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:: The Rule of Reason ::

:: Tuesday, September 30, 2003 ::

The Courts: Briefing to the Max 

:: Posted by Skip at 9:25 PM

Eugene Volokh explains the rules for filing inimicus curiae--or "enemy of the court"--briefs in federal court:
1. Focus primarily on repeating the arguments of your favored party. After all, anything worth saying once is worth being said by everyone who wants to say it. The official term for this (originally from Law French) is the "moi aussi principle."

2. If you do have a genuinely original twist to add to the analysis, don't just stick with it -- that's bad form. Be sure to surround it with lots of other points that echo what your favored party says (see item 1 above). A ratio of 10 page of repetition to 1 page of new material is the norm, though experts believe that even this is too low.

3. Always include lots of general rhetoric, such as "The importance of the timeless guarantees of the First Amendment cannot be overstated in our marketplace of ideas, and the republic on which it rests." Judges and law clerks just love that sort of stuff. This is especially true when filing briefs before the Supreme Court. The sorts of close and difficult cases that the Court hears are almost always decided primarily by applying general slogans. In fact, it's considered disrespectful of the Court to focus on mere factual details, or to use more mundane language.

4. Always keep in mind that (according to Rule 3.7), "The primary purpose of an inimicus curiae brief is to allow the inimicus to tell donors and other supporters that the inimicus Has Filed A Brief Before The Court expressing the timeless verities for which the inimicus and its supporters stand." Any departure from this purpose is frowned on.
Eugene, of course, is humorously describing common problems with amicus curiae briefs. As the person resonsible for drafting CAC's amicus briefs, I have seen all of these foibles many times over. Here at CAC, we try to avoid making these mistakes, though admittedly we're not always successful. Our brief in the Michigan affirmative action cases was largely repetitive of the general arguments offered--but then again, with more than 90 amicus briefs filed, it's hard to say anything original. At least we kept our brief to eight pages, likely making CAC's contribution to that case the shortest of the 90-plus participants.

In our briefs in Nike v. Kasky and United States Postal Service v. Flamingo Industries, however, I believe CAC made a valuable contribution. In both cases we brought up constitutional arguments that were not addressed at all by the parties. In Nike, we challenged the constitutionality of California's "private attorney general" statute under the Guarantee Clause of the Constitution (which requires all states to maintain republican governments rather than direct democracies). And in Postal Service, we argued the structure of the USPS violates the Supreme Court's requirements for a sovereign agency under Morrison v. Olson (which defines the difference between "superior" and "inferior" officers of the Executive Branch). Whatever impact our briefs had on the ultimate outcome (none in Nike; to be determined in Postal Service), we upheld our role as legitimate "friends of the court".

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The Culture: So where do you advance Objectivism? 

:: Posted by Nicholas Provenzo at 12:08 AM

An anonymous Objectivist scholar has been bloging on the apparent collapse of David Kelley's "Objectivist Center." TOC is a quintessential libertarian organization in that it is an organization without either a worthwhile intellectual base or a practical focus. I have ignored it accordingly. While I agree with the post on the substantive points about TOC, I was struck by his comments that TOC's efforts are likely run out of "some guy's apartment in Alexandria." That's hardly damming in my mind. After all, I run the Center out of my Alexandria apartment. But the comment, however directed, irritated me enough to get me thinking.

In her 1962 Ford Hall Forum talk, "America's Persecuted: Big Business," Ayn Rand called for a civil liberties group for businessmen. The founding vision of the Center is for it to be just such a group. Dare I brag, our activities have pioneered now ground in the advancement of Objectivism (after all, there have been three Objectivists that have appeared on national broadcast TV--Ayn Rand, Leonard Peikoff, and me). But given our resources, I run the Center out of my Alexandria apartment. I do so because the Center does not enjoy the financial support to allow it to pay for commercial office space.

Does that diminish the value of the Center's accomplishments? In the past year, the Center has filed briefs with the US Supreme Court defending equal treatment under the law (Gratz v. Bollinger and Grutter v. Bollinger), the rights of businessmen to full protection of their speech (Nike v. Kasky), and attacking government-created monopolies (United States Postal Service v. Flamingo)? The Center has issued a continuous stream of comment letters defending the victims of antitrust prosecution. Objectivist arguments will win in political and legal debates once they are engaged by our opponents. Of course, this requires our opponents hear our arguments in the first place, particularly given that these people currently control the political and legal forums in which these debates occur. The Center has fought for capitalism where no Objectivists have before--in the corridors of power that squelch our freedom and potential for prosperity and with the very people that suffer accordingly.

I wish I had all the funding I needed to fully advance the Center's goals. I want nothing more then to one day lay the cornerstone for what I envision would be both an office and Objectivist community center here in Washington. But in the meantime, I am proud of the record accomplishments of the organization I lead, however humble our digs.

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:: Monday, September 29, 2003 ::

Antitrust News: A Battle of Steel Wills 

:: Posted by Skip at 8:37 PM

The Washington Times' editorial page has discovered a potential barrier to economic efficiency--antitrust:
Steel analysts agree that consolidation can only help a global market burdened with oversupply. Anti-trust regulators could differ with this consensus, however, to the detriment of the U.S. steel industry. Consolidation cops have an undistinguished record on blocking steel mergers, such as preventing U.S. Steel's attempt to buy National Steel in 1994.

In the coal industry, there has been more recent evidence of overzealous anti-trust policing that analysts say augurs badly for future steel mergers, with the Federal Trade Commission giving Arch Coal a second information request on its bid to buy Triton Coal. "This is a review," said Merrill Lynch metals analyst Dan Rolling, "that should have taken five minutes," since there is a gross overabundance of coal. Instead, regulators are effectively suspending a merger that should have gotten speedy approval.
Just a few months ago, the Times' editors were chomping at the bit to subject Major League Baseball to antitrust prosecution because owners wouldn't relocate the Expos to Washington, DC. And the Times, like most major media outlets, provided no substantial coverage or scruting of the Bush administration's antitrust misdeeds in other industries. Still, the Times' comments are welcome here, if only because it demonstrates not all conservatives consider antitrust an enlightened form of government intervention.

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Rights and Reason: The Real Costs of Healthcare 

:: Posted by Skip at 8:33 PM

Today's Wall Street Journal reports health care costs are expected to rise 12% for businesses that provide coverage for their employees. This would be the fifth consecutive year of double-digit percentage increases. This year costs rose an average of 16%.

Jim Foreman, managing director of Towers Perrin, the consulting firm that produced the survey, noted that employers' were facing added strains of providing health benefits in a bad economy because "[t]here's no way you can pass these costs on to customers." And therein lies the problem. Most of American healthcare financing policy is now based on the axiom "the consumer must never pay market value". Federal policymakers have gone to great lengths to install smoke and mirrors throughout the healthcare system to hide the true costs from consumers. Employers are given tax breaks to provide healthcare coverage, something which is not inherent to the employer-employee relationship. The FTC and DOJ prosecute doctors that try to protect the erosion of their incomes by government-sponsored managed care companies. The managed care firms, in turn, acclimate the consumer population to paying more for an inferior level of service. And all the while, political leaders are looking for ways to further mask consumer costs--exhibit A being the ongoing effort to provide government-sponsored prescription drug benefits.

Major labor unions--which enjoy cartel protections under federal law--firmly oppose any effort by employers to shift the cost of healthcare back to consumers. This is not just a matter of short-term practicality, but of long-term ideology: the AFL-CIO backs government-run socialized healthcare, and the best way to get that is by driving employers to the brink of financial ruin over healthcare costs. That way big business will be clamoring for socialized medicine just to get the cost monkey of their backs. This is why, for instance, many larger corporations have thwarted efforts to give physicians an antitrust exemption . Corporate America will condemn physicians to serfdom rather than take a principled stand for free markets.

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The War: Treason in the White House? 

:: Posted by John Bragg at 11:40 AM

From the Washington Post:

At CIA Director George J. Tenet's request, the Justice Department is looking into an allegation that administration officials leaked the name of an undercover CIA officer to a journalist, government sources said yesterday.
In July, the odious Robert Novak wrote a column exposing Valarie Plame, the wife of former Ambassador Joseph Wilson (the author of the report debunking the Niger uranium story), as a CIA agent or operative. Novak cited two senior administration officials.

According to the Post, yesterday another senior administration official revealed that the two officials were shopping the "story" to six different journalists, and that the motivation of the two officials was revenge against Joseph Wilson.

At least, Robert Novak has revealed the identity of an alleged CIA agent. If Novak is telling the truth, then two people in the Administration need to go to jail and he is shielding them. If the Post's senior administration official is telling the truth, then five other journalists also know who the culprits are, and are concealing the truth. In addition, the senior administration official knows the truth and is remaining silent, in public at least.

Someone needs to go to prison for this.

