After Consumer Financial Protection Bureau Freezes Data Collecting, Sen. Elizabeth Warren Demands Reversal

A federal court last week again ruled in favor of Mick Mulvaney as the rightful head of the Consumer Financial Protection Bureau, which strengthens his hand on such issues as the recent decision to freeze data collection in light of cybersecurity concerns.

But Sen. Elizabeth Warren, D-Mass., who conceived the idea of the consumer agency, which critics say has too much and often undefined power, strongly objected to the agency’s temporary halt in data collection just last week.

“CFPB cannot fulfill its core functions without collecting personally identifiable information,” Warren wrote in a Jan. 4 letter to top CFPB officials.

“When a consumer submits a complaint, the CFPB asks for information, such as their name and account number, to enable the agency to help resolve the dispute,” Warren continued.

“CFPB bank examiners and enforcement lawyers regularly use account-level data provided by regulated institutions to detect improper and unlawful activity.”

President Donald Trump appointed Mulvaney to be acting CFPB director, in addition to continuing to serve as director of the Office of Management and Budget. In December, Mulvaney announced plans to halt personal-data collection after an inspector general’s report warned of cybersecurity problems with the agency.

“I think we should find ways to have as rigorous a data-security program as possible here before we start expecting that from people who we oversee out in the industry,” Mulvaney told reporters at the time.

However, in her letter last week, Warren—who was previously critical of metadata collection by the National Security Agency—said hobbling CFPB data-gathering endangers consumers vis-a-vis financial institutions.

“Examinations are data-driven and granular. If examiners aren’t able to request information from the relevant financial institution, they can’t do their job,” Warren’s letter said.

In June 2013, as a first-year senator, Warren joined a bipartisan group of 26 senators in a letter to then-Director of National Intelligence James Clapper, raising questions about the NSA metadata gathering.

Warren’s office did not respond to inquiries from The Daily Signal for this article.

Even former CFPB Director Richard Cordray has said the personal information isn’t entirely safe, countered House Financial Services Committee Chairman Jeb Hensarling, R-Texas.

“The American people should rightfully be worried about the massive amounts of private information a single government agency collects on their personal lives, especially when the former director of the agency acknowledged that the data held by the CFPB is ‘not 100% secure,’” Hensarling told The Daily Signal in an email statement.

“In this age of criminal hackers, data breaches and identity theft, we must safeguard the privacy and security of America’s private, personal information,” the Texas lawmaker added. “Considering the scale of data-collection efforts by the CFPB, I applaud Acting Director Mulvaney for taking such bold action to protect Americans.”

The temporary halt is perfectly reasonable, said Ronald L. Rubin, a former CFPB enforcement lawyer and a former chief adviser on regulatory policy for the House Financial Services Committee.

“If you would like to know what Elizabeth Warren is going to protest tomorrow, just look at whatever Mick Mulvaney is doing tomorrow,” Rubin told The Daily Signal. “Given Equifax and other problems, it’s hard to understand why you wouldn’t be cautious about data collection in any shape or form.”

Rubin added that the stop is temporary.

“Data collection has always been something Republicans were worried about at the CFPB,” he said. “People of all political backgrounds are concerned about their information being compromised.”

In a report released Oct. 30, CFPB Inspector General Mark Bialek said:

The Office of Inspector General has likewise identified information security as a major management challenge for the CFPB, due to the advanced, persistent threat to government information technology (IT) infrastructure.

CFPB management needs to continue improving its information security program, overseeing the security of contractor-operated information systems, transitioning IT resources from the U.S. Department of the Treasury (Treasury), and ensuring that personally identifiable information is properly protected.

Before that, a Government Accountability Office report from September 2014 noted serious concerns about the privacy and security of the consumers whose data are being collected by the CFPB.

The GAO found the CFPB was collecting more information than was necessary for its regulatory mission, from 87 percent of the credit card market. It further said the agency’s 12 mass data collections had information on 173 million loans.

The agency already has accountability issues, said Norbert Michel, director of the Center for Data Analysis at The Heritage Foundation, who has been a CFPB critic.

“It brings up questions of why do they need to collect so much information,” he said. “We know the potential for problems with personal data. If the mass data collection isn’t well-defined, who knows if it is secure?”

Warren’s letter identified Leandra English as the “acting director” of the CFPB, despite a court ruling rejecting a request for a temporary restraining order to block Trump from appointing Mulvaney as acting director. The letter identified Mulvaney only as the director of the Office of Management and Budget.

After Trump named his budget director to temporarily lead the consumer agency, English, the deputy CFPB director, sued to retain the position to which she had been appointed by Cordray when he departed, and has appealed the court ruling.

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‘Internet of Things’ Devices Have Their Security Risks. How Regulators Should Address Them.

Most Americans own some sort of “smart” device, whether it’s a smartphone, a smart thermostat, or a smart fitness tracker.

