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July 25th, 2014 at 10:02 am
Solar Subsidies: Crony Capitalism Amounting to Class Warfare
Posted by Timothy Lee Print

Throughout solar technology’s checkered history, one thing has remained constant:  It’s not a cost-effective way to generate electricity.

Despite technological advance and even falling prices for solar panels, that unfortunate reality remains true.

For that reason, environmental activists and political liberals have succeeded in creating a complex array of local, state and federal subsidies to prop it up – funded by your hard-earned tax dollars.  Solar simply cannot compete as a power source without distorting the market through generous government subsidies.

To be clear, we at CFIF maintain no arbitrary animosity toward solar energy itself, or any form of energy for that matter.  We believe, however, that American consumers and taxpayers should remain aware that certain fashionable forms of energy  – conspicuously available to only some people – are subsidized in whole or in part by wasteful government spending.  By now we’re all well aware of the danger when government power is used to pick winners and losers in the market, but solar subsidies constitute a particularly bad example.  Artificial favoritism toward the solar sector has benefited rooftop solar users at the expense of taxpayers and consumers who don’t or can’t utilize solar.

Here’s how that distorted scheme works.

Favored homeowners exploit a generous 30% federal tax credit and other bureaucratic incentives to install rooftop solar systems.  Afterward, utility companies must then repurchase the excess power generated by the solar panels at full retail price under a policy known as “net metering.” That, in turn, allows rooftop solar users to enjoy the benefits of traditional electrical generation, and the grid that distributes electricity, without contributing to the broader costs associated with keeping the lights on, so to speak.  Meanwhile, consumers without solar remain on the hook for the maintenance of the electrical grid.

There’s an ugly irony that seems to have escaped most liberals who advocate that system of subsidies.  Namely, most consumers remain unable to exploit the system of handouts because they can’t afford solar in the first place.  Accordingly, liberals have created a government subsidy in which middle-income and lower-income consumers end up subsidizing wealthier homeowners.  How’s that for class warfare?

Just as unseemly, the solar industry and activist groups actually claim that solar subsidies promote “choice and competition.”  The reality is that the solar industry and its advocates simply seek favored economic status via crony capitalism.  Using bureaucracy to elevate the solar sector doesn’t promote choice or competition.  It’s simply government picking winners and losers – with everyday consumers paying the price.

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July 14th, 2014 at 2:53 pm
“Operation Choke Point” – Rogue Obama Administration Program Faces House Scrutiny This Week
Posted by Timothy Lee Print

Already mired in myriad scandals – the IRS, our southern border, Benghazi, etc. – one would presume the Obama Administration reluctant to run a legally and ethically dubious program named “Operation Choke Point.”  Yet that’s exactly what this tone-deaf administration has done.

Fortunately, the House of Representatives is paying close attention, and holding several important hearings on the matter this week.

For those still unfamiliar, Operation Choke Point is a program initiated by Eric Holder’s Department of Justice to interrupt – or “choke” – access to private financial resources by entirely legal industries such as firearms sales, ammunition sales, coin dealers and others.  If the administration can successfully pressure financial services like banks and third-party payment processors to refuse to do business with those industries, they obviously cannot survive for very long.  All the while, none of the targeted industries have even been shown to have violated any laws.  Accordingly, it’s a prototypical Obama Administration effort to demonize and target legal business that it happens to dislike.

This week, however, two House committees will bring cleansing public sunlight to this rogue operation.  On Tuesday at 10:00 a.m., the House Financial Services Oversight & Investigations Subcommittee will hold a hearing entitled “The Department of Justice’s ‘Operation Choke Point,’” and at 2:00 p.m. the House Financial Services Financial Institution and Consumer Credit Subcommittee will hole its hearing entitled, “Examining Regulatory Relief Proposals for Community Financial Institutions, Part II.”  Then, on Thursday at 9:30 a.m., the House Judiciary Regulatory Reform, Commercial and Antitrust Law Subcommittee will hold its hearing entitled “Guilty Until Proven Innocent?  A Study of the Proprietary & Legal Authority for the Justice Department’s Operation Choke Point.”

As with other Justice Department and IRS campaigns, Operation Choke Point is characterized by abuse of due process, secrecy and dishonesty.  Thankfully, this week’s battery of House hearings will provide some much-needed public scrutiny, and hopefully help end this rogue scheme.