The Washington Post Article

The Bob Novak column



UPDATE: Novak has changed or updated his story. From the Drudge Report, with no attribution:

'Nobody in the Bush administration called me to leak this. In July I was interviewing a senior administration official on Ambassador Wilson's report when he told me the trip was inspired by his wife, a CIA employee working on weapons of mass destruction. Another senior official told me the same thing. As a professional journalist with 46 years experience in Washington I do not reveal confidential sources. When I called the CIA in July to confirm Mrs. Wilson's involvement in the mission for her husband -- he is a former Clinton administration official -- they asked me not to use her name, but never indicated it would endanger her or anybody else. According to a confidential source at the CIA, Mrs. Wilson was an analyst, not a spy, not a covert operator, and not in charge of undercover operatives'


Part of this quote is duplicated on
cnn.com in the 9th paragraph
and given as something Novak said on Crossfire today.

According to the Washington Post's anynonymous source, there are five journalists who can either corroborate Novak's story or contradict his account of what Novak's anonymous sources said. This might not be a matter of criminal conduct, but of Novak's trademark sloppiness. Why does this guy keep his job again?

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Rights and Reason: Barriers to Entry 

:: Posted by Skip at 9:44 AM

Thomas Sowell attacks one of the major reasons for the shortage of qualified teachers in government schools:
You may have heard how hard it is to find enough teachers -- and therefore how necessary it is to raise salaries, in order to attract more people into this field. One example can demonstrate what is wrong with this picture, though there are innumerable other examples.

A young man who graduated summa cum laude from elite Williams College decided that he wanted to be a teacher. He sent letters and resumes to eight different school districts. Not one gave him even the courtesy of a reply.

Does that sound like there is a teacher's shortage? Moreover, any number of other highly qualified people have had the same experience.

The joker in the deal is that, no matter how highly qualified you are, your desire to become a teacher is not likely to get off the ground unless you have jumped through the bureaucratic hoops that keep people out of this field -- thereby protecting the jobs of unionized incompetents who are already in our schools.

The most important of these hoops is taking unbelievably dreary and stupid courses in education. Using these costly and time-consuming courses as a barrier, those in the education establishment "maintain low standards and high barriers at the same time," as Secretary of Education Rod Paige has aptly put it.

Factual studies show no correlation between taking these courses and successful teaching. Private schools are able to get good teachers by hiring people who never took any such courses. That is where our Williams graduate finally found a job.

The very people in the education establishment who maintain barriers to keep out teachers are the ones constantly telling us what a shortage of teachers there is -- and how more money is needed. This is a scam that has worked for years and will probably work for more years to come.
State licensing of professionals constitutes a major barrier to entry, yet you rarely hear much about this from antitrust regulators. Instead, the Federal Trade Commission has spent its resources attacking voluntary professional societies that try to maintain ethical standards without resorting to government coercion. The FTC, of course, sees voluntary action as illegal, but not state-imposed licensing regimes, which like antitrust are designed to, cough, "protect the public interest".

In the past year, the FTC prosecuted three groups for minor provisions in their ethical codes that did not meet the standards set by Commission lawyers. In all three cases, the FTC explicitly banned the groups from expressing any opinion about ethics that conflicted with the views of the Commission. To give you an example of what we're talking about, one group--the Institute of Store Planners--had an ethical rule that said members should avoid participating in certain types of bid competitions. Store planners, who design retail interiors, had been screwed in the past by unethical customers who solicited designs from multiple store planners, then after picking one designer, the winning bidder would steal design elements from his competitors. The losing bidders, meanwhile, received little to no compensation for their work. ISP's rule was thus designed to prevent store planners from hurting themselves. ISP never enforced the rule, since it was understood to be an ethical opinion. But the FTC spent thousands of dollars to force ISP to drop the opinion from their ethics code on grounds that consumers were being harmed.

The FTC then misled Congress about the ISP and other voluntary ethics code cases. In a formal report to Congress, the FTC said their actions in these cases broke-up "smoke-filled room conspiracies"--their words, not mine--and that consumers significantly benefitted. In fact, there was no evidence of consumer benefit, and these "conspiracies" all involved ethics codes that had been public knowledge for years--in ISP's case, for more than three decades.

If the FTC put half the energy it spends violating the First Amendment into fighting the teacher unions, then we might see some "consumer benefit". But attacking large, well-financed targets is not the FTC's preferred method of operation.

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:: Sunday, September 28, 2003 ::

Politics: Objectivism in Action 

:: Posted by Skip at 7:14 PM

I bitch when Objectivists sit on their fat hides and don't do anything, so it's only fair I praise the ones that do. D. Logan Darrow Clements is an Objectivist running for governor on the California recall ballot. He seems to have the rhetoric down nicely:
Ayn Rand knew that big government ruins all it touches while freedom leads to incredible prosperity. I know, as did she, that the economy will roar to life if we liberate it from excessive taxation and abusive regulation. See the work of freedom in grocery stores filled with food, hospitals filled with lifesaving technology, and a computer industry filled with innovation. See the work of big government in power blackouts, failing schools and traffic jams. The more important the task, the more reason it should be handled by resourceful companies motivated by profit, not bumbling politicians motivated by power.
His website constantly refers to Atlas Shrugged as "America's 2nd most influential book". I believe it came in behind Dr. Phil's new weight loss book.

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Rights and Reason: Commerce on commerce 

:: Posted by Skip at 10:58 AM

Commerce Secretary Donald Evans has an op-ed in today's Washington Times explaining the Bush administration's approach to business:
Past government leaders have failed to address the growing burdens American businesses carry. Inaction in the 1990s on problems such as growing health care costs, runaway junk lawsuits, insufficient energy and unreasonable business regulations now are forcing businesses to lay off employees.

The Bush administration came to office to solve problems — not pass them on to future generations. The president is working with Congress to create the conditions under which businesses can grow and create jobs.

The president's tort reform and medical liability reform will make our businesses more competitive. Junk lawsuits — especially the ones aimed at our doctors — might enrich trial lawyers, but they bankrupt good businesses and put blue-collar Americans out of work.
Evans' fine rhetoric, unfortunately, does not explain why the administration's antitrust policy has become more aggressive and destructive with each passing month. Evans highlights the unique burden doctors face from tort lawsuits, yet he expresses no understanding of the antitrust burden thrust upon them by the government's antitrust lawyers. Evans notes unfair regulations destroy jobs, yet he makes no acknowledgment of the wealth that is destroyed by the FTC's efforts to undo mergers years after the fact or the jobs that have been lost when businesses are forced to shut down rather than face antitrust investigations where they are afforded few, if any, constitutional due process rights.

Every day this administration is in office, its antitrust regulators hurt the rights and economic livelihoods of "average Americans". Until Secretary Evans (and his boss) realize this, we must continue to treat the current administration as an enemy, not a friend, of individual rights and capitalism.

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:: Saturday, September 27, 2003 ::

Sports: Dissent in the Ranks 

:: Posted by Skip at 12:56 PM

Perhaps I've been unfair in treating the sports media's position on Maurice Clarett as monolithic. The Washington Post's Michael Wilbon thinks Clarett's case is full of holes. Wilbon even provides an answer to the charge that the NFL's three-year rule is not explicitly incorporated into the Collective Bargaining Agreement:
As far as this nonsense that the draft eligibility rule isn't really part of the current agreement as has been reported in some places, [former NFL assistant general counsel David] Cornwell points out that the NFL and NFL Players Association wrote the rule into the constitution and by-laws in 1988 (allowing Barry Sanders to enter after his third year instead of four full years). Why wasn't it in the CBA originally? Because there was no CBA at the time. The league was coming off its 1987 work stoppage. But Paragraph 1 of the CBA adopts the constitution and by-laws, including the draft eligibility rule.
I'm not sure what Wilbon means by "Paragraph 1", but Article III, Section 1 of the CBA says the following:
This Agreement represents the complete understanding of the parties on all subjects covered herein, and there will be no change in the terms and conditions of this Agreement without mutual consent. Except as otherwise provided * * * the NFLPA and the Management Council waive all rights to bargain with one another concerning any subject covered or not covered in this Agreement for the duration of this Agreement, including the provisions of the NFL Constitution and Bylaws; provided, however, that if any proposed change in the NFL Constitution and Bylaws during the term of this Agreement could significantly affect the terms and conditions of employment of NFL players, then the Management Council will give the NFLPA notice of and negotiate the proposed change in good faith.
The three-year rule was written into the NFL constitution and bylaws in 1988; the CBA was adopted in 1993, amended in 1996, and reaffirmed in 1998. The union explicitly waived their right to negotiate the three-year rule, which by extension means the rule is the proper subject of labor negotiations, and thus immune from antitrust scrutiny as a matter of federal law. If the NFL wanted to amend or abolish the rule, for instance, the union would then have the right under Article III to negotiate said changes with the league.

