Category: Regulations

FCC Regulations Motivated by Cronyism, Not Economics

(p. A13) . . . , this burgeoning competition between fixed and mobile has always been predictable and yet has figured not at all in the Federal Communications Commission’s regulatory efforts, which paint the country as descending into an uncompetitive broadband hell.
A new study by economists Gerald Faulhaber and Hal Singer details how an agency that once prized economic analysis increasingly ignores or disregards economics in its regulatory findings. Why? Because if it acknowledged the increasing competitiveness of the market, there would be nothing to regulate, no favor-factory opportunities for its political sponsors to milk.

For the full commentary, see:
HOLMAN W. JENKINS, JR. “BUSINESS WORLD; Big Cable and Mobile Are Ready to Rumble; Technology is about to upend Washington’s dire prescriptions for a broadband monopoly.” The Wall Street Journal (Sat., Oct. 8, 2016): A13.
(Note: ellipsis added.)

The working paper mentioned above, is:
Faulhaber, Gerald, and Hal Singer. “The Curious Absence of Economic Analysis at the Federal Communications Commission: An Agency in Search of a Mission.” 2016.

“Politicized Regulatory State” Cuts Hiring and Slows Innovation

EaseOfDoingBusinessGraph2016-09-30.jpgSource of graph: online version of the WSJ article quoted and cited below.

(p. A13) Sclerotic growth is America’s overriding economic problem. From 1950 to 2000, the U.S. economy grew at an average rate of 3.5% annually. Since 2000, it has grown at half that rate–1.76%. Even in the years since the bottom of the great recession in 2009, which should have been a time of fast catch-up growth, the economy has only grown at 2%.
. . .
. . . the U.S. economy is simply overrun by an out-of-control and increasingly politicized regulatory state. If it takes years to get the permits to start projects and mountains of paper to hire people, if every step risks a new criminal investigation, people don’t invest, hire or innovate.
. . .
How much more growth is really possible from better policies? To get an idea, see the nearby chart plotting 2014 income per capita for 189 countries against the World Bank’s “Distance to Frontier” ease-of-doing-business measure for the same year. The measure combines individual indicators, including starting a business, dealing with construction permits, protecting minority investors, paying taxes and trading across borders.
. . .
Most of all, the country needs a dramatic legal and regulatory simplification, restoring the rule of law. Middle-aged America is living in a hoarder’s house of a legal system. State and local impediments such as occupational licensing and zoning are also part of the problem.
. . .
There is hope. Washington lawmakers need to bring about a grand bargain, moving the debate from “they’re getting their special deal, I want mine,” to “I’m losing my special deal, so they’d better lose theirs too.”

For the full commentary, see:
JOHN H. COCHRANE. “Ending America’s Slow-Growth Tailspin; The U.S. economy needs a dramatic legal and regulatory simplification.” The Wall Street Journal (Tues., May 3, 2016): A13.
(Note: ellipses added.)
(Note: the online version of the commentary has the date May 2, 2016.)

Laws to Protect “Endangered” Species “Lag Far Behind Scientific Research”

(p. A19) The first large study of North American wolf genomes has found that there is only one species on the continent: the gray wolf. Two other purported species, the Eastern wolf and the red wolf, are mixes of gray wolf and coyote DNA, the scientists behind the study concluded.
The finding, announced Wednesday, highlights the shortcomings of laws intended to protect endangered species, as such laws lag far behind scientific research into the evolution of species.
The gray wolf and red wolf were listed as endangered in the lower 48 states under the Endangered Species Act in the 1970s and remain protected today, to the periodic consternation of ranchers and agricultural interests.

For the full story, see:
Zimmer, Carl. “The One and Only Wolf Species of North America.” The New York Times (Thurs., JULY 28, 2016): A19.
(Note: ellipses added.)
(Note: the online version of the commentary has the date JULY 27, 2016, and has the title “MATTER; DNA Study Reveals the One and Only Wolf Species in North America.”)

