Regulations – Page 26 – artdiamondblog.com

Nevada Government Lets Tesla Sell Directly to Consumers

(p. A13) . . . in addition to rubber-stamping the agreement that waived Tesla’s property, sales and business taxes for a decade or more–while throwing in discount power rates–the Nevada legislature also approved a bill last week that would exempt the auto maker from franchising regulations outlawing the company’s retail approach. The state’s auto dealers, who only weeks ago threatened to sue over the matter, shifted gears and endorsed the legislation.
“My car dealers want to assist in any way they can,” John Sande of the Nevada Franchise Auto Dealers Association told the Reno Gazette Journal. “Nevada law does not allow Tesla to come in and sell directly to the consumer, so we are going to have to come in and change it so they can sell directly to the consumer.”
No doubt the dealers balanced the pros and cons of agitating for their own self-interest against overwhelming political support for the deal and the spending potential of thousands of new, well-paid workers who may prefer a Ford or Chevy pickup over a $70,000 Tesla Model S. But the fact that Nevada legislators so quickly jettisoned a key provision of the state’s dealership-franchise provisions speaks volumes about how essential these statutes really are to the well-being of their constituents.
There is no rational reason Tesla–or any other automobile manufacturer–should be restricted from selling new cars directly to those who seek to buy them.

For the full commentary, see:
JOHN KERR. “OPINION; Tesla Breaks the Auto Dealer Cartel; Nevada lets the electric car maker sell directly to consumers. Too bad everyone else still can’t.” The Wall Street Journal (Weds., Sept. 17, 2014): A13.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date Sept. 16, 2014.)

French Socialist Wants to Encourage Entrepreneurs by Reducing Regulations

“Emmanuel Macron, France’s new economy minister, has been a major force behind a recent shift by President François Hollande toward a more centrist economic policy.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. B3) . . . , what is important, Mr. Macron said, as a late train from the nearby Gare de Lyon rumbled beneath his window, is that France continue to streamline and modernize the welfare state.

“For me being a Socialist today is about defending the unemployed, but also defending businessmen who want to create a company, and those who need jobs,” he said. “We have to shift the social model from a lot of formal protections toward loosening bottlenecks in the economy.”

For the full story, see:
LIZ ALDERMAN. “France’s 36-Year-Old Economy minister Is Face of the New Socialism.” The New York Times (Tues., OCT. 7, 2014): B3.
(Note: ellipsis added.)
(Note: the online version of the story has the date OCT. 6, 2014, and has the title “Emmanuel Macron, Face of France’s New Socialism.”)

Feds Allow Hollywood to Use Drones

(p. B1) LOS ANGELES — The commercial use of drones in American skies took a leap forward on Thursday [Sept. 25, 2014] with the help of Hollywood.
The Federal Aviation Administration, responding to applications from seven filmmaking companies and pressure from the Motion Picture Association of America, said six of those companies could use camera-equipped drones on certain movie and television sets. Until now, the F.A.A. has not permitted commercial drone use except for extremely limited circumstances in wilderness areas of Alaska.
Put bluntly, this is the first time that companies in the United States will be able to legally use drones to fly over people.
The decision has implications for a broad range of industries including agriculture, energy, real estate, the news media and online retailing. “While the approval for Hollywood is very limited in scope, it’s a message to everyone that this ball is rolling,” said Greg Cirillo, chairman of the aviation practice at Wiley Rein, a law firm in Washington.
Michael P. Huerta, the administrator of the F.A.A., said at least 40 similar applications were pending from companies beyond Hollywood. One is Amazon, which wants permission to move forward with a drone-delivery service. Google has acknowledged “self-flying vehicle” tests in the Australian outback.
“Today’s announcement is a significant milestone in broadening commercial use,” Anthony R. Foxx, secretary of transportation, told reporters in a conference call.

