1086-3036

2 CEI.ORG COMPETITIVE ENTERPRISE INSTITUTE


E-Cigarette Panic, continued
has more than halved, from 15.8
percent in 2011 to 7.6 percent in 2017.
Rather than e-cigarettes acting as a Government bans
gateway to smoking, as is assumed by
government and advocacy groups, this and restrictions on
indicates that teenage e-cigarette use is
more likely diverting would-be smokers e-cigarettes don’t
Help the Competitive
toward a less harmful means of nicotine
consumption and potentially away from help save lives. Enterprise Institute carry
nicotine consumption altogether.
Meanwhile, smoking is the leading death. The math simply doesn’t add up on its work for generations
cause of preventable death in America, if the goal is to improve public health. by joining the Legacy
according to the CDC, responsible for Anyone concerned about public
more than 480,000 deaths per year in health should be looking for effective, of Liberty Society
the United States. By the government’s innovative ways to encourage
own estimates, more than 16 million smoking cessation or at least lower-
Americans live with a disease caused risk products. Substituting e-cigarettes Thanks to the generous support of our friends,
by smoking, like cancer, heart disease, for smoking could prevent up to the Competitive Enterprise Institute has
stroke, lung diseases, diabetes, and 7 million premature deaths in the remained a successful advocate for liberty
chronic obstructive pulmonary disease United States, according to research- for 35 years. The Legacy of Liberty Society
(which includes emphysema and driven estimates. That’s why the recognizes the faithful support of any donor
chronic bronchitis). hyped headlines and rhetoric about who desires to advance the principles of free
If e-cigarettes can help smokers e-cigarettes and the recent FDA ban enterprise and limited government through
make the switch and save them from on e-cigarettes sales in convenience his or her will, trust, life income gift, retirement
disease and death, as research stores are so problematic. plan, life insurance dedication, or another
increasingly proves, isn’t that Government bans and restrictions planned giving instrument.
something we ought to celebrate? on e-cigarettes may help government Contributions to CEI are tax deductible. We
Instead, activists are demanding agencies and advocacy groups get accept gifts via check, credit card, cash, or
restrictions or bans on the availability millions of dollars in tax money, but Bitcoin—as well as stock or other securities
of e-cigarettes, even though making they don’t help save lives. and assets. CEI also accepts contributions in a
e-cigarettes harder to buy or less will or trust. Including CEI in your estate plans
palatable (by eliminating flavors) will is easy, and can be altered as needed.
result in fewer smokers switching. Michelle Minton (michelle.minton@
Consult your tax professional about the limits
While one can understand the cei.org) is a Senior Fellow at CEI and
and conditions regarding charitable deduc-
concern over adolescent nicotine use, the author of the recent study, Fear tions and your tax situation. For contributions
the relatively minor risk it poses to the Profiteers: How E-cigarette Panic in a will or trust, consult a tax or estate profes-
small percentage of teens vaping does Benefits Health Activists. A version of sional for language that is appropriate for
not warrant sacrificing the many adult this article was originally published at your estate and financial situation.
smokers at risk of serious illness and Inside Sources.

AVAILABLE FROM CEI If you would like to join the Legacy


of Liberty Society or learn more
about the impact you can make
Traders of the Lost Ark through one of CEI’s giving societies,
please contact CEI’s Philanthropy
Rediscovering a Moral and team at (202) 331-1010 for more
Economic Case for Free Trade information.
Andy Yuan
BY IAIN MURRAY AND RYAN YOUNG Philanthropy Department
andy.yuan@cei.org | (202) 331-1010
https://cei.org/content/traders-lost-ark

COMPETITIVE ENTERPRISE INSTITUTE C E I . O R G 3


Lessons from the GM Layoffs: End the
Tariffs and Subsidies
add an average of $250 to the cost of
BY RYAN YOUNG making a car. Other tariffs affect more
than 100 car parts, from tires to car

