Here it comes again — talk of an EU carbon tax. This time it’s a member of the new administration of new French President Francois Hollande, namely his minister for “industrial revival,”Arnaud Montebourg, who called for carbon border tariffs in his first official interview. He seems to be following up on former President Nicholas Sarkozy’s earlier scheme to institute a carbon tariff on EU imports so that industries in the EU subject to carbon restrictions wouldn’t be disadvantaged.

But France was not alone in those earlier calls. The European Commission in 2008 considered imposing carbon taxes on goods from countries that didn’t have greenhouse gas emissions policies as stringent as the EU’s. Those countries would have had to buy permits and join the emissions trading scheme.

The U.S. also seriously flirted with enacting legislation for carbon border taxes in a huge energy-suppression cap-and-trade bill in 2009 until the summer of 2010 when the bill didn’t have enough Senate votes.

Meanwhile, another EU action against the airline industry continues to be controversial. In a protectionist approach to try to force other countries to adopt their cap-and-trade scheme, an EU directive, upheld in December 2011 by their highest court, would assess carbon taxes on full-trip emissions from airlines that take off or land in the EU.

This morning the American Enterprise Institute held a seminar discussing the airline emissions directive — “The First Carbon Trade War? The EU vs. the World,” in which an EU representative, trade scholars and environmental policy experts offered some differing viewpoints on the implications of the EU policy. Several speakers noted that it may be possible for the International Civil Aviation Organization to come up with a global plan that would not cause trade frictions. One major point speakers made was that developing countries, especially China and India, are taking the lead on this issue against the EU. Since the directive applies equally to developed and developing countries, China has been adamant about not paying the emissions tax and has retaliated by holding up orders for airbuses from the EU manufacturers. In fact, it was reported yesterday that the EU had reached out to China in an attempt to find a compromise.

This issue could have far-reaching implications in relation to trade, sovereignty, extraterritoriality of taxation and standards.

Here and here are some earlier CEI articles on this issue.

Have a listen here.

Driverless cars are a new technology that could revolutionize the way we think about transportation. A prototype driverless car made by Google recently made the rounds in Washington, D.C., and Land-use and Transportation Policy Analyst Marc Scribner got to take a ride. He shares his experience, talks about the potential benefits for road safety and congestion, and the regulatory hurdles that driverless cars must clear before they can enter the marketplace.

Today, the Senate will vote to reauthorize and modify the Food and Drug Administration’s (FDA) prescription drug and medical device user-fee program (S. 3187). During debate on the measure, Senator Dick Durbin (D-Ill.) announced plans to introduce an amendment to give the FDA more power over supplements such as vitamins and energy drinks. While Sen. Durbin is selling the amendment as moderate, commonsense legislation, its passage would significantly increase the financial and regulatory burden on supplement companies — especially small ones. Worst of all, it would do nothing to increase consumer safety.

Durbin’s amendment is a scaled back version of previous attempts to regulate supplements. It would require manufacturers to submit a report to the FDA disclosing the name of each product they make, a list of ingredients for each product, and a copy of the label. Durbin claims that these requirements are not onerous, but any increase in operation costs will in fact hurt these businesses. With an estimated 50,000 supplements on the market (not including energy drinks), the increase in paperwork would certainly be a burden for the already overworked FDA, which has a backlog of drugs waiting in the approval process.

In addition, this is an unnecessary and redundant measure. The FDA already has the power to pull harmful supplements off the market if it can show that they are harmful. Why should we give the already overwhelmed FDA more responsibility if it cannot use the power it already has effectively? The backlog and costs associated with the drug approval process are prompting companies to make fewer drugs, especially generics that are less profitable. There are about 215 medications currently listed on the American Society of Health-System Pharmacists’ (ASHP) drug shortage bulletin.

This amendment may sound innocuous, but those familiar with Durbin’s past attempts to regulate the vitamin and energy drink market know that he has much bigger plans. Last year, Durbin introduced a measure that would have forced supplement manufacturers to go through an approval process similar to that of pharmaceutical companies.

Amendments that increase the regulatory burden on America’s businesses, no matter how small a lawmaker thinks they are, will have an impact on the cost of doing business. As a result, supplement companies may have to lay off workers or increase their prices. While Dick Durbin probably wouldn’t mind if his daily multivitamin increased by a dollar or two, for some families it may mean they have to stop taking vitamins altogether. At a time when businesses and families are struggling just to stay afloat, these small burdens can add up.