For the full story, see:
BROOKS BARNES. “Drone Exemptions for Hollywood Pave the Way for Widespread Use.” The New York Times (Fri., SEPT. 26, 2014): B1 & B7.
(Note: bracketed date added.)
(Note: the online version of the story has the date SEPT. 25, 2014.)

Feds Protect Us from Baby Photos

(p. 1) Pictures of smiling babies crowd a bulletin board in a doctor’s office in Midtown Manhattan, in a collage familiar to anyone who has given birth. But the women coming in to have babies of their own cannot see them. They have been moved to a private part of the office, replaced in the corridors with abstract art.
“I’ve had patients ask me, ‘Where’s your baby board?’ ” said Dr. Mark V. Sauer, the director of the office, which is affiliated with Columbia University Medical Center. “We just tell them the truth, which is that we no longer post them because of concerns over privacy.”
For generations, obstetricians and midwives across America have proudly posted photographs of the babies they have delivered on their office walls. But this pre-digital form of social media is gradually going the way of cigars in the waiting room, because of the federal patient privacy law known as Hipaa.
Under the law, the Health Insurance Portability and Accountability Act, baby photos are a type of protected health information, no less than a medical chart, birth date or Social Security number, according to the Department of Health and Human Services. Even if a parent sends in the photo, it is considered private unless the parent also sends written authorization for its posting, which almost no one does.

For the full story, see:
ANEMONA HARTOCOLLIS. “Baby Pictures at the Doctor’s? Cute, Sure, but Illegal.” The New York Times, First Section (Sun., AUG. 10, 2014): 1 & 19.
(Note: the online version of the story has the date AUG. 9, 2014.)

Regulations Deter Start-Ups, Creating a “Senile Economy”

(p. 5B) We may have a “senile economy,” says economist Robert Litan of the Brookings Institution. That’s senile as in old, rigid and undynamic.

. . .

Litan is not just blowing smoke. In a new study, he and Ian Hathaway measured the age of American businesses. They were astonished by what they found: From 1992 to 2011, the share of U.S. firms that were 16 and older jumped from 23 percent to 34 percent.

. . .

What happened to all the entrepreneurs? Good question.

“We do not have an explanation,” write the University of Maryland and the Census Bureau economists. Neither does Litan. “One theory is that the cumulative effect of regulations,” he says, discriminates against new businesses and favors “established firms that have the experience and resources to deal with it.” What allegedly deters and hampers startups is not any one regulation but the cost and time of complying with a blizzard of them.

For the full commentary, see:
ROBERT J. SAMUELSON. “Fewer entrepreneurs spells trouble.” Omaha World-Herald (Mon., August 11, 2014): 5B.
(Note: ellipses added.)

The article mentioned above by Hathaway and Litan is:
Hathaway, Ian, and Robert E. Litan. “The Other Aging of America: The Increasing Dominance of Older Firms.” In Economic Studies at Brookings, The Brookings Institution (July 2014): 1-17.

For Health Entrepreneurs “the Regulatory Burden in the U.S. Is So High”

(p. A11) Yo is a smartphone app. MelaFind is a medical device. Yo sends one meaningless message: “Yo!” MelaFind tells you: “biopsy this and don’t biopsy that.” MelaFind saves lives. Yo does not. Guess which firm found it easier to put their product in consumers hands?
. . .
In January 2010, Jeffrey Shuren, a veteran FDA official, was appointed director of the FDA’s Center for Devices and Radiological Health, the division responsible for evaluating MelaFind. Dr. Shuren, Dr. Gulfo writes, had “a reputation for being somewhat anti-industry” and “an aggressive agenda to completely revamp the device approval process.” Thus in March MELA Sciences was issued something called a “Not Approvable letter” raising various questions about MelaFind.
. . .
The letter sent the author into survival mode. He battled the FDA, calmed investors, and defended against the lawsuit all while trying to keep the company afloat. Under stress, Dr. Gulfo’s health began to decline: He lost 29 pounds, his hair began to fall out, and the pain in his gut became so intense he needed an endoscopy.
. . .
The climax to this medical thriller comes when, in “the greatest 15 minutes of [his] life,” Dr. Gulfo delivers an impassioned speech, à la “Twelve Angry Men,” to the FDA’s advisory committee. The committee voted for approval, 8 to 7, and, perhaps with the congressional hearing in mind, the FDA approved MelaFind in September 2011.
It was a major triumph for the company, but Dr. Gulfo was beat. He retired from the company in June 2013– . . .
. . .
Google’s Sergey Brin recently said that he didn’t want to be a health entrepreneur because “It’s just a painful business to be in . . . the regulatory burden in the U.S. is so high that I think it would dissuade a lot of entrepreneurs.” Mr. Brin won’t find anything in Dr. Gulfo’s book to persuade him otherwise. Until we get our regulatory system in order, expect a lot more Yo’s and not enough life-saving innovations.