G eneral Motors (GM) announced


on November 26 that it will be
laying off 14,700 workers, closing five
batteries, further increasing costs and
consumer prices. The billion dollars that
tariffs will cost GM annually is enough
factories, and discontinuing several to pay the salaries of 24,000 assembly
car models. This has caused some workers. The layoffs affect about
soul-searching in the midst of a boom 14,700 workers.
economy. There are three main lessons President Trump did not take kindly
for policy makers and the public. to the plant closings, tweeting a threat
One, GM is being too shy about to end GM’s government subsidies
the reasons for the layoffs. President as retaliation for the plant closings.
Trump’s tariffs have already cost the Such a proposal would have to pass
company a billion dollars. GM is through a skeptical Congress, and
skirting the topic, possibly to avoid any legislation would be immensely
political blowback—a strategy that is complicated, with provisions ranging
not working. from green energy subsidies and labor
Two, President Trump is right to want regulations to trade protectionism that
to end GM’s government subsidies, but would, implausibly, target GM, but not As the new $200 billion China
for the wrong reasons. other companies. Still, he is right that tariffs take effect and the other new
Three, contrary to popular belief, GM shouldn’t be getting government tariffs settle in, the damage will only
U.S. manufacturing is healthy, despite subsidies—but neither should any other increase over time. The manufacturing
GM’s bad news. private business. sector will find a way to remain
GM has publicly cited many Unfortunately, this is not what the competitive, but current trade policies
reasons for its layoffs and restructuring. president has in mind. His subsidy are making the job harder than it needs
Autonomous vehicles are the future, proposal is part of his larger approach to be. Neither manufacturers, their
and many of those vehicles likely will of using government to help or harm workers, nor consumers will benefit.
not use gasoline engines. Even a big individual businesses as he sees fit. GM’s layoff announcement will not be
company like GM only has so many In this case, the president’s larger the last bit of bad economic news we’ll
resources available. It is putting less policy goal is to revive American see in the next few years.
into traditional cars so it can put more manufacturing. Fortunately, the patient It is important to learn the right
into developing what it thinks people is healthy. Real value-added U.S. lessons now to fix current mistakes
will want in the future. manufacturing was $2.125 trillion as and prevent future ones. Companies
The other major cited reason of the most recent report, setting a new and consumers need to be more
is shifting consumer tastes. People all-time record—which was previously assertive in standing up against harmful
are increasingly moving away from set in 2007, just before the Great policies. Government needs to dole out
sedans and toward SUVs. So GM Recession. fewer subsidies. And despite popular
is discontinuing poor-selling sedans Unfortunately, President Trump’s perceptions and harmful policies, U.S.
such as the Buick LaCrosse and Chevy efforts to aid a healthy sector will manufacturing is cranking out record
Cruze that aren’t as popular as they hurt it instead. His trade policies and output and doesn’t need Washington’s
used to be, as well as the Chevy Volt, other countries’ retaliation decreased hurtful brand of help.
an electric plug-in hybrid car that car last quarter’s growth by as much as
buyers mostly ignored. 1.8 percentage points—meaning that
Tariffs are conspicuous in their already-stellar 3.5 percent growth Ryan Young (ryan.young@cei.org)
absence from GM’s public statements. could have been 5.3 percent instead. is a Fellow at CEI. A version of this
President Trump’s steel tariffs alone The new manufacturing output record article was originally published at Fox
should have been set even higher. Business.

4 CEI.ORG COMPETITIVE ENTERPRISE INSTITUTE


Tesla Shareholders, Not the Government,
Should Hold the CEO Leash
BY JOHN BERLAU
It must be up to
D epending on who you talk to, Tesla
CEO Elon Musk is either the next Tesla’s shareholders,
Henry Ford or the next P.T. Barnum.
Musk’s explosive tweets reverberate not the government,
in financial markets almost as much as
those of tweeter-in-chief @realdon- to decide whether
aldtrump. So what should the govern-
ment do to help shield Tesla investors Musk’s tweets are
from the share-price volatility his tweets
may cause? Absolutely nothing, unless cause for removing
his tweets are found to be fraudulent
and deceptive, not merely outrageous. him from executive
Musk’s emotional tweets—such as
the recent one calling the Securities posts.
and Exchange Commission (SEC) the
“Shortseller Enrichment Commission”— secured” for taking Tesla private at Elon Musk
may at times hurt Tesla sharehold- $420 a share was misleading or even
fraudulent. If so, then it was right for Some CEOs may indeed need
ers by causing share-price volatility.
the SEC to fine him as an individual for a strong leash, but in a free market,
However, it is a risk these shareholders
violating securities laws. shareholders—the real stakeholders in
signed up for, knowing he ran the com-
But the SEC was wrong in its settle- a company—must be the ones holding
pany when they bought the stock. And
ment with Tesla to ban Musk from that leash.
it must be up to Tesla’s shareholders,
not the government, to decide whether serving as the company’s chairman
Musk’s tweets are cause for removing and to mandate that Tesla must hire
him from executive posts. two new directors the SEC deems as John Berlau (john.berlau@cei.org) is a
Based on the charges it alleged, “independent” of the company. Those Senior Fellow at CEI. A version of this
the SEC may have been right in saying are issues for Tesla’s shareholders to article was originally published in USA
Musk’s tweet that he had “funding decide. Today.

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It’s an easy way to expand the
boundaries of freedom!