Low Interest Rates Cannot Substitute for Needed Deeper Reforms

(p. B3) MUMBAI, India — Three years before the 2008 global financial crisis, an Indian economist named Raghuram G. Rajan presciently warned a skeptical audience of top economic thinkers that excessive risk threatened the entire global financial system.
As Mr. Rajan stepped down on Sunday [Sept. 4, 2016] as India’s top central banker, following intense criticism at home, he offered a new warning: Low interest rates globally could distort markets and would be difficult to abandon.
Countries around the world, including the United States and Europe, have kept interest rates low as a way to encourage growth. But countries could become “trapped” by fear that when they eventually raised rates, they “would see growth slow down,” he said.
Low interest rates should not be a substitute for “other instruments of policy” and “various kinds of reforms” that are needed to encourage growth, Mr. Rajan said in a recent interview with The New York Times. “Often when monetary policy is really easy, it becomes the residual policy of choice,” he said, when deeper reforms are needed.
. . .
In discussing the Indian economy in the interview, Mr. Rajan offered a less-than-ringing endorsement of the government’s emphasis on manufacturing in India — what the prime minister has called his Make in India campaign.
Mr. Rajan said he did not support the view of critics that it was too late in world economic history for India to become a manufacturing hub. But he also said that he would not focus exclusively on manufacturing as the solution to joblessness.
If India improves infrastructure and reduces government regulations, manufacturing might take off in a big way, but it “could also be services. It could be value-added agriculture also.”`

For the full story, see:
GEETA ANAND. “A Departing Central Banker’s Warning.” The New York Times (Mon., SEPT. 5, 2016): B3.
(Note: ellipsis, and bracketed date, added.)
(Note: the online version of the story has the date SEPT. 4, 2016, and has the title “Raghuram Rajan, India’s Departing Central Banker, Has a New Warning.” The online version is somewhat longer than the print version, and has minor differences in the last three paragraphs quoted above. The last three paragraphs quoted above, are from the online version.)

“I Could Lose My Ability to Control My Business”

(p. B4) Small-business owners say they are shouldering higher costs and scaling back expansion plans because of a revised federal rule that gives employees more leverage in settling workplace grievances.
The new policy, intended to hold businesses accountable for labor-law violations against people whose working conditions they control but don’t claim as employees, was put in place last year through a ruling by the National Labor Relations Board, . . .
. . .
Businesses say they are in a regulatory limbo because the new standard is vague about what constitutes control.
The previous test measured the direct control one business had over working conditions of people employed by another business. Now, even indirect control can count.
So far the impact seems to be largely on the franchisees. A home health-care business in Wisconsin is taking on $10,000 in annual recruiting costs because its franchiser stopped providing assistance to steer clear of regulators, and a small hotelier in Florida is abandoning expansion plans in small markets because one of its franchisers scaled back worker training it provides. A printing business owner in Washington state said he canceled plans to open an eighth store because he doesn’t want to risk the investment until it is clear his franchiser wouldn’t be considered a joint-employer.
“I could lose my ability to control my business,” said Chuck Stempler, an owner of the seven printing stores that operate under the AlphaGraphics brand in Washington and California.
. . .
Employers say the NLRB is confusing control with contractual relationships that help businesses and workers thrive.
“The NLRB is applying a new legal standard that would undermine a successful American business model that has enabled thousands of families to operate their own small businesses and help support millions of American jobs,” McDonald’s said in a statement, referring to the franchising business.

For the full story, see:
MELANIE TROTTMAN. “New Labor Law Curbs Small Firms’ Plans.” The Wall Street Journal (Sat., Aug. 6, 2016): B4.
(Note: ellipses added.)
(Note: the online version of the story has the date Aug. 5, 2016, and has the title “Some Small-Business Owners Trim Expansion Plans, Cite New Labor Law.”)

Did Feds Try to Sully Sully’s Reputation?

(p. B3) Even before this weekend’s release of the Hollywood movie “Sully,” about the pilot who safely landed a disabled US Airways airliner on the Hudson River on a frigid January day in 2009, a rebuttal campaign is already underway by some of the participants in the real-life story.
The federal investigators who conducted the inquiry into the flight contend that “Sully” tarnishes their reputation.
. . .
Allyn Stewart, a producer of the film, said it was not a case of taking creative license to ratchet up the drama. “The story is told through the experiences of Jeff and Sully, and so they felt under extreme scrutiny and they were,” Ms. Stewart said.
Jeff is the co-pilot, Jeff Skiles, played in the film by Aaron Eckhart.
Captain Sullenberger, who retired from US Airways in 2010, said in an email that the tension in the film accurately reflected his state of mind at the time. “For those who are the focus of the investigation, the intensity of it is immense,” he said, adding that the process was “inherently adversarial, with professional reputations absolutely in the balance.”

