A Boom in Small Business Optimism
Thursday September 13, 2018 | Craig Eyermann

When President Trump came into office, many small businesses in the United States had been laboring under burdensome conditions for a very long time. Writing at Entrepreneur magazine in 2014, Scott Shane identified the regulatory burden imposed by the U.S. government as one of the main contributors to the ongoing malaise of small business owners.

One of the best ways for Congress to help small businesses would be to reduce their regulatory burden, which is heavier now than when President Obama took office in January 2009. This increase in regulation is both unfair and inefficient: Compliance with governmental rules and laws is a greater encumbrance on small companies than large ones, and regulation hinders small business formation, growth, and job creation. The cost of federal regulations rose by $70 billion during the President’s first term in office, the Heritage Foundation reports. And small business has not been exempted from the rising tide. At the end of 2012, the number of federal regulations affecting small companies was 13 percent higher than at the end of 2008, Forbes reports.

That burden only continued to grow through President Obama’s second term in office. So when one of President Trump’s first acts in office was to order a cut in federal regulations, the small businesses that were disproportionately and negatively impacted by the heavy hand of the regulatory state had reason to begin becoming optimistic. Inc. magazine carried a story by the Associated Press at the time. (more…)

Let Competition, Not the FDA, Resolve the EpiPen Shortage
Wednesday September 12, 2018 | Raymond March

The Food and Drug Administration recently approved the first generic version of EpiPen. EpiPens provide swift, and potentially lifesaving, treatment for those with anaphylaxis (allergic reactions requiring emergency medicine). Anaphylaxis is surprisingly common, affecting between 1.6 percent and 5.1 percent of the U.S. population. The release of a generic alternative to EpiPen provides medical and financial relief for millions of Americans. It also comes at a critical time. As FDA Commissioner Scott Gottlieb remarked, “This approval means patients living with severe allergies which require constant access to life-saving epinephrine should have a lower-cost option, as well as another approved product to help protect against potential drug shortages.” Far from being “potential shortages,” EpiPens are currently in a global shortage, exposing millions to elevated risks of going into anaphylactic shock without readily available treatment. According to Food Allergy Research and Education (FARE), about 200,000 people require emergency medical care annually for food allergies alone. With millions of people desperately try to fill prescriptions for themselves and their children (especially as the school year begins), these numbers are likely to increase. Over the past several months, the FDA has floundered to provide solutions. Shortly after approving a generic EpiPen, the agency called on drug providers to expand EpiPen’s expiry date by four months. Extending expiration dates might delay patients from refilling prescriptions, but this is at best a short-term solution. To meaningful address shortages, we need more competition in the market. (more…)

Climate Policy and the Case for Humility
Wednesday September 12, 2018 | Randy Simmons

[Editor’s update: The Heartland Institute and the Independent Institute are rebutting the alarmist claims at the Global Climate Action Summit. We are broadcasting live from Independent’s Conference Center in Oakland, across the bay from the San Francisco summit. Sept. 13 coverage is here; Sept. 14 coverage is here.]

The Global Climate Action Summit is September 12-14 in San Francisco. One purpose is to “ratchet up the ambition of national climate action plans.” Another is to “provide the confidence to governments to ‘step up’ and trigger this next level of ambition sooner rather than later.” If you attend the Action Summit, you will hear arguments that go much like this: The “science is settled,” 97 percent of scientists agree that climate change is real and that humans are the main cause, and the planet will suffer irreparable harm if something is not done immediately. If you do not agree with these claims, you must be a tool of energy companies or of funders of right-wing political causes. The easy default position to take in the face of such claims is to trust the Global Climate Action folks. But, is the science settled and do 97 percent of climate scientists agree? It is useful to know where there are agreements and where there are disagreements. There is, in fact, consensus among climate scientists that:

• global temperatures have increased overall since 1880
• humans are contributing to a rise in atmospheric CO2 concentrations
• Carbon dioxide and other greenhouse gases have a warming effect on the planet

(more…)

Crazy Rich Asians and an American in Singapore
Tuesday September 11, 2018 | Sam Staley

The late summer surprise hit of the year appears to be Crazy Rich Asians, a romantic-comedy-drama that has raked in more than $160 million at the box office in less than a month. The filmmakers and cast hope Crazy Rich Asians‘ story of an American in Singapore will challenge modern-day stereotypes of Asia and Asians in general. In some important ways, the movie succeeds, but not necessarily through the devices the producers (or director) may have intended. Like many romantic-comedies, the core of the story is a “fish out of water” tale. In this case, a New York City-raised first generation Chinese American woman, Rachel Chu (Constance Wu, Fresh off the Boat TV series), falls in love with a Singapore-born Chinese man educated in England—Nick Young played by Malaysian actor Henry Golding. Rachel is an economist at New York University—the youngest person to receive an faculty appointment, her boyfriend harps at one point—where she teaches game theory and behavioral economics. (Yes, that’s right, someone on the screenwriting team paid attention in college.) Raised by a single Chinese immigrant mother in the City, Rachel’s exposure to her ethnic heritage (and life beyond New York) is limited. In fact, her working knowledge of Asian American culture appears practically non-existent as the story starts out with one important exception: she speaks fluent Mandarin. (more…)