COMPETITIVE ENTERPRISE INSTITUTE C E I . O R G 5


How to Rein in Regulatory Dark Matter
BY WAYNE CREWS AND RYAN
YOUNG Certain rules and
guidance have not
D ivisive hot-button issues are distract-
ing public attention from policy
reforms that could make everyone better been submitted to
off by expanding the economy. One of
these is regulatory reform. It is a huge Congress for years,
enough task on its own. But it is made
more difficult by a major transparency and are technically
problem. Many regulatory costs are
never accounted for. illegal.
Agencies issue all manner of
regulatory “dark matter” outside
an executive order should strengthen such existing guidance documents to
the required rulemaking process—
disclosure requirements for guidance be invalid unless the GAO and both
guidance documents, bulletins,
documents, which aren’t always made chambers of Congress had properly
circulars, memoranda, administrative
public. They should be made available received them in the past, and strictly
interpretations, and more—that are not
in a single location and a standardized enforce that requirement for future
officially “rules,” but carry regulatory
easily searchable format. After all, guidance documents as well.
weight. Such guidance covers issues
people can’t comply with regulations All federal regulations are publicly
ranging from medical devices to
they don’t know about. And dark matter cataloged and searchable in the Code
college admissions. Guidance is not
is, by nature, very hard to detect. of Federal Regulations. Dark matter
supposed to be legally binding, but
Agencies are already required to needs a similar compendium. Agencies
if your business needs a permit, your
contribute to transparency reporting have issued more than 13,000 guidance
choices may be slim.
via the twice-yearly Unified Agenda of documents since 2007—that we know
The long-term fix to this stealth
Federal Regulatory and Deregulatory of. Of those, just 189, roughly half of 1
lawmaking must come from Congress.
Actions for recent and upcoming percent, were reported to the GAO and
But until then, the president can issue
regulations. The Agenda lists rules that Congress. Given that such submission
an executive order to rein in regulatory
go through the standard rulemaking is required under the CRA, much of the
dark matter until Congress can make
process, but not guidance documents. universe of guidance is unlawful. At
such reform permanent.
An executive order should require the very least, an Executive Order can
There is precedent for such
the Agenda to include guidance and partially solve the basic transparency
executive action. Presidents Reagan,
other agency sub-regulatory directives. and accountability problem.
Clinton, and Obama all issued
Each guidance document should also Federal regulations have costs
Executive Orders to increase
be classified as either “regulatory” or that rival taxation. In the short term, a
transparency and ensure that agencies
“deregulatory” to make their individual well-crafted executive order can do a
followed better rulemaking procedures.
impacts easier to determine. lot of good for public accountability
Early in his term, President Trump
All regulations, and guidance and regulatory relief. If the president
issued an executive order capping net
documents too, are required to wants to continue to brag about a
regulatory costs and instituting a one-
be submitted to Congress and the growing economy, an executive action
in, two-out policy for new significant
Government Accountability Office is something he can easily do, and
regulatory actions. Net regulation has
(GAO) per the Congressional Review Congress should be eager to share
likely not shrunk under Trump, but its
Act (CRA), which gives Congress 60 credit.
growth has noticeably slowed, and
legislative days to pass a resolution
those executive orders deserve some
of disapproval to repeal the rule or
credit for the current strong economic
guidance. Wayne Crews (wayne.crews@cei.
growth. Reining in excessive guidance
Worse, certain rules and guidance org) is Vice President for Policy at CEI.
would be a solid next step.
have not been submitted to Congress Ryan Young (ryan.young@cei.org) is a
An executive order can set a
for years, and are technically illegal. Fellow at CEI. A version of this article
positive precedent that Congress can
The Executive Order should deem all was originally published in The Hill.
later expand upon and codify. Such

6 CEI.ORG COMPETITIVE ENTERPRISE INSTITUTE


Science Shows It’s Not Really Green
to Ban Plastic Bags
BY ANGELA LOGOMASINI

A s if grocery shopping weren’t


enough of a hassle, it’s about to
become even more inconvenient in
New York—for no good reason.
State lawmakers may soon cave
to the anti-plastic craze by passing a
statewide plastic bag ban. In its zeal to
jump on the anti-plastic bandwagon,
the legislature would force consumers
to use alternatives that use up more
resources and have been shown to to other counties, ER admissions Although there is always room for
endanger public health. increases by at least one fourth, and improvement, the U.S. does a pretty
What will New Yorkers gain after deaths exhibit a similar increase.” good job at keeping plastics out of the
being forced to relinquish one of While correlation doesn’t prove ocean. A 2017 study published in the
the most useful inventions of modern causation, the jump in ER admissions journal Environmental Sciences and
times? Alternatives include potentially in San Francisco was high enough to Technology reported that up to 95
disease-ridden reusable bags or those at least merit further examination by percent of plastic waste enters oceans
hard-to-carry, commuter-unfriendly legislators and public health authorities from just 10 rivers worldwide.
paper bags that fall apart in the rain in New York before they force reusable Eight of the rivers are in Asia, and
and use more energy in the production bags on residents. two are in Africa. None are in the U.S.
process than their plastic counterparts. Reusable bags, moreover, require A 2015 study in Science magazine
First, consider the public health far more energy and other resources estimated that the U.S. contributes less
profile of reusable cloth bags. to make, and they may produce more than 1 percent of the plastic litter in the
A study conducted by researchers at landfill waste. A 2011 study by the UK world’s oceans.
the University of Arizona and California’s government’s Environment Agency The plastic bag crusade is
Loma Linda University in 2010 measured found that cotton bags would have to part of a wider anti-plastics trend
bacteria in a sample of reusable bags, be used 131 times before they yield sweeping the green left. But like
finding many containing dangerous ones, environmental benefits. the equally misguided anti-straw
such as coliform (found in half the bags) As for paper bags, they do work in campaigners, the plastic-bag scolds
and E. coli (found in 12 percent of bags). many cases and break down easier if base their claims more on ideological
Pathogens can develop from leaky they become litter, but they have their commitment than on good science.
meat packages as well as unwashed tradeoffs, as well. They also give no consideration to
produce. And consumers reported that One study reports that plastic the needs of people, not least the
they rarely wash the bags, according to bags require 71 percent less energy physically disabled, who are often
the study. to produce. Plastic bag production dependent on both products.
The consequences of such also uses less than 6 percent of the Let’s hope the New York legislature
contamination can be serious. After water needed to make paper bags. In doesn’t bend to unscientific hysteria,
San Francisco banned plastic bags in addition, paper bags generate nearly because the resulting policies are bad
2007, the number of emergency room five times the amount of solid waste. for people and the environment.
visits for bacterial related diseases Still, many people are rightly
increased, according to a study concerned about plastics becoming
conducted five years later by legal part of the ocean pollution problem. Angela Logomasini (angela.
scholars at George Mason University But the answer to that real problem is logomasini@cei.org) is a Senior Fellow
and the University of Pennsylvania. “ER much simpler: Ensure that products are at the Competitive Enterprise Institute.
visits spiked when the ban went into disposed of properly so they never A version of this article was originally
effect,” the study explained. “Relative enter waterways. published in The New York Post.