These devices are benefiting Americans in countless ways, from helping them become more energy-efficient, to saving money and even tracking their health.

But many of these devices can also pose a security risk to unsuspecting consumers. It’s up to consumers to decide whether the sticker price is worth the personal risks from these “internet of things” devices.

Every year, The Heritage Foundation publishes papers highlighting some of the most significant cyber incidents involving both the public and private sectors. This year’s papers include a list of cyber incidents that involve the interconnected devices.

These devices extend beyond just the desktop computer and begin to combine real-world information with data analytics and automation. Internet of things devices include heating, ventilation, and air-conditioning systems; baby-monitoring devices; automatic transportation services; and other office and home devices.

These devices continue to multiply in number, given their utility and relatively low costs. By the year 2021, 73 million households in North America are forecast to be a “smart home” or contain some smart device other than smartphones.

>>> Understanding the Internet of Things

The purpose of this list is to highlight everyday devices that consumers might not have realized had become connected, and the risks that can pose.

Still, regulators should remain wary of imposing new rules that harm the development of internet of things devices. Consumers’ demand for these devices will continue to drive investments in both markets for cheap devices with poor security, and markets for expensive, secure devices.

Increasing the cost of devices through burdensome regulation might impede the creation of all new devices. Congress should be content that within these markets, assuming equal costs, consumers will naturally tend toward buying devices that are more secure.

Internet of Things Devices at Risk

Wireless Routers: Wireless routers have become the common connecting device between consumers, wireless devices, and the internet. However, if manufactured with poor security, hackers can find ways to access almost any devices that are connected, such as a desktop computer or smartphone.

The Smart Fish Tank: A smart fish tank—used to monitor and automate features, such as water temperature—was reportedly used to breach the networks of a casino. Hackers were then able to use the access they gained to siphon information from the casino’s networks.

Wireless Pacemakers: Instead of risking patients’ health by putting them back under the knife during complications, manufacturers are opting for safer, wireless connections to these devices.

A trade-off is made between the physical risks of surgery with the potential risks of a cyber incident. Pacemakers with poor security are at risk of being tampered with by malicious cyber activity. In August, the FDA recalled 465,000 pacemakers it identified as having a cybersecurity vulnerability.

The Smart Car Wash: Car wash owners may find it appealing to control their systems over the internet, but vulnerable systems could be taken over by hackers to cause physical damage to both vehicles and their passengers.

Internet Security Cameras: These devices are great for monitoring office security or for checking who’s at the front door. However, poorly protected internet-enabled security cameras can be accessed by hackers to spy on unsuspecting families.

Internet-Connected Toys: Parents who travel or have limited interaction with their children could see the appeal in being able to have a conversation with their child through one of these devices. This appeal is quickly lost once hackers are able to hear personal conversations or deliver their own messages through these fuzzy creatures.

Smart Lightbulbs: These devices let consumers change the lighting throughout their homes with the use of an application on their phone.

It’s a nuisance if hackers are able to turn the lights on and off without consumers’ consent, but a larger problem comes from these interconnected devices and malware being able to jump across them, spreading like a virus.

Smart Meters: These devices could be used by hackers to collect information on homeowners, mess with the electricity, and even increase the monthly electricity bills.

Solar Panels: Like smart meters, solar panels connected to the internet are potentially at risk from being targeted by hackers. Dutch researchers found vulnerabilities that could allow hackers to control the flow of electricity and potentially affect local power supplies.

Consumers should be cautious what information their new devices collect and how that affects everyday life. But policymakers must also be concerned about the risks these devices would pose when unified in a single cyberattack, often referred to as a botnet attack.

Last October, Dyn, a New Hampshire-based computer firm whose specialty is providing the means to access websites through its servers, was temporarily taken offline by a botnet attack known as Mirai.

Mirai created a botnet from internet of things security cameras, DVRs, and routers. Attempting to access Dyn’s services all at once, the overload of traffic was too much for Dyn.

A German internet service provider was temporarily taken offline a month later by a similar attack, which used a variation of Mirai.

Mirai was able to scan the internet for internet of things devices and use a pre-configured list of 61 common passwords to take control of vulnerable devices. A list of 1,700 common internet of things passwords used by manufacturers has been leaked online since.

Advancing Innovation and Security

New technology can seem complicated and, therefore, scary. To protect both consumers and producers of internet of things devices, Congress should take the following steps:

  1. Promote third-party security researchers. Third-party researchers, and even cybersecurity firms working on behalf of tech companies, are important for finding security flaws in new devices. Greater knowledge of security flaws enables consumers to make safer choices. Congress should promote the necessary services these individuals and companies provide. 
  2. Recognize that the markets of internet of things devices are diverse. The market for internet of things devices as a whole is still relatively new. For the foreseeable future, even within the markets for devices such as security cameras or wireless routers, demand will continue to exist for cheap, unsecure devices and expensive, secure devices. Congress should recognize the diversity in these markets and avoid restricting consumers’ choices.
  3. Limit government regulation on internet of things security. In the wake of a cybersecurity incident, Congress is quick to come down heavy-handedly to impose new regulations on companies. These regulations are often quick to become out of date and impose more costs on companies than actually benefit consumers.

