Newsletters

Newsletter 85 - Spring 2017

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A sea of troubles
Global warming
CFPB
Convention of States
Higher education
Another side of Trump
Transition
SAFE Board
Join us

A sea of troubles – You’ve probably seen surveys like this one. A series of issues are listed – respond to international security threats; secure the border; ensure the availability of high quality, affordable healthcare; cut government spending; reform taxes; eliminate regulatory red tape; etc. - and respondents are asked to name their top one or two issues.

Such inquiries are basically useless, as all the issues enumerated are important and many others as well. The government exerts influence over every important activity in our society, and misguided policies or bungled execution can have serious consequences. Experience has shown that the public needs to stay informed about what our government leaders are doing instead of blithely assuming they will “do the right thing.”

A series of examples follows in which a change in the government’s approach may be needed. Kudos to the SAFE members who have been following these issues.

•Global warming (John Greer) – Scientific studies confirm a global warming trend, but only weakly support claims of human causation and fears that the warming trend could dramatically accelerate. Accordingly, proposed curbs on the use of fossil fuels to reduce CO2 emissions appear economically unjustified – they should be paused or reversed.

•Consumer Finance Protection Bureau (Daniel Kerrick) – The CFPB is a great example of a government agency that was given lots of power and little effective oversight, with the result that it has been disrupting legitimate business activities. Time to rein it in!

•Convention of States (talk to the RMLC, arranged by Jerry Martin) – Ken Quinn of the COS project explained the legal authority for a COS, how a COS might work, and why a COS may be the only way to get the government to concentrate on its core missions.

•Higher education (Suzie Dickson) – A recent book documents that the cost of a college education has soared, in part due to the ready availability of student loans from the government, but our colleges & universities aren’t delivering more value.

Scientific studies support skeptics, John Greer, P.E. (retired) - Over 1,000 peer-reviewed papers skeptical of man-made climate change have been published in the last three years; they present strong scientific evidence that climate changes primarily due to natural vs. man-made causes. Excerpts and links to full papers are posted at NoTricksZone.com.

The papers examine the major mechanisms of weather and climate, finding strong influences from (a) the sun (132 papers in 2016 alone); (b) clouds and oceanic/atmospheric oscillations like El Niño, which in turn are strongly sun-influenced; and (c) volcanoes and tectonics. However, only a "questionable to weak" influence is found from humans and CO2.

The papers find temperature fluctuations over the last 10,000 years, driven by the Earth's orbital cycles, with temperatures at some points warmer than they are now. No "hockey stick" temperature change from human activity is apparent.

The papers find no increasing trends in extreme weather such as hurricanes and droughts, no harmful ocean acidification, and only natural variations in ice sheets and sea level.

Recent increases in atmospheric CO2 are explained as a lagged response to increased sea surface temperatures, which are primarily driven by solar activity vs. human emissions. Also, rising atmospheric CO2 has served to raise crop yields and "green" the planet.

CFPB under fire, Daniel Kerrick, Esq. - Enacted in 2010, the Dodd-Frank Act was supposed to ensure that nothing like the 2007-2008 financial crisis would ever happen again (there probably will be financial crises in the future, however, as there have been throughout history).

This sweeping legislation included a feature having little apparent connection to the financial crisis, namely creation of an agency called the Consumer Financial Protection Bureau. It is not clear why Congress created a new agency instead of relying on the protection of state laws or amending the charters of existing federal agencies (e.g., the Federal Trade Commission) that were similarly created to protect consumers and commerce.

Since its inception, the CFPB has used a mix of aggressive enforcement actions and rulemaking to go after so called bad actors in the credit industry, i.e., firms that engage in abusive or deceptive practices. While this writer admits there are bad actors in the credit industry, I submit that existing laws (federal and state) provided generally appropriate protection to consumers. Furthermore, the CFPB has single-mindedly focused on the conduct of lenders, attorneys, and the collection industry while ignoring the fact that consumers make bad choices too.

Several law firms that pursue consumer credit debt have been subjected to hefty fines without first establishing that they had violated consumer laws. Such fines and “consent orders” have had a chilling effect on the enforcement of debt obligations, a critical aspect of the credit industry (unless delinquent debt can be collected in a cost-effective way, credit for marginal borrowers will dry up), and caused the credit industry to incorporate compliance protocols and hire additional staff despite any evidence that existing procedures were inadequate or abusive.

Critics of the CFPB point to the following factors as indicative of unchecked power: the agency has one director, who is removable only for cause, a source of funds (fees collected by the Federal Reserve) that circumvents the regular appropriations process, independent litigation authority, and a sweeping mandate to regulate financial markets for the protection of consumers.

The CFPB’s structure was recently ruled unconstitutional by a three-judge panel of the DC Court of Appeals on grounds that the president should be able to fire the director at will; a request for en banc review is pending (without support from the Department of Justice).

With a new administration intent on rolling back excessive regulations, the CFPB’s role seems like an obvious target. Consumer advocates claim the CFPB has been a success, but speak to anyone in the banking or credit industry and they will probably tell you otherwise.