If the Senate really wants to improve the nation’s economy and physical well-being, it should reject proposals that duplicate regulations and do nothing to protect American consumers.

Should Congress’s power extend to creating taxpayer-funded government entities that are free from state and federal laws concerning ethics, transparency, and disclosure? No, but it does, and for Virginia residents, it is their reality.

The Metropolitan Washington Airport Authority (MWAA), which is in charge of the $6 billion construction of the Dulles Metrorail extension, is such an entity. MWAA’s lack of both accountability and transparency to the public, in combination with its imprudent spending, raised concerns from federal, state, and local government officials. Arising from their calls is an ongoing investigation into the MWAA’s governance and management. The Department of Transportation’s Inspector General report gave merit to government officials’ concerns, uncovering numerous violations including issuing unauthorized contracts, improper expenses by Board members, and an overall lack of transparency.

The Washington Examiner reports MWAA improprieties in detail:

• Metropolitan Washington Airports Authority board members recently racked up inappropriate expenses, including $4,800 for three Hawaiian dinners, $238 for two bottles of wine, and $9,200 for a last-minute airline ticket to Prague.
• A board member recommended the law firm where his wife is employed for a $100,000 contract. The firm got the contract.
• Board members charged the authority for at least six first-class airline tickets one year without proper authorization.
• The authority’s financial disclosure requirements are too weak to identify all potential conflicts of interest.
• The authority shrouded its activity with “an inappropriate use of closed sessions.” Even a recent discussion of enhancing transparency was closed to the public.
• The authority awarded about $6 million in no-bid contracts over two and a half years, even though none of the contracts fell under special rules allowing limited competition.
• The airports authority never fixed contracting problems pointed out in 2002 by federal auditors.

There is no light at the end of the tunnel regarding ending MWAA’s excessive waste of tax funds or penalties for offending Board members. MWAA originated from the Metropolitan Washington Airports Act of 1986. Congress, in agreement with Virginia and the District of Columbia, conferred power and jurisdiction to MWAA. It operates as an independent government entity solely to improve the metropolitan Washington airports. MWAA’s unique self-governing status removes federal and state government oversight protections that defend the public from opportunistic bureaucrats.

In fact, Virginia and the Federal government provide an array of remedies for ethics, transparency and contract violations occurring in government, Congress simply must apply the existing law to MWAA. However, congressional action in unlikely and will not be quick. To combat MWAA’s special privilege status, Virginians must demand its tax dollars no longer fund a government entity that does not serve the public interest, its supposed only purpose.

A fascinating article in MSN Money asks, “Are Baby Boomers to Blame?” Specifically, is that famously large and famously self-absorbed generation the driving force behind our multi-faceted fiscal crises?

Mostly yes, concludes the author, Anthony Mirhaydari, who paints a grim portrait of our economic straights and lays the blame largely at the feet of aging boomers:

If nothing is done, by 2024 — according to a Credit Suisse estimate — 100% of U.S. tax revenues will go to entitlement spending and interest payments on the federal debt. That’s it. Nothing left for tanks, jets, food stamps and SEC regulators. Nada.

While this seems intractable, the root of the problem is really quite simple: too many old people.

Specifically, the nearly 80 million members of the baby boom generation are quickly aging, with most in their mid-50s now. This simple dynamic is the undercurrent beneath many of our problems, from a stagnant stock market to a bleak jobs outlook and the debt/deficit problem.

Certainly there’s no doubt that the rapidly retiring boomers are going to put enormous, perhaps catastrophic stresses on our entitlement programs as they get older and sicker. Medicare, Medicaid, Social Security, and (perhaps) Obamacare will soon be absorbing legions of claims from this greying population.

But the real culprit of our fiscal woes is the generation that preceded the boomers, the so-called “Greatest Generation.” Members of this generation, roughly those born between 1914 and 1924, are rightly praised for their perseverance and courage in facing the ravages of the Great Depression in the ’30s and then putting paid to the Hitler-Tojo axis in the ’40s.

But the Greatest Generation has another, darker side that is far too infrequently acknowledged. A ravenous, greedy side. It was this generation, after all, that erected the modern entitlement state that is wrecking our fiscal and moral fabric. First, by continually re-electing Franklin Roosevelt and enthusiastically supporting his New Deal, and then by voting themselves more goodies from the public treasury in 1965 with Medicare and other wealth transfer programs.

The great generation demanded, and received, the Great Society.