COMPETITIVE ENTERPRISE INSTITUTE C E I . O R G 7


Latest Bipartisan Carbon Tax Folly
carbon “fees” in H.R. 7173 increase on
BY MARLO LEWIS autopilot from 2022 through 2050.
Instead of using carbon tax Few investors
O n November 27, Reps Ted
Deutch (D-Fla.), Francis Rooney
(R-Fla.), John K. Delaney (D-Md.),
revenues to cut taxes on capital or
labor, H.R. 7173 would distribute
the proceeds in pro-rata shares to
want to park
Brian Fitzpatrick (R-Penn.), and Charlie all citizens and legal residents. This their capital in
Crist (D-Fla.) introduced H.R. 7173, guarantees that the bill will have net
the Energy Innovation and Carbon negative impacts on U.S. GDP. industries Congress
Dividend Act. The bill would tax green- Although the bill would preempt
house gas emissions and return the net the Environmental Protection Agency has targeted for
revenue in rebates to U.S. households. from regulating greenhouse gas
The bill aims to reduce U.S. emissions under several Clean Air extinction.
greenhouse gas emissions by 40 Act (CAA) provisions (sections 202,
percent in 12 years and 91 percent 211, 213, and 231, which deal with
by 2050, compared to 2015 levels. automobiles, motor fuels, non-road emissions . . . to levels that are at or
This would be achieved by imposing engines, and aircraft, respectively), below the emission reduction targets.”
a tax of $15 per metric ton of carbon it does not preclude greenhouse gas In short, although dubbed a
dioxide-equivalent emissions in 2022 regulation under the National Ambient “carbon fee,” the bill establishes de
and increasing the tax by $10 every Air Quality Standards program (CAA facto carbon caps, which means that
year. sections 108-110), the stationary any purported price predictability is an
I am unaware of any technical source performance standards illusion.
economic study at this time that program (CAA section 111), or the Finally, “Nothing in this legislation
estimates the Deutch bill’s impacts on international air pollution program shall preempt or supersede, or be
U.S. firms, workers, and economic (section 115). interpreted to preempt or supersede,
growth, but the net economic harm Notwithstanding the any State law or regulation.” That
would be sizable. Few investors want aforementioned regulatory exemptions means states like California and
to park their capital in industries for motor vehicles, non-road engines, regional compacts like the Northeast
Congress has targeted for extinction. and aircraft, the bill authorizes the EPA Regional Greenhouse Gas Initiative
Consequently, many carbon-intensive to limit greenhouse gas emissions from are free to offset any regulatory
firms would go bankrupt long before those sources. It would also legalize relief the bill might achieve in federal
explicit carbon prices rendered them California’s purloined power to set environmental programs.
unprofitable. The U.S. government motor vehicle greenhouse gas emission
cannot pursue deep de-carbonization standards.
in earnest, as this bill proposes to do, Nor is that all. The bill sets emission- Marlo Lewis (marlo.lewis@cei.org) is
without aborting the emerging era of reduction targets for 2022-2050, a Senior Fellow at CEI. A version of
U.S. energy dominance. and if those goals are not met, H.R. this article was originally published at
Several of the bill’s features are 7173 requires the EPA “to issue such OpenMarket.
particularly troublesome. Unlike regulations as the Administrator deems
other taxes enacted by Congress, the necessary to bring greenhouse gas

8 CEI.ORG COMPETITIVE ENTERPRISE INSTITUTE


Cities Should Stop Slowing Down
America’s 5G Revolution
BY JESSICA MELUGIN
Less red tape
T he Federal Communications
Commission (FCC) recently will ensure
approved a proposal to speed up
deployment for the next generation of that consumers
wireless service, known as 5G. The plan
puts states and localities on a shot clock have access to
for approving installments and caps fees
at rates that compensate them for their America’s next era
troubles but don’t allow them to extract
a profit. of innovation.
Less red tape will ensure that con- the country might not dominate mobile
sumers have access to America’s next that promotes the deployment of next technology, and its platforms, such as
era of innovation, with virtual reality, generation wireless access without Instagram, Snapchat, and perhaps
4K video, self-driving cars, remote concern that excessive regulation or even Facebook and Netflix might not
surgeries, and more. small cell siting fees slows down the have become global powers.”
The new wave of 5G devices process.” FCC Commissioner Brendan Carr
and applications will require a major But there are plenty of examples hopes that his agency’s efforts to reduce
network upgrade. Increased data of officials trying to game the system state and local obstacles will “reduce
demands a denser network infrastruc- to fill the public coffers. Crown Castle, the regulatory costs of small cell deploy-
ture than currently exists. This means America’s largest provider of wireless ment by 80 percent, cut months off
more and smaller radio access nodes infrastructure, recently claimed that deployment timelines, and incentivize
located closer together, known as Newport Beach, California, adopted thousands of new wireless deploy-
small cells. Experts predict that install- an annual charge of $10,800 per ments.” The 5G speeds will be at least
ing the hundreds of thousands of small small cell site. That price is completely 10 times faster than the current 4G stan-
cells needed to support the 5G revolu- out of line with the rates of states who dard, and a report from the American
tion will cost approximately $200 have already acted to limit their fees Consumer Institute found that consumer
billion. for wireless attachments: Florida and benefit from 5G in the hundreds of bil-
That capital investment is enormous Rhode Island at $150 per attachment lions of dollars. The stakes are too high
and there are still technical challenges and Ohio at $200. Newport Beach to let meddling local and state politi-
to overcome—such as eliminating politicians seem to be acting in the cians extract their pound of flesh.
interference from trees, weather, and short-term interest of their city’s bank The FCC’s plan will allow compa-
man-made structures. But the FCC’s account, not in the long-term interests nies to complete deployment of this
plan solves one major roadblock: of their city’s residents. new infrastructure quickly and effi-
excessive fees from local and state The political impulse to prioritize ciently. The least government can do is
governments looking to use the 5G profits over progress is why the FCC get out of the way.
rollout as an ATM. must intervene in order for the United
Some local and state officials have States to win the 5G race. The Wall
wisely called on the FCC to streamline Street Journal quoted former FCC Jessica Melugin (jessica.melugin@cei.
the approval process for small cell Commissioner Rob McDowell, who org) is Associate Director of CEI’s Center
deployment. In a letter to the FCC, the said that being slow to 5G puts, “the for Technology and Innovation. A version
mayor of Sterling Heights, Michigan, U.S. at a competitive disadvantage of this article was originally published at
wrote, “there are significant, tangible globally.” The article explains that if, Inside Sources.
benefits to having a nation-wide rule “the U.S. hadn’t led the way of 4G,

