Freedom Line Blog

The nine most terrifying words in the English language are: I’m from the Government, and I’m here to help.

There’s a good reason why one of Ronald Reagan’s most memorable adages remains so poignant today.

Namely, government officials’ ability to harm people whom their well-intentioned laws are meant to benefit remains a tragic and all-too-common pitfall of government activity.

A recent illustration of that tragic paradox exists in a California proposal known as AB 1414, which if enacted would prohibit landlords from making internet service subscriptions with specific service providers part of their rental packages.

Although any proposal that purports to increase tenant choice seems superficially positive in the abstract, the problem with AB 1414 is that it would only undermine a critical tool that makes broadband access more affordable for lower-income tenants throughout the state.

Here’s why.

Landlords serving lower-income tenants often reach agreement with internet service providers to offer group discounted rates to their tenants.  Accordingly, those lower-income tenants become able to access high-speed broadband at much lower rates and without such additional costs as deposits, installation fees and even credit history investigations.  It’s a big win for lower-income tenants.

However well-intentioned, AB 1414 would undermine those beneficial accommodations.  As a result, lower-income tenants would only suffer reduced access to high-speed internet, pay more for the service, reduce incentives for internet service providers to offer service to those customers and only widen the nation’s “digital divide” between upper-income and lower-income Americans.

What’s more, existing federal laws already protect tenants by banning service providers from imposing contractual provisions granting them exclusive rights to provide video services to apartment complexes.

Accordingly, while it’s in everyone’s interest to close the digital divide and increase internet access for lower-income consumers, AB 1414 will only have the opposite effect.  Hopefully California lawmakers perceive that reality in time.

From our friends at Unleash Prosperity, another fantastic visual aid to rebut the predictable default rationalization that climate change, rather than incompetent leadership, underlies wildfires in California or elsewhere:

Climate Change? No.

California Governor Gavin Newsom, who faced recall despite his state’s deep-blue status, continues his bizarre campaign to pick fights with Florida Governor Ron DeSantis, and can attempt to spin California’s disastrous social and economic decline any way he’d like.  The numbers, however, don’t lie.  Rhetoric is cheap, but people vote with their dollars and feet.  And in that measure, Newsom’s California suffers alongside his deep-blue brethren, as illustrated by our economist friend Steve Moore using official U.S. Census Bureau data:

DeSantis vs. Newsom in One Picture

Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

An unfortunate byproduct of life in a democratic system is that complex policy matters are often reduced to simplistic slogans, and politicians exploit attractive terms to peddle harmful proposals.

California offers a textbook example, where legislators are pushing something called the “California Broadband Internet Privacy Act” (A.B. 375) in the name of “protecting consumer privacy.”

The reality is far different.  In truth, the bill constitutes crony capitalism on behalf of some industries at the expense of others, and would stifle innovation and undermine rather than boost consumer welfare.

This battle was already fought and won at the federal level, when Congress employed the Congressional Review Act to rescind an Obama Federal Communications Commission (FCC) rule to the same effect.

Supporters of the proposed legislation will tell you that it’s necessary to protect consumers against internet service providers who seek to gather and sell private information.  In that vein, the bill would require that consumers “opt in” before service providers could use their data to improve service or tailor advertising to consumer preferences or needs.  Current law, however, already allows consumers to “opt out” from collection of non-sensitive data if they choose.  Notably, few consumers choose to do so, because that would interfere with their ability to enjoy more customized online service that they prefer.

It’s also important to note that current law also already requires that consumers “opt in” to allow access to particularly sensitive personal information.

So what the proposed law would do is impose a one-size-fits-all mandate that most customers currently don’t choose.

Secondly, the Federal Trade Commission (FTC) already possesses authority to protect consumers against privacy violations and punish improper data collection should it occur.  That’s how the system has worked for over two decades while the internet flourished like no innovation in human history.  And that’s why the FTC expressed opposition to this sort of “privacy” legislation at the federal level before it was quashed.  California’s attorney general is also empowered to investigate and seek legal remedy for “unlawful, unfair or fraudulent business acts or practices” under California’s Unfair Competition Law.

