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David Frum

Monday, October 26, 2009  |  posted by Hugh Hewitt

David Frum and I mixed it up on air tonight. The two columns I challenge him on are here and here. Frum accused me of narcissism because I treat the references to me in both of them as attacks on me. You read them and decide for yourself.

The transcript will be posted here later. The audio will be available at the Hughniverse. I invited David to continue the debate in the third hour of the show. He declined. The unwillingness to confront anger in his targets doesn’t speak well of Frum. Neither does his unwillingness to own what he writes.

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“We’re From The Government and We’re Here To Tell You How You May Advertise Your Products”

Monday, October 26, 2009  |  posted by Hugh Hewitt

My column today picks up where my column last week left off -pointing to the “guidance” from the Food and Drug Administration issued last week that warned all food manufacturers in America that big brother was watching their “front of package” branding and was ready to pursue penalties against any packaging claims that the FDA found not only false or misleading but also lacking in nutritional soundness. Some of America’s biggest names in the food business took quick note of the threat and suspended one campaign designed to brand their products as a “Smart Choice” for consumers. Just like that, millions of dollars of marketing effort went poof.

Not your problem, right? The sunk costs in the “Smart Choices” effort and any other similar effort cannot impact your grocery bill by even a nickel or even a penny. What’s the harm in that?

Only that the government flexed a previously unannounced power and the market shuddered and retreated a few steps. The FDA now knows all it has to do is publish a “guidance letter” and the marketplace will react.

Not only will the FDA bureaucracy be emboldened as to cereal packaging, but toward all other food packaging as well. Once the premise of the guidance letter is accepted -that it is the federal government’s business to police claims of nutritional soundness-there is not limit to the fed’s reach. Once the prevention of obesity is a sufficient reason to prosecute a package, which packages are going to be safe from government scrutiny? And if a package can be exiled, why not the product within it?

It is easy enough to understand why the food companies blinked -the plaintiffs’ bar. Just last week McDonald’s, Burger King and Friendly’s were sued for allegedly failing to warn consumers that their grilled chicken products contain a dangerous carcinogen. Imagine the attention that various products will attract from predatory plaintiffs’ lawyers if those lawyers can point to FDA “guidance” denouncing this or that bit of packaging and then assert a claim that children suffering the ill effects of obesity would not have been so burdened if the packages had just fairly informed mom of the nutritional dangers involved.

Corporate counsel in America’s largest, most successful food companies are practiced in the demands made by “consumer groups” masquerading as public advocates and by narrow issues lobbies that have confused their passions for particular food choices –the “slow food” movement, for example-with urgently necessary public policy choices backed by threats of recalls, fines and even prosecution. Within every major food company there is a regulatory compliance branch that surveys all the regimes of the fifty state governments, the international regs wherever products are sold abroad, and of course the FDA.

Now too they will be obliged to patrol the courts of 50 different states, trying to stay one step ahead of the state court lawsuits opening their products up to claims of injury due to content or inadequate warning. Lots of really obese kids out there. Someone’s got to pay the bill. Plaintiffs’ lawyers will be arriving in locust like numbers to demand payment from food producers with snazzy boxes and catchy jingles. “They made my child obese!” will be the rallying cry. “Pay up!”

The alternative to this scenario playing out is for the food industry to push back and push back hard, beginning with this guidance letter from the FDA. Challenge the FDA’s claim of authority over “Front of Packaging” (“FOP”) decisions in a free society, and ask the public to join in the effort.

Not only would manufacturers challenge the assumptions in the guidance letter, they would stand ready to fight back in court as well. They should challenge any particular application of any particular packaging regulation as in excess of the authority inherent in the regulation.

The regulation itself should also be attacked as in excess of authority the statute could confer in the first place. Not so long ago the Supreme Court ruled that the United States of Army Corps of Engineers had exceeded the authority granted it under the Clean Water Act when the Corps attempted to regulate some intermittent streams not connected to a navigable water. Agencies get carried away with heir own sense of mission, and usually because they are staffed by dedicated professional passionate about their work but less concerned with the appropriate limits on federal power in a government that values personal liberty over many other good things.

Finally, if the application of the regulation was appropriate and the regulation itself did not exceed the authority of the statute that gave it birth, then the statute, the regulation and the application would all have to be tested against the First Amendment’s robust protection of Free Speech, including commercial speech. Consumer advocates might balk at the idea that puff talk in selling is in any way protected by the First Amendment, but not only is it protected, it is as protected as all sorts of speech upon which American puts value. Increasingly this kind of commercial speech is being understood as every bit as central to our lives as political speech and artistic speech, and certainly it deserves at least as much protection as vulgar or licentious speech has garnered over the past many years.

The food industry needs to convene –right now– a gathering devoted to whether or not it will simply accept FDA-governed marketing in all aspects of its business, because that is the path the government is on. I think the manufacturers would be surprised at the support they would receive from the public in any effort to push back at federal regulators and refuse to be dictated to on such matters.

“Affordability,” 2010 and the Health Overhaul

Monday, October 26, 2009  |  posted by Hugh Hewitt

The Monday morning column from Clark Judge:

“Affordability”, 2010 and the Health Overhaul
by Clark S. Judge, managing director, White House Writers Group

This morning’s Politico (here: ) headlines “Public Option resurfaces as an affordability issue”. In the paper version, a bigger headline to the same story explains, “2010 Haunts Health Care Debate”.