COMPETITIVE ENTERPRISE INSTITUTE C E I . O R G 9


Walking off the Job at Taxpayer Expense
BY TREY KOVACS

S ome teachers in Oklahoma got


paid by taxpayers to walk off their
jobs in April, newly released informa-
tion reveals.
Thousands of teachers walked out
of Oklahoma classrooms and flooded
the state capitol to demand higher
salaries and increased education
funding. As a result of the two-week
walkout, around 200 school districts
were forced to close, according to The
Oklahoman.
Prior to the teacher strike, lawmak-
ers passed legislation that provided
teachers with an average $6,100
raise, the largest in Oklahoma history.
In addition to pay raises, the teachers’
unions released a list of demands to
end the strike. At the top of the list was
increased education funding. On April Oklahoma collective bargaining • American Federation of School
6, the legislature passed measures to agreements between government Administrators—40 hours
increase education funding by $40 employers and public employee Due to the limited response, it is
million. Ultimately, union leaders ended unions also include union leave impossible to calculate the cost of
the strike when further legislative action arrangements. The Competitive union leave taken by Oklahoma City
looked unlikely, instead redirecting Enterprise Institute submitted a public teachers to go on strike, but likely it
union focus to the upcoming election. records request to Oklahoma City was not cheap.
Media reports on the strike noted Public Schools asking for union leave In the new legislative session,
sacrifices some teachers made for records. Below is the response in its lawmakers should consider eliminat-
the walkout. In the school districts that entirety: ing union leave altogether. While the
remained open, teachers used their cost of the union subsidy is unknown in
• On the advice of the General
“sick days or personal days to par- Oklahoma, an inspection of Oklahoma
Counsel, under the Open Records
ticipate in the walkout, and others are collective bargaining agreements show
Act you are only entitled to receive
paying substitute teachers from their it is a fairly common practice.
a summary report of the total
own pockets.” Ultimately, public sector unions
amount of leave taken by each
Now it turns out taxpayers made should put their money where their
union’s members. Names or sala-
the sacrifice in many instances. There mouth is. If teachers’ unions are
ries will not be provided since those
is a little-known provision in most col- concerned with a lack of education
are considered personnel records.
lective bargaining agreements called funding, they should not bargain for
Below you will find the total number
union leave or release time, which provisions that take teachers out of the
of hours of union leave reported for
allows public employees to conduct classroom to perform union business
the last school year.
union business instead of teaching and waste taxpayer funds.
while still being paid by taxpayers. But • American Federation of Teachers
neither the amount of union leave used (certified)—20,116 hours (attributed
nor its costs are usually made known to heavily to the teacher walkout in the
Trey Kovacs (trey.kovacs@cei.org) is
the public. None of the activity serves spring)
a Policy Analyst at CEI. A version of
a public purpose. Instead, it exclusively • American Federation of Teachers this article was originally published at
benefits government unions. (classified)—50 hours NewsOK.

10 CEI.ORG COMPETITIVE ENTERPRISE INSTITUTE


Will New Congress Seek Reforms to
Highway Funding?
Ranking Member Sam Graves (R-Mo.), Senators have been quieter on the
BY MARC SCRIBNER who is currently the outgoing chair- MBUF front, but given the existing sup-
man of its Highways and Transit port among transportation leaders in the