The government should focus on making sure its own systems are secure before attempting to impose security regulations on others.

The internet of things and other emerging technologies will be beneficial for American consumers, even as they give rise to threats that are not currently foreseeable. Congress should avoid attempting to solve potential problems with slow and static regulations.

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House and Senate Should Reconcile Their Bills to Replace Dodd-Frank

In June, the House passed the Financial CHOICE Act, a comprehensive financial regulatory reform bill that would replace large parts of the 2010 Dodd-Frank law.

Because the Republicans hold a slim majority in the Senate, passing such a comprehensive reform package is difficult, at best. Nonetheless, the Senate Banking, Housing, and Urban Affairs Committee, led by Chairman Mike Crapo, R-Idaho, recently passed its own reform bill with bipartisan support.

That bill—the Economic Growth, Regulatory Relief, and Consumer Protection Act—is a more targeted financial reform bill than the CHOICE Act, but there’s a great deal of overlap between the two measures.

The following chart provides an overview of the key differences and similarities between the two bills. (For more details, see this Heritage Foundation issue brief and backgrounder).

One of the most important areas of overlap between the House and Senate bills is that each includes its own version of a regulatory off-ramp. Although the Senate bill includes a more limited regulatory off-ramp than the CHOICE Act, the two versions are not irreconcilable.

Overall, the Senate bill includes similar versions of about 15 CHOICE Act provisions.

These efforts by the House and Senate give hope that Congress can enact important financial regulatory reforms, with the Senate possibly voting on its bipartisan bill as early as this month.

To help the most Americans, members of Congress should enact—and broaden—as many of these reforms as they can agree to.

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10 Ways the Trump Administration Beat Back Excessive Regulation in 2017

Federal rulemaking slowed dramatically in 2017, with the Trump administration issuing two-thirds fewer regulations in its first year (1,136) than both Presidents Barack Obama (3,356) and George W. Bush (3,927).

The White House has also committed federal agencies to more than 400 deregulatory actions in 2018.

Here are 10 of the past year’s most consequential actions to rein in the regulatory excesses of previous administrations.

1. Clean Power Plan.

At an estimated annual cost of $7.2 billion, the Clean Power Plan was the centerpiece of the Obama administration’s global warming crusade. The Environmental Protection Agency on Oct. 16 published its proposed repeal of the regulation on the grounds that the rulemaking exceeded the agency’s statutory authority.

Beyond the avoided compliance costs, the repeal would reset limits on the EPA’s climate-related regulatory excesses.

2. Net Neutrality.

The 2015 “net neutrality” rule, formally titled the Open Internet Order, subjected internet service providers to antiquated regulation by the Federal Communications Commission. The order was reversed on Dec. 14 by a commission vote of 3-2.

3. Utilizing the Congressional Review Act.

The White House and Congress have exercised the Congressional Review Act to rescind 15 regulations in the past 12 months. Although enacted in 1996, the law had only been successfully used once before, in March 2001.

Among the most deserving of repeal: the Consumer Financial Protection Bureau’s ill-conceived ban on mandatory arbitration clauses in credit contracts to resolve disputes.

4. Waters of the United States.

This rule, jointly issued by the EPA and the U.S. Army Corps of Engineers, created a new definition for the waters that the federal government can regulate under the Clean Water Act. The definition tramples property rights and overrides the role of states in water stewardship.

The agencies are proposing to delay implementation for two years, during which time officials would reconsider the definition.

5. Sue and Settle.

EPA Administrator Scott Pruitt announced in October that his agency would no longer engage in the sham legal settlements frequently negotiated by the Obama administration.

The practice involved the EPA encouraging lawsuits by environmental lobbyists to force rulemaking or enforcement action. The agency would privately strike a generous settlement, with the plaintiffs heavily involved in the rulemaking and the public excluded.

Similarly, Attorney General Jeff Sessions on June 5 ended the Obama administration’s practice of funneling billions of dollars in settlement funds to left-wing allies.

6. Neomi Rao at Office of Information and Regulatory Affairs.

President Donald Trump in April nominated Neomi Rao to be the administrator of the Office of Information and Regulatory Affairs. This office plays a critical role in fulfilling the president’s regulatory agenda by reviewing proposed and final regulations, managing agency requests for information collection, and overseeing data quality government-wide.

Among her many professional affiliations, Rao founded and directed the Center for the Study of the Administrative State at George Mason University’s Antonin Scalia Law School. Only months into her new position, Rao has demonstrated the fortitude necessary to rein in the regulatory state.