Now that generation is passing away, but the the architecture of their avarice still stands. Indeed, it has grown and grown, and consumes more and more of our national wealth with each year. The boomers are hardly to blame for this — after all, the tail end of that generation was still being born in the mid-1960s when Johnson commenced finishing F.D.R.’s great social experiment. Now, boomers are guilty of little more than aging into, and taking advantage of, a system that their parents and grandparents created.

The boomers inherited the entitlement state, and an entitlement mentality, from the Greatest Generation, perhaps the greediest, most irresponsible generation in American history. The boomers’ predecessors demanded “security” from the government, either not understanding — or not caring — that it would come at the expense of the prosperity and liberty of future generations.

In a way, the boomers are lucky; most of them will likely get most of their promised benefits as they sail off into retirement. Not so lucky are Generations X and Y, who will be left with bare cupboards and cut-up credit cards even as the price of living in this decaying republic skyrockets.

It will get messy, and the “greatest” generation will be to blame.

If President Obama has found it hard in responding to critics who accuse him of being “anti-business,” he really only has his own administration’s policies to blame. Today in a Wall Street Journal op ed, former American Express Chairman and CEO Harvey Golub sums it up succinctly.

[T]his administration has been overtly hostile to business across the economy except for progressive favorites like electric cars or wind and solar power. It has tightened regulatory screws on the coal industry and all other fossil-fuel providers, enacted health-care “reform” based on false estimates of its likely costs and effects, unleashed a hostile National Labor Relations Board on businesses, and passed financial regulations in the form of Dodd-Frank along with hundreds of other regulatory actions that put increased burdens on the private sector.

And that’s just the beginning.

For more detail on the large and growing regulatory burdens on American businesses, see the newly released 2012 edition of CEI’s annual survey of the federal regulatory state, Ten Thousand Commandments by Wayne Crews.

The First Amendment generally protects even offensive speech, so if you wish to wear a t-shirt celebrating a bloodthirsty thug like Mao, Stalin, or Che Guevara, you can do so without being punished by the government. But you can’t wear a Confederate flag t-shirt to work, without risking an investigation by the federal Equal Employment Opportunity Commission (EEOC), under the EEOC’s February 8 ruling in Dawson v. Donahoe, which reversed an agency’s dismissal of a racial-harassment complaint a Postal employee filed over co-workers repeatedly wearing confederate flag t-shirts.

Despite the odious nature of the Confederacy, the Confederate flag is  speech protected by the First Amendment. Thus, a federal court ruled that the Maryland Department of Motor Vehicles (DMV) could not deny the local Sons of Confederate Veterans a “vanity” license plate bearing a confederate flag (while issuing other controversial license plates), because to do so would infringe their right to free speech, in violation of the First Amendment. (See Sons of Confederate Veterans v. Glendening, 954 F.Supp. 1099 (D.Md. 1997).) But now, the EEOC is suggesting that mere repeated exposure to the Confederate flag is illegal, even though the federal court’s First Amendment ruling in the Confederate Veterans case presumably requires such exposure by DMV employees. Is the EEOC effectively thumbing its nose at the federal courts?

Although the EEOC’s ruling involved a federal agency — the Postal Service — its reasoning would apply equally to private sector employers, who likewise are forbidden to allow “racial harassment” of their employees through a “racially hostile work environment” (and can be forced to pay hundreds of thousands of dollars in damages and attorneys fees over “harassing” conduct or speech by employees that they supposedly should have known about and prevented).

How Over-Regulation is Robbing Investors of Wealth from Smaller IPOs

When I wrote pieces here and at the Daily Caller late last week injecting a note of skepticism as to the gains of ordinary investors from the Facebook inital public offering (IPO), I was slightly worried that the piece would be seen as raining on the parade.

Now that this “parade” has turned into a stampede in the other direction, I still worry that my overall point will be missed. That is that as a result of the massive increase in the cost of going public from the Sarbanes-Oxley Act of 2002, Dodd-Frank and other regulations that have attempted to protect ordinary shareholders from all forms of risk, middle-class investors are being robbed of smaller IPOs that would allow them to grow wealthy with companies at their growth stages, with job growth that would have been enabled by the added capital suffering as well.

The Associated Press today reports that regulators are “probing” issues with the IPO rollout. But all they might find is that the price of Facebook, like all stocks, falls after an initial frenzy. Rather, what policy makers really need to “probe” is the over-regulation that has resulted in IPOs fewer in number and larger than ever, resulting in ordinary investors left with far fewer opportunities to get in on companies like Facebook at their emerging growth stages.