W ith a divided Congress and with


the current surface transportation
law expiring at the end of September
Subcommittee, signaled his support for
MBUFs over gas tax increases in an
op-ed earlier this year.
House, the new Congress appears well
positioned to address the ailing Highway
Trust Fund. This may turn out to be the
2020, shoring up the Highway Trust DeFazio himself, while a vocal bipartisan “infrastructure plan” that has
Fund with user fee alternatives to fuel proponent of increasing the gas tax, been eluding Washington for the past
taxes could be a bipartisan affair. has also shown interest in MBUFs. Last two years. We hope incoming congres-
Could the 116th Congress be the perfect year, he praised Oregon’s road usage sional leadership sees it that way.
storm for mileage-based user fees? charge pilot program. This puts him in
In the House, likely incoming roughly the same boat with the White
Transportation and Infrastructure House. The February 2018 Economic Marc Scribner (marc.scribner@cei.org)
Committee Chairman Peter DeFazio Report of the President touted the bene- is a Senior Fellow at CEI. A version of
(D-Ore.) would be wise to seek fits of MBUFs and highlighted Oregon’s this article was originally published in
broad support for reforming the ailing ongoing experiment. OpenMarket.
Highway Trust Fund. Federal fuel tax
rates were last raised in 1993 and
provide the vast majority of revenue for
the Highway Trust Fund. Unfortunately,
since 2008, Congress has outspent
what it has collected, leading to
approximately $140 billion in general
fund bailouts over the last decade.
Making matters more challenging,
Dinner Is Coming
rising fuel economy and increasing pen-
etration of electric vehicles will make the
already regressive fuel taxes even more
regressive, disproportionately hurting
the poor in rural and exurban communi-
ties. Charging road users directly for
their road use, rather than using a proxy
such as fuel or tire taxes, is the best way
to restore the users-pay/users-benefit
principle to its rightful place at the
center of surface transportation policy.
Rep. DeFazio’s home state is a
pioneer in mileage-based user fees
(MBUFs), having launched the first
statewide pilot in 2015. His Oregon col-
league Rep. Earl Blumenauer (D-Ore.)
has long been an MBUF champion.
Even better, this concept enjoys bipar-
tisan support. Outgoing Transportation
SAVE THE DATE
and Infrastructure Committee Chairman CEI's 35th Anniversary Dinner and Reception
Bill Shuster (R-Penn.) floated a legisla-
June 20, 2019
tive proposal last summer that would DINNER.CEI.ORG
have studied replacing fuel taxes with
MBUFs. Possible incoming committee

COMPETITIVE ENTERPRISE INSTITUTE C E I . O R G 11


CEI EVENTS AND PUBLIC APPEARANCES

Wayne Crews Discusses CEI Experts Present New Agenda for Congress on Capitol Hill
Regulatory Reform at New On February 4, CEI hosted a luncheon briefing on Capitol Hill for congressional
York Luncheon staffers to announce the release of Free to Prosper: A Pro-Growth Agenda for
On December the 116th Congress. Ben Lieberman, Richard Morrison, Iain Murray, Daniel
6, CEI Vice Press, and Marc Scribner discussed the pro-growth impacts of removing tariffs
President for and de-scheduling cannabis and shared key strategies for regulatory reform
Policy Wayne in finance, environmental, and transportation policy. CEI Government Affairs
Crews spoke at a Manager Canyon Brimhall moderated the panel.
policy luncheon
hosted by CEI
at the 21 Club
in New York
City. A longtime
deregulatory
expert, Crews
discussed the status of the Trump
administration’s two-for-one regulatory
rollback program, efforts to tame
“regulatory dark matter,” and prospects
for reform going forward.

Marlo Lewis Debates Carbon Left to right: Iain Murray, Marc Scribner, Ben Lieberman, Canyon Brimhall,
Tax Proposals on AEI Panel Daniel Press, and Richard Morrison
On November
14, CEI Senior Robert J. Smith Discusses Federal Land Management on
Fellow Marlo Heritage Foundation Panel
Lewis participated
on the panel Also on November 14, CEI Distinguished Fellow
discussion, “How Robert J. Smith participated in the panel, “How
Strong is the We Pay for Federal Lands and Innovative Funding
Conservative Solutions,” hosted by the Heritage Foundation, as
Case for a part of the half-day conference, “Challenges and
Carbon Tax?” Solutions to Improve Federal Lands Management.”
hosted by Joining Smith on the panel were Heritage Foundation
the American Policy Analyst Katie Tubb and Property and
Enterprise Institute (AEI). The panelists Environment Research Center (PERC) Research
debated the question: Would a tax on Fellows Holly Fretwell and Tate Watkins. PERC Policy
greenhouse gas emissions, whether and Partnerships Coordinator Hannah Downey
imposed by the U.S. alone or by moderated the panel.
international agreement, advance
both environmental improvement and Michelle Minton Discusses the Future of Beer in America
economic growth? Joining Lewis on
the panel were AEI Resident Scholar On February 15 at Atlas Brew Works in Washington,
Benjamin Zycher, Hudson Institute Senior D.C., the Federalist Society and the Pacific Legal
Fellow Irwin Stelzer, American Action Foundation hosted a screening of the documentary,
Forum President Douglas Holtz-Eakin, American Craft: What Beer Can Teach Us about
and AES Corporation Cofounder and Well-Crafted Laws. The screening was followed by a
Chairman Emeritus Roger Sant. discussion on the benefits of well-crafted beer laws
and the future of the beer market. The panel included
the film’s director, Matt Wood; Atlas Brew Works
founder Justin Cox; Matt Kibbe of Free the People;
and CEI’s Michelle Minton.

