The FDA’s Trans Fat Ban: Their Laws, Your Body

The Obama administration’s Food and Drug Administration today announced a near-ban, in the making since 2013, on the use of partially hydrogenated vegetable fats (“trans fats”) in American food manufacturing. Specifically, the FDA is knocking trans fats off the Generally Recognized as Safe (GRAS) list. This is a big deal and here are some reasons why:

  • It’s frank paternalism. Like high-calorie foods or alcoholic beverages, trans fats have marked risks when consumed in quantity over long periods, smaller risks in moderate and occasional use, and tiny risks when used in tiny quantities. The FDA intends to forbid the taking of even tiny risks, no matter how well disclosed.
  • The public doesn’t agree. A 2013 Reason-RUPE poll found majorities of all political groups felt consumers should be left free to choose on trans fats.  Even in heavily governed places like New York City and California, where the political class bulldozed through restaurant bans some years back, there was plenty of resentment.
  • The public is also perfectly capable of recognizing and acting on nutritional advances on its own. Trans fats have gone out of style and consumption has dropped by 85 percent as consumers have shunned them. But while many products have been reformulated to omit trans fats, their versatile qualities still give them an edge in such specialty applications as frozen pizza crusts, microwave popcorn, and the sprinkles used atop cupcakes and ice cream. Food companies tried to negotiate to keep some of these uses available, especially in small quantities, but apparently mostly failed.

U.S. Taxpayer Subsidies for European Welfare States Continue

The lackluster defense spending of U.S. allies is again in the news. At the G7 Summit in Germany earlier this month, President Obama implored British Prime Minister David Cameron to reverse the decline in the UK’s defense spending, which is widely expected to fall below NATO’s 2 percent of GDP mandate next year.

This is not the first time in recent months that the topic has come up. During a private meeting in Washington in February, Obama reportedly told the Prime Minister: “if Britain doesn’t spend 2 percent on defense, then no one in Europe will.”

In fact, hardly any of America’s NATO allies meet their NATO commitments. In 2014, only Greece, Estonia, the U.S. and the U.K. spent as much as 2 percent of GDP on defense. Excepting NATO member Iceland, which is exempted from the spending mandates, the 23 other NATO members failed to spend even two cents of every dollar to defend themselves from foreign threats. And Greece only met the 2 percent threshold because their economy is falling faster than their military spending.

The Three M’s: Milosevic, Mugabe, and Maduro

What do Slobodan Milosevic, Robert Mugabe, and Nicolás Maduro have in common? The Communist Manifesto and inflation.

At 480% per annum, Venezuela’s inflation is currently the world’s highest. The Bolivarian Revolution is pushing prices up at a rate of 36% per month. Will these punishing inflation numbers spell the end of President Nicolás Maduro’s reign? Maybe not. Milosevic’s Yugoslavia and Mugabe’s Zimbabwe witnessed much higher inflation rates, and both hung on for many years.

Slobodan Milosevic was in the saddle when inflation gutted the rump Yugoslavia. Milosevic’s inflationary madness reached its peak in January 1994, when the monthly inflation rate hit 313,000,000% – almost nine million times greater than Venezuela’s current monthly rate. Nonetheless, Milosevic retained his grip on what was left of Yugoslavia for another six years.

House Leadership Blocks Key Intelligence Reforms

The House GOP leadership’s hostility to reforming the U.S. Intelligence Community is on full display this week. The House Rules Committee (which is controlled by House Speaker John Boehner) blocked several key reform amendments to the annual Intelligence Authorization bill from even reaching the House floor for consideration.

Furious over an op-ed by Privacy and Civil Liberties Board chairman David Medine that called for an independent review of the executive branch’s “assassination-by-drone” policy, House Intelligence Committee chairman Devin Nunes (R-CA) included language in the annual Intelligence Authorization bill banning the PCLOB from examining the “covert” drone program. A bipartisan amendment (led by Rep. Jim Himes of Connecticut) that would have struck that language was barred from consideration.

Last week, the House passed a bipartisan amendment to the annual Defense Department spending bill baring the federal government from using taxpayer dollars to search the stored communications of Americans collected by NSA. That same amendment would also prevent the federal government from mandating that American tech companies build encryption-defeating “back doors” into their products. The authors of that amendment, Democrat Zoe Lofgren of California and Republican Thomas Massie of Kentucky, wanted to make those provisions permanent, but their amendment was also blocked.

Red Coats: A Different Look at the Battle of Waterloo

Thursday will mark 200 years since the Battle of Waterloo and the British press is, understandably, eager to remind the world of the singular service the Anglo-Prussian alliance provided to humanity by finally ending the bloody career of the French megalomaniac dictator, Napoleon Bonaparte. Tucked in one of the articles was a sentence that caught my attention. Following the battle in which 55,000 men were either killed or wounded, the “dead… were hastily stripped and buried.”