7. Transgender Bathrooms.

Early in 2017, the Trump administration revoked the “guidance” issued by the Obama administration’s departments of Justice and Education specifying that transgender students have the right to use public restrooms that match their gender identity. The original directive injected the federal government into matters more properly addressed by states and local school districts.

8. Fiduciary Rule.

The president in February issued a Memorandum on Fiduciary Duty Rule, which directed the secretary of labor to determine whether the Department of Labor’s Fiduciary Rule would adversely affect access to financial advice.

The Labor Department in November delayed the rule until July 1, 2019, “because of its concern that … consumers may face significant confusion, and regulated parties may incur undue expense to comply with conditions or requirements that the department ultimately determines to revise or repeal.

9. Individual Mandate.

The recently enacted tax reform legislation abolished the financial penalties associated with the Affordable Care Act, which forced Americans to purchase health insurance coverage or be fined.

10. Paperwork Reduction.

The White House in August stayed an Obama administration rule that would have required businesses with 100 or more employees to report on what they pay employees by job category, sex, race, and ethnicity.

Employers already submit wage data for some 130 different categories, and the new rule would have increased the reporting volume to 3,300 categories.

Reform is difficult to accomplish because regulation is far more than policy. It is also a political spoils system by which various special-interest groups impose their will on the public. Thus, powerful forces favor the status quo.

Beyond the numbers, however, there is no question that there has been a fundamental—and welcome—shift in regulatory policy under Trump.

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Government Too Often Gets in the Way of Home Cooking Sales, New Study Finds

When cooking your favorite holiday dishes, remember this friendly advice from the FDA: “The most important ingredient in preparing food for the holidays isn’t love (sorry granola people), salt (sorry New York Times), or cannellini beans (sorry Oprah). It’s food safety.

But if you’re among the growing number of people who sell homemade food, government safety regulations might be getting in the way of your profits.

A new report by the Institute for Justice surveys state regulations on the cottage food industry and finds that some needlessly hinder the success of entrepreneurial home chefs.

Consider the case of Kriss Marion, a Wisconsin chef. As co-founder of a local farmer’s market and a bed-and-breakfast owner, Marion regularly served homemade baked goods to patrons. But state law forbade her from selling them.

So, she would feed her leftovers to animals or give them away for free. That is, until she teamed up with other home bakers and the Institute for Justice to successfully challenge the law in court.

The report shows that while many home chefs like Kriss sell their goods as a source of supplemental income or as a hobby, it can also help people achieve financial independence. That income is typically invested in the cooking business, a nest egg, or used to pay the bills.

Only about 20 percent of the 775 home chefs that the Institute for Justice interviewed reported selling their food sales as their primary occupation. Yet the survey results suggest that this business is particularly attractive to women in rural areas who report below-average income.

Especially in times when the economy slackens and rural communities struggle to attract jobs, selling safe, fresh, and tasty home food items can be exactly the opportunity that a family and their community will look for. It provides self-employment with low overhead, relatively low investment, and a great family life.

Others may see selling homemade food as one of their few available economic opportunities. After an injury left Jane Astramecki unable to work outside her home, she built “Jane Dough Bakery” to sell baked goods from her own kitchen.

By teaming up with the Institute for Justice, Astramecki challenged a state restriction on home food sales and was soon able to help support her family through her own business.

These businesses also empower aspiring chefs to test their products before going all in on a brick and mortar venue.

But as Marion and Astramecki’s stories illustrate, some states put excessive red tape in the way of a would-be Julia Child or Wolfgang Puck.

States can and do impose a broad array of restrictions on who can sell food, where, when, in what quantity, and what types. Those rules most often seek to protect the public from harmful, unsafe foods.

That is undoubtedly an important state interest.

But the Institute of Justice’s report confirms numerous studies on occupational licensing laws, including several by Heritage Foundation senior legal scholar Paul J. Larkin, Jr., that show how “today’s licensing regimes prohibit individuals, sometimes on pain of criminal liability, from engaging in conduct that poses no risk of harm to any person or to the community.”

“Such a regime,” Larkin notes, “causes injury rather than protecting against it.”

And according to the Institute of Justice’s research, there “appears to be no rational link between many restrictions on cottage food sales and any legitimate government concern for public health and safety.”

Meanwhile, home cooking businesses can bring prosperity and well-being to a family and value to their neighbors-turned-customers.

As the report suggests, “[s]tates can, and should, take steps to encourage entrepreneurship by easing restrictions on cottage food producers.”

States that have relaxed cottage food laws or expanded protections for those who are already in the industry deserve kudos. As the number and size of safe home cooking businesses increase in states like Texas, California, and Minnesota, other states should follow their lead and enhance economic liberties for home cooks, too.

And as the industry grows, states with greater regulatory burdens should take the Institute of Justice’s hint: “leave the [lawsuit], take the cannoli.”