July 14th, 2014 at 1:42 pm
This Week’s “Your Turn” Radio Show Lineup
Posted by Timothy Lee Print

Join CFIF Corporate Counsel and Senior Vice President Renee Giachino today from 4:00 p.m. CDT to 6:00 p.m. CDT (that’s 5:00 p.m. to 7:00 p.m. EDT) on Northwest Florida’s 1330 AM WEBY, as she hosts her radio show, “Your Turn: Meeting Nonsense with Commonsense.”  Today’s guest lineup includes:

4:00 CDT/5:00 pm EDT:  Aloysius Hogan, Senior Fellow at the Competitive Enterprise Institute – Harris v. Quinn and Unions Targeting Women;

4:30 CDT/5:30 pm EDT:   Evan Moore, Senior Policy Analyst at the Foreign Policy Initiative – Unrest in the Middle East;

5:00 CST/6:00 pm EDT:  Dakota Wood, Senior Research Fellow in Defense Programs at The Heritage Foundation – U.S. Inaction Creates Opportunities for our Enemies;

5:15 CST/6:15 pm EDT:  Ashton Ellis, CFIF Fellow and Adjunct Faculty at Pepperdine University School of Public Policy – To Impeach or Not?;  and

5:30 CDT/6:30 pm EDT:  Sally Pipes, President, CEO and Taube Fellow in Health Care Studies at the Pacific Research Institute – How ObamaCare Will Kill Job-Based Plans and Why Healthcare’s Problem is Not High Drug Prices.

Listen live on the Internet here.   Call in to share your comments or ask questions of today’s guests at (850) 623-1330.

July 8th, 2014 at 3:58 pm
What Economists Miss in the Patent Reform Debate
Posted by Timothy Lee Print

Following up on our patent reform post last week, today’s Wall Street Journal includes an interesting viewpoint via letters to the editor.  Specifically, Paul Adams of Albuquerque, New Mexico notes that while some economists short-sightedly applaud the way in which weakening patent protections and encouraging copying can lower costs in the near-term, they ignore the longer-term incentive to invest and invent that strong patent protections provide:

It may satisfy economists that allowing copying by large corporations will drive down prices for consumers since there is no other way to compete.  But that does enhance technology.  In fact, one benefit of the patent system is the pressure on competitors to invent a different and likely better solution, thereby advancing the technology.  I have on many occasions assisted competitors in ‘designing around’ a patent creating a new product or service.  There are few patents of such broad scope that there is not an alternative.”

Opponents of strong patent protections often fancy themselves clear-sighted, dispassionate, economics-based observers, but their positions are more accurately penny-wise but pound-foolish, as Mr. Adams correctly notes.

July 2nd, 2014 at 5:05 pm
The Mythical “Patent Troll?”
Posted by Timothy Lee Print

“Patent troll.”  The term has assumed prevalence amid discussion of broader patent law reform, which we at CFIF have supported in some incarnations.

The “patent troll” problem, however, is to a large degree a litigation problem more than a problem inherent in our patent system.  And in that vein, two prominent conservative/libertarian figures have penned a Wall Street Journal commentary entitled “The Myth of the Wicked Patent Troll.”  Author Stephen Haber is a senior fellow at the Hoover Institution’s Task Force on Intellectual Property, Innovation and Prosperity, while co-author Ross Levine is a business professor at the University of California, Berkeley and a senior fellow at the Milken Institute.  In other words, their intellectual and free-market credentials are well-established.

In their commentary, Mr. Haber and Mr. Levine substantively detail research showing that, “innovation rates have been strongest in exactly the industries that patent-reform advocates claim are suffering from ‘trolls’ and a broken patent system.”  They also correctly highlight the fact that, for whatever its flaws, our patent system is the world’s greatest:

Thanks in large part to the patent system we have, the current rate of invention in the U.S. might be the fastest in human history.  Where is the evidence that society would benefit from undertaking the risky process of reforming a patenting system that has been the envy of the world for more than two centuries?”

The real problem, they say, is large corporations seeking to leverage government power in pursuit of their own self-interest:

There is one basic reason behind the attacks on trolls:  Big Money.  Many patent-intensive products — the smartphone in your pocket, the laptop computer in your briefcase — are produced by big corporations that license many patents.  The iPhone is a classic example:  It contains thousands of patented components, but Apple does not own many of the key ones.  It must negotiate for the right to use them.  These corporations can make higher profits the less they pay to use patented technology they do not own, and higher profits still by paying nothing at all.  The battle over the ‘right price’ for patented technologies takes many forms, one of which is political.  Indeed, some corporations are looking to gain a competitive edge by changing the rules of the game.  The strategy is to pass patent-reform legislation that weakens the negotiating position of patent holders.  Corporations that pay large sums for patented technologies will point to lawsuits, trolls and anything else that will encourage lawmakers to pass such reforms.”