But what about Clarett, who is not currently a member of the NFL Players Association? Why should he be bound by a CBA he never agreed to. That's been a common argument of Clarett supporters, but it fails as a matter of labor policy. The CBA's preamble clearly applies the contract to all current and future NFL players. Clarett has no right under law to negotiate his own labor agreement. That is, after all, the entire point of collective bargaining.

Technical questions of law aside, Wilbon also defends the validity of the three-year rule on policy grounds, and questions why the NFL should bend over backwards to accomodate Clarett's impatience:
The NFL and NFLPA also found through a ton of research that players who earn their college degrees fare much better and have much longer careers than players who don't. In other words, the NFL is like most industries. An apprenticeship helps. "It's a way more mental game than people think," [Washington Redskins linebacker LaVar] Arrington said. "I wouldn't have come out [of Penn State] as a sophomore because there's still too much education involved in the game, to become a better player. I mean, Ohio State is a great program. . . .

"Why are you in such a rush? You can't let greed blind you from having a good experience in college, man. The money is going to be there. I don't know what his reasoning is. Maybe there are some people who really, really need him to make money. But I look at it like this: He's been in the financial situation that he's been in thus far, so what's another year? What's another year or two?"

He's in a rush because he didn't want to go to school and probably went to the wrong school in the first place. He's in a rush because he wanted to go straight to the pros like his boy LeBron James. He's in a rush because, just as Arrington suspects, there are folks around him who want to get paid, who have seen him as a lottery ticket since he turned 15. So the NFL, because Clarett is in a rush, ought to capitulate and take on not just this kid, but everybody who'll rush in once the flood gates are open? At a time when patrons and viewers and sponsors are demanding more standards, Clarett and his supporters want fewer standards.
It should tell you something when a linebacker makes more sense than most antitrust lawyers and media pundits.

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Rights and Reason: Prioritizing Rights 

:: Posted by Skip at 12:33 PM

This will be my last post on Do Not Call for awhile, at least until the Tenth Circuit decides what to do. The FTC has appealed and asked the district court in Denver to stay its decision and allow the registry to take effect while the appeals are pending. I found this paragraph from the FTC's brief in support of the stay motion quite fascinating:
There will be irreparable harm if a stay is not granted. Already, consumers have registered more than 50 million telephone numbers onto the registry. By doing this, millions of consumers have indicated that they find unwanted telemarketing calls to be abusive and they want them stopped. Again, as this Court noted, “protecting the well-being, tranquility, and privacy of the home is of the highest order in a free and civilized society.” Order at 20. The Rule’s registry provisions that protect consumers were scheduled to take effect on October 1,
2003. If this Court’s Order is not stayed, these consumers will continue, after that date, to receive abusive telemarketing calls. There is no remedy for the countless intrusions on privacy such abusive calls will impose on these consumers during the time an appeal in this case is pending.
The FTC's argument would have more credibility with me if the agency didn't spent the majority of its resources violating the fundamental rights of Americans. While the FTC considers "privacy of the home" sacrosanct in this context, the Commission thinks nothing of stripping the nation's physicians of their right to contract, forbidding private associations from expressing ethical opinions, or taking the property of private companies to serve an undefined "public interest". Yet when it comes to thwarting telemarketers, the agency will spare no expense (or rhetoric) in defense of individual liberties.

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:: Friday, September 26, 2003 ::

The Culture: Defining Divinity 

:: Posted by Skip at 9:23 PM

Ann Coulter offer this insight on religion: "There is no surer proof of Christ's divinity than that he is still so hated some 2,000 years after his death." By that standard, Hitler will become a mainstream deity in about 1,942 years. Except among the French.

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Sports: Every Rule Has an Exception 

:: Posted by Skip at 9:20 PM

Eric McErlain, who runs the Unofficial Official Blog of the Maurice Clarett case (with this site running a close second), points to Dave Anderson's New York Times story on one player that got around the NFL's three-year rule in 1991. Well, sort of:
But two years before that 1993 agreement was signed, Eric Swann, a 300-pound defensive lineman who had been out of high school in Lillington, N.C., for only two years, was drafted by the Arizona Cardinals with the sixth pick in the first round of the 1991 draft.

Swann, who never enrolled in college, had been playing semipro football for the Bay State Titans, according to the Cardinals media guide, while lugging pipe for an electric company and running errands for a restaurant.

The three-year rule had been inserted in the N.F.L. constitution in 1990, but when Swann's eligibility for the draft developed in 1991, the N.F.L. was involved in other legal cases, notably those involving Freeman McNeil and Marvin Powell. It chose to ignore Swann's situation. Despite chronic knee injuries, Swann, a Pro Bowl alternate in 1993, endured for a decade with the Cardinals and the Carolina Panthers.

The N.F.L. will argue that Swann's arrival predated the 1993 collective bargaining agreement, but it remains a precedent that could haunt the league in the Clarett case. Why is the three-year rule so vital now, the judge may want to know, when Swann was out of high school for only two years when he was drafted?
McErlain argues that Swann's case demonstrates why the three-year rule is inherently arbitrary, and that a "player's right to try" and make it in the NFL, regardless of age, should be protected. The issue, though, is whether the government should force the NFL to afford Maurice Clarett that "right". As I've said all along, everyone seems concerned about Clarett's rights, yet the NFL's rights as a business owner are simply disregarded.

Another thing to consider: Much of the anti-NFL position in the press stems from the view that college football provides a free minor league to the NFL, and that this is inherently unfair. You won't get any disagreement from me there. But one reason--a big reason, if you ask me--that the NFL doesn't develop its own minor league is the same antitrust laws folks consider Maurice Clarett's liberator.

The reason baseball has such a successful minor league system is because that system is expressly exempt from the antitrust laws. Without that exemption, Major League Baseball would have little incentive to maintain a proprietary minor league. The minor leagues are the last vestige of the old "reserve clause". The original reserve clause basically assigned a player's rights in perpetuity to the first Major League team that acquired them. There was no free agency under this system. The rise of the player's union put an end to that nonsense. But what remains is the ability of clubs to sign players--many just out of high school--and assign them to affiliated minor league clubs. This creates value that justifies the Major League teams substantial investment in supporting their lower affiliates. This, in turn, allows the minor leagues to survive, and in many markets thrive.

Hockey has a similar system. Why it's never been challenged under U.S. antitrust laws I couldn't say; most likely the cross-border nature of hockey's minor leagues--Canada's unlikely to challenge the system under its antitrust laws for cultural reasons--makes it a non-issue. Football and basketball, however, are U.S.-based sports with no antitrust exemption. Thus, they are legally restrained from emulating baseball's successful model.

If the antitrust laws were repealed, and the NBA and NFL were free to operate their own minor leagues, situations like Clarett's would quickly become a thing of the past. Players in those sports could bypass the corrupt amateurism of the NCAA and try their hand in truly developmental professional leagues. Yet you're unlikely to hear much call for antitrust repeal among the sports media elite.

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Rights and Reason: Do Not Call Battle Rages On 

:: Posted by Skip at 9:01 PM

Only eight House members voted against yesterday's congressional decision to grant the FTC explicit authority to implement the national Do Not Call registry. A number of reactionary bloggers posted the phone numbers of the eight members—along with the Oklahoma judge that issued the ruling prompting the congressional action—demanding the people harass said members for failing to adhere to mob rule. National Review Online's Jonathan Adler was a rare voice of reason in the rush to demonize the dissenters:
Rather than harass those who voted against creating a federal "do not call" list, I'm inclined to recognize these members of Congress as profiles in courage for recognizing that this sort of thing is simply not a proper responsibility of the federal government. There are voluntary, albeit imperfect, private do not call list, as well as numerous services and technologies that can block unsolicited calls. It is rare for a member of Congress to stand up and say a popular initiative is beyond the scope of federal power. On such rare occasions, we should applaud those who stand on such principle.
Shortly after Congress essentially mooted the Oklahoma judge's ruling, another U.S. district judge sitting in Denver ruled the Do Not Call registry unconstitutional under the First Amendment. I have not yet reviewed the full text of the judge's opinion, but the gist of it as I understand it is that becaue the FTC requires commercial telemarketers, but not charitable or political telemarketers, to adhere to the registry, the FTC is unconstitutionally favoring one category of speech over another. Because the "governmental interest" here is supposed to be protecting privacy, there is no basis for distinguishing commercial and noncommercial speech. An unsolicited caller taking a poll violates the listener's privacy just as much as a caller selling consumer products.

This point appears lost on Congress and the FTC's somewhat hysterical backers. Equally lost is the fact that Congress previously gave the FCC explicit authority to create the Do Not Call registry, and that when they properly decided not to exercise that authority, the FTC simply did it on its own without authorization. I guess this is what you'd call "competing governments" theory in practice.

