What the "cliff" means to you

With all the rhetoric swirling around the debate over the fiscal cliff and the consequences of "going over," I found this interactive feature from the Washington Post quite enlightening -- it enables the user to calculate how the outcome of the fiscal cliff negotiations will affect particular households based on household composition and income.

An added bonus: the levels of income available to be selected as parameters represent the 20th, 50th, 80th, 99th, and 99.9th percentiles of U.S. income for each of six household types: single; single head of household with two kids; married without kids and under 65; married with two kids; married with one kid in college; married over 65. Just seeing these numbers provides a concrete perspective on income inequality in this county.

 

Rules on commenting that I like

by Paul Alan Levy

The following was noted on the site of someone who posted comments on my article about Patrick Henry College: 

Comments: As the Doorbell Queen, I’d like to welcome all commenters.

Here are a few rules:

• Anonymity: I allow anonymous commenting because I have friends in the interwebs who’d rather not be tracked from site to site. If you want to comment anonymously, that is fine with the following limitations: be kind; be respectful; no spam; use a screen name; and, when possible, shoot me a private e-mail letting me know who you are. Thanks.
• Spam: I don’t allow it. Spam gets deleted. If I want to sell something, I will sell it. If you want to sell something, get your own blog.
• Mean-spiritedness / bullying / disrespect: Deleted. That is all.

 So, welcome! I hope that you will come often and comment freely within these simple rules. Thanks so much

I myself tend to excise the URL's of commenters who say little or nothing of substance but are careful to link to their own blogs.  But, I make an exception in this case

Bogus trademark claim from Patrick Henry College

by Paul Alan Levy

Michael Farris, the chancellor of Patrick Henry College, which markets itself as a Christian college with strong ties to the home-schooling movement, recently threatened to sue gay students at the school for creating a blog and Facebook page about the difficulties they face at this institution. Farris, who at one time fancied himself as a high-powered lawyer (and still promotes himself as a speaker on legal issues), used Facebook to notify the authors of the blog that they had violated the “copyright” in the college’s name.

He threatened to use litigation both to shut down the blog and to compel the identification of its authors. Because Patrick Henry’s rules for students forbid advocacy of gay rights, exposure could have meant the bloggers’ expulsion, not to speak of obloquy from their friends and families. Apart from displaying his ignorance about the difference between copyright and trademark, Farris showed his lack of familiarity with the rudiments of trademark law, which allows bloggers to use the name of the target of their criticism to identify the pages where the criticism appears. (We handled a similar case in which Jerry Falwell learned this lesson and lost in his efforts to shut down criticism from a gay blogger)

The students reached out to Public Citizen for assistance, and before drafting a letter in response to his threat, I called Farris to inquire whether he was represented by counsel. Within a few minutes, Farris had posted on his Facebook page a retraction of this threats, saying in tortured English that “while we believe in the inappropriate nature of the use of our trademarked name, litigation is not appropriate.” (The retraction may also have been the result of an inquiry from New York Magazine).

Not appropriate indeed.

Mark Budnitz on Mobile Financial Services

Mark Elliott Budnitz of Georgia State has written Mobile Financial Services: The Need for a
Comprehensive Consumer Protection Law, 27 Banking & Finance Law Review (2012).  Here's the abstract:

The article first describes mobile financial services for consumers and the types of companies participating in the provision of those services. Anticipated consumer problems are explored, including: security, privacy, unauthorized transfers, error resolution, viruses, system breakdown, consumer mistake, and the need for documentation and a history of transactions. Public policy and government
regulatory issues are examined. Applicable U.S. state and federal laws are reviewed; their gaps and inadequacies are identified. The article concludes with a description of a proposed Model Law that provides satisfactory consumer protection.

 

 

Healthy Sugary Soda? Not.

In this column, Mike Jacobson, head of the Center for Science in the Public Interest, describes the efforts of sugared-soda manufacturers to make their products sound healthy even though they are often a straight shot toward obesity.

How does a manufacturer do this? It sells pretty much the same sugar-laden product, but, for example, adds some vitamin E and gives the product a name like "Cherry Antioxidant." Here is an excerpt from Jacobson's piece:

Big Soda must know it has a public relations problem on its hands. With study after study making plainer the links between sugary-drink consumption and obesity, the industry is under siege. Reducing soda consumption is increasingly a priority of public health officials, and in the years ahead more and more cities will turn to caps on serving sizes (a la New York City's recent ordinance), taxes, and other strategies to drive down consumption. Perhaps seeing the handwriting on the wall, soda companies are diversifying their product lines with reduced-calorie sodas, waters, and juice drinks. Another part of the plan: Make soda look like a health food by dressing it up with added vitamins or fiber.

Jacobson calls on the FDA to use its fortification rule to stop this practice.  Jacobson says that the fortification rule is designed, in part, to prevent fortification of junk food with nutrients in an effort to make the junk food seem healthier than it is.

