Thus, Representative Joe Barton (R., Texas) this year introduced the Better Use of Light Bulbs (BULB, get it?) Act, repealing any such energy efficiency standards, on the grounds that the former Act “bans” normal light bulbs and requires use of CFL’s (Compact Fluorescent Lights), those spiral shaped bulbs we’re seeing more and more often.

The newly discovered perspective on this evil legislation even convinced its former co-sponsor Fred Upton (R., Mich.) to switch and work for its repeal. Unfortunately for them, however, the House defeated the proposed repeal of the law on a 233-193 vote, which failed to reach the necessary two-thirds majority.

So, what happened to turn so many Republican heads against a law they sponsored four years ago, including Rep. Upton who currently chairs the House Energy and Commerce Committee? A recent campaign by Rush Limbaugh, Rep. Michelle Bachmann (“President Bachmann will allow you to buy any light bulb you want”), and Tea Party “leader” Sen. Jim DeMint (R., S.C.) cast the law as a federally mandated ban on normal light bulbs. The law did no such thing, and simply spurred innovative light bulb manufacturers to find better ways to tackle the original, energy hungry, incandescent bulb invented by Thomas Edison in 1880, back when energy was home grown and plentiful.

Light Bulb Ready to Make the Switch

In fact, major American light bulb manufacturers such as Sylvania, Philips and General Electric (founded by Edison) were in favor of the 2007 legislation, and are in the process of unveiling new light bulbs, including incandescent bulbs, that meet the new federal standards and save the country billions in energy costs per year. It is estimated that the new standards will save the average household between $100 and $200 per year in energy costs and reduce harmful heat-trapping gases equivalent to the emissions from 17 million cars. Even Edison’s family is in favor of such innovations. Barry Edison Sloane, Edison’s great-grandson, stated: “I am appalled that any legislative body would be so narrow-minded as to discourage new and advanced technology.” Nope, no light bulb ban anywhere in sight.

Pushing Dirty Energy

So what’s behind this sudden aversion to a law everyone seemed to love just four years ago? According to columnist Jim Hightower, a big part of the recent attempt to derail the law came from the Koch brothers, leading financiers of the conservative “lights” mentioned above.  Koch Industries is a $35 billion privately held petrochemical company, and as Hightower points out, the Koch brothers are in the “dirty energy business and profit when you use more of it to light your house.”

Political debate in this country has become so polarized that we can’t even seem to be able to agree on a simple proposition that saving energy costs and promoting innovation are good things.

It comes as no surprise that the latest polls show Congress’s approval rating at an all time low of 14%. If we disapprove of the job Congress is doing, why do we keep voting incumbents back into office, as we do year in and year out?

Our Two Party System

A big part of the problem with our system is the two party politics that have infected this country from almost its beginning. Come national election day, no matter what the issues are or what we think about them, we are always faced with the same three choices: vote for the Republican nominee, vote for the Democratic nominee, or stay home. This is the case despite the fact that the Constitution makes no mention of political parties, two or otherwise. Only our first President George Washington, however, was elected without an affiliation with one of two major parties.

Every now and then, a third party candidate makes an attempt to break the deadlock the two major parties have on our elections. In 1992, Ross Perot’s Reform Party campaign did well in early polls, but come election day he only garnered 19% of the popular vote, and zero electoral votes. Republicans and Democrats are quite happy with their monopoly on American politics, and impose as many barriers as they can to third party candidates, from onerous ballot access laws to debate rules that usually exclude third parties from participation.

It is probably a common phenomenon that American voters look at the two choices on the ballot, hold their noses, and vote for the “lesser of two evils.”

A Modest Proposal

There is, however, a way out of our self-inflicted predicament. Imagine if the next time you went into a voting booth to vote for your Representative, Senator or President you always had three choices: Republican, Democratic, or None of the Above. Instead of having to vote for one of two choices, neither of whom may be particularly palatable to you, you could in effect say: “Nope, I don’t like either one of you.”

