OpenMarket

The California Senate on 24th August passed legislation that extends the state’s greenhouse gas (GHGs) emission reductions to 2030.  SB 32, which passed on a 25 to 13 vote, gives statutory authority to Governor Jerry Brown’s (D) executive order mandating a GHG target of 40% below 1990 levels by 2030.  The Assembly passed the bill a day earlier by a 42 to 29 vote, so it will now go to the governor for his signature.

California’s Global Warming Solutions Act of 2006 (AB 32) mandated GHG reductions to 1990 levels by 2020.  That law is set to expire in 2020.  Passage of the new, much more ambitious target of 40% below 1990 by 2030 depended on agreement to pass another bill, AB 197, that requires the California Air Resources Board to order reductions in sources of GHGs that are near communities impacted most by air pollution or climate change.  This “climate justice” bill is a result of California’s cap-and-trade program, which allows large GHG emitters, such as oil refineries, to buy credits that allow them to maintain their emission levels from sources in parts of the state with lower air pollution levels.

At the moment, Britain is still a member of the European Union, and therefore its trade arrangements are subject to the terms of the EU’s customs union. However, new Prime Minister Teresa May has appointed Liam Fox MP, a committed Atlanticist, to head up a new Department for International Trade. This department will presumably start to conduct informal trade negotiations with other countries in advance of the UK’s formal exit from the European Union.

One thing that must be at the front of Dr. Fox’s mind is a free trade agreement with the United States. He is not alone. Speaker Paul Ryan told a TV audience shortly after the Brexit vote that the administration “should begin discussions with Great Britain . . . so that we do have a smooth trade relationship with Great Britain, because they are our indispensable ally.” Senator Mike Lee has gone further and introduced a bill – the United Kingdom Trade Continuity Act – to ensure a smooth transition to trading with the UK outside the EU and to instruct the administration to begin trade discussions shortly after the bill becomes law.

The Parks Department of Milwaukee County, Wisconsin is not happy about virtual pocket monsters. The department sent a letter to Niantic, developer of the popular Pokémon Go app, demanding “immediate compliance” with the parks’ geocache policy. Niantic is directed to “deactivate and remove all Pokémon Go sites, including Poke stops and Gyms within Milwaukee County parks” until these sites are approved as “virtual geocaches.” In fact Milwaukee, suffering recent riots and myriad problems, wants to bill Niantic for the public’s peaceful use of their public parks.  

There seems to be an administration-wide dictate coming from the White House to ensure as many individuals as possible are considered employees under federal labor law. The reason for this is obvious: the more individuals deemed “employees,” the more potential dues paying union members there are.

Just yesterday, the National Labor Relations Board (NLRB) overturned precedent set in its previous Brown University decision and determined that graduate assistants (and a whole host of other student positions, see footnote 1 of the decision for full list) are employees covered by the National Labor Relations Act (NLRA). The case involves graduate assistants at Columbia University and United Automobile Workers union.

Dissenting Board member Philip A. Miscimarra cited one of his predecessors, summing up the thinking of the majority opinion that allows graduate assistants and other related students to form a union: 

the Board resembles the “foolish repairman with one tool—a hammer—to whom every problem looks like a nail; we have one tool—collective bargaining—and thus every petitioning individual looks like someone’s ‘employee.’” 

Democratic vice presidential candidate Tim Kaine recently outlined his and Hillary Clinton’s plan to promote fair housing. Basically, they want to throw money at the problem of high home prices, offering to match buyer down payments of $10,000.

This won’t help low-income home buyers much, and belies the reason that homes have become so very expensive in many cities.

As Cato Institute Scholar Randall O’Toole explains in a recent blog post, free markets are not the source of this problem; it’s largely created by dumb government policies. Housing prices within the metro regions of places like Los Angeles, Portland, Ore., New York, and Washington D.C. are inflated in good measure due to misguided urban planning policies.

Consider government zoning programs, which once were used for the insidious purpose of segregating populations based on race. The federal Civil Rights Act of 1968 (also referred to as the federal Fair Housing Act) eventually barred all housing discrimination based on race, color, religion, or national origin, yet today many zoning policies still disadvantage low-income families.