Even former Democratic California Congressman Henry Waxman observed that this type of law would “undermine beneficial uses of data” and “could result in tangible competitive and consumer harm.”

Another flaw in the bill is that it conspicuously exempts powerful content companies like Google, which obviously earn their billions by monetizing consumer data for purposes of advertising and sales.  Those content companies access customer personal information just as much as service providers, if not more.  After all, consumers tend to access the internet via different devices and networks, whereas they tend to use the same search engines (i.e., Google) and visit the same content sites.

Accordingly, the proposed bill amounts to crony capitalism benefitting one set of companies at the expense of another set.

California’s proposed law would create the additional problem of imposing burdens that other states don’t impose, thereby creating a “spaghetti bowl” regulatory effect for companies that offer nationwide products and services.

Online privacy remains a natural and important concern for consumers in California and across America.  But we must also beware politicians pushing laws that undermine consumer welfare, threaten the thriving internet sector and amount to crony capitalism by picking winners and losers in the marketplace.

Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

If you’re going to encourage massive immigration, you better build the infrastructure to sustain it.

That’s just one of the many insightful points in a new article by Victor Davis Hanson, a fellow at the Hoover Institution and a Central Valley farmer.

“A record one in four current Californians was not born in the United States, according to the nonpartisan Public Policy Institute of California,” writes Hanson. “Whatever one’s view on immigration, it is ironic to encourage millions of newcomers to settle in the state without first making commensurately liberal investments for them in water supplies and infrastructure.”

Over the last forty years, California’s environmentalists – aided and abetted by once and current Governor Jerry Brown – have systematically opposed the construction of water storage facilities that would have kept pace with the state’s population boom. To make matters worse, millions of acre feet of water that should go to households instead is flushed down riverbeds and into the ocean to create more swimming space for endangered fish.

With California entering another year of drought, environmentalists are applauding Governor Brown’s decision to mandate 25 percent reductions in water usage. They claim we just don’t have the water. The truth is they refused to build the storage capacity, and now we get draconian measures.

New issue, same problem: Liberals want all the benefits of a permissive social policy, but they refuse to accept responsibility for the costs.

California’s water crisis – and Governor Jerry Brown’s draconian response to it – could go a long way toward uniting middle class and elite urbanites in a revolt against political favoritism run amuck.

As Shikha Dalmia explains, “The best — and most sustainable — solution to California’s water woes would be full-bore markets in which prices can rise and fall with supply and demand. Under such a system, depleting water reserves would have led to price increases long ago, producing an automatic incentive to conserve. More importantly, this would have clearly signaled growing scarcity, spurring new technologies for affordable water generation. All of this would have allowed consumers and businesses to make small adjustments over time without letting the shortage reach a crisis point.”

“Moving overnight to a system of market-based water pricing is probably not doable,” she continues. “But if California has to make emergency cuts, it would make sense to impose the biggest cuts on the biggest users — which means the deepest cuts for fish-rescuing environmentalists, followed by water-hogging farmers, followed by residential users. Instead, Democratic Gov. Jerry Brown is doing the exact opposite.”

The constituencies being hit the hardest by Brown’s mandatory water usage reduction order are rich enclaves like Beverley Hills and Newport Beach, and middle class urban residents who already pay the highest rates for water, but use the least when compared to other groups.

Those outside California may not remember that what ultimately led to Governor Gray Davis’ successful recall was his support for tripling the annual vehicle license fee. Californians will put up with a lot from politicians, but making it exorbitantly expensive to enjoy basic comforts like driving and water consumption could be just the disruption it takes to break the liberal stranglehold on state government and implement the kind of market-based reforms Dalmia is promoting.

