Freedom Line Blog

In this week’s Liberty Update, we emphasize how intellectual property (IP) protection should be priority number one for the Trump Administration as it renegotiates the North American Free Trade Agreement (NAFTA) this month.

In that vein, we’re pleased to see Senator Pat Toomey (R – Pennsylvania) echo that point in his commentary in today’s Wall Street Journal:

[T]he administration can accept the advice from many members of Congress and others to modernize Nafta in ways that expand trade opportunities without curtailing American consumers’ freedom…  Nafta’s pre-internet intellectual property rules could be strengthened.”

Well said, and hopefully the message resonates within the Trump Administration to continue its remarkable recent string of economic and international successes.

Something that should’ve happened long ago, but that all Americans should be grateful to have been accomplished in swift order by President Trump – new street signs pointing to U.S. embassy in Jerusalem:

At Long Last - U.S. Embassy to Jerusalem

From the always-insightful Holman Jenkins of The Wall Street Journal in his latest “Business World” commentary:

Mr. Pai, chairman of the Federal Communications Commission, cares about good policy.  That hasn’t been the rule for years.  During the Obama era, tech and telecom policy were driven by White House interest in whipping up millennials and exploiting public hostility to cable providers.”

It’s almost as if the wave of deregulation and tax cuts had some sort of impact.  The Congressional Budget Office (CBO), no refuge of supply-side enthusiasts, just boosted its job growth estimate by 2.6 from last year’s estimate:

Deregulation and Tax Cuts: Jet Fuel For Jobs

We at CFIF have long sounded the alarm regarding the federal sugar policy morass.

It costs almost three times as many jobs as it claims to protect;  results in American consumers and manufacturers paying double the cost for a product that consumers and industries in other countries pay;  eliminates over 100,000 American manufacturing jobs;  and costs Americans approximately $3 billion per year.

From our friends at AEI in honor of Earth Day, another “inconvenient fact” refuting hysterical climate alarmist claims:

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Another Inconvenient Fact

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So after just one year of tax-cutting and deregulation under the Trump Administration, the Congressional Budget Office (CBO) has revised its estimate of job growth over the next decade upward by over 2.5 million new jobs.  As they say in the legal field, “res ipsa loquitur” – “the fact speaks for itself.”

Upward Job Growth Estimate

Where’s Google?

That’s the question asked by Timothy Lee, CFIF’s Senior Vice President of Legal and Public Affairs, in an op-ed published by The Hill in the lead up to Facebook CEO Mark Zuckerberg’s much-anticipated testimony before Congressional committees this week.

While Facebook understandably is dominating the news, Lee wrote, “Google’s data practices are perhaps even more troubling.”

Lee goes on to suggest that its time for all internet platforms, including Facebook, Google and others, to stop eschewing accountability:

As a threshold matter, platforms must accept that they play an important role in addressing the harms they enable. To date, their voluntary measures have fallen far short, largely consisting of asking outside groups like Wikipedia or Snopes.com to referee their problems. But non-profit encyclopedias and fact-checkers simply aren’t equipped to solve these problems, particularly those who might possess their own biases and motives. Platforms themselves can and should do far more to address illegal and illicit conduct they facilitate.

The internet has changed the way we communicate, conduct commerce and entertain ourselves. Growing concerns about the ease with which bad actors exploit it, however, undermines consumer confidence and erodes public trust. By eschewing accountability, dominant online platforms contribute to that downward spiral.

CFIF steadfastly supports America’s world-leading tradition of strong intellectual property rights, which have made us the most creative, inventive and prosperous nation in human history.

That includes the music industry, which stands unrivaled in terms of worldwide influence and fecundity, but which we’ve noted merits attention from Congress:

Under byzantine laws, artists receive just compensation whenever their post-1972 recordings are played, but in many cases not for their pre-1972 recordings.  That’s an indefensible and arbitrary artifact that has persisted far too long.  Why should Neil Diamond receive payment whenever ‘America’ is played, but not classics like ‘Solitary Man?’

Fortunately, the opportunity to correct that unfairness has arrived.  Even better, legislation to correct the existing flawed system arrives alongside other music legislation that galvanizes the coalition to finally correct the situation.  As a result, a broad coalition of music organizations representing everyone from songwriters, composers, performers, publishers and labels support three new pieces of legislation…”

Well, this week offers very welcome news.

