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Archive for August, 2022
August 31st, 2022 at 6:18 pm
Senate Should Take Up Companion Legislation to the House’s American Music Fairness Act (H.R. 4130)
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Congress doesn’t maintain a spotless record of affixing accurate titles to proposed legislation, but in the case of the American Music Fairness Act (H.R. 4130), the House of Representatives nails it.

Now it’s time for the Senate to take up companion legislation and bring greater fairness to performance rights in the music industry.

By way of background, federal law currently secures royalty payments for songwriters and others when their songs are played on AM-FM terrestrial radio, but not for the performing artists themselves.  Deepening that odd paradox, performance artists receive compensation when their songs play on digital broadcast platforms like the internet, satellite and cable.  Terrestrial radio broadcasters, however, somehow remain exempt under existing law from having to pay that same compensation.  There’s no logical or legal justification for that paradox, which amounts to crony capitalism in the form of a special government carve-out.

Fortunately, the American Music Fairness Act currently before the House would finally secure performance rights for artists whose recordings are played on terrestrial radio (with exceptions maintained for smaller mom-and-pop stations).  In 2021, we at CFIF joined numerous fellow conservative and libertarian organizations in a coalition letter to the House amplifying the need to pass this legislation to protect artists’ natural intellectual property (IP) rights:

The Constitution protects intellectual property rights and specifically delegates to Congress authority to protect creative works.  Artists who produce music therefore have the right to protect their intellectual property, including both the writer and performer of a given recording.  When a given work is transmitted, common sense and basic fairness dictate that the medium of transmission should not affect the existence of these rights.  Yet, under the current regime, a performer does not hold effective or enforceable rights to his or her product when it is distributed through terrestrial radio.”

Opponents of the American Music Fairness Act illogically suggest that it would somehow introduce needless market regulation, but the obvious reality is that the market is already regulated in the discriminatory manner described above.  The American Music Fairness Act would merely level the playing field and respect the value of the artists’ works.

Some opponents of H.R. 4130 also falsely attempt to portray it as creating a “tax.”  As leading anti-tax crusader Grover Norquist of Americans for Tax Reform answers, however, taxes are compulsory payments to government, whereas royalties are voluntary payments to broadcast others’ creations:

[W]hat is proposed is not, in fact, a tax but a royalty.  The definition of a tax is the transfer of wealth from a household or business to the government.  Taxes aren’t voluntary; paying a royalty is.  It is completely within the rights of broadcasters to decide not to pay for the use of a performer’s song by simply not using the song.  This may not be an ideal option, but these songs actually are the property of someone else…  Just as dishonest as calling a tax a fee or fine, so too is it wrong to apply the word ‘tax’ to a royalty payment.  Creating the negative perception that this legislation creates a new tax may be convenient in the short term and assist opponents in gaining political support;  in the long run it is incredibly unhelpful to those who work to reduce the burden of government in our everyday lives.”

By any standard of fairness and logic, performing artists possess a natural right to enjoy the fruits of their labor and creativity, just like any of us do for our work.  After all, artists already receive performance payments from non-terrestrial radio stations, reflecting the value of their work.  The American Music Fairness Act simply corrects an unfair and illogical federal carve-out.

Accordingly, the House should promptly pass this long-overdue legislation, and the Senate should similarly take up companionate legislation.

August 26th, 2022 at 2:31 pm
AEI’s Shane Tews Highlights Another Peril of Government-Owned Broadband: Cybersecurity Weakness
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For years we at CFIF have highlighted the failures and peril of government-run broadband boondoggles.  Government-owned networks (GONs) have an uninterrupted history of failure both domestically and overseas.  They compete with private investment in commercial networks, they create more debt for taxpayers who ultimately become liable for them, they rarely if ever manage to break even financially, and they offer substandard quality.

In that vein, our friend Shane Tews of the American Enterprise Institute (AEI) offers an excellent new analysis highlighting yet another fatal defect of GONs:  weaker cybersecurity:

Local governments are good at many things, but asking them to understand how to keep local networks safe and protect connections to the nation’s internet infrastructure is a stretch.  Cybersecurity plans deserve more scrutiny at every level — especially given the possibility of local weaknesses in our network fabrics via government-owned and -operated broadband networks that often lack the tools to detect cyber intrusions.”

She rightfully contrasts the superior comparative performance of private broadband, and suggests a better option:

Commercial broadband providers, on the other hand, spend tens of billions of dollars annually to keep things running safely. They invest heavily in network security, pay hundreds of professionals to guard their network operations, and endlessly brainstorm ways to protect customers’ information.