12 CEI.ORG COMPETITIVE ENTERPRISE INSTITUTE


CEI Summit 2019
Savannah, Georgia

F rom February 21 to 24, CEI hosted its third annual summit


at the brand-new Perry Lane Hotel in Savannah’s historic
district. Guests enjoyed thought-provoking presentations and
Reason Foundation Director of Transportation Policy Robert
Poole, on his new book, Rethinking America’s Highways;
economics columnist John Tamny, on the legacy of Warren
engaging conversations with CEI experts and other prominent Brookes’s The Economy in Mind; and American Enterprise
free-market scholars. Institute Senior Fellow and Arthur F. Burns Fellow in Financial
CEI’s Wayne Crews, Sam Kazman, Marlo Lewis, Jessica Policy Studies Peter Wallison, on in his new book, Judicial
Melugin, Michelle Minton, Iain Murray, Daniel Press, Ryan Radia, Fortitude.
and Marc Scribner delivered in-depth seminars on antitrust, Attendees also got the opportunity to enjoy Savannah’s
regulatory dark matter, FinTech, technology policy, energy many attractions, including the Benedetto Guitars factory,
mandates, the lingering effects of Prohibition, and the road ahead maker of the famed archtop guitar; the Service Brewing Co.;
for transportation policy. local culinary institution the Garibaldi; and the final resting
Guest speakers included former risk manager and place of local legends, Bonaventure Cemetery. (Photos by
Bloomberg contributor Aaron Brown, on cryptocurrency; Amber France)

Google Public Policy Manager Max Left to right: Wayne Crews, Iain Murray (left) and Daniel Press
Pappas (left) and Service Brewing Peter Wallison, and Kent Lassman
Co. CEO and co-founder Kevin Ryan

Sam Kazman Aaron Brown Left to right: Iain Murray, Ryan Radia, Jessica Melugin, and Wayne Crews

Marlo Lewis Michelle Minton Marc Scribner (left) and Robert Poole

COMPETITIVE ENTERPRISE INSTITUTE C E I . O R G 13


THE THE THE
GOOD BAD UGLY

The Good: Supreme Court The Bad: SEC Threatens to


Agrees to Hear Challenge Impose Burdensome Rules The Ugly: FDA Tries to
to Auer Deference on Cryptocurrency Curb E-Cigarette Sales

On December 10, the U.S. Supreme Cryptocurrency, and its supporting On November 15, the Food and Drug
Court agreed to consider overturning infrastructure known as the blockchain, Administration (FDA) announced
a precedent that has given enormous promise transformative innovations stringent new limits on the sale of
unilateral power to federal regulators, that could revolutionize everything electronic cigarettes, supposedly to
in a case called Kisor v. Wilkie. Under from payments to property registry. restrict teenagers’ access to vaping
the legal doctrine known as Auer (or Unfortunately, the Securities and products, which regulators claim
Seminole Rock) deference, courts Exchange Commission is moving can lead to smoking tobacco later.
are required to defer to regulatory toward regulating cryptocurrencies as Yet, whatever the FDA’s intentions,
agencies’ interpretation of the rules the “securities,” an action that would could its rules also restrict adults’ access
agencies themselves issue. bring said innovation to a screeching to e-cigarettes, making it harder
“Auer deference encourages halt. for smokers trying to quit to access
agencies to write vague regulations “Deeming cryptocurrency as a alternatives to combustible cigarettes.
so that they can make substantive ‘security’ would be disastrous, because And it won’t discourage teen use
decisions as to what the regulations the same red tape—both from SEC of nicotine, but rather encourage
mean long after the regulations are regulations and from Sarbanes- more dangerous means of nicotine
issued,” said CEI Attorney Devin Oxley and Dodd-Frank—could put consumption.
Watkins. “It is wonderful news for the cryptocurrency out of reach of middle- “In addition to making it harder for
rule of law that the Supreme Court class investors just as it has stock adults to switch to e-cigarettes, which
is reconsidering the destructive Auer in early stage growth companies,” the FDA admits are far safer than
deference doctrine. Hopefully this said CEI Senior Fellow John Berlau. smoking, the restrictions will have other
is also the first step to reconsidering “For cryptocurrency and other new unintended consequences,” said CEI
Chevron deference, where agencies technologies to flourish, consumers, Senior Fellow Michelle Minton. “Rather
are given deference as to what statutes investors and entrepreneurs must be than keeping adolescents away from
mean. Chevron allows agencies to protected from the overreach of the nicotine, the FDA’s new rules will
expand the scope of their own power SEC.” likely push adolescents to acquire
by reinterpreting what Congress wrote e-cigarettes through illicit channels or
as the Court held in City of Arlington v. simply use combustible cigarettes.”
FCC (2013).”