We’ll see if Governor Moonbeam gets the hint, or sacrifices millions of people’s well-being for the sake of his beloved environmental movement. If he indulges the latter, there could be an opportunity for another California taxpayers’ revolt like the one that put a stop to annual property tax spikes in the 1970s.

A fight is brewing in California between state regulators and local water suppliers over how to cope with mandatory water usage reductions ordered by Governor Jerry Brown.

California’s State Water Resources Control Board received more than 200 letters from cities, counties, and water districts balking at the proposed regulatory structure for monitoring compliance.

Criticisms include:

• Monthly water usage rates are “meaningless” because varying temperatures and rainfall fluctuate dramatically during the year
• Lack of credit given to water agencies that have already reduced their usage rates through local conservation programs or locally financed desalinization projects
• Farmers outside the Central Valley – the state’s agricultural hub – being treated the same as urban districts which do not get an exemption
• Failure to subject public school and college campuses to the same water use restrictions imposed on cities, since the former often are able to “override local building and zoning codes”

Everyone in California is feeling the pinch of decades’ worth of neglected improvements to water storage capacity.

Thanks to ‘green’ environmentalism, much of California may soon be brown.

H/T: L.A. Times

In 2006, the last time the Drug Enforcement Agency counted the number of outdoor marijuana plants in California, there were roughly 17.5 million.

Since then the number has likely increased significantly due to lack of enforcement by the Obama administration and the effective decriminalization of marijuana use by lax police departments.

Even so, as Ethan Epstein explains, if we take the 2006 figure as a baseline and add to it the fact that a marijuana plant soaks up about six gallons of water per day during its 150-day growing season, California could have saved 63 billion gallons of water since the start of the drought four years ago.

Imagine the savings if California officials got serious about curtailing illegal marijuana growing today.

If Governor Jerry Brown wants to find ways to reduce unnecessary water consumption he should start by uprooting the millions of illegally grown marijuana plants. Had the plants not been siphoning off a precious natural resource over the course of the drought, California could have saved 15 percent of the total Brown wants to recoup through rationing.

In other words, cut off the crooks before knee-capping the law-abiding.

California Governor Jerry Brown’s new water rationing edict is giving state regulators the cover they need to impose all kinds of nanny state restrictions on law-abiding citizens.

In addition to installing ‘smart meters’ on businesses and homes to monitor water usage and impose fines, the California Energy Commission is using Brown’s executive order to increase the use of low-flow appliances. Beginning in January 2016, all toilets and faucets sold in the state must conform to higher water efficiency standards.

“Wednesday’s vote also sets a 1.28 gallon maximum water flow for toilets, putting in place a limit included in a 2007 law but never formally translated into water-efficiency regulations,” reports the Sacramento Bee.

It’s hard to believe that a state so friendly to the environmental lobby as California would have failed to implement even more restrictions when it had the chance, unless doing so would be extremely burdensome and therefore unpopular. Now, however, they can simply claim an emergency and ignore the outcry.

Texas has long been held up as the free market alternative to California’s regulation-heavy approach to public policy. Companies like Raytheon and Toyota have relocated because of the cheaper price of doing business, as have thousands of individuals.

But the competitive advantage that Texas enjoys over California could come to a screeching halt if the federal government imposes California-style regulations on the states.

The description of a March 12 event in Houston explains the threat.

“California’s tough environmental rules and planning represent the wave of the future to many planners and pundits, as well as to large parts of the federal government,” says the Center for Opportunity Urbanism. “The goal is to rein in ‘sprawl,’ based largely on questionable environmental and urban design considerations. California consciously seeks to impose a high-density, transit-focused future on the residents of the state.”

It continues, “But California’s policies do not just affect Californians. Many federal agencies, including the EPA and US Fish and Wildlife Service, have embraced the Golden State’s regulations on climate change, wetland and endangered species protections, as role models to be adopted nationally. As California-style regulations diffuse through the federal government, Texas business could soon be subject to many of the same programs and policies.”