In his essay “An Economic History of Zoning,” Dartmouth economics professor William A. Fischel notes that during the past several decades, zoning has become a tool of the Not-In-My-Back-Yard (NIMBY) suburban homeowners’ movement. Unable to use zoning to keep specific groups of people out of their neighborhoods, the NIMBY activists advocate “smart growth” policies in the name of “environmental protection.”

In our new and revised version of Cutting the Gordian Knot: A Roadmap for British Exit from the European Union, Rory Broomfield and I set out a series of important steps the UK must take if it is to make a success of Brexit. Some of those steps are daunting, to be sure, but since the people have spoken and new Prime Minister Teresa May has said “Brexit means Brexit,” there are some hard decisions to be made.

How we envisage the Brexit process unfolding is as follows:

Americans have heard many promises from presidential hopefuls this year, especially from the two major-party candidates, Hillary Clinton and Donald Trump. But at CEI, we don’t subscribe to a political party. We are partisans of freedom, fairness under the law, and making good policy into good politics. Naturally, we have some concerns about the outcome of this year’s election.

Both major-party platforms have significant problems (see here, here, and here), but one provision in the 2016 Democratic Party platform in particular hits home for CEI. It represents a very troubling trend in politicization of science and government suppression of free speech.

In a section titled “Securing Environmental and Climate Justice,” the platform states:

Democrats also respectfully request the Department of Justice to investigate allegations of corporate fraud on the part of fossil fuel companies accused of misleading shareholders and the public on the scientific reality of climate change.

In this week’s episode, Julian Morris, Iain Murray, and Richard Williams make the case for Britain’s regulatory rebellion and chart the path forward from Brexit.

Up first is Julian Morris, Vice President of Research at the Reason Foundation and a UK native, mapping Britain’s leave legacy. Julian outlines key policies Britain must adopt to flourish post-Brexit. By liberalizing its trade policy and joining the European Free Trade Association (EFTA), he argues the UK can thrive outside and alongside the EU, and that other EU member states may be encouraged to follow Britain’s route. 

My second guest this week is Iain Murray, Vice President for strategy at the Competitive Enterprise Institute, discussing the future of the firm and Brexit. Iain channels Ronald Coase and describes the evolution of corporations as they adapt to the gig economy. A British expat, Iain shares why he remains optimistic that Britain will emerge successfully from the prisoner’s dilemma it faces vis-a-vis the EU, which it seeks to exit on favorable terms.

Both presidential candidates have delivered economic speeches over the past two weeks, and both have at least given a nod to red tape and the need for regulatory reform.

Hillary Clinton promised “new national initiatives to cut red tape at every level” and acknowledged complex tax filing as problematic for small business and entrepreneurship.

Donald Trump promised to “issue a temporary moratorium on new agency regulations” and to “cut regulations massively.”

Over at Forbes.com, I wrote a two part series this week called "How The Next President Can Use Executive Power To Jumpstart Economic Growth On Day One" (here are Parts One and Two)

It’s based in part on our recent CEI OnPoint “Channeling Reagan by Executive Order.”

The modern debate over checks and balances and the separation of powers has been dominated by President Obama’s use of executive action to affirmatively create policy whether or not Congress approves, and what the bounds are.

Friday’s Federal Register was one of the year’s biggest, with 74 agency notices, 4 proposed regulations and 15 final regulations spanning 1,119 pages. New rules for the week range from almonds to tall ships.

On to the data:

• Last week, 67 new final regulations were published in the Federal Register, after 88 the previous week.
• That’s the equivalent of a new regulation every two hours and 31 minutes.
• With 2,313 final regulations published so far in 2016, the federal government is on pace to issue 3,592 regulations in 2016. Last year’s total was 3,406 regulations.
• Last week, 2,560 new pages were added to the Federal Register, after 1,581 pages the previous week.
• Currently at 56,392 pages, the 2016 Federal Register is on pace for 87,565 pages. This would exceed the 2015 Federal Register’s all-time record adjusted page count of 81,611.
• Rules are called “economically significant” if they have costs of $100 million or more in a given year. 22 such rules have been published so far in 2016, one in the last week.
• The running compliance cost tally for 2016’s economically significant regulations ranges from $3.99 billion to $6.19 billion.
• 179 final rules meeting the broader definition of “significant” have been published this year.
• So far in 2016, 416 new rules affect small businesses; 68 of them are classified as significant. 

Highlights from selected final rules published last week: