Day: January 27, 2021

Is this North Carolina Congressman hawking Bitcoin?

Sometime last week, Neeraj K. Agrawal, the communications director for the DC-based cryptocurrency think tank Coin Center, tweeted a link to an empty website: whitehouse.gov/bitcoin.pdf.

The idea he was trying to convey, in Internet speak, is that hopefully, one day we can look forward to the day when the Bitcoin whitepaper would be hosted on the White House’s website.

That would signal that the executive branch has endorsed elements of the cryptocurrency, and hosted the fundamental founding document to build confidence in the government using Bitcoin as a unit of currency.

That’s futuristic, crypto-fueled optimism that was nothing but a cheeky tweet in that moment.

Taking that to the next level, tech investor and entrepreneur Balaji Srinivasan put forward a challenge: which forward-thinking country or US state would host the Bitcoin white paper on their main domain?

Enter North Carolina Congressman Patrick McHenry.

U.S. Rep. Patrick McHenry (R-NC)

Hailing from Gastonia, a town I once worked in as a newspaper reporter, McHenry represents the 10th district in the northwestern part of the state, home to NASCAR drivers, the mighty Catawba River, and stretching to the stunning Blue Ridge Mountains.

He once represented part of Gaston County in the State House and was later elected to Congress as one of the youngest congressmen in 2004.

As the ranking member on the Financial Services Committee, McHenry has often been involved in regulatory debates and discussions on cryptocurrencies and financial projects, including Facebook’s Libra project.

At least in previous statements and letters, McHenry usually joined hands with his Democratic colleagues to oppose any competition to the US dollar, as we’ve noted in past press releases.

However, it seems McHenry is changing his tune on the future of innovation in the cryptocurrency space.

On Wednesday, he took on the challenge originally posted by Agrawal and followed by Srinivasan: he posted the Bitcoin whitepaper to his own website.

Not only that, but he stated that “policymakers should be on the side of innovation and ingenuity, which are vital to American competitiveness,” and urged his colleagues to join him.

Is this North Carolina Republican Congressman hawking Bitcoin? It seems the answer is yes.

Looking into it more, he’s grown more bullish on Bitcoin and tech-related financial services in the last two years and even clarified his position on why projects like Libra do not represent a true cryptocurrency.

Appearing on series of podcasts, including one with fellow Republican Congressman Dan Crenshaw, McHenry has been more vocal on why Bitcoin’s technology is like nothing before, and in fact, represents the future of financial and digital services.

And top it off — he posted the Bitcoin whitepaper on the congressional web server!

If McHenry’s statements are true, and if he is using his position as a Financial Services committee member to advance those ideas, I think we may have a consumer champion congressman to follow in the next two years.

As a fellow North Carolinian and advocate for consumer-friendly policies, I have been critical toward McHenry’s various positions in the past, specifically on legitimizing financial services for cannabis-related companies.

I believe the exact tagline I used was “The North Carolina Republican singlehandedly blocking progress on cannabis banking“.

Obviously, McHenry’s ideas and policies are more nuanced and deserve a closer look. I look forward to him expounding on that much more. So while we may not agree on cannabis banking, there still could be much to agree on with the congressman.

If more politicians in DC and various statehouses approached this issue like McHenry, perhaps our governments would be better vehicles for fostering innovation and helping grow consumer choice.

Kudos to you, Rep. McHenry.

Yaël Ossowski is deputy director of the Consumer Choice Center

A truly single digital market

Why is Europe struggling to create its own digital giants?

Why is Europe struggling to create its own digital giants? This is the million-euro question that obsesses the European Commission. In an op-ed published last July in Le Figaro, the European Commissioner for the Internal Market Thierry Breton warned of the urgent need to “ensure Europe’s digital sovereignty” in a context where the rivalry between the major powers is intensifying.  

The budget granted to the policy of sovereignty by the European Union has increased by “20% compared to the previous budget, and even 30% after the departure of the United Kingdom”, Thierry Breton was pleased to report in Les Echos. The new DigitalEurope programme, he continues, “will allow additional investments of more than 20 billion”. The initiative aims to ‘encourage’ and ‘support’ digital technology industries-as can be read on the official website.  

At the same time, the European Commission is continuing its war against the GAFA (Google, Apple, Facebook and Amazon) and is considering taxing the American digital giants to finance its recovery plan. To justify this new tax, which will inevitably reduce consumers’ purchasing power, the EU argues that GAFA pay “half as much” tax in Europe as other companies. However, as the Institut Economique Molinari has shown in a recent study, GAFA pay as much tax as large European companies. In the light of this fact, the GAFA tax appears most unfair. 

Subsidising domestic companies on the one hand and taxing international competitors on the other: the European Commission’s approach seems to be inspired by the doctrine of infant industries advocated by the 19th century economist Friedrich List. However, this strategy does not address the fundamental problem of the European digital market-as well as being extremely costly. 