For the full story, see:
CHRISTINE NEGRONI. “Safety Agency Challenges True’ Story told in the Film ‘Sully’.” The New York Times (Sat., SEPT. 10, 2016): B3.
(Note: ellipsis added.)
(Note: the online version of the story has the date SEPT. 9, 2016, and has the title “‘Sully’ Is Latest Historical Film to Prompt Off-Screen Drama.”)

Sully’s book, on which the movie is loosely based, is:
Sullenberger, Chesley B., III, and Jeffrey Zaslow. Highest Duty: My Search for What Really Matters. New York: HarperCollins Publishers, 2009.

When Consumers Want More Trucks and SUVs, Feds Mandate More Hybrids and Electrics

(p. B1) DETROIT — While American consumers were taking advantage of low gas prices to buy trucks and sport utility vehicles in large numbers, some automakers delayed investing in slower-selling electrified vehicles.
But with increases in federal fuel-economy standards looming in 2017, car companies are hustling to bring out hybrid and electric models to help them meet the new rules — even though electrified vehicles make up only 2 percent of overall sales.
The federal government has mandated corporate average fuel economy of 54.5 miles per gallon by 2025. But companies need to meet an interim standard of about 37 m.p.g. by next year.
Now, despite declining gas prices, automakers are showing off a raft of electric and hybrid models this week at the annual North American International Auto Show in Detroit.

For the full story, see:
BILL VLASIC. “Going Electric, Even if Gas Is Cheap.” The New York Times (Tues., JAN. 12, 2016): B1 & B3.
(Note: ellipsis added.)
(Note: the online version of the story has the date JAN. 11, 2016, and has the title “Automakers Go Electric, Even if Gas Is Cheap.”)

Airline Startups Stall in Bureaucratic Regulatory Headwinds

(p. B4) Mr. Vallas owns California Pacific Airlines, known as CP Air, his latest venture in a peripatetic business career that has included stints in areas as varied as land development and other aviation-related ventures.
CP Air has sat on a metaphorical runway for years — engines idling, ready for takeoff — while awaiting certification by the Federal Aviation Administration.
Mr. Vallas’s patience is wearing thin. After all, he is 95, and he regards the airline as a legacy, an exclamation point to a colorful life.
. . .
. . . then there was that matter with the F.A.A. The agency has repeatedly denied applications. A letter from 2013, one of several from the agency, advised him that the application’s contents were “incomplete, inaccurate and do not appear to have been reviewed for quality.”
. . .
The government shutdown in 2013 and the F.A.A.’s staff reduction did not help matters, the agency acknowledges.
. . .
The process of greenlighting a new airline has become more complicated since Mr. Vallas sold a previous venture, a charter service called Air Resorts, in 1997.
He acknowledges the vast increase in paperwork since that era but contends that the conditions for acceptance have been met.
Mr. Vallas’s airline is not the only one that has encountered bureaucratic headwinds. Other proposed airlines are in limbo for various reasons, including Baltia Airlines, created in 1989 to fly between New York City and Russia, which still lacks the authorities’ blessing.

For the full story, see:
MIKE TIERNEY. “ITINERARIES; A Start-Up Airline Idles on a California Runway.” The New York Times (Tues., APRIL 26, 2016): B4.
(Note: ellipses added.)
(Note: the online version of the story has the date APRIL 25, 2016, and has the title “ITINERARIES; Start-Up Airline Idles on a California Runway, Stymied by Bureaucracy.”)