For the full review, see:
ALEX TABARROK. “BOOKSHELF; It’s Broke. Fix It. MelaFind’s breakthrough optical technology promised earlier, more accurate detection of melanoma. Then the FDA got involved.” The Wall Street Journal (Tues., Aug. 12, 2014): A11.
(Note: ellipses added, except for the one internal to the final paragraph, which is in the original.)
(Note: the online version of the review has the date Aug. 11, 2014, and has the title “BOOKSHELF; Book Review: ‘Innovation Breakdown’ by Joseph V. Gulfo; MelaFind’s breakthrough optical technology promised earlier, more accurate detection of melanoma. Then the FDA got involved.”)

The book under review is:
Gulfo, Joseph V. Innovation Breakdown: How the FDA and Wall Street Cripple Medical Advances. Franklin, TN: Post Hill Press, 2014.

Rollin King Found Legal Way to Avoid Fed’s Regulations

(p. 25) Rollin W. King, a co-founder of Southwest Airlines, the low-cost carrier that helped to change the way Americans travel, died Thursday [June 26, 2014] in Dallas. He was 83.
. . .
The concept for Southwest came to Mr. King when he noticed that businessmen in Texas were willing to charter planes instead of paying the high fares of the domestic airlines.
At the time that Mr. King first proposed the idea to Mr. Kelleher over drinks, the federal government regulated the fares, schedules and routes of interstate airlines, and the mandated prices were high.
Competitors like Texas International Airlines, Braniff International Airways and Continental Airlines waged a protracted legal battle before Southwest could make its first flight. By not flying across state borders, Southwest was able to get around prices set by the Civil Aeronautics Board.

For the full obituary, see:
MICHAEL CORKERY. “Rollin King, 83, Pilot Who Helped Start Southwest Airlines.” The New York Times, First Section (Sun., June 29, 2014): 25.
(Note: ellipsis, and bracketed date, added.)
(Note: the online version of the obituary has the date June 28, 2014, and has the title “Rollin King, Texas Pilot Who Helped Start Southwest, Dies at 83.”)

U.S. Constitution Reflects Lockean Natural Rights

(p. A13) Over the past three decades, Richard A. Epstein has repeatedly argued–with analytical rigor and astonishing erudition–that governments govern best when they limit their actions to protecting liberty and property. He is perhaps best known for “Takings,” his 1995 book on the losses that regulations impose on property owners. Of late, he has exposed the flaws of a government-administered health system.
In “The Classical Liberal Constitution,” Mr. Epstein takes up the political logic of our fundamental law. The Constitution, he says, reflects above all John Locke’s insistence on protecting natural rights–rights that we possess simply by virtue of our humanity. Their protection takes concrete form in the Constitution by restricting the federal government to specific, freedom-advancing and property-protecting tasks, such as establishing a procedurally fair justice system, minting money as a stable repository of value, preserving a national trade zone among the states, and, not least, guarding the rights listed in the Bill of Rights.