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Antitrust News: Reliance on Microsoft Called 'Risk' to U.S. Security 

:: Posted by Nicholas Provenzo at 10:53 AM

The Computer & Communications Industry Association, the same people who have built careers out of hating Microsoft, now claim that Microsoft software is a national security risk

“As fast as the world's computing infrastructure is growing, vulnerability to attack is growing faster still,” said Dan Geer [the principal author of CCIA’s paper]. “Microsoft’s attempts to tightly integrate myriad applications with its operating system have significantly contributed to excessive complexity and vulnerability. This deterioration of security compounds when nearly all computers rely on a single operating system subject to the same vulnerabilities the world over.”

* * *

“This report underscores and explains many of the dangers that we have warned of for some time,” said Ed Black, President and CEO of the Computer & Communications Industry Association. “Microsoft’s monopoly threatens consumers in a number of ways, but it is clear that it is now also a threat to our security, our safety, and even our national security.”
Black forgot to add that his members will be happy to sell you an alternative product.

And in case you thought that this was useful information presented by people who wanted you to think it over and act on your own good judgment, note Black’s use of the words “threaten” and “monopoly.” Fee, fi, fo, fum, do I smell a legal remedy?

Of course, none of this is a problem, since Microsoft has put antitrust behind them—the same way a thief in the night is behind you when you turn your back to him.

UPDATE: Jonathan Krim of the Washington Post reports that Dan Geer was fired by his employer AtStakeInc., a computer security firm that does business with Microsoft, for his contribution to the CCCCIA report. It seems Microsoft is not completely asleep to the implications of CCIA's paper.

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Politics: The GOP's Mexican Standoff 

:: Posted by Nicholas Provenzo at 9:15 AM

But then again, there is some substance to Schwarzenegger after all. The actor-turned candidate had this to say in a Wall Street Journal op-ed on Wednesday:

I have often said that the two people who have most profoundly impacted my thinking on economics are Milton Friedman and Adam Smith. At Christmas I sometimes annoy some of my more liberal Hollywood friends by sending them a gift of Mr. Friedman's classic economic primer, "Free to Choose." What I learned from Messrs. Friedman and Smith is a lesson that every political leader should never forget: that when the heavy fist of government becomes too overbearing and intrusive, it stifles the unlimited wealth creation process of a free people operating under a free enterprise system.

And that is the essence of the economic and fiscal crisis that confronts the state of California today. Over the past five years our state budget has grown nearly three times the pace of inflation. Our debt burden has risen by more than the other 49 states combined. The matrix of onerous regulations we impose on property owners and businesses has made the cost of doing business in California almost twice as high as in neighboring states. Our tax rates have become among the highest in the nation.

And perhaps worst of all our governor, Gray Davis, has created a counterproductive culture in Sacramento where businesses and entrepreneurs that dare make a profit are treated as if they are enemies of the state. Mr. Davis says he wants jobs, but he has done everything possible to chase away job creators. Thanks to the economic policies of this administration, for the first time in California history more native-born Americans are leaving this state than are moving here. No one would confuse the destructive economic policies of Gov. Davis and Lt. Gov. Cruz Bustamante with the pro-growth ideas of Milton Friedman or Adam Smith.
That’s pretty good stuff. The money line is this one though:

California does not have a taxing problem, it has a spending problem.
A spending problem indeed.

This is a Mexican standoff, par excellence.

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Politics: The GOP's Mexican Standoff 

:: Posted by Skip at 12:31 AM

Arthur Silber lays out a persuasive case for Tom McClintock over that other GOP candidate for governor.

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:: Thursday, September 25, 2003 ::

Rights and Reason: Texas University Shuts Down Bake Sale 

:: Posted by Nicholas Provenzo at 9:34 PM

You would think that a college as large as Southern Methodist University would protect its student's right to make a point. The AP reports no:

Southern Methodist University shut down a bake sale Wednesday in which cookies were offered for sale at different prices, depending on the buyer's race or gender.

The sale was organized by the Young Conservatives of Texas, who said it was intended as a protest of affirmative action.

A sign said white males had to pay $1 for a cookie. The price was 75 cents for white women, 50 cents for Hispanics and 25 cents for blacks.

Members of the conservative group said they meant no offense and were only trying to protest the use of race or gender as a factor in college admissions.

Similar sales have been held by College Republican chapters at colleges in at least five other states since February.

A black student filed a complaint with SMU, saying the sale was offensive. SMU officials said they halted the event after 45 minutes because it created a potentially unsafe situation.

"This was not an issue about free speech," Tim Moore, director of the SMU student center, said in a story for Thursday's edition of The Dallas Morning News. "It was really an issue where we had a hostile environment being created."

The sale drew a crowd outside the student center and several students engaged in a shouting match, Moore said.

David C. Rushing, 23, a law student and chairman of Young Conservatives of Texas at SMU and for the state, said the event didn't get out of hand. At most, a dozen students gathered around the table of cookies and Rice Krispies treats, he said.

"We copied what's been done at multiple campuses around the country to illustrate our opinion of affirmative action and how we think it's unfair," he said.

Matt Houston, a 19-year-old sophomore, called the group's price list offensive.

"My reaction was disgust because of the ignorance of some SMU students," said Houston, who is black. "They were arguing that affirmative action was solely based on race. It's not based on race. It's based on bringing a diverse community to a certain organization."
By using race as a proxy. Nice try.

If the students were black and sold blacks cookies at 3/5th the price they charged whites, so as to remind students of the three-fifths compromise, I wonder if Southern Methodist would have shut them down.

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The Courts: Flamingo Arguments Scheduled 

:: Posted by Skip at 7:28 PM

Oral arguments in United States Postal Service v. Flamingo Industries Ltd. will be held at the Supreme Court on Monday, December 1, at 10 a.m. CAC filed a brief in support of neither party but supporting the Ninth Circuit's decision to hold USPS amenable to suit under the antitrust laws.

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Rights and Reason: Recall vs. Republicanism 

:: Posted by Skip at 6:15 PM

Ashland University professor John Lewis offers a valid critique of California's recall mechanism:
Under republican government, the citizens select official representatives, for defined terms, with specific powers. The officials then administer the government. The people may not demand the removal of an elected official unless his actions are manifestly illegal. This is so even if the majority favors the recall. The requirements of the constitution elevate the rule of law over the short-term desires of the people.

In contrast to a republic, a democracy runs on direct citizen action. The citizens may assemble, in the voting booth, and exercise their power directly, by affirming particular policies. This is what voters do when they remove sitting officials in the mid-term, in defiance of the terms mandated by the constitution.

The recall is a solidly democratic action. Power is no longer delegated by the people, but exercised directly, in the form of popularity contests that may descend on an official at any moment. This is a repudiation of republicanism in favor of democracy.

The clause in California’s constitution that permits this is a deadly concession to democracy, and a repudiation of the constitution’s own principles. A constitution that allows the people to override its own mandates provides no means to stop such popular referenda from becoming the norm. Such a constitution sows the seeds of its own destruction.
In Nike v. Kasky, CAC argued that California's "private attorney general" law, which gives every citizen in the state standing to sue any business for unfair competition without having to allege personal injury, violated the federal Constitution's requirement that every state maintain a "republican form of government". Dr. Lewis' criticism falls within that same argument. If the government is to serve as a monopoly on the use of force, the power to use that monopoly must be constrained under clearly stated procedures. Direct democracy, however, operates without effective constraints, and encourages mob rule over the rule of law.

Some have compared the California recall experiment to parliamentary democracy, such as that of Canada or Britain. But that's not a valid comparison. In a parliamentary republic, power is vested in a parliament, which in turn appoints senior government officials from its own ranks. While there is a maximum term a parliament can remain in office without an election, five years, early elections can be called. But such early elections are either called by the government itself, or following a vote of no-confidence by parliament--in essence, a self-imposed recall.

It's not a perfect system by any means. I've never cared for the idea of governments calling "snap elections" to take advantage of current political advantages. Yet this is still not the same thing as what's transpiring in California. For one thing, even a sudden parliamentary election takes place according to the same rules as any regular general election. Each party nominates candidates, the leaders hold debates, and elections are held within a fixed period. The California law completely obliterates the regular election order, instead permitting just about anyone to run without regard to traditional party organizations. I've never heard of a parliamentary contest with 135 candidates.

Electing a unitary executive outside regular election cycles is also far different than electing a new parliament on short notice. A British or Canadian prime minister only takes office if his supporters win a majority of parliamentary seats. The next California governor, in contrast, could take control with less than one-third of the total ballots cast. This makes it substantially more likely a governor beholden only to a particular, narrow interest group will exercise power. The very mechanism that makes such narrow victories impossible in a parliamentary system, however, is completely missing from the California process.

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Rights and Reason: Maybe if They Gave the Profits to the Football Players... 