How would this work? Who would win the election? In my system, if  “none of the above” got more votes than all of candidates, the parties would have to go back to the drawing board and come up with two new candidates. The election would be won by the first candidate to win more votes than the other candidate and “none of the above.” Finally, true freedom of choice.

Advantages of “None of the Above”

Under such a system of voting, certain advantages would accrue to the electorate. Currently, our two party system is a zero sum game. In other words, any vote Candidate A can take away from Candidate B comes into Candidate A’s camp. Thus, we have the endless stream of negative advertising we are all subjected to every election. Candidates don’t have to convince you to vote for them, just vote against that idiot in the grainy photograph who advocates socialism or fascism.

With “none of the above,” that won’t work as well. If Candidate A does not give you a good reason to vote FOR him or her, as opposed to Candidate B, you can always choose that third option – I don’t want either of you representing me. Give me a good reason why I should vote for you, not against the other guy. Negative ads from each of the two major party candidates will almost guarantee that “None of the above” would win.

Perhaps such a system will actually encourage more viable third parties, particularly centrist parties seeking to appeal to the large number of independent voters discouraged by decades of incompetent rule by Republicans and Democrats in Congress.

Disadvantages

Obviously, such a voting system would be more expensive for each major party, since they would have to reconvene and come up with new candidates. In order to prevent an endless succession of “none of the above’s” there would have to be a limit on re-voting. Perhaps after two tries at coming up with better candidates, the election would go to the one candidate who got the most votes out of all the elections.

Also, this system would make election season longer if the voters are dissatisfied with the choices given to them by the two major parties. There would probably have to be limitations on the length of campaigns.

Such regulation of political campaigns is also problematic, in and of itself, and would probably not find approval under First Amendment grounds.

There is, of course, one other big disadvantage. It will never happen. The Republican and Democratic parties have a death grip on American politics. Their petty squabbles will continue. “If you don’t give me what I want, I’m taking my ball and going home.”

Oh well, it was a thought.

Perhaps a better solution is term limits for congressmen and a limited six year term for the President. That would allow our politicians to concentrate on doing some good and seeking solutions for America while they’re in office, instead of spending all of their time posturing and running for re-election. But that’s another column.

In one of the most blatant examples of just how corrupt politics has become in Washington, D.C., the head of the Federal Communications Commission, just a few months after voting to allow one of the largest corporate mergers in history, has accepted a high paying job at the new giant NBC/Comcast media company. This raises an interesting question: can we call it corruption, if it’s all perfectly legal under current rules?

The Marriage of Two Giants

Last year, two media giants decided to get married. NBC/Universal is a media and entertainment company which owns and operates television stations and networks, movie studios, and theme parks. The total value of the company last year was $32 billion. Along came Comcast Corporation, the world’s largest cable operator, home internet provider and third largest telephone company, worth $44 billion. The two companies thought that a merger would create a behemoth media entity that could rule the airwaves.

One Major Hurdle

Of course, there was a huge hurdle. They first had to convince the FCC, our watchdog for the interests of consumers and free competition for our airwaves (a limited resource that must be used sparingly), that such a marriage was a good thing for the country, as well as their respective bottom lines. So hearings were held and hard questions asked and answered.

One of the five FCC commissioners making this important decision was Meredith Attwell Baker, family friend of the Bush’s and former telecommunications lobbyist, recently appointed to a “Republican seat” (yes, these seats are assigned based on political affiliations) by President Obama at the start of his administration. Previously, as a regulator with the Commerce Department, Commissioner Baker had already become a friend of Comcast based on her support of its fight against the FCC regarding net neutrality rules.

On a 4-1 vote, the FCC decided that letting two of the largest media companies merge and consolidate their businesses was “good for America.” It will come as no great surprise that Commissioner Baker was a solid vote for the merger of these two giants.