FDA Blocking Stem-Cell Therapies from Those With No Other Hope

(p. D2) Research is exploding into ways stem cells might be harnessed to cure diseases, mend damaged tissue, even grow replacement organs.
. . .
Jeffrey Weiss, a retinal surgeon in Margate, Fla., has treated about 570 patients with retinal and optic nerve diseases with stem cells taken from patients’ bone marrow as part of a study, and says that about 60% have had meaningful improvement. Patients pay $19,000 to $21,000 to receive the injections.
Shawn Rockafellow, a 31-year old truck dispatcher in Chandler, Ariz., started rapidly losing his vision in 2014 to a genetic disease and says he was told to accept that he was going blind. His mother read about Dr. Weiss’s work. Mr. Rockafellow raised the $20,000 fee on GoFundMe, a personal charity website, and had the treatment in both eyes in January.
After three months, the vision in his right eye went from roughly 20/1,000 to 20/400. After six months, it was 20/300. His left eye hasn’t improved as much, so he wants to try the treatment again. His regular ophthalmologist, Scott Markham, says “the fact that he’s not worsening is fantastic.”
. . .
Mark Berman, a Beverly Hills, Calif., cosmetic surgeon who co-founded a network of stem-cell clinics, says “fundamentally, all we are doing is a simple, surgical procedure. This is not witch-doctor stuff. We are repairing cell damage with people’s own stem cells.” He says the member clinics in 25 states have treated about 5,000 patients to date, with no significant adverse events.
SammyJo Wilkinson, a former dot-com executive, developed multiple sclerosis in 1995 and was confined to a wheelchair by 2011. She says her symptoms started to improve almost immediately after receiving a high-dose stem cell treatment at a Houston clinic in 2012. When the FDA blocked access to that form of therapy, Ms. Wilkinson went to Cancún, Mexico, for follow-ups. After a total of five treatments for $90,000, she says she has far less pain, can exercise and walk short distances with the help of a walker.
At the FDA hearing, Ms. Wilkinson, who founded a patient group called Patients for Stem Cells, plans to appeal for a faster approval process for stem-cell therapies and a registry to monitor patient outcomes. “Patients will never get these treatments if they have to go the traditional double-blind placebo-controlled trial route. That takes 10 years and $1 billion,” she says. “There’s got to be a middle ground, where you don’t shut off treatment, you just keep track of it.”

For the full story, see:
Beck, Melinda. “Stem-Cell Treatments Become More Available, and Face More Scrutiny.” The Wall Street Journal (Tues., Aug. 30, 2016): D2.
(Note: ellipses added.)
(Note: the online version of the story has the date Aug. 29, 2016, and has the title “Stem-Cell Treatments Become More Available, and Face More Scrutiny.” There are minor differences in wording between the online and print versions. The sentences quoted above, follow the online version.)

Precautionary Principle Slows Cloning Innovation

(p. A8) Dolly the Sheep started her life in a test tube in 1996 and died just six years later. When she was only a year old, there was evidence that she might have been physically older. At five, she was diagnosed with osteoarthritis. And at six, a CT scan revealed tumors growing in her lungs, likely the result of an incurable infectious disease. Rather than let Dolly suffer, the vets put her to rest.
Poor Dolly never stood a chance. Or did she?
Meet Daisy, Diana, Debbie and Denise. “They’re old ladies. They’re very healthy for their age,” said Kevin Sinclair, a developmental biologist who, with his colleagues at the University of Nottingham in Britain, has answered a longstanding question about whether cloned animals like Dolly age prematurely.
In a study published Tuesday in Nature Communications, the scientists tested these four sheep, created from the same cell line as Dolly, and nine other cloned sheep, finding that, contrary to popular belief, cloned animals appear to age normally.
. . .
Not only did many countries, including Canada and Australia, ban reproductive cloning in animals, but the United Nations banned all kinds of cloning in humans in 2005. Last year the European Union made importing food from cloned animals or their offspring illegal.
. . .
Now, based on results of this new study, researchers have confirmed what most scientists believed years ago: Cloning does not lead to premature aging.
. . .
Many scientists hope that changes in perception will lead to advances in reproductive technology that will enable us to provide food for a growing global population, save endangered species and develop advanced therapies.

For the full story, see:
JOANNA KLEIN. “Dolly’s Fellow Clones, Enjoying the Golden Years.” The New York Times (Weds., JULY 27, 2016): A8.
(Note: ellipses added.)
(Note: the online version of the commentary has the date JULY 26, 2016, and has the title “Dolly the Sheep’s Fellow Clones, Enjoying Their Golden Years.”)