Agree or disagree, their piece brings an important and under-discussed perspective to the ongoing patent reform debate.

July 1st, 2014 at 2:51 pm
Hobby Lobby Hypocrisy? Not So Fast
Posted by Timothy Lee Print

Criticism of yesterday’s Supreme Court Hobby Lobby decision is already pioneering new realms of intellectual dishonesty and irrationality.  In one commentary that seems to be maintaining particular inertia on the Internet, Mother Jones labels the Hobby Lobby organization hypocritical because its retirement plan invests in contraceptive manufacturers.

Fortunately, Ryan Ellis of Americans for Tax Reform provides a welcome antibiotic.  Specifically, he rebuts the Mother Jones commentary, explaining in clear terms the nature of such retirement plans and the weakness of the Mother Jones assertion:

401(k) plans are directed and invested by employees, not by employers. It’s the Hobby Lobby employees that would be disenfranchised by the twisted logic employed by Redden and Ungar here.  They are the ones–not their bosses–who choose which mutual funds to invest in.  This is true both of the employee’s elective deferral and the employer’s match.  The menu of choices is primarily provided not by the Hobby Lobby employers, but by the 401(k) plan administrator, who helps select a wide menu of mutual fund (and, increasingly, exchange traded fund) choices so that the fiduciary obligations of the plan are met.”

It’s a brief, straightforward piece that is well worth taking a moment to read and share with others.

June 24th, 2014 at 3:52 pm
RESPECT Act: Rectifying a Legal Anomaly, Providing Equity for Digital Broadcast of Pre-1972 Recordings
Posted by Timothy Lee Print

Is it fair that digital radio broadcasters pay royalties for the privilege of playing songs recorded after the arbitrary date of February 15, 1972, but not for pre-1972 recordings?

By way of perspective, no fewer than 305 of Rolling Stone’s 500 “Greatest Songs of All Time” were recorded before 1972, including 9 of its top 10.  Additionally, 65 of its 100 greatest artists recorded songs prior to 1972, including all 10 of its top 10.  Further, the overwhelming majority of artists inducted into the Rock & Roll Hall of Fame also recorded before 1972, as were 83% of the recordings in the Grammy Hall of Fame.

Yet due to a legal quirk, digital broadcasters decided they would stop paying royalties for music recorded before 1972, believing that they’re entitled to play them for free.

Recordings predating 1972 remain protected by a patchwork of state laws, whereas recordings after February 15 of that year going forward are covered under federal law.  That amounts to a historical idiosyncrasy, without any prevailing substantive logic.  But digital radio stations, some of which center entirely upon pre-1972 music, have capitalized on the legal aberration to simply stop paying for performance of the pre-1972 songs still covered by state laws.  Estimates of royalties lost as a result reach $60 million per year.

As a result, the Righteous Brothers’ “You’ve Lost that Lovin’ Feelin’” receives no payment, but Hall & Oats’s remake does.  The Rolling Stones’ “(I Can’t Get No) Satisfaction” is not compensated, but Devo’s remake is.  The Beach Boys get paid for “Kokomo” but not “Good Vibrations.”  This situation has also led to numerous lawsuits spanning various states, adding further legal complexity and uncertainty for artists, consumers and digital broadcasters alike.

Digital radio stations operate under privilege of federal license to broadcast, but take the position that they need not pay for pre-1972 songs that remain protected under state laws.  They profit from playing those songs, but refuse to pay accordingly.  Keep in mind that unlike contemporary performers, many of those older affected artists are no longer capable of touring, and sales of their records have diminished over the years, leaving royalties for performance of their songs as their only remaining means of continuing compensation.

Now, however, some in Congress seek to rectify that unfairness.  Representative George Holding (R – North Carolina) has introduced the Respecting Senior Performers as Essential Cultural Treasures Act – the “RESPECT” Act.  Under that legislation, digital radio stations that enjoy federal broadcast privileges would finally be obligated to provide royalty payments for songs recorded before 1972, in the same way they already pay for songs recorded after 1972, as a condition for maintaining their licenses.  Importantly, the bill does not attempt to rework copyright laws or “federalize” pre-1972 recordings, which would introduce unnecessary legal complexity and confusion.  Rather, it explicitly maintains existing protection under state laws.  It simply conditions continued broadcasting privilege upon payment to artists for pre-1972 recordings.  A long list of musicians, spanning Martha Reeves to Brian Wilson to the Allman Brothers to Al Green have signed on in support of the bill.