The Revolving Door ”Pay-off”

It should also come as no surprise that just four months after voting for this lucrative merger, Commissioner Baker left after serving just two years of her five year appointment. What could have lured her away from such a fine government post? She became “Senior Vice President of Government Affairs” (i.e., highly paid lobbyist) for NBC/Universal. Even for some jaded Washington insiders, this blatant example of a revolving door between government jobs and corporate jobs was almost too much.

Due to the uproar caused in some circles by this switch from public regulator to corporate bigwig, Congress will investigate, so we can all breath a sigh of relief. Republican Chair of the House Oversight and Government Reform Committee, Representative Darrell Issa (CA), has asked the FCC to explain the departure of Commissioner Baker. Here’s a firm prediction you can take to the bank: Comcast and Senior Vice President Meredith Baker will state that any and all discussions about coming to work for the merged giant occurred only after the merger vote had been taken, and thus no rules were violated. A few members of Congress will tut-tut and bemoan the infamous revolving door problem, and the news will become quickly forgotten.

We have gotten so used to the open air corruption that is commonplace in our government, to the buying of Senators and Congressmen, the clear love affair regulators have with big corporations and antipathy to the average consumer, that such stories as the Comcast merger no longer give rise to outrage. It’s just business as usual.  As someone once said: “Every country has the government it deserves.” If you don’t like what you see, America, quit voting the way you do year after year.

Why is it that every time you turn around these days, you find a lawmaker up on Capitol Hill trying to stick it to the consumer?  Of course, it’s very important to protect multi-million dollar corporations from those pesky people who buy stuff from them; we all know that.  But gosh, isn’t this going a bit far.  First, we must ensure our oil companies continue to get their tax breaks, and now Republican Congressman from North Carolina Patrick McHenry is taking cheap shots at the person trying to set up a Consumer Protection Bureau.

Consumer Advocate and Harvard Professor Elizabeth Warren came up with the crazy idea that there should be someone looking out for consumers these days, since they’re getting ripped off so much.

Flashback to the mortgage meltdown, bogus banking fees and credit card interest rates,  just to name a few. Anyhow, she’s now working on setting up a federal Consumer Financial Protection Bureau and went before a House committee to talk about it.  Enter Representative McHenry.  He attacked Warren repeatedly, calling her part of a “super class of administrative elites.”

It seems McHenry is upset that Warren is proposing to simplify consumer contracts with companies, so there won’t be so much small print.  Warren has come up with a two-page mortgage contract to help homeowners avoid problems like signing up for mortgages they don’t understand, but apparently Representative McHenry thinks it’s a good idea to trick consumers into signing up for something they don’t really want.  Companies make more money that way, you know.  McHenry was clearly gunning for his corporate buddies.

Ever since last year when Warren’s idea for a Consumer Financial Protection Bureau became a reality with the Dodd-Frank Act, Republicans have been trying to eliminate any power it might have to help consumers. Why have consumers become the enemy?  Are we really that dispensable to these politicians who prefer corporate interests over consumer interests?  Maybe it’s time to send a message.  The next time you head to the voting booth, think about your friends in Congress.  Think really hard, about who their friends really are.

Consumer Warning Network’s Terry Smiljanich came across a homepathic product at the pharmacy that promises to help flu-like symptoms… and boy, did it set him off.  Click here to watch the video above  and find out why he’s so concerned.

In our advertising we stated that Power Balance wristbands improved your strength, balance and flexibility. We admit that there is no credible scientific evidence that supports our claims and therefore we engaged in misleading conduct .  .  .  [under Australian law].

Despite this admission, the company is doing quite well, thank you. In yet another example of how gullibility can be made profitable, it has just been announced that Power Balance is buying the naming rights to Arco Stadium in Sacramento, California, where the Sacramento Kings NBA team play. Yes, “Power Balance Stadium,” flush from record sales, will be hosting many professional sports and other community events.

“We are thrilled to be partners with Power Balance,” said Kings co-owners Joe and Gavin Maloof. “This is a great collaboration for the entire Kings franchise and we are particularly excited in this economy to be able to sign a multi-year agreement with a company on Power Balance’s trajectory.”

Indeed, the CNBC Network named the Power Balance Bracelet the “Sports Product of the Year” for 2010, and Amazon.com has stated these plastic bracelets with holograms on them were one of its top five best selling items this holiday season. Many professional athletes claim to wear them because they improve their strength, flexibility and balance.

In a recent press release, the company’s President Keith Kato stated: “The mission of Power Balance has always been to develop and deliver quality products that enhance people’s lives. Our products are based on the idea of optimizing the body’s natural energy flow, similar to concepts behind many holistic and Eastern philosophies. Frankly, we know there will always be critics of new technologies, but our products are used by those with open minds who experience real results. Our company is absolutely committed to further evaluating the technology behind its products’ performance so that we can continue to offer products that enhance people’s lifestyle.”

“New technology”? Holograms have been around since the 1950′s, and the last time we looked, plastic bracelets have been around at least as long as that. Holograms work by using scattered light off of a flat surface. Holograms are on many plastic driver’s licenses and credit cards, so most of us are already “wearing holograms.”

And how does Power Balance respond to the admission forced on it by the Australian government that there is “no credible scientific evidence” to support its claims and that it engaged in misleading conduct? Its press release states:  Contrary to recent assertions in the Australian press, Power Balance has made no claims that our product does not perform. True enough. It only admitted that there is no credible scientific evidence to support its scientific claims regarding holograms and “body frequencies.”

Let’s make this as plain as we can: wearing a plastic wristband with a cheap hologram on it will not “optimize the body’s natural energy flow,” whatever that vague statement means, nor will it “resonate with and respond to the natural energy field of the body,” whatever that pseudoscientific phrase means, nor does broadly referencing “holistic and Eastern philosophies” add any credibility to such claims. The only thing wearing this $29.95 item will optimize is the obviously healthy bottom line of the Power Balance company.

All the testimonials in the world from “thousands of athletes” will not prove the claims of this company, any more than statements from millions of people that wearing a rabbit’s foot brings them luck. Australia’s consumer watchdogs did their job. Where are this country’s consumer protection agencies in the midst of all this nonsense?

By Terry Smiljanich:

Katherine Heigl, formerly of TV’s Grey’s Anatomy, recently “lit up” an electronic cigarette on the Letterman Show, thereby providing some free advertising to a relatively new smokeless tobacco product which is showing phenomenal sales in the United States. These “smoke sticks,” also known as “e-cigarettes,” deliver nicotine without the combustible smoke by-products found in regular cigarettes which contain most of the deadly carcinogens – but are they safe?

How They Work

Electronic cigarettes are tube shaped devices containing a cartridge of liquid nicotine solution heated by a battery. As a person inhales through the mouthpiece, the heated air vaporizes the nicotine liquid and delivers this to the “smoker,” but without the burning tobacco and its associated multiple carcinogens. There is even a small diode at the tip of the device that lights up red as the person inhales.

One cartridge of the nicotine solution is equivalent to a pack of 20 cigarettes, resulting in a “per pack” cost of about $2, much cheaper than the current cost of anywhere between $5 and $10 per pack of cigarettes.

The idea is that the device satisfies a smoker’s craving for nicotine, and further reinforces the hand-to-mouth repetitive motion of smoking that provides a psychological simulation of the smoking habit. As an added benefit, there is no risk of ‘second hand smoke” to others. No carcinogens means a safer product, right?

Enter the FDA

Manufacturers of e-cigarettes have been in a battle with the FDA during this past year. The FDA has tried to ban the importation of these devices, primarily made in Asia, categorizing them as unapproved drug-delivery devices. In January, however, a federal district judge ruled that, since their active ingredients are made from tobacco plants, they are tobacco products and, thus, not subject to drug restrictions under the federal Tobacco Act.