You may be inclined to say, “duh.” But though, as Politico also reports, Mr. Obama’s demand for a $900 billion cap on the planned program’s expenses came as a surprise to many Congressional Democrats, the White House move was a predictable response to intense public concern about health overhaul’s price tag.

Yet, to most Americans, $900 billion still looks like a big deal. And it is, now and even more profoundly in the decades ahead.

In a stop last week at the Hoover Institution on the Stanford University campus in Northern California, I received a chart on Federal government budget outlays from 1795 to 2065. It came from Hoover economist John Cogan, once President Reagan’s deputy director of the Office of Management and the budget. Using 2005 data, it tracks government spending as a percent of GDP.

Here are the key points and why the “years ahead” loom so large in the health care debate:

  • In 2005, spending minus Social Security and Medicare/Medicaid totaled about 12 percent of GDP. It was expected to tick up a little over the next several years to about 14 percent, remaining flat as a proportion of the economy after 2030.
  • Social Security, Medicare and Medicaid were a different story. They were projected to double from ten percent of the economy to 20 percent, increasing the total U.S. government take in the economy to about 34 percent of GDP. State and local government adds to the burden.
  • Cogan warned, however, that this story is out of date.
  • Enactment of the Obama Administration’s health takeover and other programs would jump the total federal number including Medicare, Medicaid, and Social Security up to nearly 60 percent of GDP by 2065.
  • The previous peak was during World War II, when for one year Federal outlays topped 40 percent.
  • We are entering, Cogan noted, “uncharted territory”. We have never been here before.

Where does the road lead? It is impossible to sustain the entrepreneurially driven economy that currently drives our growth and fuels our national dynamism with the government taking such a large portion of GDP. We would necessarily move to a corporatist model, with the government owning or effectively directing large sectors that we now assume should be private and independent. We are talking here about a fundamental transformation on the most profound levels of the American economy and American society.

In this morning’s Wall Street Journal, Arthur C. Brooks, president of the American Enterprise Institute, notes (Here: ), “The health-care debate is part of a moral struggle currently being played out over the free enterprise system…. Will we strengthen freedom, individual opportunity and enterprise? Or will we expand the state and its power?”

So “affordability” is not just about budget numbers. It is about who we Americans are… and what it means to have and pass along a free society. These are the true issues “haunting” 2010. Affordability is their surrogate.

The Endangered Species Act, Critical Habitat and Polar Bears

Monday, October 26, 2009  |  posted by Hugh Hewitt

When the Bush Administration designated the polar bear as “threatened” last year, it did so because of computer models showing a dangerous decline in the ice cover the bears need to survive. The models were challenged at the time, both as to their accuracy and as to legal sufficiency as data sufficient to support a listing under the Endangered Species Act. Those of us who practice in the area of the ESA knew that once a listing was in place, the effects that would spin out from such a designation would be ruinous to individuals making their livings in and around the protected species’ habitat. The ESA is such a draconian statute that it should be invoked only when the science is clear and compelling, not speculative. The devastation to California’s Central Valley because of the listing of the delta smelt is just the most recent in a long line of ESA-triggered disasters.

Now the after-effects of the polar bear listing are beginning to arrive. The New York Times cheers the recent designation of the bear’s “critical habitat” as “it seems highly unlikely that Mr. Salazar would authorize major oil and gas development in territory that his own Fish and Wildlife Service has identified as crucial to the bears’ future.”

“The designation of critical habitat does not automatically bar commercial activities like oil and gas drilling,” the paper correctly observes. “It does mean that such activities, if they occur on federal land or require a federal permit, cannot go forward without intensive review by agencies like the Fish and Wildlife Service, which can limit them or prohibit them.” Exactly right. The United States Fish and Wildlife Service is now a partner in every drilling operation in or even near the vast area designated as “critical habitat” for the polar bear.

There is no scientific connection, of course, between the lands designated as critical habitat for the bear and the loss of ice which propelled the polar bear on to the list. Designating the critical habitat will in no way hinder the loss of more ice or speed the return of lost ice. According to the Service when the bear was listed, climate change was the culprit, and climate change cannot be affected by the oil exploration in the critical habitat area or even the consumption of the oil produced there. No serious scientist would even begin to argue differently.

But still the designation occurred because the ESA demands it and now all of the exploration in the area is burdened with more government review and more vetoes while the bear’s situation changes not a bit. We lose oil and natural gas but the bear’s situation is not altered one bit.

That’s the ESA in operation, and the accumulation of such inanities is why we have an energy crisis in America. It is also a demonstration why we will never build the giant wind farms some envision, or necessary new pipelines, or the massive improvements to the electricity grid we need or the nuclear power plants we must have. The only context in which the designation of the polar bear habitat makes sense is deindustrialization.

Whenever a species is listed as “endangered” or “threatened,” the ESA demands that its “critical habitat” be designated. It happened recently not just with the polar bear, but also with Buena Vista Lake Shrew and the arroyo toad. It happens all the time in fact. Very few land owners know of the designation and won’t know of it until the time comes to use their land in a way that requires a permit of some sort from the federal government. At that point the stop sign goes up and the demand letter arrives from the feds –and that’s the best case. A critical habitat designation can delay a project for years or completely halt it –even when the species in question does not live on the land involved.

This is not rational species planning and it is profoundly damaging to economic growth and especially to property rights. Years of inaction by landowners and of accommodation by big interests such as the largest oil and gas companies have allowed the ESA’s burdens to spread to nearly every western state. The lawyers and staffs of the environmental groups are extremely competent in the use of the ESA, as the entire polar bear fight showed yet again.

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