14 CEI.ORG COMPETITIVE ENTERPRISE INSTITUTE


MediaMENTIONS
Senior Fellow Michelle Minton John Stossel, in his nationally As CEI’s Marc
pushes back against proposals syndicated column, cites Michelle Scribner points
for a new federal online Minton’s work opposing out, self-driving
gambling ban. government threats against vehicles could mean
Michelle Minton, a senior fellow a product that offers a lower tremendous gains
at the Competitive Enterprise Institute, risk alternative to smokers: for personal and
said the move would just force e-cigarettes. commercial mobility,
gamblers to go to illegal sites with Compared to regular cigarettes, but Congress
fewer scruples. e-cigarettes are “extraordinarily less must act to create a regulatory
“Prohibition has never worked,” harmful,” says Michelle Minton of framework for allowing the new
Minton said. “It just turns law-abiding the Competitive Enterprise Institute. In technology to flourish.
citizens into lawbreakers and reduces my new newest video she says, “We Lawmakers and American car
the level of trust in government.” should really be encouraging people manufacturers are mounting a last-ditch
Minton said the new legal opinion to use vaping.” effort to move legislation setting up an
is likely to create further confusion, –November 28, initial regulatory framework for self-
and may dissuade states from Foxnews.com driving vehicles to President Trump before
authorizing new internet gambling the end of the year. “If they can’t get it
operations. It is likely to lead to [a] done under favorable conditions in this
spate of legal challenges over online A Wall Street Journal editorial Congress, I suspect you are going to see
betting in various state, she added. trumpeted Chris Horner’s work a lot of developers looking abroad to
“They may choose to not exposing private donors’ funding make these critical investments,” Marc
prosecute, knowing it will never hold of climate activism by state Scribner, senior fellow at the Competitive
up in a court of law, and as a result attorneys general. Enterprise Institute, said in a recent
the uncertainty in the law would With the courts and Trump interview. “It signals to the industry that
persist,” she said. “My bet is that there administration rolling back federal Congress can’t be serious about this.”
won’t be prosecutions.” climate regulation, green activists –November 17
–January 19, have turned to the states. But there’s The Washington Examiner
Daily Mail a troubling ethical twist: Instead of
merely lobbying, activists are placing CEI’s Angela Logomasini highlights
An Investor’s Business Daily employees in attorneys general the burden that Hoboken’s ban
editorial featured Wayne offices in dubious private-public on plastic bags will place on
Crews’s year-end assessment of condominiums. businesses and consumers, for
President Trump’s deregulatory –November 6 little environmental gain.
progress. The Wall Street Journal This week, stores across Hoboken
The Competitive Enterprise will become BYOB: bring your own
Institute has just released its year-end CEI’s Agenda for the 116th bag. On Tuesday the city’s plastic bag
reckoning of Trump’s deregulatory Congress garnered a write-up ban goes into effect, making Hoboken
moves for this year. As they note, it’s in Jennifer Harper’s Washington the largest city in the state to say “no
both good and bad. As they describe Times column. thanks” to single-use plastic bags
the president’s 2018 record, it was The advice from the nonprofit public that contribute to a global scourge of
“Better than Obama, Bush II, and policy organization is straightforward. waste. The bans are less popular with
Clinton in terms of fewer regulations; Reduce the clutter of federal Angela Logomasini, a senior fellow
but not as good as Trump’s own first regulations that stifle American lives at libertarian think tank Competitive
year.” and livelihoods, and prosperity will Enterprise Institute. Creating reusable
–December 31, follow. bags comes with its own environmental
Investor’s Business Daily –January 8, costs and, if shoppers don’t wash
The Washington Times them, there are potential health risks,
Logomasini told The Jersey Journal.
–January 21,
NJ.com

COMPETITIVE ENTERPRISE INSTITUTE C E I . O R G 15


Nonprofit Org.
U.S. Postage
PAID
1310 L Street NW, 7th Floor Permit 425
Washington, DC 20005 Southern MD

...END NOTES
Copyright of Laws? Food Options so Popular They Need to be
When the nonprofit Public.Resource.org tried to publish the Mandated
Peach State’s legal code to make it more accessible to the A Los Angeles city council member is so convinced of the
public, the state sued its founder, Carl Malamud, for copy- benefits of a vegan diet that he, quite literally, believes
right infringement. The state’s suit largely rested on the fact there ought to be a law mandating its availability—and not
that the official version of the state code is annotated by the just because of health benefits. In December, Councilman
private legal information company LexisNexis, which trans- Paul Koretz introduced a proposal for all concessions, at
fers its copyright on the annotations to the state. In October, both city-operated facilities and privately operated movie
the 11th Circuit Court of Appeals sided with Malamud, but theaters and venues, to offer at least one vegan protein
since then, state officials have resorted to blocking his efforts option. Koretz cited several studies that suggest a link
to purchase a copy of the code—despite the unambiguous between the dairy industry and the environment, reported
language of the court’s ruling: “The resulting work is intrinsi- CBS Los Angeles. “Vegan eating is booming, but good laws
cally public domain material, belonging to the People, and, like this do not come soon enough,” said Ben Williamson,
as such, must be free for publication by all.” senior international media director for People for the Ethical
Treatment of Animals (PETA). There was no word from Koretz
An Expensive Game of Parking Musical Chairs or PETA on what to do about the mountains of food waste
Street parking is notoriously difficult to come by in New York, resulting from unsold tofu corn dogs.
so it’s no surprise the city enforces parking regulations rather
strictly. However, as NY1 reports, one Queens resident’s car Vermont Man Gives New Twist to Art in Public Places.
was recently towed after she parked in a legal space. The Obtaining a building permit can cause frustrating delays,
problem? The city changed the parking spot’s status unex- but 10 years? That’s how long one Vermont resident says
pectedly and then punished her for it. Nicole LaVeglia says he’s been fighting local authorities to build a garage on his
she parked her car at an intersection in Queens’ Maspeth property. Ted Pelkey, of Westford, Vermont, says he got so
neighborhood on January 2, just after 7 AM. About 45 fed up that he decided to give the town’s planners a piece of
minutes later, a worker from the city’s transportation depart- his mind—in the form of a sculpture of a giant raised middle
ment arrived to drill a hole in the sidewalk to install … a new finger. Pelkey says the offending gesture is meant only for
“no parking” sign. Then a police tow truck hauled away local bureaucrats. “It was critical to me to make sure that my
LaVeglia’s car. LaVeglia, who was alerted to the incident neighbors and the people who live in this town understood
by a neighbor, was issued a $185 fine, which she says she that I didn’t put that up there for them,” Pelkey said. “It is aimed
plans to fight. directly at the people who sit in our town office”—except for
the town clerk, whom Pelkey described as “a great person.”

16 CEI.ORG COMPETITIVE ENTERPRISE INSTITUTE

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