Oroville Dam Repair Costs Surge to $1.1 Billion
Tuesday September 11, 2018 | K. Lloyd Billingsley

As we noted last year, the cost of repairing Oroville Dam surged to $870 million and “taxpayers statewide should not be surprised if the total costs wind up well north of $1 billion.” That has now come to pass, as the cost now comes to $1.1 billion. Some review is in order.  During heavy rains in February 2017 the concrete spillway failed, launching fears that the nation’s tallest dam might fail and forcing the evacuation of 188,000 people. Politicians said the dam’s emergency spillway worked well until it had to be used, and state officials kept design and maintenance records secret, on the grounds that they might fall into the hands of terrorists. As it turned out, they had other realities to hide.  The massive Independent Forensic Team Report: Oroville Dam Spillway Incident blamed the failure on “a complex interaction of relatively common physical, human, organizational, and industry factors, starting with the design of the project and continuing until the incident.” The principal designer for the Oroville spillways was a post-grad student with “no prior professional experience designing spillways.” The report did not reveal the name of the unqualified person or the person who tapped him for the job. Perhaps he or she was related to some politician or government official. Neither did the report reveal what other dams or bridges the unqualified person might have designed, and how they had stood up over the years. One Department of Water Resources vet who worked on the dam said no such person existed, but the legacy is still in place.  The city of Oroville has filed a lawsuit against the DWR for mismanagement of the dam, built 50 years ago in 1968. The repair costs have risen from $870 million to $1.1 billion and taxpayers should not be surprised if they rise still higher. DWR bosses look to the federal government but if the crisis was caused by faulty maintenance, FEMA could reject reimbursement. 

*** K. Lloyd Billingsley is a Policy Fellow at the Independent Institute and a columnist at The Daily Caller.

Is Trump Dismantling the Regulatory State?
Monday September 10, 2018 | K. Lloyd Billingsley

In rallies and speeches Donald Trump proclaims that no president has ever cut so many regulations. Cass Sunstein, from 2009 to 2012 an administrator of the Office of Information and Regulatory Affairs, brings a different perspective to that claim.  Under George W. Bush, he explains, the Office of Information and Regulatory Affairs approved about 2,500 final regulations and under Barack Obama, about 2,100. What really counts, according to Sunstein, is repeal of existing regulations and the Trump administration has only repealed “dozens.” If the true number is around 100, that accounts for “about 2 percent of the number of regulations finalized over the past 16 years.” The number isn’t higher because, “after regulations have been on the books for a while, people get accustomed to them. Companies aren’t eager to have to make large-scale adjustments, especially if they have changed their practices to adapt to previous requirements.”  Sunstein believes that many regulations do more good than harm, and that “in 2017 and 2018, the U.S. would also have seen a slowdown in regulatory activity under Hillary Clinton.” Even so, “Trump’s effort to push the pause button has worked—and it is undoubtedly more dramatic than what would have happened in a Democratic administration.” The real lesson, according to Sunstein, is that “for any president, it’s a lot easier to reduce the flow of new regulations than to eliminate those on the books.”  Whatever Trump’s performance on regulations, taxpayers might note the president has failed to eliminate any federal agencies, however redundant or useless they might be. The previous administration, during a recession, launched a new federal agency, the Consumer Financial Protection Bureau, funded by the Federal Reserve, not Congress, and headed by a single person, presidential pick Richard Cordray. The former CFPB boss is now running for governor of Ohio. 

*** K. Lloyd Billingsley is a Policy Fellow at the Independent Institute and a columnist at The Daily Caller.

Federal Government versus Private Sector Compensation
Monday September 10, 2018 | Craig Eyermann

President Trump recently made news when he announced that he would suspend the automatic pay increases that civilian federal government employees were set to receive in January 2019, which would be the first time since President Obama suspended automatic pay raises for U.S. government workers in 2011. Bloomberg‘s Toluse Olorunnipa and Louis Labrecque describe how much that raise would cost U.S. taxpayer if President Trump did not act to stop it by August 31, 2018.

Had Trump not acted by Friday, federal workers would have received an automatic across-the-board pay increase of 2.1 percent and locality pay increases averaging 25.7 percent under the 1990 Federal Employees Pay Comparability Act, according to the letter.

To get a sense of the cost of the automatic pay raise that was to take effect, we need to know two things: (1) how many civilian federal government employees are on Uncle Sam’s payroll, and (2) how much money they make. Here, we know that the U.S. government has over 2 million employees on its civilian payroll, while an April 2017 Congressional Budget Office report that compared the compensation of federal government and private sector workers provides their average annual compensation. (more…)