As Luca Bertoletti and Ryan Khurana, authors of a policy note on the subject for the Consumer Choice Center (CCC), point out, if the European Union is at a disadvantage compared to the United States or China it is because it does not have a true single digital market. Only 15% of Europeans, for example, shop online on a site based in another EU country. 63% of websites don’t even let consumers buy a product from another EU country.

So Europe’s digital market is far from being a single market as it is in the US and China. This is problematic because it limits competition on a national scale and prevents Europe’s most successful firms from gaining market share and achieving significant economies of scale. The authors of the note for the Consumer Choice Center therefore recommend removing the remaining barriers to competition in the European digital market.

The fragmentation of the telecommunications sector is particularly striking. While Romanian and Finnish operators are among the best in the world, both in terms of quality and price competitiveness, telecommunications services in Spain and Ireland are often of poor quality and excessively expensive. 

Spanish and Irish consumers would greatly benefit from increased competition in this sector. In order to allow the best services to gain market share, the European Union should encourage the cross-border provision of telecommunications services and remove protections for incumbent operators. Competition law should also be adapted to allow the merger of different national telephone operators and to ensure that small countries are not put at a disadvantage. Shareholder states should partially withdraw from the merger to encourage private investment and thus promote competition. 

In a true digital single market, users should also not be discriminated against on the basis of their IP address or the location of their bank account. We should, therefore, introduce cross-border licensing of digital media and freeing the purchase of digital content from geographical constraints. Such measures would allow consumers to have access to a wider choice and thus intensify competition between providers.

We should also note that the regulatory environment is still too unfavourable to experimentation and innovation in Europe. This is one of the reasons why the most disruptive technologies are often imported from abroad and rarely developed in Europe. To remedy this, we should increase the number of “regulatory sandboxes” that allow companies to derogate from regulations in order to test new products in a controlled environment.

We should also draw attention to the European Commission’s decision to use Wifi as an infrastructure to accommodate autonomous cars. While it is true that Wifi is faster to implement and less expensive, 5G technology is much more promising. Car manufacturers have already expressed their concern on this subject. To choose 5G rather than Wifi is to fall behind a technology which will surely be the basis of the fourth industrial revolution to come.

The challenge for Europe today is to avoid making the same mistakes as in the past. If Europe wants to play in the same league as the United States and China, it will certainly have to make the necessary investments in the infrastructures of the future, but also – and above all – harmonise and liberalise its digital market. 

Originally published here.

The value of brands

Brands are flashy, but they aren’t malicious.

Have you ever bought something because of the branding? Surely you have, especially when the packaging is very flashy and enticing. If we were to deny that we respond to good ads we might as well condemn millions of marketing departments to obscurity, because what value does marketing have in a world of numb people?

We respond to brands as a factor guiding our purchasing decisions, but establishing customer loyalty takes more than good packaging. Modern consumers look beyond even the quality of a product — they are interested in production methods, ethical treatment of workers, and sustainable supply chains. Whatever we tend to sometimes cynically call “greenwashing” is a real phenomenon of consumers exerting pressure on companies to change their policies.

What good would this pressure be if we were to get rid of marketing or brand awareness altogether? The reason I pressure my favourite laptop producer to avoid slave labour at all cost is so I can consciously stay loyal… not to laptops themselves, but to this particular brand. If that software producer also commits to thorough privacy standards, then I am even happy to be an unpaid brand ambassador for this company, through word-of-mouth. 

Some public health advocates have claimed that branding and marketing are essentially deceiving consumers into buying things that are unhealthy for them or guiding them to purchases they don’t really want to make. The terms “marketing” and “brainwashing” sometimes appear synonymously, especially when it comes to children. Some products face blatant advertising bans in some EU member states because of them advertising to children — or rather advertising to the parents making the purchase later. These suggested bans cut out the responsibility of parents.

If the choice is between educating children about the consequences of their behaviour and a blatant ban on the advertisement for products, most people would prefer to educate children. Children can only learn to become responsible consumers later if they are educated, instead of being told off. The restrictive and punitive approach to being confronted with the world is what we used to apply to children and young adults until the cultural revolution in 1968, and it did not produce any positive results. Yes, broadcasters need to be aware that displaying alcohol ads during children’s shows is (beyond not being economical to the advertising company) irresponsible. This, however, doesn’t mean that we should veil the existence of alcohol from children. Yes, alcohol exists, and consumption at the appropriate age and in appropriate quantities can be enjoyable and is safe.  

We should treat children as children, but we shouldn’t forget that they are in a process of growing up, and capable to understanding nuances as they grow older. Being overly protective is not only unproductive, it is patronising to adult consumers. Under the guise of the ill-informed belief that all marketing is malicious and under the accurate yet out-of-context statement that all ads CAN be seen by children, some argue for complete bans. That is the wrong way to go. Many video platforms and streaming services already offer parental control options, that help regulate the things children see. Major internet browsers do the same.

Marketing restrictions aren’t only a blow to consumer information from a perspective of availability of products, it’s also a clear message to parents that says “we don’t trust you to make the right choices for your own children. Advertisements are essential to brand freedom. Brands matter to consumers, not only because they establish consumer loyalty, but also because they help distinguish products on the market. In situations where companies give inaccurate information about their goods, competitors should be able to market safer and healthier products. That is the essence of consumer choice.