The Music Modernization Act (H.R. 5447) has been introduced in Congress, as cogently summarized by the musicFIRST Coalition:

Introduced by House Judiciary Committee Chairman Bob Goodlatte (R – VA) and Ranking Member Jerrold Nadler (D – NY), the Music Modernization Act combines music licensing reforms outlined in the CLASSICS Act, Songwriters Equity Act of 2015, the rate standard parity provisions of the Fair Play Fair Pay Act, and AMP Act into a single, consensus piece of legislation.  The MMA addresses specific music legacy issues such as establishing federal copyright protection for artists who recorded before 1972, creating a single licensing entity to administer music publishing rights for all digital music and ensuring producers and engineers receive royalties for their contributions to the music they help create.

The consensus legislation introduced today in the House would not have been possible without the leadership from Chairman Goodlatte, Ranking Member Nadler, Rep. Doug Collins (R – GA), Rep. Darrell Issa (R- CA), Rep. Hakeem Jeffries (D – NY) and other leaders from both parties who worked together to craft legislation that is broadly supported by the entire music industry, streaming services and music creators.”

This legislation is long overdue.  CFIF therefore applauds the Committee for its unanimous support, and urges swift passage by the House to finally rectify the existing unfairness in the nation’s music laws.

During the Obama years, when we endured the worst cyclical economic “recovery” in recorded U.S. history, we were told that the 3% economic growth to which we’d become accustomed since measurement began was a thing of the past, and that “secular stagnation” was the order of the future.  Well, in just the first year of the Trump presidency, a funny thing happened:

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Three Percent Miraculously Returns

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Writing in the Pensacola News Journal, WEBY 1330 radio host Mike Bates offers potent commentary regarding Florida’s new Second Amendment restrictions:

Although well intended, the law’s exemption that permits 18- to 20-year-old military personnel to buy firearms is an outrageous provision.  Does the government of Florida really believe that military personnel deserve special constitutional rights that are denied to civilians?  Should constitutional rights be earned through military service and denied to those who do not serve?  That’s what the new Florida law does.”

He concludes with a stirring call to action and citizen involvement:

If we are not steadfast in defense of our liberties, the politicians and judges will destroy our constitutional rights.  It won’t occur through outright repeals;  it will happen by rendering our rights meaningless through unconstitutional laws and court rulings.  It is an obligation of all decent citizens to prevent that.  The government of Florida has already shown it will not.  It’s disgraceful.”

Read the entire piece here.

Bit by bit, Obama Administration regulatory abuses are being dismantled by the executive, legislative and judiciary branches.  This month, the Fifth Circuit Court of Appeals overturned one of the worst.

The Dodd-Frank Act, which itself made matters worse rather than better in the wake of the government-fueled financial downturn of 2008, explicitly empowered the Securities and Exchange Commission (SEC) as the agency to formulate rules relating to investment advisers who offer “personalized investment advice about securities to a retail customer.”  The statute also explicitly prevented the prohibition of commission-based compensation.

But as was too often the case, a rogue federal agency under Obama felt unconstrained by mere laws and norms of conduct.  Specifically, Labor Department Tom Perez decided to dictate the exact opposite:

Mr. Perez essentially rewrote the 1974 Employee Retirement Income Security Act (ERISA), which regulates employer- and union-sponsored plans differently from individual retirement accounts.  For instance, individuals are allowed to sue fiduciaries of employer and union plans for charging a commission.  Labor applied the more rigorous protections for employer and union plans to IRAs.  Mr. Perez also extended Erisa’s definition of ‘investment advice fiduciaries,’ who provide advice ‘on a regular basis,’ to broker-dealers and financial-insurance agents who merely  sell a product.”

The Fifth Circuit Court of Appeals, however, was unamused and eviscerated Mr. Perez’s lawless maneuver.  Judge Edith Jones, one of the most reliably impressive judges in the entire judiciary branch, wrote for the majority that, “Transforming sales pitches into the recommendations of a trusted adviser mixes apples and oranges.”  She added that this created an impossible dilemma to navigate, as, “Thousands of brokers and insurance agents who deal with IRA investors must either forgo commission based transactions and move to fees for account management or accept the burdensome regulations and heightened lawsuit exposure required by the [best interest contract exemption] contract provisions.”