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A State Agency’s Crusade Against Seawalls Erodes the Rule of Law

“Pacific” means peaceful. But the ocean that bears that name doesn’t always live up to it.

Ask any oceanfront resident who has weathered the damaging storms and waves that winter can bring. Combined with relentless tides, they can threaten homes by eating away the land underneath.

How can oceanfront homeowners safeguard their property, even their lives, from the erosive power of the Pacific?

Over the decades, many residents on the California coast have built seawalls of rock, concrete, or other sturdy material to protect their homes. In a sense, they share a kinship with the people of Holland, who have spent centuries defending their livelihoods by holding back the North Sea. But while the Dutch pushed back the waters to “reclaim” the land beneath them, California’s oceanfront residents simply want to protect the dry land that is already there–their own private property.

This understandable desire has solid grounding in the law. The California Coastal Act recognizes the right of homeowners to use seawalls to protect their homes against erosion. The guarantees of property rights  in the state and federal constitutions offer additional support.

However, the California Coastal Commission, which oversees land use in coastal regions, is another story. The commission has a notorious tradition of disrespecting property rights. Its policy on seawalls is particularly troubling.

That policy can be reduced to a phrase: The commission is against seawalls. The hostility is expressed in technological terms, focusing on concerns about rising ocean levels and shrinking beaches. But instead of analyzing specific impacts of specific seawall proposals, the commission has imposed one-size-fits-all restrictions that smack more of ideology than scientific rigor.

For some years, when homeowners have sought permits to repair or replace existing seawalls, the commission has come back with harsh demands such as time limits on  a permit–leaving the owners in fear they’ll have to tear out their seawalls and abandon their homes in the future.

The agency has gone further by imposing heavy-handed conditions on new residential development. If you own a coastal lot and want to build, you must promise never to put in a seawall to protect your future home from the ocean’s force.

This edict is a direct threat to owners of oceanfront property, of course. But it should concern all of us, no matter where we live, because it is an example of a powerful state agency abusing its authority.

When regulators propose a policy like this, California law says they must give notice to the public, conduct hearings, and allow public comment. The commission did none of this. It imposed its anti-seawall restriction by fiat.

The commission skirted the legal and procedural requirements that are designed to keep bureaucrats accountable to the Legislature and the public. Indeed, one of the underpinnings of a free society is the assurance that those who write laws and regulations are answerable to the rest of us who must live under them.

Ultimately, this means lawmaking is the role of elected legislators. To the extent that writing regulations has been delegated to administrative bodies such as the commission, their decision-making must be fully open to public review and participation. Yet, the seawall policy was developed without input from property owners or anyone else outside of a cloistered circle of staffers and commissioners.

Foisting this edict on the public through raw bureaucratic power is especially galling because the scheme is so sweeping and the apparent end  game is so radical. The commission has embraced a strategy of allowing the whole of California’s shoreline to give way gradually to erosion.

“Planned retreat” is its euphemistic name. But no euphemism can obscure the reality. What would “retreat” is the land, homes, and dreams of real people. Over time, their property would disintegrate, all under a scheme that never has been signed off on by the Legislature or even run through the barest safeguards of the rulemaking process.

“For some spots, 50 years from now, houses may be lost,” as the mayor of Pacific Grove put it to a reporter, discussing how his city is working to implement what the California Coastal Commission calls its shoreline management directives. “And planning for that is very, very difficult. Because nobody wants to volunteer and say OK, let the ocean take my property.”

Pacific Legal Foundation, the public interest law firm where we work, recently asked state officials to acknowledge formally that the Coastal Commission acted unlawfully in implementing its “no seawalls” rule for new residential development. A courtroom legal challenge may follow.

The Coastal Commission’s rogue behavior in its anti-seawall crusade must be checked–not just for the sake of property rights along the coast and everywhere else in California, but for the stake that we all have in the rule of law.

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4 Big Signs of a Trump Economic Recovery

The economic numbers clearly have improved on President Donald Trump’s watch, with unemployment down and consumer confidence stronger.

“We are just getting started,” @POTUS says.

“Economic growth has topped 3 percent,” Trump said Thursday at a White House event while addressing his administration’s reduction in regulations. “Two quarters in a row, except for the hurricanes, we would have almost hit 4 percent, and you remember how we were doing when I first took office.”

Trump also noted a difference between President Barack Obama’s eight years in office and the current outlook.

“This country was going economically down,” he said. “Small business optimism is at its highest point in 34 years, and we are just getting started.”

Trump touted the coming benefits of tax reform, as Republican lawmakers iron out final details of their bill, and noted that his administration so far has killed 22 regulations for every one added. The president’s original executive order called for elimination of two regulations for every new one.

The debate with any president comes with how much credit or blame his policies deserve for the economy’s performance, and how big a factor his immediate predecessor’s policies are.

Some experts are more cautious than others in giving Trump credit.