This is a good reminder that vigilance at the federal level is necessary to protect economic freedom back home.

First Uncle Bear, now Uncle Sam.

“The Obama administration says it sent about 800,000 HealthCare.gov customers the wrong tax information, and officials are asking those consumers to delay filing their 2014 taxes,” reports CNBC.

The massive blunder comes on the heels of a similar admission by California officials that the state sent out approximately 100,000 error-laden tax forms to residents using the state’s ObamaCare exchange, Covered California.

No timeline was apparent on when revised forms would be sent out, or whether early tax filers would be penalized by the Internal Revenue Service for submitting unknowingly false information.

Another item in the CNBC report may foreshadow the next move. Due to concerns that some people will be angered for being penalized for not buying insurance to comply with ObamaCare’s coverage mandate, the Obama administration is creating another sign-up extension.

Perhaps the IRS will get similar instructions from on high and bump back the filing deadline.

If so, expect to hear the millions of non-ObamaCare customers clamor, “Me too!”

The CBS affiliate in San Francisco is reporting on a massive failure by the state’s ObamaCare exchange to correctly reconcile information on customers with health insurance providers.

“About 100,000 or 12 percent of the forms generated by Covered California have inaccuracies,” says the report. The forms are needed by California ObamaCare users to claim tax refunds and verify subsidy amounts with the IRS.

A spokesperson for Covered California said the inaccuracies are due in large part to discrepancies between the state’s records and what the insurance companies have. Despite this, the exchange sent out the forms anyway to beat the February 2 deadline.

Corrected forms are scheduled to go out later this month, but it’s unclear whether all of the 100,000 or so recipients of the inaccurate forms know they are bad. If not, they could be submitting false information to the IRS, an issue that could cause considerable problems down the road.

Expect this to add to the ire already forming ahead of Tax Day.

If you purchase an ObamaCare plan in California, good luck trying to find a directory that matches your insurance policy with a specific doctor.

“Altogether, the 10 insurers in Covered California have contracted with an estimated 75% of California’s licensed physicians, or nearly 90% of those considered active in the state,” reports the Los Angeles Times. “However, many of those doctors are available in just one or two health plans.”

That is, if you can find them.

“There’s no timetable for a state provider directory after the exchange scrapped an initial version that was riddled with errors. Instead, Covered California refers people to insurance company websites that vary in usefulness,” says the paper.

The resulting anger and confusion has spawned almost 300 complaints to state regulators and two consumer lawsuits against some of the biggest insurance companies in California.

Doctors are getting hosed too, according to the report. “Insurers say they can pass along savings by paying doctors less and rewarding that select group with higher patient volume. It’s also hoped those doctors will take on a bigger role coordinating patient care.”

To clarify, in return for getting paid less doctors that accept ObamaCare-compliant plans are getting more patients and more exposure to medical malpractice lawsuits.

No wonder there’s no directory matching providers to plans. The docs want to hide!

“Nearly one-third of California’s total population – roughly 11.5 million people – will be enrolled in Medi-Cal next year, according to Gov. Jerry Brown’s administration,” reports the L.A. Times.

“Enrollment is expected to exceed previous estimates by 1.4 million, and administration officials said it would cost the state $1.2 billion more than originally thought.”

Brown’s health policy czar calls the jump in enrollment part of the “woodworking effect;” meaning that the media’s attention on ObamaCare’s insurance exchanges enticed many people to sign up, only to find out they already qualified for Medi-Cal (California’s name for its Medicaid program).

Readers may recall that ObamaCare expands eligibility for Medicaid into higher income brackets. To get states to go along, ObamaCare pays for all of the new spending associated with covering these new enrollees (at least until 2017). But for those who would have qualified under the old system – where states contribute 50 cents to every dollar spent – the state gets no relief.

This is the scenario California finds itself in as officials head into the budget negotiation season needing to find an additional $1.4 billion they didn’t plan for.