This ruling has been temporarily overturned by an appellate court, and on September 9, 2010, the FDA announced it was taking enforcement action against five companies for making unsubstantiated health claims and poor manufacturing practices. The FDA has written a letter to the “Electronic Cigarette Association,” (the industry-wide association of private e-cigarette manufacturers) demanding further research and efficacy studies regarding what the FDA considers to be both a drug and a drug delivery device.

The FDA notes that some companies promote their product as a way to quit smoking, something which the government claims has not been adequately tested. The FDA also notes that at least one of the cited companies, Johnson Creek Enterprises, has failed to establish adequate quality control and testing procedures, resulting in inconsistent doses of nicotine from cartridge to cartridge.

On the other hand, the American Association of Public Health Physicians has urged the FDA to approve e-cigarettes, claiming that such smokeless tobacco products have less than 1% of the mortality rate of regular cigarettes.

Health Concerns

Contrary to the claims of manufacturers, FDA tests have shown the presence of detectable levels of known carcinogens in some e-cigarettes tested, including nitrosamines and diethylene glycol, a chemical used in anti-freeze.

In addition, some recent studies indicate that oral “smokeless” delivery of nicotine increases the chance of contracting cancer. A study by the Medical Research Council of the University of London suggests that the levels of nicotine in nicotine gum and lozenges, sold as ways to help quit smoking, can contribute to mutations associated with mouth cancer. If so, smoke sticks may present the same dangers.

Dr Muy-Teck Teh, who led the British research team, said: “Smoking is of course far more dangerous, and people who are using nicotine replacement to give up should continue to use it and consult their GPs if they are concerned. The important message is not to overuse it, and to follow advice on the packet.”

User Complaints

We talked to a handful of e-cigarette users who said they were generally satisfied with the product, and said that while using “smoke sticks,” they did quit smoking regular cigarettes. Some liked the different flavors available, including menthol, mocha, and vanilla.

One major concern in using e-cigarettes is the fact that there is no built in time limitation while “smoking.” A real cigarette burns out in about ten minutes. Since one smoke stick cartridge contains the equivalent of a pack, however, it can lead to improper over-use.  One person told us he had been working at his computer while using an e-cigarette, and had not noticed that he had been inhaling for over an hour until he started to feel the effects of nicotine overdose.

A 1987 study of snuff and chewing tobacco found increased levels of nicotine absorption in users, with associated adverse cardiovascular effects. Will use of smoke sticks show the same effects? More studies are obviously needed.

Some users have experienced adverse reactions from members of the public while puffing on one. The product does create a vapor looking like smoke, but this water vapor does not violate any indoor air quality regulations. This means that one could “smoke” in a theater, a restaurant, or a mall.  Despite this, members of the public have come up to a user and complained: “You’re not allowed to smoke here!”

Joe Camel?

There is concern, also expressed by the FDA, the American Cancer Society, the American Heart Association, and others that promotion of such products will further encourage young  people to take up smoking.

Remember those white candy cigarettes with the red tips, that allowed kids to pretend they were smoking? Remember Joe Camel, the cool dromedary with sun glasses? Will e-cigarettes help hook a new generation to a consumer product that causes up to 400,000 deaths a year? Let’s sincerely hope not.

Could we really be headed for a future where kids take Lipitor with their Flintstone vitamins? Childhood obesity is an epidemic, but this has the potential of going too far.  A new study in the latest issue of Pediatrics, the leading journal of pediatric medicine, argues that current standards for pediatric cholesterol screening are inadequate, and that universal cholesterol screening of children 8 years and older should be instituted. Children are now being shoved into the spotlight, even though questions still surround the widespread use of cholesterol-lowering statin drugs by adults.

Children, Cholesterol and Cardiovascular Disease

Several past studies have shown that cardiovascular disease (CVD) is a process that can start early in life and slowly progress in severity over time. The main risk factors for CVD are a family history of heart problems, obesity, high blood pressure, high cholesterol levels, and environmental factors such as smoking. Moreover, repeated studies have shown that abnormally elevated cholesterol levels during childhood are associated with an increased risk of CVD in adulthood.