The House Financial Services Committee has shown strong interest in making changes, and bills are pending in the Senate and House to eliminate the CFPB by repealing the section in Dodd-Frank that created it. Eliminating perceived protection for consumers is unpopular, however, and less sweeping changes may ultimately be enacted.

A COS to bypass DC – Ken Quinn of the Convention of States project (regional director for the Northeast Region) spoke to the Retired Men’s Luncheon Club on March 17. His talk was arranged by SAFE director Jerry Martin. In sum, Mr. Quinn explained the legal basis for a Convention of States (Article V of the US Constitution), described how such a convention might be expected to work, and concluded that a Convention of States may be the only way to rein in a federal government that has expanded well beyond the bounds intended by the nation’s founders.

Inspired by attending the 9/12/09 “March on Washington” (as did a SAFE contingent), Quinn became active in Maine politics. He was initially opposed to the idea of a Convention of States (COS), which critics said might scrap the Constitution for something entirely different, but changed his mind after doing some research and became an active supporter of the project.

In developing a federal government framework to replace the failed Articles of Confederation model, the founders envisioned that the new government might eventually grow too strong. They feared that national government leaders might resist constitutional amendments that would reduce their own power, e.g., term limits and a balanced budget requirement. If this sounds familiar, it should; technology has made great strides since 1787, but human nature hasn’t changed a great deal.

The founder’s solution was to allow two thirds of the states (currently 34) to call for a constitutional convention, which could consider and propose amendments (in harmony with the authorizing resolution) that would become effective if ratified by three quarters of the states (currently 38). The role of Congress in the process was limited to (a) formally calling the convention pursuant to the states’ resolution, and (b) determining whether state ratification would be via state legislative action (which has been the customary approach for ratifying constitutional amendments) or state conventions (which were used for the repeal of prohibition).

At last report, the legislatures of ten “red” states had approved the COS resolution and encouraging progress is being made elsewhere. Quinn noted, that this project can’t succeed, however, unless some “blue” or “purple” states get on board. He would love to help organize an effective push here in Delaware, and we hope to arrange a return engagement for him.

Trouble in academia, Suzie Dickson – “Fail U” by Charles J. Sykes, St. Martin’s Press (2016), documents a major decline in the performance of US institutions of higher education in recent decades. Thus, “the cost of a college degree has increased by 1,125 percent [emphasis added] since 1978 – four times the rate of inflation.” And here are some other mind-boggling statistics: “between 1975 and 2005, full-time faculty increased 51 percent; bureaucrats increased by 85 percent and ‘other professionals’ increased by 240 percent.” College physical facilities have also grown exponentially.

Nearly two thirds of all college students borrow to attend college, and total student debt has risen to $1.3 trillion. The average student graduates with more than $30,000 in debt. Such debt levels might be manageable if students were able to obtain high paying jobs after graduation, but many graduates have trouble finding a job in their chosen field. In 2011, according to Sykes: “53 percent of college graduates under 25 were unemployed or underemployed.”

Finally, it seems that the current generation of students, i.e. millennials, are floundering academically. Thus, an Educational Testing Service study released in 2015 found that “U.S. millennials aged 16 - 34 with a four-year B.A. scored below their counterparts in 19 of 21 participating countries regarding reading, math and problem-solving in a technology-rich environment.' (Japan and Finland scored the best.)” Similar results were reported for students with advanced degrees.

Ironically, millennials are receiving higher letter grades than previous generations; “A 2012 study reports that 43 percent of all letter grades are now A’s, up 28 percent since 1960.”

Based on the foregoing, one might conclude that our institutions of higher learning deserve an F.

Another side of Trump – On 3/25/17, the president’s weekly address was devoted to human curiosity about the cosmos. The video (4:44) of the talk and supporting footage is inspiring.

Transition – From the 13th issue of SAFE’s quarterly newsletter: “Ed Fasig of Spring Valley, west of Wilmington, De was elected director for 1999 through 2001, at the March 9 Board of Directors meeting. Ed, a recent DuPont Company retiree, is looking forward to serving as a director.”

As it turned out, the new director would serve for 18 years, during most of which time he would also serve as SAFE’s treasurer. Dan Kerrick was elected as the new SAFE treasurer at the board meeting last November, and Ed recently stepped down from the SAFE board. His faithful service is much appreciated, and he will be missed.

SAFE Board
Andrew Betley, (302) 239-9679
Suzie Dickson
Dan Kerrick, treasurer, (302) 658-7101
Steve McClain, (302) 998-3910
Jerry Martin, (302) 478-5064
rycK Stout, (302) 478-9495
Bill Whipple, president, (302) 464-2688
For e-mail addresses see:
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About SAFE - SAFE is a non-partisan, all-volunteer organization that was founded in 1996. We advocate smaller, more focused, lower cost government, to be achieved by cutting spending, restructuring “entitlements,” simplifying taxes, and rationalizing regulations.

The SAFE agenda is promoted through: (1) Our website, including issue statements, a weekly blog, and a “Delaware Chatter” microblog; (2) Letters to the editor, public events, legislative contacts, etc., which are also posted and/or recapped on the website; (3) This quarterly newsletter, available in print (since 1996) and now electronic editions; and (4) Posts on Twitter and/or Facebook (click icons on the website to access).

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