The National Association of Manufacturers’ survey of members found that 94.6 percent of respondents had a positive outlook for their companies for 2018. That is the best result in the survey’s 20-year-history, and up significantly from the survey done in late 2016, when positive outlook hit 63 percent.

This rosy attitude can be in part attributed to Trump’s policies, said Jay Timmons, president of the manufacturers association.

“Most of our respondents were talking about pro-growth tax policies and getting around the regulatory morass, and those are the two big priorities for manufacturers,” Timmons told The Daily Signal in an in-person interview. “The third priority [for manufacturers] is infrastructure. Those are three big priorities for the administration. This will encourage hiring and investment.”

Consumers are spending more money, but expanding companies’ physical investments–buying a major tool, a truck, a facility–will be the real measurement, said Salim Furth, a research fellow in macroeconomics at The Heritage Foundation’s Center for Data Analysis.

“The good direction of the economy in 2017 is largely a continuation of the strong economy that started in 2014, when we’ve had a huge decrease in energy prices because of fracking and low inflation,” Furth told The Daily Signal in a phone interview.

Attributing economic growth to one president is difficult, but the benefits of fracking–the extraction of fossil fuels from rocks –are clear and provable, Furth said.

“Anticipation of tax policies and regulatory policies can drive the economic outlook, but an administration that lives by the economic numbers dies by the economic numbers,” he said. “Politicians will always put their spin on numbers.”

But Trump should be credited as the “fountainhead of the current economic boom,” said Alfredo Ortiz, president of Job Creators Network, a pro-business advocacy group.

“His long and deeply held commitment to tax cuts and deregulation, among other policies, has given small businesses–and for that matter, all businesses–the confidence and ability to invest, hire, and expand, generating the current economic boom,” Ortiz told The Daily Signal in a written statement. “Now President Trump must continue to leverage his leadership skills to get his policies across the goal line and consolidate these gains.”

Here are four key categories of economic indicators and improvements since Trump took office.

1. Growth Gets Closer to 4 Percent

The gross domestic product grew by 3.3 percent for the third quarter of 2017, as the Trump administration touted the goal of achieving 4 percent growth.

The White House Council of Economic Advisers estimates that without the major hurricanes, growth would have reached 3.9 percent. During Obama’s administration, annual growth never reached 3 percent.

Labor productivity increased by 3 percent in the third quarter, up from 1.5 percent in the third quarter of 2016.

Household wealth jumped by $1.7 trillion to a record $96.2 trillion, according to the White House, and almost 1.4 million Americans dropped off the food stamp rolls since January, when Trump took office.

The unemployment rate fell to 4.1 percent for November, the lowest since President Bill Clinton 17 years ago.

Unemployment claims fell to their lowest level in 44 years, according to the White House, and 12 states–Hawaii, California, Idaho, Texas, Alabama, Maine, Mississippi, Tennessee, Washington, Colorado, North Dakota, and Oregon–reached record low unemployment rates.

2. Stock Market Hits Record Highs

The stock market performed well during the Obama administration, but hit new records under Trump.

The Dow Jones Industrial Average is up over 32 percent since Election Day 2016. On Nov. 30, the Dow closed at over 24,000 points for the first time.

“Because of our regulatory and other reforms, the stock market is soaring to new record levels, 85 [times], not including today. Hopefully, we’ll set another one today, 85 times since election day, creating $5 trillion of new wealth,” Trump said during the White House event. “And the $5 trillion was as of about three weeks ago, so I assume we probably hit $6 trillion almost.”

3. Companies Are ‘Coming Back Fast’

Trump delights in touting examples of companies that are making major new investments in the United States.

“They’re all moving back,” Trump told reporters Thursday. “They’re moving back into our country. Those companies are coming back, and they are coming back fast.”

Some examples during the year include:

  • Foxconn Technology Group announced it was investing $10 billion in Wisconsin to build a factory that will employ 3,000 workers. The company predicted it will benefit another 22,000 workers indirectly.
  • Corning Inc. announced during a White House ceremony with Trump that it was investing $500 million in new U.S. production, creating 1,000 jobs.
  • Broadcom Limited announced at another White House ceremony its plan to move headquarters back to the United States, bringing $20 billion in annual revenue.

4. Healthy Consumer and Employer Confidence

To the degree that the economy is a self-fulfilling prophecy, business leaders, economists, and ordinary Americans seem to be feeling better about the days ahead.

The Conference Board’s Consumer Confidence Index rose for the fifth month in a row in November, to a 17-year high of 129.5.

The Bloomberg Consumer Comfort Index reached a 16-year high.

The Wells Fargo/Gallup Small Business Index found that optimism among small businesses held steady in the third quarter after the biggest increase in decades during the second quarter.

The post 4 Big Signs of a Trump Economic Recovery appeared first on The Daily Signal.

How Licensing Laws Protect Special Interests at the Expense of Everyone Else

New data compiled by the Institute for Justice shows just how far states have overreached in regulating professions.