We should build on what the COVID-19 work-from-home period has taught us: that our networks work extraordinarily well. Rather than overbuilding duplicative networks in areas that already have good broadband coverage, the state should partner with the private sector to close coverage gaps and build secure networks that give new internet users safe access. There is almost no question that the size and nature of these cyber threats will continue to escalate. We need to strengthen our network defenses — not build new, defenseless networks.”

Her pieces always merit full reading, and she hits the nail on the head by encouraging government to partner with private broadband providers that work extraordinarily well, not needlessly compete against them.

 

 

August 18th, 2022 at 6:01 pm
Amid Recession and High Inflation, Groups Like the “National Consumer Law Center” Seek to Narrow Rather Than Expand U.S. Consumer Lending Options
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As inflation continues to spiral upward at multi-decade highs and with the U.S. economy now in recession, maintaining an “all of the above” array of lending options for American consumers becomes more and more important.  Unfortunately, activist groups like the “National Consumer Law Center” aim to do the opposite and limit rather than expand consumer options.

For a sense of consumers’ growing desperation, consider a Federal Reserve report on exploding credit card debt, as highlighted by Steve Cortes:

How have consumers dealt with these skyrocketing prices? The simple answer, unfortunately: via credit cards, particularly for working-class households. Just last week, the Federal Reserve Bank of New York issued a damning report on this credit binge for consumers, into a pronounced economic slowdown.

Total consumer debt rose a staggering $40 billion in June, far surpassing Wall Street expectations of a $25 billion increase…

A huge portion of this new debt flows from costly, risky credit card use. In fact, for the April-June second quarter of 2022, total credit card debt rose a staggering $46 billion, the biggest jump in 20 years. Americans pile into new accounts to accomplish this borrowing, opening up a whopping 233 million new cards during that second quarter, the most new cards since 2008. Such comparisons to the Great Recession should worry everyone.”

Additionally, credit cards aren’t always a viable option for many Americans, and traditional bank loans aren’t always an option due to small amounts needed for short-term emergencies.  Whereas higher-income Americans with stronger credit history can borrow from banks, utilize assets they possess as leverage or use their savings, consumers with lower credit scores or lacking sufficient savings cannot.  Indeed, according to the Fair Isaac Corporation, some 46% of consumers possess credit scores below 700, meaning that traditional bank loans aren’t possible for them.

In such circumstances, struggling Americans can access the money they need for the short-term via consumer finance loans.

Groups like the National Consumer Law Center (NCLC), however, want to limit the availability of such options, which they falsely characterize as some sort of scheme “to snare consumers into predatory loans for auto repairs, tires, furniture, and even pets.”

In reality, however, the unintended consequence of efforts like that of the NCLC will be to drive temporarily strapped consumers to seek out illegal loansharks, suffer overdrafts, or simply be unable to cover their temporary costs.  As none other than the World Bank found, such limitations lead to “increases in non-interest fees and commissions; reduced price transparency; lower number of institutions and reduced branch density; and adverse impacts on bank profitability, in addition to the lack of access for smaller and riskier borrowers.”

That doesn’t help the people whom groups like the NCLC claim to protect, it hurts them.  Accordingly, American consumers and elected leaders should recognize the peril that NCLC and similar groups present.  Their efforts would only make consumer lending more difficult, more dangerous and more expensive.

August 12th, 2022 at 11:54 am
Image of the Day: IRS Collected Record Taxes Through July
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Our latest Liberty Update highlights the danger of an Internal Revenue Service (IRS) that’s about to enjoy a doubling of funding and personnel via the abominable Manchin-Schumer “compromise” tax-and-spend-and-regulate bill.  Apologists for the bill rationalize that a turbocharged IRS is necessary to collect more taxes from the American people (and we highlight in our piece how Americans earning under $200,000, not the “rich,” will be the primary targets).  The U.S. Treasury Department, however, just reported that the federal government just collected a record amount of taxes so far this fiscal year.  The obvious problem isn’t insufficient funding of the federal government, but rather excessive spending:

 

August 5th, 2022 at 11:25 am
Image of the Day: Prescription Drug Prices Aren’t the Inflationary Problem
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As Senators Joe Manchin (D – West Virginia) and Kyrsten Sinema (D – Arizona) betray their “moderate” charade and join Senate Majority Leader Chuck Schumer’s (D – New York) latest tax-and-spend monstrosity, we’ve highlighted the preposterousness of the claim that imposing drug price controls will in any way address out-of-control inflation.  Price controls will kill innovation, but do nothing to reduce inflation, because prescription drug prices simply aren’t the problem.  Once again, economist Steve Moore offers a handy illustration of that truth:

Prescription Drug Costs Aren't the Problem

Prescription Drug Costs Aren’t the Problem