 Why would anyone bother stripping the dead, when every hour increased the danger of putrefaction and disease?

The most likely reason was that prior to Industrial Revolution, clothing was extremely expensive. As such, the uniforms were, presumably, washed, patched up and reused. Consider that in 1760, Britain imported only 2.5 million pounds of raw cotton. By the 1830s, it imported 366 million pounds of cotton and the price of yarn fell to one-twentieth of what it had been. This was revolutionary!

The Economic Consequences of the ACA Notch

There is great interest in how the labor market will respond to the Affordable Care Act (ACA). Much of the popular discussion focuses on the implications of the newly-implemented and widely-anticipated employer mandate, which requires firms with 50 or more workers to provide health insurance for full-time employees (defined as workers with 30 or more hours per week). The employer mandate, unsurprisingly, creates strong incentives for companies to scale back employee hours (“29 hour work weeks”) and lay off workers or consolidate part-time jobs into full-time jobs in order to get under the 50 employee threshold.

There is comparatively less discussion of the incentives faced by workers. Although the Congressional Budget Office has provided estimates and discussion of the pertinent labor market effects, one issue that tends to get lost in all of this is how increasing a household’s income creates certain “notches” in a household’s budget constraint. By “notches”, economists mean very large changes in the subsidy (known as the “Premium Tax Credit”) received by a household for extremely small changes in income. These notches are well known in other transfer programs, particularly the “Medicaid notch” and the “public housing notch”. The ACA notch occurs in both states that expanded their Medicaid program, as well as those that didn’t.

To illustrate the sheer magnitude of the ACA notch, it is helpful to examine ACA subsidies for different individuals. First, consider a person who is expensive to insure – a 64-year-old – in a locality that generally has high insurance premiums. A good example is Clay County, Georgia (where Georgia also didn’t expand its Medicaid program). As the “Plan Preview and Price Estimator” from the federal government’s exchange shows, the premium tax credit goes up dramatically for this individual at an income of $11,671 and falls dramatically at an income of $46,679.

Deconstructing Magna Carta

On the day we celebrate the 800th anniversary of Magna Carta, leave it to the New York Times to feature a boxed op-ed on its editorial pages entitled “Stop Revering Magna Carta.” As the only bow to the occasion on those pages, one imagines that the editors could not be bothered even to write a house editorial on the subject

The piece is written by one Tom Ginsburg, professor of international law and political science at the University of Chicago, an institution with which I have some acquaintance.  As suggested by its title, this is a work of deconstruction. The Charter’s fame, you see, “rests on several myths.” Indeed, “like the Holy Grail,” Ginsburg concludes, “the myth of Magna Carta seems to matter more than the reality.” And well it should. After all, history rarely springs forth in principled perfection. At best it grows one fractured event at a time, each event gradually becoming the narrative mythology of a people.

Ginsburg begins his deconstruction by claiming that Magna Carta “wasn’t effective. In fact, it was a failure.” How so? Because King John repudiated the Charter shortly after he’d signed it, whereupon the barons sought to replace him, which he avoided by dying. But the next year, we’re told, John’s young son reissued the document. Far from a failure, then, it was reissued several more times over the 13th century, culminating in the important 1297 version. Indeed, it was at that time, as the famed legal historian Edward S. Corwin wrote, well before the era of deconstruction, that the king was forced to call Parliament into existence to relieve his financial necessities. But Parliament’s subventions “were not to be had for the asking,” Corwin noted, “but were conditioned on the monarch’s pledge to maintain Magna Carta.” A failure? Hardly.

Yet another myth, Ginsburg writes, “is that the document was a ringing endorsement of liberty.” As evidence, he cites three of the Charter’s 61 chapters, each concerning matters peculiar to the time—for example, the removal of fish traps from the Thames. Yet as shown by Ginsburg’s colleague at the law school across the Midway, Professor Richard Helmholz, even that provision served in time to afford a basis for free navigation.

And therein lies the major fault of this piece. It’s a textbook example of missing the forest for the trees. To be sure, as Ginsburg writes, “Magna Carta was a result of an intra-elite struggle, in which the nobles were chiefly concerned with their own privileges.” But again, that’s how history often begins, sowing the seeds for future advances. As Corwin observed nearly a century ago, many of the Charter’s clauses were drawn in ways that did not confine their application to issues immediately at hand. Moreover, the barons realized early on that to maintain the Charter against the king, they had to get the cooperation of all classes and so too the participation of all classes in its benefits. Thus did the scope of its protections expand, much as with our own Constitution. And that’s why so many revere Magna Carta today.