Digital radio has provided an amazing innovation for which we can all be grateful.  Nevertheless, it’s simply unfair for them to attempt to exploit a legal quirk to avoid paying artists for songs recorded prior to the arbitrary date of February 15, 1972.  Congressman Holding is therefore to be applauded for his effort, and Americans should contact their Senators and Representatives to voice their support.

June 23rd, 2014 at 3:56 pm
This Week’s “Your Turn” Radio Lineup
Posted by Timothy Lee Print

Join CFIF Corporate Counsel and Senior Vice President Renee Giachino today from 4:00 p.m. CDT to 6:00 p.m. CDT (that’s 5:00 p.m. to 7:00 p.m. EDT) on Northwest Florida’s 1330 AM WEBY, as she hosts her radio show, “Your Turn: Meeting Nonsense with Commonsense.”  Today’s guest lineup includes:

4:00 CDT/5:00 pm EDT:  Craig Shirley, Author, Historian, Conservative – President Reagan, Then and Now;

4:30 CDT/5:30 pm EDT:  Hans von Spakovsky, Manager, Election Law Reform Initiative and Judicial Studies at The Heritage Foundation – Lerner’s Lost E-Mails and Other IRS Scandals;

5:00 CST/6:00 pm EDT:  Robert Zarate, Policy Director of the Foreign Policy Initiative – What to do in Iraq; and

5:30 CDT/6:30 pm EDT:  Steve Soukup, Vice President and Publisher of The Political Forum and Fellow in Culture and Economy at the Culture of Life Foundation – Immigration.

Listen live on the Internet here.   Call in to share your comments or ask questions of today’s guests at (850) 623-1330.

June 6th, 2014 at 11:52 am
The “First Sale” Doctrine: A Bad Idea for Digital Goods in the Internet Era
Posted by Timothy Lee Print

The “First Sale” doctrine refers to an exception in copyright law that allows people to resell used physical products such as books, DVDs, CDs, etc.  While a century of Supreme Court precedent and federal statutes protect that exception for physical goods, some now want to extend it to digital goods even though the doctrine’s underlying logic does not rightfully apply.  More on this in next week’s Liberty Update, but for now, two good recent commentaries from Jim Martin over at the 60 Plus Association and George Landrith over at Frontiers for Freedom.

As Mr. Martin notes:

In the online space, where copies of intangible content are identical to originals, never decay, and are virtually costless to reproduce and transport, creation of a new first sale doctrine would destroy the primary market and discourage investment, innovation and creation.”

And as Mr. Landrith observes:

The ‘first sale’ exception makes sense for physical objects, but it does not make sense for intangible content.  Many have criticized the creative community for being slow to adjust to the modern digital marketplace.  But now some of those same voices are calling for government regulation which would effectively drag our modern modes for distributing books, movies and music back to a 1908 framework that only contemplated physical distribution.”

June 6th, 2014 at 11:19 am
“Operation Choke Point” – Obama Administration’s Latest Tactic to Circumvent Rule of Law and Persecute Disfavored Groups
Posted by Timothy Lee Print

By now Americans are well familiar with the Obama Administration’s habit of circumventing laws and persecuting groups it disfavors.  The IRS.  Operation “Fast and Furious.”  Targeting journalists.  The EPA.  More recently, its release of five high-level terrorists from Guantanamo Bay without consulting Congress as required by statute.

Now, we can add “Operation Choke Point” to that dishonorable list.

As detailed by a new House Oversight and Government Reform Committee report, Operation Choke Point is an Obama Justice Department campaign to “choke out” perfectly legal businesses that the Administration simply finds politically objectionable.  “The goal of the initiative,” the House report notes, “is to deny these merchants access to the banking and payments networks that every business needs to survive”:

Over the past year, the Department of Justice has initiated a wide-ranging investigation of banks and payment processors, known informally as ‘Operation Choke Point.’  As of December 2013, the Department has issued over fifty subpoenas to banks and payment processors.  The ostensible goal of the investigation is to combat mass-market consumer fraud by foreclosing fraudsters’ access to payment systems.  However, there is evidence that the true goal of Operation Choke Point is to target industries deemed ‘high-risk’ or otherwise objectionable by the Administration.”