:: Posted by Skip at 5:57 PM

In the wake of the University of Michigan affirmative action case, conservative activists have been staging race-preference "bake sales" on campuses, charging different prices based on the customer's parentage. It's a cute joke, even if it lacks subtlety. Southern Methodist University, a private college in Texas, shut down one such bake sale on their campus due to, cough, "safety concerns". For those of us who follow college sports, SMU is known for being the first (and I believe only) NCAA Division I school to receive the "death penalty" for corruption in their athletic department. SMU's football program was shut down completely for a year and the school has never fully recovered. This really has no direct correlation to the bake sale incident, but I find it funny SMU would react quickly to it while sitting on their hands for years while its football players received illegal payoffs.

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Politics: And What Issues Would Those Be? 

:: Posted by Skip at 5:45 PM

Gen. Henry Shelton, former chairman of the Joint Chiefs of Staff, offers this fascinating remark about Gen. Wesley Clark's departure as NATO Supreme Commander:
I've known Wes for a long time. I will tell you the reason he came out of Europe early had to do with integrity and character issues, things that are very near and dear to my heart. I'm not going to say whether I'm a Republican or a Democrat. I'll just say Wes won't get my vote.
I hope Gen. Shelton plans to elaborate on this, because it sounds, um, kind of important.

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Sports: Breaking Down the System 

:: Posted by Skip at 5:42 PM

My colleague Eric McErlain offers his usual valuable insight, here on the larger issues in the Maurice Clarett case:
But what I cannot get over, is the singular fact that athletes in many other sports regularly turn professional before their 18th birthdays. Here in North America, we've been conditioned to simply shrug when we see teenage girls become instant millionaires after stepping of the balance beam, ice rink, or tennis court.

In Europe, professional soccer teams regularly sign boys before their 18th birthday, and most maintain a feeder system of players that can include local pre-teens who aspire to one day don their kits as professionals. In Canada, parents enthusiastically ship their sons across the country in their early teens to play major junior hockey -- a de facto professional league that is acknowledged as the best path to the NHL.

Are the young men who play college football any less professional than their counterparts in the minor leagues of any other sport? I don't think so, and the rules and regulations governing their conduct ought to be radically changed to acknowledge that fact.

At bottom, college football players at larger institutions essentially function as full time employees, albeit ones charged with the responsibility of representing thier institution and helping to raise its public profile. It's far past time that their work as professionals be recognized by the rules of the NCAA, and the rule of law as well.
The NCAA's philosophy of "amateurism" is obscene and irrational on every level. It's not that amateurism per se--playing a sport for enjoyment of the game without compensation--is bad. When practiced voluntarily, it is usually a virtue. But when amateur status is forced upon an entire class of athletes by institutions that actively seek financial profit for themselves, that is a moral wrong. Ohio State does not run its football program as a charity but as a revenue-producing arm of a larger corporate entity. The funds generated by football finance other athletic and university programs. Yet a key component of that revenue's producers, the athletes, are told they are wrong to seek full compensation for their efforts. In the eyes of the higher education elite, it is moral for a school to use football revenues to finance insolvent women's sports teams, but immoral to give football players even a modest monthly stipend. This is altruism at its classic worst.

We must also note that Ohio State, and many other NCAA schools, are government-run institutions. This makes the NCAA's moral corruption a matter of legitimate public concern. If I were a state legislator or governor, I would do everything in my power to prevent taxpayer-supported institutions from belonging to the NCAA or any other organization that promotes amateurism as a moral ideal. To condone the NCAA's behavior under color of government authority is no different from accepting the Mafia as a legitimate form of business organization.

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Antitrust News: FTC Strikes Washington State 

:: Posted by Skip at 5:29 PM

The Bush administration's war on physicians moves to Yakima, Washington, with news of the latest surrender:
A group of surgeons in Yakima, Washington, has settled Federal Trade Commission charges that it increased the cost of health care for consumers in Yakima by jointly fixing prices in contract negotiations with insurers in violation of federal laws. The proposed consent order with Surgical Specialists of Yakima, P.L.L.C. (SSY) and two of its members – Cascade Surgical Partners, Inc., P.S. (CSP) and Yakima Surgical Associates, Inc., P.S. (YSA) – is designed to remedy SSY’s allegedly anticompetitive collective-bargaining practices. According to the FTC, such conduct is detrimental to consumers in the Yakima, Washington, area and has resulted in higher prices for services SSY’s doctors provide.
The targeting of these small specialist groups may produce a backlash unexamined by FTC lawyers. Specialists, after all, face a far greater struggle to obtan market-level compensation for their valuable work, and in markets where managed care plans use the force of antitrust to impose their prices, these specialists can simply quit the market altogether. Yesterday I spoke to a healthcare management consultant in one major metropolitan area, and she told me of a hospital that lost all of its orthopaedic specialists because because the doctors practicing there felt under siege from the dominant HMO. Because the specialists realized any effort to negotiate prices would result in an antitrust prosecution, they simply left the market and went to work in other cities.

The FTC has never publicly acknowledged this possibility; after all, the agency is fixated on short-term price levels to the detriment of all other factors. But given the FTC's institutional hostility towards the economic rights of physicians, we might someday see the agency attempt to force physicians to stay in unprofitable markets, lest they violate the "right" of consumers to receive specialty care.

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Rights and Reason: General Clark's Redistribution Plan 

:: Posted by Skip at 5:20 PM

The Associated Press reports freshly minted Democratic presidential candidate Wesley Clark has a plan to help the economy by, you guessed it, having the government play economic God:
Delivering a 20-minute policy speech at a park along [New York's] East River, Mr. Clark said he would take the money that Mr. Bush gave the wealthy in tax cuts and create three funds: for homeland security, business tax incentives and relief for state governments.

Mr. Clark, who declared his candidacy last week, said he would allocate $40 billion for improvement of homeland security and the creation of security-related jobs such as police, fire and the Coast Guard.

Another $40 billion would be earmarked for state governments struggling under federal tax cuts, and $20 billion would be used as tax incentives for businesses that hire new employees.

The plan, Mr. Clark said, "will not increase the deficit. It simply moves $100 billion from tax cuts for households making more than $200,000 a year and directs it into job-creating funds that will help middle-income and working-class families."

"This job creation plan is part of my overall approach — one that I will be explaining over the course of the campaign," he said.
Clark's plan is obviously nothing more than a wealth transfer from producers to consumers, a staple of any Democratic economic plan. Contrary to this report, the tax cuts passed by Congress did not "give" the "wealthy" anything that wasn't taken from them by the government in the first place. Nor is it clear why Clark thinks $20 billion in "tax incentives" couldn't easily be replaced by simply cutting business taxes an additional $20 billion and off-setting them with federal spending cuts--another thing that appears to be missing from Clark's plan.

The fact that Clark is a former four-star general says a lot about his economic plan. The military is not designed to be a free-market organization, nor should it be. But the top-down decisionmaking of the Army is not appropriate for governing the private-sector economy, nor does it do much to protect individual rights generally. I would also suggest that Clark's experience as a top-level general is poor ideological preparation for the presidency in that high-ranking generals are more politician then they are pure soldier. By this, I mean the main component of a senior general's (or admiral's) job is fighting for allocation of resources within the insular, non-market world of the Pentagon. Military leaders are, in this sense, just another Washington interest group fighting for more money. I say this not to denigrate the military, or even to say the Army is the equivalent of, say, the National Education Association; what I am saying is that rational ideology requires objectivity, and that's hard to attain when your life's work is contained in an organization that consumes economic resources without producing them. I would no more favor a career general for the presidency than I would a lifelong union leader. You're just asking for narrow, concrete-bound leadership that way.

On a final note, Clark's proposed $40 billion to fund state governments "struggling under federal tax cuts" is obscene. As we've seen with many states, notably California, states are struggling because their own high taxes and anti-business regulation are reducing wealth creation. California Gov. Gray Davis recently signed union-backed legislation requiring most private employers to provide costly health insurance benefits to employees. If Clark is serious about promoting job creation, he should be calling out states that pass laws of that variety, rather than handing them a federal welfare check to encourage future bad behavior.

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The War: More Weapons-Grade Uranium Found in Iran 

:: Posted by Nicholas Provenzo at 4:54 PM

This report by George Jahn of the AP:

U.N. atomic experts have found traces of weapons-grade uranium at a second site in Iran, diplomats said Thursday. The development heightened international concerns about the nature of Tehran's nuclear activities.

The diplomats said minute quantities of the substance were found by the International Atomic Energy Agency at the Kalay-e Electric Co., just west of Tehran. They did not specify where at the site the uranium was found.

Earlier this year, U.N. inspectors found weapons-grade highly enriched uranium particles at a plant in Natanz that is supposed to produce only a lower grade for energy purposes.

Iran's Atomic Energy Organization said it had been informed of the new discovery and was evaluating the report.