The inescapable consequence of such a rule raised costs for small investors most of all, who would’ve faced no alternative to what The Wall Street Journal labels “robo-advice.”  Indeed, several investment firms had already stopped offering services in those parts of the retirement investment marketplace.

There’s still much work to do in reversing eight years of Obama Administration malfeasance, including at the Internal Revenue Service (IRS), as we have constantly emphasized.  But the good news is that the job is underway, as this latest appellate court ruling illustrates.

So that profanity-laced anti-Second Amendment protest last weekend?  As illustrated by the Daily Caller, it actually triggered a record spike in online searches for the term “NRA membership.”  Oooops.

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Marchers Trigger Record NRA Membership Search Interest

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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:  Dr. Leon Aron, Resident Scholar and Director of Russian Studies – Putin’s Re-Election;

4:15 CDT/5:15 pm EDT:  Eric Wang, Special Counsel at Wiley Rein – Citizens United, Part 2;

4:30 CDT/5:30 pm EDT:  Michelle Minton, Senior Fellow at the Competitive Enterprise Institute – Legal Sports Betting;

4:45 CDT/5:45 pm EDT:   Quin Hillyer, Contributing Editor of National Review Magazine, Senior Editor for The American Spectator Magazine, and a Nationally Recognized Authority on the American Political Process – Government Shutdowns;

5:00 CDT/6:00 pm EDT:  Andrew Och, Award Winning Television Producer, First Ladies Man and Author – Women’s History Month and the First Ladies; and

5:30 CDT/6:30 pm EDT:  Timothy Lee, CFIF’s Senior Vice President of Legal and Public Affairs – Stronger Patents, US Postal Service and the Save Local Business Act .

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

When internet sales tax proponents plead deprivation due to online commerce, highlight this CNS News graphic illustrating how state and local sales taxes actually hit a record high in 2017:

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State and Local Sales Taxes Reach New High

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According to The Washington Post, Congress is considering legislation carving out a special exception from federal labor laws for professional baseball:

A massive government spending bill that Congress is expected to consider this week could include a provision exempting Minor League Baseball players from federal labor laws, according to three congressional officials familiar with the talks.  The exemption would represent the culmination of more than two years of lobbying by Major League Baseball, which has sought to preempt a spate of lawsuits that have been filed by minor leaguers alleging they have been illegally underpaid.

The league has long claimed exemptions for seasonal employees and apprenticeships, allowing its clubs to pay players as little as $1,100 a month, well under the pay that would be dictated under federal minimum wage and overtime standards.  But with those exemptions under legal challenge, Major League Baseball has paid lobbyists hundreds of thousands of dollars to write a specific exemption into the law.”

We at CFIF maintain no opposition to that contemplated provision.  If Congress seeks to carve out exceptions from federal labor laws for professional baseball, however, they have no excuse for failing to finally pass the Save Local Business Act, which CFIF has long advocated, and reverse one of the most egregious abuses of the Obama Administration’s Labor Department:  the Joint Employer Rule.

That activist Obama Labor Department ruling reversed decades of established labor law by holding businesses liable and responsible for employees of franchisees whom they didn’t hire and over whom they exercise no control, as we explained last year:

Under longstanding court precedent and National Labor Relations Board (NLRB) interpretation, an ’employer’ for purposes of applying the nation’s labor laws was generally defined to include only those businesses that determined the essential terms and conditions of employment.

As a textbook illustration, imagine a franchise arrangement whereby the franchisee determines whom to hire, whom to fire, wages and other everyday working conditions.  The distant franchisor, in contrast, obviously doesn’t fly every potential franchisee employee in for an interview at corporate headquarters or micromanage its franchisees’ working conditions.

On that logic, the Third Circuit Court of Appeals ruled in NLRB v. Browning-Ferris Industries (1982) that the appropriate standard for defining an employer with regard to a particular set of employees was established by the U.S. Supreme Court in Boire v. Greyhound Corp. (1964).  It held that only businesses exercising control over ‘those matters governing the essential terms and conditions of employment’ were subject to collective bargaining requirements and liabilities.