Ever the populist, Brown is reframing Sacramento’s miscalculation as a case of voters needing to fund their good intentions. “I’m proud we did it,” referring to the expansion as “a huge social commitment on the part of the taxpayers of California.” “But we also have to take into account this thing is growing.”

In an interview with CFIF, Allen Dickerson, Legal Director at the Center for Competitive Politics, discusses why the California Attorney General’s demand for the list of supporters to a non-profit organization damages freedom of association, violates the clear terms of a federal tax law and ignores the Supremacy Clause of the United States Constitution.

Listen to the interview here.

Toyota is moving its U.S. headquarters from Torrance, CA to Plano, TX. The move is estimated to generate a combined $140 million annually in local property and sales taxes for the Dallas suburb.

The announcement comes on the heels of at least 250 other California-based companies heading to the Lone Star State, according the Dallas Morning News.

Industry icons include Occidental Petroleum Corp. moving some of its facilities from Los Angeles to Houston; Raytheon Co. transferring aerospace units to McKinney from Southern California; and Trend Micro Inc. changing its corporate address from Silicon Valley to Irving.

For his part, California Governor Jerry Brown isn’t concerned. “We’ve got a few problems, we have lots of little burdens and regulations and taxes, but smart people figure out how to make it [in the state],” he said at an event when asked about Toyota.

Then again, maybe smart people will opt for pro-business locations that don’t inflict “lots of little burdens and regulations and taxes.”

Troy Senik, CFIF Senior Fellow, former speechwriter for George W. Bush and senior editor of Ricochet, discusses First Lady Michelle Obama’s push for new FDA nutritional labeling guidelines and the lessons learned from California’s regime of high taxes, oppressive regulation and rampant litigation.

Listen to the interview here.

There is a lot of misreporting with ObamaCare numbers as the open enrollment period draws to a close March 31.

Consider these two examples from California.

First, Covered California – the state’s ObamaCare exchange – announced recently that more than 1 million people had applied for coverage and chosen an insurance plan. Liberal bloggers at the Daily Kos are cheering this news as a triumph. Before the enrollment period began last October, the state set as a goal 696,000 enrollments by the end of March. At 1,018,315 as of the end of last Saturday, ObamaCare supporters think they are 300,000 over their goal.

Except Covered California isn’t anywhere close. Look again at the goal and the announcement. California wants at least 696,000 people to be enrolled by the end of March. To date, they have over 1 million people who have applied to be enrolled. That’s not the same thing. In fact, in speaking recently to a source at Medi-Cal – the state’s Medicaid program – I was told that thousands of applications are in limbo across the state because computer systems at the state and county levels don’t talk to one another. This impacts Covered California’s numbers because many of the uninsured applying for insurance through the exchange qualify for the state’s expanded Medicaid program. To compensate for the technology failure, caseworkers are processing emergency requests by hand. So to recap, don’t be fooled by news about applications posing as enrollments.

The other example of misreporting is on the type of coverage most enrollees are choosing. The most popular plans also cost the least. That’s not surprising since ObamaCare requires people to purchase health insurance or pay a fine. On one hand, the increased number of policyholders does allow ObamaCare supporters to say the law is covering more people. But at what price? “[E]xperts worry plans with lower premiums could come with a different cost: Fewer doctors and hospitals could mean fewer choices and longer waits for care,” reports the San Jose Mercury-News.

Lower premiums also mean higher out-of-pocket costs. I’ve written previously about how reporting on lower-than-expected premiums ignores across-the-board spikes in deductibles. The IRS says that annual deductibles larger than $1,250 should be considered high. On California’s exchange, it’s common for the lowest priced plans to have deductibles in excess of $2,000 annually (and some as high as $4,500 or more).

When all the dust settles after March 31, it’s very likely that California won’t have hit its enrollment goal, and that of the enrollees it does have many will come to loathe the longer wait times and higher costs. Maybe then we’ll get more help from journalists in how ObamaCare insurance actually works. But probably not.