Iran says traces of the new material were imported on equipment purchased from abroad, while the United States and its allies say it is further of evidence of a nuclear weapons program.

"These are part of a long-standing pattern of evasions and deception to disguise the true nature and purpose of Iran's nuclear activities," said Scott McClellan, spokesman for President Bush.

The U.N. agency has set an Oct. 31 deadline for Iran to prove that its nuclear program is for energy purposes, as it claims, and not for weapons.
Or what? If Iran’s raving jihadists are allowed to develop nuclear weapons, its going to be all but impossible to contain them. The UN is hardly the institution able to face down Iran's nuclear menace.

This is why President Bush's speech before the UN this week was a failure. Rather then prattle on about the slave trade, which presents no security threat to the US, Bush should have focused solely on nuclear preemption, if even address the UN at all.

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FTC News: Do Not Call Backers Rally 

:: Posted by Skip at 9:05 AM

Many people are unhappy with Judge Lee West's ruling that the FTC exceeded its authority in creating the Do Not Call registry. A number of Internet sites have posted the phone numbers for Judge West's chambers in an effort to encourage telemarketing-like harassment of the good judge. On one level this is silly, but it also reveals a very disturbing theme. I've read more than one comment, from a number of nominally conservative and libertarian folks, suggesting that Judge West's ruling should be overturned because...well, just because they really, really hate telemarketing and want a Do Not Call registry. The fact that Judge West persuasively argued the FTC had no authority to implement such a program is seen as a trivial detail, a judicial obstacle thwarting the people's demands.

Give the FTC credit. Unlike the always-unpopular Justice Department, the FTC knows how to act popular and make friends. They knew the Do Not Call registry exceeded their authority, but they also knew that enough people would like the idea to ignore that trivial detail. A classic example of the ends justifying the means. This, in fact, is the FTC's modus operandi. They justify all sorts of unconstitutional and illegal activities--such as the persecution of physicians--on grounds that it "benefits consumers," as if invoking such a rhetorically noble process gives one license to steal. By and large, it does: Congress rarely exercises any oversight over the FTC, preferring to accept the dangerous myth that everything the Commission does, it does for the sake of helping consumers.

My biggest objection to the idea of a Do Not Call registry is that the FTC is running it. There are rational arguments in favor of Congress creating such a registry, and I would not condemn such congressional action as per se unconstitutional. But the FTC has demonstrated a unique unwillingness to follow the Constitution and the law, especially under the current leadership. Handing them a broad weapon to use against telemarketing firms would be like handing a blow torch to a serial arsonist. If Judge West is affirmed and Congress decides a Do Not Call registry is ultimately necessary, they should find another agency within the Executive Branch to oversee it, such as the Commerce Department.

UPDATE: The FTC has appealed Judge West's order and asked for a temporary stay pending disposition by the Tenth Circuit. I would not grant the stay. This is a case where the status quo--the registry wasn't scheduled to take legal effect until October 1--should be maintained during appeal. The FTC will suffer no irreparable harm if they're forced to wait a few weeks to begin prosecuting rogue telemarketers.

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:: Wednesday, September 24, 2003 ::

Antitrust News: Paper Money 

:: Posted by Skip at 11:18 PM

Weyerhaeuser, International Paper, and Georgia-Pacific settled a class action lawsuit brought by disgruntled consumers of cardboard. Weyerhaeuser, which is currently fighinting a multi-million dollar verdict in another antitrust suit brought by its competitors, will take a $15 million charge to cover its share of the settlement. Weyerhaeuser's general counsel maintains that the settled class action case was "without merit," but that it was "in the interests of our shareholders given the complexity, time and cost of litigation, and uncertainty of court proceedings."

Given that Weyerhaeuser is vigorously fighting one antitrust judgment, it's not necessarily unreasonable that they've chosen not to fight on a second front. But at the same time, anytime a business settles a lawsuit they believe to be "without merit," it is inevitable that future meritless litigation will follow, especially when it involves the inherently subjective antitrust laws. It would also be interesting to learn whether Weyerhaeuser initiated the settlement talks, or whether they were cornered into it by one or both of their co-defendants.

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FTC News: Do Not Call Struck Down (For Now) 

:: Posted by Skip at 5:21 PM

Yesterday U.S. District Judge Lee West, sitting in Oklahoma City, ruled the FTC exceeded its authority in creating the national "Do Not Call" registry without express congressional authorization. This is probably not a long-term defeat for the Commission, since the ruling could be reversed on appeal to the U.S. Court of Appeals for the Tenth Circuit, and failing that Congress will likely give the express authorization Judge West found to be lacking.

Still, this is an important ruling in that it demonstrates the "house of cards" nature of the FTC's exercise of power. FTC leaders inferred their authority to create the Do Not Call registry from various legislative directives permitting the regulation of "abusive" telemarketing practices, yet Congress never actually said "create a Do Not Call registry and fine violators $11,000 per violation." Like most regulatory agencies, the FTC recognizes no inherent limits on its own power, and given the agency's longstanding and vehement opposition to the principle of individual rights, it's no surprise the Commission decided to impose the most stringent form of regulation it could come up with.

This is not the first time the FTC's expansive self-image has been slapped down on appeal. During the 1990s, the FTC lost a series of court battles trying to prevent mergers in the hospital industry. A few years ago, the U.S. Supreme Court rejected the FTC's effort to broadly regulate the voluntarily regulated California Dental Association. Yet no matter how many appellate judges tell the FTC otherwise, the Commission continues to believe it has unrestricted power to govern any aspect of the economy according to its whims. This is why ultimately it is Congress, not the courts, that must step in and cut the FTC down to size (if not eliminate the FTC in its present form altogether).

Such actions are unlikely, however, given Congress' traditional favoritism toward the FTC as a useful tool to attack businesses that have fallen out of political favor. Which is why Congress will almost certainly take pity on the FTC now and authorize the Do Not Call registry.

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Antitrust News: Univision Battle May Continue 

:: Posted by Skip at 10:34 AM

TheDeal.com has this report:
Activists are poised to ask a federal appeals court to overturn a Federal Communications Commission order allowing Univision Communications Inc. to buy Hispanic Broadcasting Corp.

Though the National Hispanic Policy Institute has yet to make a final decision about whether to ask the U.S. Court of Appeals for the District of Columbia to intervene, Arthur Belendiuk, a lawyer who represents the New York advocacy group, said Tuesday, Sept. 23, he fully expects to force the FCC to defend its order. "This is not the last you have heard of this case," said Belendiuk, a partner in Washington law firm Smithwick & Belendiuk. "There are serious legal flaws in the FCC decision."
NHPI spent months running overtly racist ads encouraging the FCC and other political leaders to stop the Univision-Hispanic Broadcasting merger on political, not legal, grounds. A number of NHPI's ads argued that Univision executives should be punished for their political beliefs, including allegedly supporting California Proposition 187 several years ago (which cut off state welfare funds to illegal immigrants). NHPI, which is led by a Democratic New York State legislator, also pressed Hispanic Democrats in the House to complain that Univision's news programming was too biased in favor of Republicans.

The amazing thing is that "activist groups" are allowed to appeal FCC decisions like this in the first place. A private transaction between two businesses should not be the subject of a third-party lawsuit. But since broadcast licenses are still considered "public property", the courts are forced to entertain these political actions.

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Antitrust News: Beware the FTC 

:: Posted by Skip at 10:15 AM

Jeff Brennan, the FTC's chief inquisitor on healthcare, has threatened a new physician network in San Francisco with prosecution unless they follow the Commission's antitrust regulations that forbid doctors from acting in their economic self-interest. Here's the key paragraph in Brennan's letter to the proposed group, Bay Area Preferred Physicians (BAPP):
BAPP will be authorized to contract with any payer on behalf of physicians whose minimum payment requirements are at or below the payer's offer. The BAPP messenger also will notify those physicians whose minimum payment demand exceeds the offer that they have one opportunity to "opt in" to a contract containing the payer's offer. This notice will not reveal the number or percentage of BAPP physicians whose payment levels met or were below the payer's offer. BAPP also might provide objective information to its members to help them understand the contract terms. You have represented that BAPP and its messenger will not recommend that the physicians accept or reject an offer, opine on the appropriateness of price or other competitive terms, present contract information that suggests an opinion on whether the physicians should accept a particular contract term, or otherwise attempt to facilitate any coordination among the physicians on such terms.
This is a naked restraint of free speech. It is also a deliberate effort by the FTC to sabotage the ability of physicians to negotiate higher prices with managed care programs. If physicians cannot talk to one another about their negotiations with an HMO, the result will be low contracts for everyone. Brennan's letter literally makes it a criminal act for two doctors to have lunch and talk about a proposed HMO contract.