The size of Facebook’s IPO — over $100 billion in market capitalization — has attracted much attention. But a decade ago even a $1 billion IPO — which LinkedIn, Groupon, and others have all exceeded in the past couple years — was unheard of. Before the last decade, as noted by President Obama’s Council on Jobs and Competitiveness, 80 percent of IPOs had market caps of less than $50 million. In fact, Home Depot only had four stores when it went public in 1981. Imagine if you had bought stock in Home Depot back then! You would need a Mansion Depot today!

As I wrote last week, this relatively new phenomenon of “Cheers IPOs” — in which companies don’t go public until, to paraphrase the ‘80s TV theme song, “everybody knows their name” — reduces the benefits of going public both in terms of job growth and of the ability of ordinary investors to grow wealthy with small and mid-size firms. “What a healthy economy needs is IPOs of companies you have never heard of, which go public not to realize market value for the shares of their founders, but to raise money to expand operations and add jobs,” I contended and still do.

The good news is that in the month since the limited regulatory relief of the bipartisan Jumpstart Our Business Startups (JOBS) Act went into effect, there has been a noticeable uptick of smaller and growing firms returning to the IPO market. Among other things, the JOBS Act creates a five-year “on-ramp” for most firms going public in which they are exempt from the Sarbanes-Oxley internal control mandates, the Dodd-Frank proxy provisions, and other burdensome regulations. As I had concluded, we can hope that “the mini-IPOs enabled by the JOBS Act [and future regulatory relief] are the wave of our entrepreneurial future.”

Even Nobel laureates forget their economic fundamentals sometimes. Paul Krugman, who knows better, recently fell for the broken window fallacy in a post at his New York Times blog. He argues that the tsunami that hit Japan last year has boosted the economy. An error that basic demands correction; my attempt ran today in The American Spectator:

Imagine for a minute that the tsunami never happened. Japan’s GDP growth would probably be slower; Krugman is almost certainly correct on that. And yet, a tsunami-less Japan would be better off. For one, the survivors wouldn’t have 15,000 holes in their hearts where their families, friends, and neighbors used to be.

As far as the economy goes, all that reconstruction spending would instead go to creating brand new wealth, as opposed to merely replacing what people already had to begin with. It is better to build than to rebuild.

Read the whole thing here.

OPINION

ARNOLD KLING: “Why We Need Principles-Based Regulation”
“When we think of regulation, we think of specific rules that spell out the boundaries between what is approved and what is forbidden. For example, requiring credit card issuers to give 45 days notice prior to a rate increase. I call this bright-line regulation (BLR). What I want to propose is an alternative approach, called principles-based regulation (PBR). With PBR, legislation would lay out broad but well-defined principles that businesses are expected to follow.”

RICHARD RAHN: “How Soon They Forget”
“At what point would you consider leaving the U.S.? If you were taxed 98 percent of your income, or 75 percent as the new French president wants to do, or merely 50 percent-plus which is what many Californians will be paying if Gov. Jerry Brown gets his proposed tax increase and President Obama succeeds in getting his proposed tax increase?”

ROSS ANDERSON: “Radical Life Extension Is Already Here, But We’re Doing It Wrong”
“So far as we know, the last hundred years have been the most radical period of life extension in all of human history. At the turn of the twentieth century, life expectancy for Americans was just over 49 years; by 2010, that number had risen to 78.5 years, mostly on account of improved sanitation and basic medicine.”

NEWS

FREE SPEECH - New York Legislation Would Ban Anonymous Online Speech
“Did you hear the one about the New York state lawmakers who forgot about the First Amendment in the name of combating cyberbullying and ‘baseless political attacks’? Proposed legislation in both chambers would require New York-based websites, such as blogs and newspapers, to ‘remove any comments posted on his or her website by an anonymous poster unless such anonymous poster agrees to attach his or her name to the post.’”

FINANCE – Bill Targets Fed Conflicts
“On the heels of JPMorgan’s stunning trading losses, two senators on Tuesday unveiled a bill that would ban financial executives from regulating themselves by taking positions at the Federal Reserve.”

LEGAL – Facebook Looks to Settle ‘Sponsored Story’ Suit
“Facebook is close to settling a lawsuit over advertisements it calls ‘sponsored stories.’ Launched in early 2011, the service let brands pay to retransmit users’ activities to their friends’ pages.”