For the full review, see:
JOHN O. MCGINNIS. “BOOKSHELF; Book Review: ‘The Classical Liberal Constitution,’ by Richard A. Epstein; Our understanding of the Constitution lost its way when we embraced the idea that rights are created by a benevolent state.” The Wall Street Journal (Mon., March 23, 2014): A13.
(Note: the online version of the review has the date March 23, 2014, and has the title “BOOKSHELF; Book Review: ‘The Classical Liberal Constitution,’ by Richard A. Epstein; Our understanding of the Constitution lost its way when we embraced the idea that rights are created by a benevolent state.”)

The book under review is:
Epstein, Richard A. The Classical Liberal Constitution: The Uncertain Quest for Limited Government. Cambridge, MA: Harvard University Press, 2013.

The Vagueness and Regulatory Discretion of Dodd-Frank Is “a Recipe for Cronyism”

(p. 218) Aaron Steelman has an “Interview” with John Cochrane. On Dodd-Frank: “I think Dodd-Frank repeats the same things we’ve been trying over and over again that have failed, in bigger and bigger ways. . . . The deeper problem is the idea that we just need more regulation–as if regulation is something you pour into a glass like water–not smarter and better designed regulation. Dodd-Frank is pretty bad in that department. It is a long and vague law that spawns a mountain of vague rules, which give regulators huge discretion to tell banks what to do. It’s a recipe for cronyism and for banks to game the system to limit competition.” On how to stop bailing out large financial institutions: “You have to set up the system ahead of time so that you either can’t or won’t need to conduct bailouts. Ideally, both. . . . The worst possible system is one in which everyone thinks bailouts are coming, but the government in fact does not have the legal authority to bail out.” . . . Econ Focus, Federal Reserve Bank of Richmond, Third Quarter 2013, pp. 34-38. https://www.richmondfed
.org/publications/research/econ_focus/2013/q3/pdf/interview.pdf.

Source:
Taylor, Timothy. “Recommendations for Further Reading.” Journal of Economic Perspectives 28, no. 1 (Winter 2014): 235-42.
(Note: italics, and first two ellipses, are in original; the last ellipsis is added.)

Process Innovations, Allowed by Deregulation, Creatively Destroyed Railroads

(p. A11) In “American Railroads: Decline and Renaissance in the Twentieth Century,” transportation economists Robert E. Gallamore and John R. Meyer provide a comprehensive account of both the decline and the revival. . . . They point to excessive government regulation of railroad rates and services as the catalyst for the industry’s decay.
. . .
. . . deregulation, Mr. Gallamore and Meyer demonstrate, was a process of creative destruction. Conrail was created by the government in 1976 in a risky, last-ditch attempt to rescue Penn Central and other bankrupt Eastern railroads. It was quickly losing $1 million a day, and its plight helped make the case for the major revamp of railroad regulation that came in 1980. A wave of mergers followed, and the new companies slashed routes and employees on the way to profitability. The shrinking of the national rail system helped, too, as freight companies consolidated traffic on a smaller (and therefore cheaper) network. Freight-train crews were cut to two or three people from four or five. Cabooses were replaced by electronic gear at the end of freight trains.

For the full review, see:
DANIEL MACHALABA. “BOOKSHELF; Long Train Runnin’; Track conditions got so bad in the 1970s that stationary freight cars were falling off the rails thanks to rotting crossties.” The Wall Street Journal (Weds., July 9, 2014): A11.
(Note: ellipses added.)
(Note: the online version of the review has the date July 8, 2014, and has the title “BOOKSHELF; Book Review: ‘American Railroads’ by Robert E. Gallamore and John R. Meyer; Track conditions got so bad in the 1970s that stationary freight cars were falling off the rails thanks to rotting crossties.”)

The book under review is:
Gallamore, Robert E., and John R. Meyer. American Railroads: Decline and Renaissance in the Twentieth Century. Cambridge, MA: Harvard University Press, 2014.