The report, “License to Work,” shows that 1 in 4 jobs are now restricted by licensing requirements, and that these onerous rules generally do nothing to improve service or protect people.

Licensing requirements began as a way to protect consumers. In 1885, for example, Massachusetts became the first state to issue a bar exam, reasoning that there was a strong public need to ensure lawyers were qualified.

In the past 50 years, though, incumbent professionals have exploited licensing requirements for anti-competitive purposes and have lobbied to have these requirements extended to cases that don’t warrant them.

One example is the American Society of Interior Designers. This cartel has spent over three decades lobbying state legislatures to institute licensure requirements. Three states and the District of Columbia gave in and adopted the regulation, while a number of others agreed to titling requirements, which restrict the job titles that “un-certified” interior designers can use.

There is no clear consumer protection concern with unlicensed interior designing, and most buyers would probably be able to determine quality without the regulation in place.

The licensure requirement, though, does impose expensive and time-consuming requirements for accreditation that prevent many talented new workers from entering the industry. As a result, the labor supply is smaller and members of the American Society of Interior Designers can charge more.

Another example are dentistry lobbyists. From 2005-2013, 30 states were successfully lobbied to shut down teeth whitening businesses, arguing that they should be restricted to only dentists, citing “health concerns.”

Teeth whitening businesses generally offer the same products that could be purchased over the counter, and practitioners rarely make physical contact with their patients. But the dentistry lobby successfully grabbed a line of business from its competitors.

The licensure arms race has created a demand for professional validation among previously unlicensed professions.

>>> New Study Shows Licensure Laws Kill Jobs in All 50 States

In 1944, the American Dietetic Association president called for licensing rules for nutritionists because “there is a need for improving the status of dieticians.” The American Music Therapy Association used the same logic in 2005 when it called for licensing requirements “to achieve state recognition for the music therapy.”

As occupational licensure becomes more and more widespread, more and more industries feel the need to lobby for it lest they be perceived as insignificant.

Excessive licensing has become an epidemic. In most states, over a fifth of the labor force reports having a license. States have restricted professions ranging from shampooers to florists to auctioneers.

Most licenses are not easy to obtain, either. A study of 102 of the most significant licensure requirements showed that the average cost to obtain them is $267 in fees, an exam, and a year of education and experience.

There is little correlation in cost and time to the risk of the occupation. Cosmetologist training, for example, takes over 12 times longer than training to be an Emergency Medical Technician. These absurd regulations exclude numerous qualified, talented entrepreneurs and jobseekers in a fundamentally unfair way.

In addition to raising the cost of numerous goods and services, excessive licensure can completely eliminate certain services from regions.

The Institute of Justice report informs us that when Louisiana imposed 500 costly hours of training to obtain a hair braiding license, it left only 32 braiders to legally serve the entire state of 4.7 million people.

In neighboring Mississippi, which imposed no requirement and let the market determine the labor supply, there were over 1,200 people braiding legally.

States should review their licensure laws and replace licenses that are unnecessary, or unnecessarily stringent, with weaker regulations. In particular, a restriction on work should meet four conditions:

  1. Proper preparation must significantly improve the quality of professional work.
  2. The licensing scheme must be able to differentiate between well-prepared and poorly prepared candidates.
  3. Poor practice of the profession must predictably lead to harm that is serious and irreparable.
  4. Customers and co-workers must have substantial difficulty identifying a poorly prepared candidate.

Where those conditions are met, states should pursue the least intrusive method of professional regulation consistent with maintaining consumer protection. In all cases, laws should be subject to the burden of evidence.

Currently, evidence indicates that licensure requirements provide no better level of safety or quality.

Of the 102 requirements profiled by the Institute for Justice, only 23 were licensed in over 40 states. For most of these occupations, though, there was no difference in services between regulated and unregulated states, except in terms of cost and availability (unregulated states were better).

Among the industries with no discernable benefit are ones with supposed “health risks,” such as dental hygienists, nurse practitioners, and opticians. Near universally, though, these requirements raise costs and lower availability.

The evidence is clear. Where licensure laws are reformed and reined in—or eliminated altogether—small businesses and consumers alike are allowed to prosper and better live out the American dream.

The post How Licensing Laws Protect Special Interests at the Expense of Everyone Else appeared first on The Daily Signal.

Tech Companies That Support Net Neutrality Aren’t as Virtuous as You Think

Last week, Federal Communications Commission Chairman Ajit Pai delivered a speech on his plan to undo Obama-era “net neutrality” regulations, which the commission is set to vote on later this month.

In the speech, Pai sharply called out social media platforms for virtue-signaling their support of a “free and open internet” while simultaneously ramping up content filtering and censorship.

Regardless of where you come down on net neutrality, Pai is making an important point about how we approach regulation of the internet and the norms surrounding it.