Two years later, the NLRB formally adopted that standard, ruling in separate cases that ‘there must be a showing that the employer meaningfully affects matters relating to the employment such as hiring, firing, discipline, supervision and direction.’  In other words, an ’employer’ for purposes of labor law mandates required direct and immediate control over the terms and conditions of employment.

That stands to reason, since it makes no sense to impose legal liability upon employers that don’t actually control a bargaining unit’s employment conditions.

In August 2015, however, Obama’s NLRB suddenly and needlessly upended that established legal standard by redefining what’s known as the ‘Joint Employer Doctrine.’  Essentially, the Joint Employer Doctrine now allows multiple businesses to be held legally liable for the same set of employees.

Thus, in the infinite wisdom of the Obama NLRB, even employers with indirect or even merely potential ability to affect employment terms could suddenly find themselves subject to federal labor laws.”

That’s why the Save Local Business Act is of such immediate importance.  That legislation would overturn the Obama NLRB’s recent Joint Employer Rule redefinition, and restore longstanding legal precedent by subjecting only actual employers exercising control over the terms and conditions of employment to federal collective bargaining liabilities.

Today, nearly 800,000 franchise enterprises exist in the U.S., accounting for approximately 8.5 million jobs.  And according to an American Action Forum study, the Obama NLRB decision could reduce private sector employment by 1.7 million jobs, including 500,000 in the leisure and hospitality industry alone.

So if Congress can find the time to address professional baseball labor matters, they can certainly do the right thing by prioritizing language implementing the Save Local Business Act.  We urge all CFIF supporters and activists across America to contact their Senators and Representatives to demand it.

Call your Senators and Representative now at 202-224-3121.

Tell them that the joint employer issue impacts millions of workers in every community in the country.  Therefore, Congressional leaders must prioritize the Save Local Business Act in the upcoming spending bill.

As Congress considers reauthorization of the Federal Communications Commission (FCC), it must exercise extreme diligence to prevent it from becoming a vehicle for crony capitalism and waste of taxpayer dollars.

Currently, Congressional FCC reauthorization includes provisions that would reimburse broadcasters in spectrum incentive auctions, which could in turn be exploited to subsidize the upcoming ATSC 3.0 transition, as many had predicted.  By way of background, ATSC 3.0 refers to the upcoming transition to yet another new broadcasting standard, which will force over-the-air viewers to purchase new television sets or converter equipment at their own expense.  If that rings a bell, it’s for good reason.  That’s what occurred in recent years with the last conversion.

Here’s the problem.  Current provisions could constitute a blank check at taxpayer expense to broadcasters so that they could fund new equipment for the transition from the U.S. Treasury, as the legislation creates a new Treasury Fund in an undisclosed amount of money.  Although broadcasters ostensibly must direct the money they receive only toward costs associated with the spectrum auction, the likely scenario remains that the FCC will remain unable to detect and stop waste, fraud and abuse if the funds are used instead to upgrade their equipment in pursuit of ATSC 3.0.

Accordingly, it’s important that Congress not allow this legislation to become a wasteful open account for broadcasters to exploit for their own benefit at taxpayer expense.  At a minimum, they must establish greater safeguards to ensure that waste, fraud and abuse are not allowed, and that American consumers are not deprived of access to over-the-air TV access as a consequence of necessary installation of ATSC 3.0 transition equipment funded by taxpayers, whether in whole or in part.

To be clear, we welcome any and all technological and telecommunications advancement in this field, but we must also remain vigilant against the looming likelihood of crony capitalism and waste of taxpayer dollars in an era of growing deficits and debt.  Congress must therefore ensure that protections against those possibilities are incorporated into upcoming FCC reauthorization.

From the National Association of Manufacturers (NAM):

[T]he latest jobs numbers confirm that the labor market has tightened significantly, with manufacturers increasing employment by a rather robust 18,876 per month on average since the end of 2016.  That is quite a turnaround from the sluggish job growth in 2016, and it is a sign that firms have continued to accelerate their hiring as the economic outlook has strengthened and demand and production have improved considerably.  Indeed, manufacturers have told us that challenges in recruiting new workers is their primary business concern right now.”

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Manufacturing Jobs Up, Unemployment Down

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