Those targeted industries include firearms and ammunition sellers, short-term lenders that help lower-income workers, and other legitimate businesses.  By threatening and pressuring banks and financial institutions through this operation, the Obama Administration hopes to pressure them to refuse to continue doing business with law-abiding targeted industries.  Although the Administration claims to be acting on the basis of federal statutes prohibiting consumer fraud, the House report notes that no fraud by the targeted businesses has been demonstrated, let alone proven by evidence in a court of law.

The House will continue to pursue the matter, but individual Americans can do their part by remaining vigilant on this issue, and by contacting their elected representatives in the House and Senate to demand action (contact information can be found quickly and easily on CFIF’s “Take Action” page here).

June 2nd, 2014 at 2:17 pm
This Week’s “Your Turn” Radio Lineup
Posted by Timothy Lee Print

Join CFIF Corporate Counsel and Senior Vice President Renee Giachino today from 4:00 p.m. CDT to 6:00 p.m. CDT (that’s 5:00 p.m. to 7:00 p.m. EDT) on Northwest Florida’s 1330 AM WEBY, as she hosts her radio show, “Your Turn: Meeting Nonsense with Commonsense.”  Today’s guest lineup includes:

4:00 CDT/5:00 pm EDT –  Daren Bakst, Research Fellow in Agricultural Policy, Heritage Foundation:  New School Lunch Requirements and Michelle Obama;

4:15 CDT/5:15 pm EDT — Megan L. Brown, Parnter, Wiley Rein LLP, Washington, D.C.:  Supreme Court Round-Up;

4:30 CDT/5:30 pm EDT –  Erin Murphy, Parnter, Bancroft PLLC, Washington, D.C.:  McCutcheon v. FEC;

4:45 CDT/5:45 pm EDT –  Paul Kersey, Director of Labor Policy, Illinois Policy Institute:  Unions and Home Healthcare Givers;

5:00 CST/6:00 pm EDT –  Guest T.B.A.:  Obama Administration, Air Pollution and Global Warming;  and

5:30 CDT/6:30 pm EDT — Timothy Lee, Senior Vice President, Legal and Public Affairs, CFIF:  Net Neutrality.

Listen live on the Internet here.   Call in to share your comments or ask questions of today’s guests at (850) 623-1330.

May 30th, 2014 at 11:50 am
Copyright Alert System – A Successful First Year for a Market Initiative to Reduce Copyright Infringement
Posted by Timothy Lee Print

Copyright infringement constitutes a multi-billion dollar problem, but free market cooperation in the form of the Copyright Alert System (CAS) has enjoyed a remarkably successful first year.

One year ago, a broad coalition of private enterprises, such as entertainment and telecommunications companies, launched CAS to proactively inform consumers of infringing activity detected involving their account.  That approach derived from the knowledge that large majorities of consumers (a) agree that it is never appropriate to engage in copyright infringement, (b) are often unaware as to which online sources are illegal, and (c) stated that they would immediately discontinue participating in copyright infringement immediately if they were alerted to it.

With that in mind, here’s how CAS works.  It involves three levels of alerts – the educational stage, the acknowledgement stage and the mitigation stage – with each stage including two alerts before moving to the next stage.  The educational stage informs users that infringing activity has occurred with their account, identifies the specific content at issue, sets forth steps to avoid further infringement and provides alternative legal sources for the content.  Then, if the infringement continues on that account, the acknowledgement stage involves up to two alerts requiring the user to acknowledge that they’ve received the alert (but does not require the user to admit or deny wrongdoing).  Finally, if the infringement continues, the user receives up to two mitigation alerts, which can involve temporary reduction in Internet speeds, temporary downgrades in Internet service tier or redirection to a landing page for a set period of time until the account holder has reviewed copyright education materials.

One year in, the results are impressive.  Most prominently, the system succeeded in stopping the alerted activity before reaching the final mitigation stage:

We can report that during the first ten months of CAS’s operation, more than 2 million notices of alleged infringement were sent to ISPs and more than 1.3 million Alerts were sent to 722,820 customer accounts.  The vast majority of those Alerts were Educational Alerts (72%), while a very small fraction were Mitigation Alerts (8%), with less than 3% at the final (or second) Mitigation level.”

The system’s success is further illustrated by the fact that very few – just 0.27% – of the alerts eligible for review were actually challenged.  And among that small number of actual challenges, some 77% were upheld as valid.