You don’t have to look far to see how the rhetoric around net neutrality has, sometimes dangerously, lost touch with reality. The intensity of this discussion has been driven by celebrities, internet companies, and activist groups who want to raise the stakes and rally their side.

While there’s nothing wrong with this strategy in theory—reasonable people can have different perspectives on internet regulation and have a right to express their views—esoteric regulatory arcana and extreme populist sentiment are often a bad combination.

In this instance, inflamed rhetoric has led to political polarization, sidelining of the facts, and racist attacks on Pai, effectively poisoning the well for productive compromise and debate on the merits of the issue.

Getting to Pai’s point, this amped-up rhetoric has also led to some strange hypocrisies from the internet companies and activists pushing for Title II regulation. In Pai’s remarks, he calls them to task:

[D]espite all the talk about the fear that broadband providers could decide what internet content consumers can see, recent experience shows that so-called edge providers are in fact deciding what content they see. These providers routinely block or discriminate against content they don’t like.

Earlier this year, a range of social media companies that included Reddit and Twitter organized a “Day of Action” campaign to drive comments to the Federal Communications Commission over net neutrality.

Below the heading “Why is net neutrality important?”, the organizers said the internet should be an open platform for “free expression, and exchange of ideas.” Another campaign site, organized by the Internet Association, lists the power to block or restrict content as a top reason to support the current rules.

Twitter once described itself as “the free speech wing of the free speech party.” In a blog post on why it supports net neutrality, the social network explains that “free expression is part of our company DNA.”

Similarly, Mark Zuckerberg explained why his company supports net neutrality in a post on Facebook, saying that an open internet means service providers shouldn’t be able to “block you from seeing certain content.“

Activist groups have also emphasized the concern that, without net neutrality, companies would be free to filter content and stop online movements like Black Lives Matter.

Unfortunately, as Pai highlights, the record of these companies hasn’t held up to their rhetoric on free expression. Groups like Techdirt and EFF (who also support net neutrality), have also fiercely criticized the trend of platforms taking a bigger role in policing speech.

For example, just this year Twitter suspended libertarian-leaning law professor and pundit Glenn Reynolds, suspended legal blogger and free speech advocate Ken White (“Popehat”), shut down a Republican congresswoman’s campaign ad about abortion, and suspended actress Rose McGowan for tweeting about Harvey Weinstein.

Reddit’s CEO admitted he personally edited other users’ comments on a pro-Trump subreddit.

More recently, in the wake of Charlottesville, Reddit moved to implement stricter moderation policies targeted at the alt-right. Last year, Facebook’s trending stories section was outed for allegedly suppressing conservative viewpoints, raising the eyebrows of conservative lawmakers like Sen. John Thune, R-S.D.

This year, Facebook temporarily banned Republican Senate candidate Austin Petersen from the network for featuring a rifle giveaway. Conservative pundit Lauren Southern was suspended from Facebook for comments on President Donald Trump’s immigration policy. There are plenty of other examples.

These companies are generally within their legal rights to filter or block content as they see fit. Additionally, some incidents may be the result of genuine human error. It should also go without saying that filtering or censoring illegal activity—such as terrorism or copyright infringement—is a separate issue.

Nonetheless, when you look into the way these companies moderate speech as a whole, it reflects quite poorly on how they uphold the values they espouse in their activism.

The problem is deeper than just social media. Matthew Prince is CEO of Cloudflare, a company that participated in the Day of Action in July. The following month, Prince was in the spotlight for terminating the neo-Nazi website The Daily Stormer for being “—holes.” In the process, he opened a debate on the role of infrastructure companies in content regulation.

Not long after, in an effort to make a point about net neutrality, Prince suggested he could block Pai’s own ability to access the internet.

In a blog post from August, Prince made the case for why we need a better framework for content regulation at different layers of the internet, which are traditionally (and rightly) held to different standards. In this, he emphasized the need for due process and more transparent, consistent enforcement.

Perhaps these principles would be good for Prince, as well as other companies, to adopt—particularly if norms and practices continue to shift, as they seem to be doing post-Charlottesville.

At minimum, the proliferation of these kinds of enforcement efforts by platforms and service providers—such as reactionary community standards updates following the news cycle, or a CEO waking up and deciding that someone is an “—hole”—suggest activists might want to take a broader view of how internet policy interfaces with free expression (particularly for those who hold themselves out as neutral platforms or conduits).

Regardless of what you think of net neutrality or its application in the Open Internet Order, you should listen to the point Pai is making about the bigger picture.

This doesn’t mean we should embrace the overblown panic over social media, big tech, and the calls for expansive new regulations. But it does suggest that we should be more skeptical of virtue-signaling by companies that may just be looking out for their business interests, and the doublethink of the many activists who seem to be looking the other way.

The post Tech Companies That Support Net Neutrality Aren’t as Virtuous as You Think appeared first on The Daily Signal.