Supreme Court Grants Review in Generic Drug Preemption Case

By Brian Wolfman

In 2009, the Supreme Court held 6-3 in Wyeth v. Levine that, in general, FDA approval of a brand-name prescription drug and its labeling does not preempt a state-law damages claim premised on the drug manufacturer's failure to warn of the drug's hazards. I wrote an article on the implications of that decision. Then, in 2011, the Court held 5-4 in PLIVA v. Mensing that FDA approval of a generic prescription drug and its labeling generally does preempt a state-law damages claim premised on a failure to warn of the drug's hazards. Dena Feldman and I wrote an article on the implications of that decision.

Last Friday, the Supreme Court granted review in Mutual Pharmaceutical Co. v. Bartlett, which presents the question whether FDA approval of a generic prescription drug preempts a state-law damages claim premised on a drug's design defect. Here is how the drug company characterized the issue in its cert petition:

Whether the First Circuit erred when it created a circuit split and held—in clear conflict with this
Court’s decisions in PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011); Riegel v. Medtronic, Inc., 552 U.S. 312 (2008); and Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992)—that federal law does not preempt state law design-defect claims targeting generic pharmaceutical products because the conceded conflict between such claims and the federal laws governing generic pharmaceutical design allegedly can be avoided if the makers of generic pharmaceuticals simply stop making their products.

Remember: Taxes Are Not High; They Are at Historical Lows

As you assess whether some or all of the Bush tax cuts should be allowed to expire, bear in mind that the popular notion that Americans are suffering under a high and ever-increasing tax burden is nonsense. That's right: It's just not true. To the contrary, taxes are at historical lows. We have covered this issue over the last couple years, including here, here, and here.

Check out this New York Times article from last Thursday. The article focuses on the large gulf between popular perception (taxes are high and getting higher) and reality (taxes are low and have been getting lower). Here's an excerpt:

[A]cross the country, people ... are pained by the conviction that they are paying ever more to finance the expansion of government. But in fact, most Americans in 2010 paid far less in total taxes — federal, state and local — than they would have paid 30 years ago. According to an analysis by The New York Times, the combination of all income taxes, sales taxes and property taxes took a smaller share of their income than it took from households with the same inflation-adjusted income in 1980.

Ralph Nader: Congress Should Enact a Speculation Tax to Narrow the Federal Deficit

Ralph Nader explains in this op-ed that Congress should impose a small tax on trades of stocks and other financial products, such as derivatives. The tax would never exceed 1/2 of 1 percent of the value of the traded product, with the hardest hit on short-term investments. Here's an excerpt:

In the debate over the “fiscal cliff,” President Obama and congressional Republicans have returned to the proposals that they were sparring over before the election. They remain at odds over key elements of revenue and spending. Yet both sides are unwilling to consider a minuscule tax on financial transactions that could be a major source of income. A financial transaction tax would apply to purchases and sales of derivatives, options and stocks. The tax would be small, half a penny or less on each dollar of the transaction value, depending on the product. This idea is often called a “speculation tax,” because it would hit hardest at frothy high-volume trading as opposed to sober long-term investment.

Looking Back on David Vladeck's Soon-to-be-Completed Tenure at the FTC

Next month, David Vladeck will a leave the helm of the FTC's Bureau of Consumer Protection--by all accounts reinvograted under his dynamic leadership--to go back to Georgetown Law. Jeff Gelles, the Philadelphia Inquirer's consumer columnist, attempts to sum up David's tenure in a piece entitled "Consumer chief leaves FTC a feistier place." A snippet:

Speaking last week to the Consumer Federation of America, Vladeck said his agency felt a special duty as it saw what happened after the 2008 financial collapse. Scammers were targeting the "last dollar" of people who had already lost nearly everything - jobs, homes, creditworthiness, even their hope.

It doesn't speak especially well of humanity, but the evidence is abundant: People already on the edge are frequent targets for fraudsters who promise to settle their debts, rescue them from foreclosure, dangle new sources of income, or even promise bogus health insurance. Under Vladeck, the FTC has pursued more than 100 cases against such predators, often winning restitution and agreements barring the principals from ever striking again.

Times Magazine Asks Who Do Online Advertisers Think You Are?

by Jeff Sovern

Here.  The piece is by GW's Jeffrey Rosen and explores how online marketers gather and use information about consumers.  Rosen describes how he visited different web sites using two different browsers, as a result of which one online marketer, BlueKai, created two inconsistent personae for him.  BlueKai, incidentally, allows consumers to see what information it has collected on them here.  But what about the marketers who don't give consumers such a right?  Shouldn't Congress do for online marketing what it has done for credit reports in the FCRA--namely, give consumers the right to find out what is reported about them and correct errors?  Certainly the errors in Rosen's online avatars suggests that such errors are common. 

And then there's the discrimination risk.  Such finely-targeted advertising raises the possibility that advertisers are treating different groups differently. Advertising presents opportunities. If some ethnic groups, for example, see some types of ads that others don't, does that create issues of discrimination?  What if only whites see ads for Maui vacations, and a different ethnic group, say, sees ads for vacations in Atlanta?  Congress enacted the Home Mortgage Disclosure Act to enable observers to determine if mortgage lenders are treating different groups differently.  Perhaps we need something similar to see if advertisers are offering the same opportunities to different groups.