Simply put, after one year CAS has established a record of success based upon a model of market cooperation.  That obviously does not mean that continued and even additional law enforcement avenues to combat copyright infringement and online piracy aren’t necessary.  But it does provide encouraging news in this important ongoing concern.

May 19th, 2014 at 1:42 pm
This Week’s “Your Turn” Lineup
Posted by Timothy Lee Print

Join CFIF Corporate Counsel and Senior Vice President Renee Giachino today from 4:00 p.m. CDT to 6:00 p.m. CDT (that’s 5:00 p.m. to 7:00 p.m. EDT) on Northwest Florida’s 1330 AM WEBY, as she hosts her radio show, “Your Turn: Meeting Nonsense with Commonsense.”  Today’s guest lineup includes:

4:00 CDT/5:00 pm EDT –  Professor John Yoo, Boalt Hall UC Berkeley School of Law and former deputy assistant attorney general in the Office of Legal Counsel at the U.S. Department of Justice: Point of Attack:  Preventive War, International Law, and Global Welfare;

4:30 CDT/5:30 EDT –  Marita Noon, Executive Director for Energy Makes America Great:  Environmental Shakedown;

5:00 CST/6:00 pm EDT –  Caitlin Poling, Director of Government Relations:  Boko Haram and Terrorism in Africa;  and

5:30 CDT/6:30 pm EDT –  Alexandra Aldrich, heir to the Astor legacy:  “The Astor Orphan: A Memoir.”

Listen live on the Internet here.   Call in to share your comments or ask questions of today’s guests at (850) 623-1330.

May 16th, 2014 at 1:51 pm
Switzerland: No Minimum Wage, Low Unemployment, High Standard of Living
Posted by Timothy Lee Print

It might surprise many people to learn that Switzerland has no minimum wage, as The Wall Street Journal reports:

Switzerland will decide Sunday whether the country’s workforce should get something it has never had before:  a minimum wage.  On May 18, the Alpine nation will vote on an initiative to introduce a minimum wage of 22 Swiss francs ($25) an hour, a level that would be the highest in the world.”

But note the remarkably low Swiss unemployment rate:

Switzerland has an enviably low unemployment rate of 3.2%, but Boris Zuercher, head of the Swiss labor office, said the proposal would hurt the people it is designed to help if it makes it too expensive to hire low-skilled job seekers.”

So no minimum wage, low unemployment, and a famously high standard of living.  The Swiss example is obviously something that domestic proponents of a minimum wage increase, including Barack Obama, should internalize.

May 12th, 2014 at 3:43 pm
New Poll: Majority of Americans Care About IRS/Lois Lerner Scandal, Too
Posted by Timothy Lee Print

In last week’s Liberty Update, we debunked the claim by the Obama Administration, its Democratic Congressional apologists and the mainstream media that the Benghazi scandal is something about which Americans just don’t care.  According to a Rasmussen survey released last week, 51% say that the Benghazi affair merits further investigation, while just 34% disagree:

One can only imagine survey data on the matter if the media had bothered to cover it as it deserves.  Or, perhaps more to the point, if a Republican president presided over the attack and political coverup.  Nevertheless, it’s an encouraging sign that the American public not only expresses concern, but prefers continued investigation.  That should encourage Congressional leaders and media to get to the bottom of this important matter.”

Today, there’s more encouraging news in that regard.  Rasmussen also reports that a clear majority of Americans also say the ongoing IRS/Lois Lerner scandal merits further investigation:

Half of voters still believe the IRS broke the law when it targeted Tea Party and other conservative groups, and even more think the matter needs to be looked into further.  A new Rasmussen Reports national telephone survey finds that 57% of likely U.S. voters think the Obama administration’s handling of the IRS matter merits further investigation.  Just half as many (28%) say the case should be closed.  Fifteen percent (15%) are not sure.”

Both Benghazi and the IRS persecution of conservative groups are critical matters, and Americans shouldn’t allow the Administration to bury them.  Fortunately, that’s not the case, which should encourage the media and members of Congress to pursue the truth in both cases in a responsible, thorough, public manner.

April 25th, 2014 at 12:44 pm
Chamber of Commerce 2014 IP Champions Event Anticipates World Intellectual Property Day
Posted by Timothy Lee Print

Tomorrow (April 26) we celebrate the annual World Intellectual Property Day, recognizing IP’s critical role in protecting and promoting scientific, artistic and commercial innovation.