And in the end, BAPP can do everything they told the FTC they would and still find themselves in violation of the antitrust laws. Since the FTC has unilateral and arbitrary authority to decide what conduct is legal, they can simply decide BAPP's mere existence is too big a risk to the financial interests to HMOs. I strongly suspect BAPP won't survive when all is said and done.

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Rights and Reason: History Repeats Itself 

:: Posted by Skip at 12:54 AM

Bruce Bartlett explains why any accomodation of John Banzhaf and his terrorist lawyer colleagues is suicide:
Unfortunately, the tobacco companies seem to have learned nothing from their experience with anti-smoking zealots and are actually opening the door to lawsuits against their food divisions. They don't seem to understand that their enemies are not driven by genuine concerns about health or even by greed, but by ideology. They bring a religious fervor to their efforts that combine a Marxist hatred of capitalism with extraordinary naivete about human nature, mixed together with a tort liability system that is eager to award large damages based on the flimsiest of evidence.

Nevertheless, Kraft Foods, a division of Altria Group (formerly known as tobacco giant Philip Morris), thinks it can buy off its prosecutors by cutting portion sizes, reducing fat and sugar in its products, and scaling back marketing to children. These may all be worthwhile things to do, but to its enemies it is virtually an admission of guilt. Just as warning labels on cigarettes proved to be no defense against tobacco lawsuits, neither will Kraft's pre-emptive capitulation. It will only embolden its enemies and provide new lines of legal attack.
There are two explanations for this type of corporate behavior. One is that executives believe that they can gain profits in the short-term even if they risk long-term defeat; the other is that the executives actually believe they're guilty of what they're opponents accuse them of. Neither option is particularly comforting to those of us who advocate capitalism as a moral way of life. But on the bright side, most Americans are not ready to cross the line of destroying food companies over the "obesity epidemic" just yet. And the food industry is mounting a campaign, through it's lobbying arm at the Center for Consumer Freedom, to discredit Banzhaf and company. But we must keep pressuring the food companies to expand their fight and not be content simply to fight their persecutors to a draw in the legal arena. Nothing short of total defeat of Banzhaf and his can suffice.

UPDATE: Overlawyered.com cites Banzhaf spinning his loss in the recent McDonald's lawsuit by arguing "it takes time for legal theories to coalesce in a way that forces major societal change." Note the word "forces". Banzhaf has no interest in rationally persuading people of his theories; he intends to use force--primarily the deliberate abuse of the court system--against all Americans who disagree with him.

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Antitrust News: Climbing the Mountain 

:: Posted by Skip at 12:33 AM

On Tuesday afternoon, I filed a motion with the U.S. district court overseeing the Justice Department "settlement" with the now-defunct Mountain Health Care (MHC). The motion asked for permission to add me as a party to the case so I can appeal part of the district judge's order signing off on the settlement. That part deals with whether the DOJ disclosed all of the documents they were legally required to. For more than six months now, I've argued to the court that the DOJ intentionally withheld material information about MHC's operations and activities. At every turn, the DOJ has resisted calls to release even basic information about their investigation of MHC--an investigation that led to a coerced "settlement" that forced MHC to dissolve before the court even had an opportunity to examine the government's case.

MHC is part of the Bush administration's ongoing campaign to eliminate the free market for physician services. For nearly a decade, MHC was a physician-owned healthcare network that provided reliable service to customers in western North Carolina. Managed care groups, i.e. HMOs, were unhappy with MHC's popularity in the marketplace. So they whined to the DOJ, which launched a two-year investigation of MHC in a scavenger hunt for "antitrust" violations. The result was a broad charge that MHC engaged in illegal "price fixing" by maintaining a voluntary fee schedule that all member physicians adhered to in dealing with managed care payors.

This fee schedule may or may not exist. The DOJ won't disclose it, and my discussions with MHC officials indicate there was never any mandatory price list--individual physicians were free to set their own prices for many services--and that MHC was complying with all DOJ antitrust requirements in their operations.

The DOJ says MHC's very existence raise prices for physician services above "competitive" levels. Yet the DOJ never explains how the "competitive" price level for the market is determined, or even how far above this level MHC's alleged fee schedule was. When this issue was raised by me during the public comment period, the DOJ arrogantly asserted that I had no knowledge of the market and was motivated solely by ideological opposition to antitrust. While they're correct about my ideology, it's irrelevant to whether the DOJ disclosed required documents related to the settlement. The point of the statutory process is to allow the public opportunity to analyze whether a proposed antitrust settlement will remedy allegedly anticompetitive actions. How can one determine the effects of a settlement, however, if one is not told the precise nature of the problem being remedied?

The law requires the DOJ disclose any document that was "determinative" in formulating a proposed settlement. In almost every antitrust settlement that's been subject to review, however, the DOJ claims there are no "determinative" documents. The DOJ admits they take a very narrow view of the disclosure requirement. They argue that if they were forced to disclose documents such as the ones I describe, it would bring the entire antitrust settlement process to a halt. The DOJ claims it's an unreasonable hardship to expect the Government to actually prove what it's saying is true. But in this case at least, I only asked the DOJ to disclose documents that were already in their possession. If the line between settling a case and costly litigation is the inability to make photocopies, then we're dealing with a DOJ that's lazy as well as morally corrupt.

This, then, is what my appeal to the U.S. Court of Appeals for the Fourth Circuit will focus on. I won't seek to overturn the actual judgment--after all, MHC is out of business--but I will seek a definite answer from the courts on what exactly the scope of "determinative" is under the law. There is precious little case law on this question, largely because no organization or individual has taken up the cause of fighting antitrust on a consistent, principled basis. Since I'm the resident Village Idiot, I might as well be the trailblazer.

Incidentally, I'm laying out my own money to fight this appeal, so a donation to CAC to defray my costs would be much appreciated right now. Considering the number of people who allegedly give money to self-absorbed bloggers (I'm looking in your direction, Mr. Sullivan), I'm hoping a few people can spare a buck or two to fight for the principles we presumably share.

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:: Tuesday, September 23, 2003 ::

Rights and Reason: Adelstein Defends Diversity 

:: Posted by Skip at 11:34 PM

After several months of political wrangling, the Federal Communications Commission voted 3-2 to approve Univision Communications' $3.1 billion purchase of Hispanic Broadcasting Corporation, a merger that stregnthens the nation's largest Spanish-language media company. Jonathan Adelstein, a Democrat, was one of the two FCC commissioners to vote against permitting the deal. His rationalization, not surprisingly, is rooted in the Democratic Party's main recurring theme--diversity:
Adelstein said the "FCC is turning a deaf ear to millions of Spanish-speaking Americans."

"By allowing this transaction to go forward with no protections for consumers, the FCC denies Spanish speakers their right to receive a diversity of perspectives over the nation's airwaves," Mr. Adelstein said.
How exactly does a group obtain a "right" to diversity? In the absence of private property owners to develop commercial television stations, there would be no "perspectives" at all over the airwaves. What would Adelstein do if there was only one Spanish-language media company to begin with? Or what about the various language groups that don't have any broadcast stations dedicated to their interests? Should the FTC force the networks to develop "Russian-language" or "French-language" formats to satisfy the "right" to diverse programming?

Adelstein's view also assumes, as most anti-business regulation does, that consumers are incapable of making their demands known to the marketplace in the absence of government intervention. If Spanish-speaking Americans are dissatisfied with their media choices, they will act accordingly within the market, and if a large company like Univision doesn't satisfy consumer demand, those consumers will seek other alternatives, even if that means looking for entertainment and information outside the limited spectrum of broadcast television and radio--say through cable and satellite television and, um, that Internet thing.

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Antitrust News: Clarett Complains Too Much 

:: Posted by Skip at 6:46 PM

The money line, literally and figuratively, from Maurice Clarett's federal complaint against the NFL comes in paragraph 31:
Had Clarett been eligible for the 2003 [NFL] Draft, it is almost certain he would have been selected in the beginning of the First Round and would have agreed to a contract and signing bonus worth millions of dollars.
Even by antitrust standards, this is a huge assumption. Clarett is seeking triple damages to compensate his alleged losses in not being a high first-round pick in last April's draft. There's no objective way to prove such a claim. It's possible an NFL owner might argue "I wanted to take Clarett with the #3 pick, but I knew he wasn't eligible," but somehow I doubt that's going to happen.

Mel Kiper, Jr., the best-known analyst of the NFL Draft, says Clarett is "no better than a second-round pick at this point." Clarett hasn't even played one full year of college football, as he was injured for part of the 2002 season. Len Pasquarelli, who covers the NFL for ESPN, cites numerous NFL scouts as projecting Clarett as a second- or third-round pick. This is not a trivial difference from a financial standpoint, and Clarett knows this, which is why the complaint insists he's a guaranteed first-round pick, despite the lack of supporting evidence.