Since children and adolescents have been know to show early signs of systemic changes that can progress into serious CVD problems, the American Academy of Pediatrics since the 1990′s has recommended targeted screening of children for cholesterol testing in order to single out those young patients in need of early help.

Short of invasive methods or expensive procedures such as esoteric imagery (e.g., carotid ultrasonography), simple cholesterol testing remains the most cost effective way of looking for likely future CVD candidates. Coming up with a “one size fits all” list of standards for cholesterol testing is, however, a challenge, especially since what constitutes an abnormal level of cholesterol is highly variable, based on age, gender and ethnicity.

Pediatricians are concerned, however, with what they see as an apparent epidemic of obesity in young children, pointing clearly to increased prevalence of CVD in the future unless the problem is identified and treated at an early stage.

Current Testing Standards for Children

In 1998, the American Academy of Pediatrics Committee on Nutrition issued its recommended standards for cholesterol testing of children. The Committee recommended first a “population” approach, emphasizing education in healthy lifestyles for children, including increased physical activity, lower saturated fat in their diets, more fruits and vegetables, and fewer fruit juices, sweetened foods and salt.

In addition to this population approach, the Committee recommended that selected children should be targeted for cholesterol testing. If a child comes from a family with a history of CVD problems, or if a parent has been tested with high cholesterol, the child should be tested for LDL cholesterol levels (the “bad” cholesterol number). Levels of LDL below 110 are considered normal. An LDL reading between 110 and 129 should trigger concern and parents should pay increased attention to diet and weight control for their child. With an LDL reading of 130 or higher, parents should consider consultation with a professional nutritionist for a more aggressive approach to diet and weight control.

Drug Therapies for Children?

What did the Committee recommend in the way of drug therapy? Here’s where it becomes more controversial. The Committee recommended no drug therapy for children younger than 10 years of age. If a child’s LDL level remains at or above 190, or if the level remains at 160 or above and the child has a family history of CVD, the Committee recommended administering “bile acid-sequestrants” such as Colestipol, which have been shown to reduce cholesterol levels by 10-20% and have no systemic side effects other than some gastrointestinal discomfort.

As for statins, the Committee recognized that most studies had shown such drugs to be safe for children. It did not, however, recommend statin prescriptions for children except in consultation with a lipid specialist.

Universal Testing?

The study in the latest issue of Pediatrics is calling into question this targeted testing approach for children. Looking at the records of over 20,000 West Virginia fifth graders, all of whom had received cholesterol testing.  It found that 71.4% of the students had positive family histories for CVD and thus would already have met the guidelines for cholesterol screening. Of those children meeting the guidelines, 8.3% (1,200 children) were found to have LDL numbers indicating a cholesterol problem, and 1.2% (14) of them were found to have numbers high enough to suggest a need for drug treatment for high cholesterol.

The study went on, however, to look at the test results of those children who had not meet the existing guidelines for targeted testing because they showed no relevant family history of CVD. Of these 5,800, 9.5% (550) had abnormal LDL levels, of which 9 students had levels high enough to warrant drug intervention.

In summary, using just the existing guidelines for which students should be tested for cholesterol levels, a total of nine students would not have warranted cholesterol testing, yet showed tested levels of LDL that indicating the potential need for drug therapy.

Given the fact that nine students with very high LDL numbers, out of a total of 20,000, would have slipped through the screening guidelines, the authors suggest the need for universal cholesterol testing of children, even where no family history indicates the need for it. “The use of universal cholesterol screening would identify all children with severe dyslipedemia [high cholesterol], allowing for proper intervention and follow-up, leading to the prevention of future atherosclerotic disease.”