In that vein, the U.S. Chamber of Commerce’s Global IP Center held its 2014 IP Champions event in Washington, D.C. this week to celebrate organizations and people who have particularly embodied and advanced IP over the past year.  It brought a packed audience, the panels were informative and entertaining, and the award recipients spanned an impressive range of scientists, songwriters, entrepreneurs, engineers, foreign dignitaries and political leaders like Congressman Doug Collins (R – Georgia).

Most importantly, the recipients highlighted the critical value of patents, copyrights and trademarks in protecting their creations, encouraging further innovation and – critically – helping protect consumers against unsafe and defective counterfeit goods.  It is no coincidence that the United States stands as the most scientifically and artistically prolific nation in human history, given our tradition of strong IP protections in comparison to other nations and legal systems.  That’s a truism that bears emphasis and preservation in our increasingly interconnected global economy, lest we recede in our leadership role and witness a diminution in the pace of innovation.

April 22nd, 2014 at 3:11 pm
FCC Micromanagement Could “Blow Up” Planned Spectrum Auction
Posted by Timothy Lee Print

Does the federal government have too little on its plate these days, or too much?  The American public is unequivocal on that question, with a record 60% telling Gallup that bureaucrats are wielding too much power.  Only 7% say “too little.”

Despite that ugly reality, the Federal Communications Commission (FCC) seeks to increase its level of micromanagement over our telecommunications market.  The auction of spectrum from television stations to wireless carriers is obviously long overdue, and ideally would improve service quality and speed within that growing market.  Unfortunately, the FCC intends to limit participation in bidding on highly valuable low-frequency airwaves by excluding the largest and most successful carriers in many markets.  As Bret Swanson observes at TechPolicyDaily.com, that threatens to “blow up” the entire auction:

Because the auction depends on inducing the broadcasters to give up their spectrum in the first place, if two of the largest prospective bidders are limited, or sit out entirely, the whole thing could blow up.  Without the two largest bidders, prices are likely to be much lower, and broadcasters might say, no thanks.  No broadcaster participation, no new spectrum for new mobile innovations.”

The wireless industry has brought innovation scarcely imaginable even five years ago, but that vitality will be jeopardized if bureaucrats pursue this sort of overregulation and abandon the regulatory light touch approach.  As Swanson ominously notes:

The FCC is about to take a huge risk with a hugely successful U.S. industry.  It’s also openly favoring and disfavoring specific firms, something U.S. law used to try to avoid.  The added irony, although it shouldn’t matter in a country that values the Rule of Law, is the favored firms are both foreign and the two disfavored are domestic.”

Instead if new FCC micromanagement, what we need is an open and fair incentive auction.  Allowing the market to work, unencumbered by such bureaucratic arbitrariness, will unleash more of the profound potential that the wireless marketplace possesses to spark new social, economic and technological realities for America’s consumers.

April 21st, 2014 at 11:12 am
This Week’s “Your Turn” Radio Lineup
Posted by Timothy Lee Print

Join CFIF Corporate Counsel and Senior Vice President Renee Giachino today from 4:00 p.m. CDT to 6:00 p.m. CDT (that’s 5:00 p.m. to 7:00 p.m. EDT) on Northwest Florida’s 1330 AM WEBY, as she hosts her radio show, “Your Turn: Meeting Nonsense with Commonsense.”  Today’s guest lineup includes:

4:00 CDT/5:00 pm EDT:  Phil Kerpen, President of American Commitment – IRS, ObamaCare, Keystone XL Pipeline and other scandal and scams;

4:30 CDT/5:30 EDT:  Allen Dickerson, Legal Director for Center for Competitive Politics – State disclosure laws and how they violate the First Amendment;

5:00 CST/6:00 pm EDT:  Jennifer Gratz, President of President of the XIV Foundation – A debate on affirmative action;  and

5:30 CDT/6:30 pm EDT:  Timothy Sandefur, Principal Attorney at the Pacific Legal Foundation – “Conscience of the Constitution.”

Listen live on the Internet here.   Call in to share your comments or ask questions of today’s guests at (850) 623-1330.

April 17th, 2014 at 11:50 am
IRS Assuming Control of Your Tax Preparation? What Could Possibly Go Wrong?
Posted by Timothy Lee Print

In recent weeks, we’ve highlighted the pernicious effort to make the Internal Revenue Service not only the nation’s tax enforcer, but also its tax preparer:

This IRS scheme is part of a broader, ongoing campaign to socialize the tax preparation business in America entirely, which would ultimately make it the nation’s one-stop-shop tax preparation service.   That would obviously create a conflict of interest with the IRS serving as both tax preparer and tax collector, and it would surely result in higher tax calculations to facilitate wasteful federal spending.”