Originally published here.

Banning single-use plastics won’t solve Florida’s pollution problem. Chemical recycling will

In early January, Democratic Florida lawmakers Linda Stewart and Mike Grieco introduced a bill to greenlight local plastic bans, previously prohibited by state statute. While the desire to keep plastic waste out of the environment is understandable, the fact is that plastic bans often do more harm for the environment than good.

Banning single-use plastic products can be more environmentally damaging because alternatives are even more wasteful.

When Denmark considered a ban on single-use plastic grocery bags, their studies found that they were far superior in comparison to alternatives. The Danes came to that conclusion based on 15 environmental benchmarks, including climate change, toxicity, ozone depletion, resource depletion and ecosystem impact. They calculated that paper bags would need to be reused 43 times to have the same total impact as a plastic bag. For cotton, the figures were even worse. A cotton bag has to be reused 7,000 times, while an organic version would need to be used 20,000 times to be on par with a single-use plastic bag.

Clearly, consumers do not reuse plastic alternatives anywhere near the number of times necessary to make a positive difference. Given the energy expended to make these alternatives, forcing consumers to use them because of a ban on plastic is a net negative if we care about the environment.

Beyond that, prospective local bans miss the mark on how we can actually deal with plastic waste. When we are talking about plastic waste in our environment, we are really talking about mismanaged litter. If plastics are ending up in Florida’s parks or on its beaches, that is a serious problem that needs to be dealt with. Luckily, there are a variety of innovative ways that plastic can be responsibly handled, that doesn’t involve banning entire product categories.

Rather than clearing a path for future bans, legislators should be narrowing their sights on better processes to reclaim plastic waste and investing in recycling through chemical depolymerization. Through depolymerization, virtually all plastic products can be broken down into their original building blocks and repurposed into other products. This means that traditionally single-use plastic products can have their lifespan extended indefinitely. This isn’t hypothetical — there are countless examples across North America where innovators take plastic waste, especially single-use products, and turn them into everything from resin pelletstiles for your home and even road asphalt.

Of course, the timing of prospective bans shouldn’t be ignored either. The pandemic has been devastating for bars and restaurants. Local bans on single-use items would force them to switch to costlier alternatives at the most inopportune time. Bans on plastic bags, cutlery, take-out containers or even bottles would be kicking these business owners right as they are trying to get back on their feet. The bans also impact consumers, not just by limiting consumer choice, but also by inflating business costs, which are more often than not passed on to consumers via higher prices.

Outside of restaurants, the prospect of a patchwork of local bans could be incredibly disruptive for supply chains in Florida. Different cities with vastly different rules could mean that manufacturers have to repurpose production lines based on Zip code, which, of course, is incredibly costly and time-consuming. Those costs are again, often passed on to consumers.

Florida’s communities can’t afford to wage a war on plastic with local bans. Instead, state government should show leadership on proper waste management. Leaning on innovative processes to deal with plastic waste ensures that plastics stay in the economy rather than ending up in the environment and avoids the trap of pushing consumers to high cost, and high impact, alternative products.

David Clement is the North American Affairs Manager with the Consumer Choice Center.

Originally published here.

Leaked Europe’s Beating Cancer Plan threatens consumer choice

A leak of the upcoming “Europe’s Beating Cancer Plan” signals the European Commission’s determination to create a “Tobacco-Free Generation” by turning a blind eye to science. In particular, according to the leaked proposal (attached below), the Commission fails to acknowledge vaping as an innovative way to reduce harm associated with smoking and as a method to help smokers quit.

The leaked proposal reveals the push to expand taxation to “novel tobacco products,” including vaping; extend the coverage of the smoking bans indoor and outdoor to e-cigarettes, and a broad flavour ban.

“Europe’s Beating Cancer plan is a momentous opportunity to embrace innovative ways of fighting cancer. The stakes are extremely high, and the European Union simply cannot afford to get it wrong. Vaping was invented to help smokers quit by providing them with a safer alternative. As of today, endorsing vaping is the best-known way to balance out an urgent need to reduce cancer rates and the need to protect consumer choice of current and future generations in the EU,” said Luca Bertoletti, Senior European Affairs Manager at the Consumer Choice Center.

“Vaping has gained popularity among European smokers precisely because it reduces harm. The proposed restrictive approach won’t drive down demand. Rather, it will result in a spike in illicit trade which, in turn, will endanger European consumers and increase the budget losses from uncollected taxation.

“If the European Commission proceeds with this version of the plan, it will not only fail to fight cancer, but will also miss out on a chance to put Europe on the path toward a pro-innovation, pro-consumer choice, and pro-science future. We at the Consumer Choice Center call on the Commission to reconsider its antiquated approach to beating cancer and recognise the life-saving potential of vaping. Let us make the most out of a once-in-generation opportunity to put in place a policy that saves lives,” concluded Bertoletti.

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