Criticism

The idea of testing all children for cholesterol levels has come under criticism. Is it really necessary? Although high cholesterol has shown some correlation with increased risks for CVD, there is as yet no solid evidence that lack of identification and treatment of high cholesterol patients leads to increased risks. It is possible that other risk factors (family history, high blood pressure, obesity, etc.) play a prominent role in the development of the disease and that high cholesterol is not a “cause” in and of itself.

A quick look at nighttime television and the ubiquitous ads for Lipitor, Pravachol, Zocor and other statins, will convince you that such drugs constitute a large profit center for Big Pharma. Can you see it coming? More testing of children will inevitably lead to to greater numbers of pediatric prescriptions. Lipitor has already been approved in the United States for use by 10 year olds, and the European Union has approved a chewable, child-friendly version of Lipitor.

Because of the risks associated with the taking of statins, Consumer Reports (in consultation with health care consultants) recommends against the taking of statins by children except in the rarest cases.

The fact remains that the single best way to avoid heart disease, whether you are young or old, is to lead a healthy lifestyle, exercising regularly and eating wisely. Do we really want to teach our children at an early age that taking a pill can help you avoid harder decisions about changing your life style?

The Ultimate Hypocrisy

A bad thing, insider trading – that is unless you are privileged enough to get elected to Congress.

Once inside the Capitol Building, you can break these laws to your heart’s content. Members of Congress, responsible for enacting our laws, are the one group of people exempted from punishment for insider trading.

Insider trading is the conduct of profiting from insider information concerning a publicly traded stock. Say, for example, a corporate employee knows that secret talks have resulted in a merger with another company that when announced publicly in a few weeks will cause the stock to soar. If she were to use that inside information, not yet available to the general public, to buy extra stocks and cash in on the future rise, or to pass the tip along to her brother-in-law for him to cash in, a crime will have been committed.

Insider Trading is a Crime for Most

After the stock market crash of 1929, and the enactment of the Securities and Exchange Act of 1934, stock frauds were outlawed. The courts soon interpreted the law to mean that insider trading by a corporate insider was a form of stock fraud, subject to SEC regulation (Rule 10b-5). In 1961, this interpretation was expanded to include corporate “outsiders” (e.g., the brother-in-law). In 1984, insider trading was made a separate crime.

Congress has seen fit, however, to exempt itself from this limitation imposed on the rest of us. All sorts of confidential information come to the attention of lawmakers conducting hearings and investigations or corresponding with their constituents. Such lawmakers are immune from regulations or laws prohibiting insider trading, and are thus, free to profit off of secret information you and I are not privy to.

Congressional Portfolio Outperforms Average

All of this might help explain why congressmen are so much better at picking stocks than you or me. One study showed that during the 90′s U.S. Senators outperformed the average market gains by more than 12%, while average households barely held their own. A 2004 Georgia State University study similarly revealed that Senators received annual investment returns 25% higher than that of average households.

Congressional members have many opportunities to obtain nonpublic information that could affect a stock’s price. They may, for example be aware of impending tax legislation that will pass and which will affect a company’s stock positively or negatively. Similarly, they may be aware of imminent approval of a new drug or the award of a new government contract.

Ah, Ethical Shmethical

Congressional staffers are subject to ethical rules prohibiting them from profiting off of any information confidentially received in the course of their duties. In one year, for example, the top aide to then Republican Majority Leader Tom DeLay was criticized for reportedly engaging in a flurry of stock trading, greatly increasing his net worth.

Some members of Congress feel guilty about their privileged status. In 2006, a bill was introduced in Congress to prohibit congressional insider trading. It went nowhere fast. Again in 2009, a bill, the “Stop Trading on Congressional Knowledge Act,” was introduced by three members of Congress to prohibit lawmakers from profiting off of insider trading. The bill only gathered seven co-signers and was referred to seven different House Committees, never to be heard from again.