Believe it or not, however, some continue to assert that it’s an idea whose time has come.  Because, according to ProPublica, Barack Obama supports it and the Europeans do it.  And allegedly, the notoriously tax- and bureaucracy-loving Ronald Reagan was also an enthusiast.

But Ryan Ellis of Americans for Tax Reform, one of the most informed and cogent tax experts in contemporary public discourse, throws cold water on the idea in a new commentary entitled “Top Seven Reasons the IRS Shouldn’t Do Your Taxes for You”:

The basic argument is always the same: the IRS has all this information on you anyway, so wouldn’t it just be easier and better if they simply prepared your taxes for you?  Wouldn’t that be better than having to pay some rent-seeking middleman?  This flawed line of thinking fools many a reporter this time of year, but it’s refuted pretty easily once you scratch beneath the surface.”

In trademark fashion, Ellis details those seven reasons in clear, convincing form.  It’s well worth the quick read on an issue that is becoming increasingly important.

But his conclusion is worth particular emphasis:

The bottom line. These tired, annual articles from white collar lefty pseudo-academics living in the Beltway all ignore the really big story here: namely, that it’s a giant conflict of interest for the IRS to determine your tax liability, and then to be able to seize your wages and assets in order to collect that tax liability.  To ignore that is to be criminally-naive about the way the IRS goes about its business.  It betrays either a lack of knowledge of how the tax system actually works, or it’s a giant con job by people whose common cause with the IRS is growing the size of government.

Demonizing the tax prep industry doesn’t change any of the arguments from above.  It does, however, provide a thin shield of self-righteousness for what is otherwise a fool’s errand.”

April 14th, 2014 at 11:10 am
“Sons of Fannie Mae”: WSJ Shares Our View of Current Fannie/Freddie “Reform” Legislation in Senate
Posted by Timothy Lee Print

For weeks, CFIF has detailed the hazard presented by two proposed Senate bills – Johnson/Crapo and Warner/Corker – claiming to offer home finance “reform” of Fannie Mae and Freddie Mac.

It was therefore refreshing to see The Wall Street Journal reach the same conclusion this morning in its opinion piece entitled “Sons of Fannie Mae.”  While reform of Fannie and Freddie is indeed critical, the latest attempt from Senators Tim Johnson (D – South Dakota) and Mike Crapo (R – Idaho) isn’t the answer.  “The bad news,” it reads, “is that the Senators want to replace Fan and Fred with multiple private mortgage bond issuers that would each also have a  taxpayer guarantee.”

It continues:

While Johnson-Crapo claims to end Fan and Fred’s “affordable housing” requirements, the bill is larded with provisions to encourage and subsidize loans to non-creditworthy borrowers while driving up the price of housing.  The bill includes a new 0.1% tax on federally insured mortgages that will be distributed to housing slush funds across the bureaucracy.”

The bill also promises to continue subsidizing mansions that don’t need help:

On that point, Johnson-Crapo also ensures that the universe of loans eligible for subsidies will continue to grow.  Under their proposal, the FMIC could raise the size of mortgages eligible for federal insurance as home prices rise.  But it bars the agency from ever lowering this so-called conforming loan limit.  Guess what would happen the next time a President runs for re-election?

According to the National Association of Realtors, February’s median sales price of an existing U.S. home was $189,000.  Yet Fannie and Freddie offer mortgages up to $417,000 across the country and in high-cost areas they run as high as $625,500.  That means that with 20% down a borrower can get taxpayer help when paying more than $780,000 for a house.  In most places that’s called a mansion.

Beyond the obvious reasons wealthy buyers don’t need subsidies, the “jumbo” market for mortgages above the conforming limits has been thriving.  At times in the last year jumbo rates have been lower than conforming rates and even now are within four-tenths of a percent.”

Fortunately, the piece ends on a high note, highlighting superior alternative legislation from Congressman Jeb Hensarling (R – Texas):

Some of our friends say the political window to kill Fannie and Freddie is closing, and Johnson-Crapo is the only vehicle that can do so because it is the only one that has White House support.  We’re not so sure.  Texas Rep. Jeb Hensarling has a better reform in the House, and a GOP Senate might be able to cut a better deal next year.  The Senate should go back to the drawing board and come up with a reform that doesn’t use the demise of Fan and Fred to create a dozen mini-me replacements that could grow to become the same monsters.”

Well said.