Members of Congress are the first ones to demand that wrongdoers be put in jail, whether these criminals are illegal immigrants or the Martha Stewarts of the world. They are good at holding hearings to point the finger at those responsible for the 2008 financial crisis (all the while ignoring their own role in the issues), but when it comes to cleaning their own house, they’re suddenly much too busy.

So the next time you sell that stock that doesn’t seem to be doing too well, it might just be a congressman’s portfolio that bought the stock knowing it’s value would soon soar. Too bad, sucker!

The on-going tragedy of the massive oil spill in the Gulf of Mexico, caused by the catastrophic destruction of British Petroleum’s (BP) Deepwater Horizon drilling platform, has raised serious questions concerning legislative protections afforded to companies causing such environmental disasters. How will such legal limitations on liability serve to protect BP from being responsible for full compensation to the victims of this man-made calamity?

Oil Pollution Act of 1990

After the 1989 Alaskan oil spill caused by the Exxon Valdez, Congress passed the Oil Pollution Act of 1990.The Act increased federal oversight of maritime oil transportation and drilling, increased safety standards for such activities, set liability standards for such spills, and activated a trust fund to help pay for cleanup costs resulting from oil spills.

Responsible parties for causing such oil spills were made liable for removal costs and damages resulting from the incident, including economic losses resulting from damage to natural resources such as fishing and recreation. There is no liability for removal costs or damages if the spill incident is caused by an Act of God, an Act of War, a third party, or any combination of them.

As a trade off for requiring the creation of an industry-funded oil spill trust fund, responsible companies were provided a limitation on their liability for such removal costs or environmental damages. Such liability limits were set at $75 million.

Are such liability limits sufficient to protect the public? Obviously not. According to a study conducted by the Department of Homeland Security last year, since 1991 there have been 51 spill incidents in which the damages exceeded the liability caps. The potential damages resulting from the BP spill are already estimated at $1.6 billion, and this figure could rise further. Even at $1.6 billion, such damages exceed the current cap on BP’s liability by more than 20 times.

If, however, claimants can prove gross negligence by the responsible party (a much higher standard of proof), the limitations on liability would no longer apply. It would be up to courts and juries to make such findings and allow higher damages to be awarded beyond the $75 million total cap.

Oil Spill Liability Trust Fund

In 1986, Congress had created a trust fund, the Oil Spill Liability Trust Fund, to be paid for by the oil industry to provide contingency funds for clean-up and damage costs resulting from oil spills. This trust fund remained unfunded, however, until after the Exxon Valdez incident. In the Oil Pollution Act of 1990, the oil industry was required to put $1 billion into the trust fund, based upon a new tax (currently 8 cents per barrel). This reserve fund currently stands at $1.6 billion.

These costs on the oil industry are, of course, passed on to the consumer. It is estimated that the tax to cover the Oil Spill Trust Fund increases the cost of oil by about one tenth of a percent. Have no doubt about it, readers, but we consumers are the ones who actually paid for the $1.6 billion currently sitting in the fund. Meanwhile, BP’s profits just for the first three months of this year stand at $6.1 billion, after posting profits of $4.3 billion in the final quarter of last year (that’s not a typo).

BP’s Liability

BP’s CEO Tony Hayward announced that “this is not our accident, but it’s our responsibility.” BP has stated that it will pay “all necessary and appropriate clean-up costs,” and will pay compensation for “legitimate and objectively verifiable” claims for property damage, personal injuries and commercial losses.

If BP holds true to its word, the government will be compensated for its clean-up efforts and the Oil Spill Liability Trust Fund will remain intact. There will undoubtedly be clean-up costs and liability claims that BP will dispute, and such disputes (given the example of the Exxon Valdez incident) will take decades to resolve.

If the oil slicks damage the sensitive wetlands of Louisiana, the rich oyster beds of the Gulf Coast and the coral reefs off of the Dry Tortugas and the Florida Keys, no amount of money in the world will compensate us for our ecological and economic losses. Such are the risks that need to be weighed against our overweening thirst for oil and desire to “drill, baby, drill.”