Under the current system, which permits college juniors to leave one year early for the NFL, 10 of the 32 first round picks this year were eligible underclassmen. Of those 10 only one plays running back, Clarett's position, and that was Miami's Willis McGahee. Overall, only 23% of the college juniors that declared for the draft were taken in the first round, and 34% weren't taken in any of the draft's seven rounds. This hardly spells a guaranteed multi-million dollar contract for a freshman running back with less than a dozen games to his credit.

Here's one problem I see: Suppose the court permits Clarett to enter the 2004 Draft, and he's not taken until the third round. Will he then go back to Court and argue the owners are "colluding" against him because, in his mind, he should have been a first round pick? And to take that hypothetical one step further, will future underclassmen who enter the draft and don't get picked as high as they want seek antitrust relief? As things stand now, these would be ridiculous scenarios. Underclassmen get shafted all the time in the NBA Draft and there are no antitrust complaints. But if Clarett is allowed to recover damages from the NFL under his "I was definitely a first-round pick" theory, all bets could be off.

And incidentally, Clarett's complaint omits any mention of the fact he was kicked off the Ohio State team, or that he's currently facing criminal charges in Ohio over filing a false insurance claim.

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Antitrust News: Clarett Sues NFL 

:: Posted by Skip at 5:20 PM

While not a surprise, this is still disappointing:
Suspended Ohio State tailback Maurice Clarett sued the NFL on Tuesday, asking a judge to throw out a league rule preventing players from entering the draft until they have been out of high school three years.

Clarett, who rushed for 1,237 yards and led Ohio State to a national championship last year as a freshman, is not eligible for the draft until 2005 under current rules.

The suit, filed in Manhattan federal court, claims the NFL rule violates antitrust law because it is separate from the NFL's current collective bargaining agreement with its players' union.

"The rule is a restraint of amateur athletes who were strangers to the collective bargaining process," the suit says.
The first word of this report requires emphasis--"suspended". The only reason Maurice Clarett is going to court now is because he intentionally violated NCAA rules and got himself thrown off the Ohio State team. Yes, the NCAA promotes the immoral, anti-capitalist philosophy of "amateurism", and many of the association's rules are ill-conceived. But Clarett knew what he was getting into when he signed up. It was his choices that got him in trouble, and now he's seeking to deflect that blame onto the NFL, an innocent third party.

Many, if not most, sports media commentators will talk about Clarett's "right" to seek employment; few, if any, will speak of the NFL's right to decide its own rules in pursuit of the league's self-interest.

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Antitrust News: FTC Finds Limits on Power Problematic 

:: Posted by Skip at 5:15 PM

In antitrust there's something known as the "state action doctrine." This doctrine, like most antitrust rules, a creation of the Supreme Court, says that a state government can ignore the federal antitrust laws and "replace competition" with a state regulatory regime. The reason for this doctrine is that the courts concluded that the antitrust laws were not applicable to state governments. Federal antitrust authorities, not surprisingly, don't like this doctrine, since it restricts their ability to go after private businesses that obtain protection from states.

The moving industry is a common target of FTC-state action tension. Many states permit trade associations of competing movers to file joint tariffs with state authorities. These tariffs are legally required statements of prices movers charge customers. The FTC considers joint tariff-filing akin to price fixing, and wants to eliminate it in every state. The legal issue then becomes whether the state action doctrine protects joint tariff filing; the courts have generally said yes, but the FTC always says no.

Given this background, it's interesting to consider this press release today from the FTC:
In a staff report released today, the Federal Trade Commission’s State Action Task Force concludes that the scope of the antitrust state action doctrine has expanded dramatically since first articulated by the Supreme Court in 1943. The doctrine has become unmoored from its original objectives, the report concludes, and is frequently invoked to protect private commercial efforts with no relation to state policy. Accordingly, the “Report of the State Action Task Force” recommends a number of specific clarifications of the doctrine, including more rigorous application of the “clear articulation” and “active supervision” requirements.

“The state action doctrine can have significant benefits, but over-broad interpretations impose significant costs on consumers,” said FTC Chairman Timothy Muris. “The Task Force has identified instances in which parties with a direct financial interest in the regulated field have attempted to characterize their own protectionist efforts as the will of the state. The Supreme Court never intended to shield such conduct from antitrust enforcement.”

The report identifies recurrent areas of concerns in recent state action case law, and challenges the conventional wisdom that the anticompetitive impact of an over-broad interpretation of the doctrine can be limited to a single state.

“The Task Force Report confirms once again why exemptions from the antitrust laws must be construed narrowly,” noted Todd Zywicki, Director of the FTC’s Office of Policy Planning. “Extending the protection of the state action doctrine to parties operating under a vague grant of authority, with little or no state supervision, not only harms consumers in the state in question, but frequently results in harm to consumers outside the state imposing the restraint.”
Translation: An FTC-appointed task force decided the FTC doesn't have enough control over the economy. The argument that antitrust exemptions "must be construed narrowly" is particularly telling. You will never hear the FTC argue that their authority should be construed narrowly, or for that matter, that the FTC should even be bound by any objective law.

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The War: Airman at Guantanamo Charged With Spying 

:: Posted by Nicholas Provenzo at 3:55 PM

This report in from Matt Kelly of the AP:

An Air Force translator at the U.S. prison camp for suspected terrorists has been charged with espionage and aiding the enemy, a military spokesman said Tuesday.

Senior Airman Ahmad I. al-Halabi is being held at Vandenberg Air Force Base in California, facing 32 criminal charges, spokesman Maj. Michael Shavers said.

Al-Halabi worked as an Arabic language translator at the prison camp for al-Qaida and Taliban suspects at Guantanamo Bay, Cuba, Shavers said. The Air Force enlisted man knew the Muslim chaplain at the prison arrested earlier this month, but it's unclear if the two arrests are linked, Shavers said.

The translator was arrested more than six weeks before the chaplain, Shavers said.

Al-Halabi is charged with nine counts related to espionage, three counts of aiding the enemy, 11 counts of disobeying a lawful order, and nine counts of making a false official statement.

Al-Halabi was based at Travis Air Force Base in California and assigned to a logistics unit there, Shavers said.

Pentagon officials said an investigation into possible security breaches at Guantanamo Bay continues.
Two members of the American Armed forces are accused of espionage? In support of al-Qaida and the Taliban? These allegations are simply stunning.

So what if both are practitioners of the Islamic faith. They are both Americans who grew up with the benefit of a secular and free culture. If these charges are true, I would like to understand exactly what thought process turned these men against their freedom.

And then I would like to see them hang.

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Capitalism & the Law: Resturant Scoffs Law Professor  

:: Posted by Nicholas Provenzo at 3:35 PM

Blaine Hardenof the Washington Post reports that a Seattle resturant is sticking it to John Banzhaf, GW Professor of Public Interest Law.

In an attempt to make a law professor in the other Washington look silly, a popular restaurant here is requiring customers to sign a liability waiver before they eat a fat-by-design dessert called The Bulge.

The waiver, a semi-serious gimmick that might be the first of its kind in the United States, is displayed in poster-sized dimensions near the front door of the 5 Spot, an eatery on Seattle's affluent Queen Anne Hill.

"I will not impose any of sort of obesity-related lawsuit against the 5 Spot or consider any similar type of frivolous legislation created by a hungry trial lawyer," the release says. After a diner signs it, a waiter hauls out a sugarcoated, deep-fried, ice cream-swaddled, caramel-drizzled, whipped-cream-anointed banana.

"We thought, what can we do to illustrate how stupid it is to make restaurants responsible for monitoring the eating habits of Americans?" said Peter Levy, co-owner of the 5 Spot. "We came up with the most fattening and delicious dessert we could think of."

In the week since The Bulge appeared on the menu (and has been ordered by more than 150 patrons, most of them women), Levy said he has been besieged by calls from foreign radio stations. "They all ask the same question: 'What are you crazy Americans doing now?' "

The lawyer being mocked by the fat banana is John F. Banzhaf III, a professor of public interest law at George Washington University Law School. He is a successful anti-tobacco litigator who recently turned his attention to America's obesity epidemic.
Too funny.

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Foreign Policy: Iranian Nuclear Program 

:: Posted by John Bragg at 2:08 PM

It's been a few days since our last call for a military strike on Iran's nuclear capabilities before Iran becomes the North Korea of the Middle East. NRO's Michael Ledeen argued last week that the Iranian people's time is up, and that it is time for US military action against the Teheran government.

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The Culture: They should have quit while they were ahead 

:: Posted by Nicholas Provenzo at 12:13 AM

Andrew Sullivan took a cheap swipe at Rhodes Scholars when discussing Wesley Clark at his blog yesterday:

To my mind, the most important thing about Clark is that he was a Rhodes Scholar. Almost to a man and woman, they are mega-losers, curriculum-vitae fetishists, with huge ambition and no concept of what to do with it.
That's the kind of worthless hyperbole that most people dismiss out of hand--unless of course you are a mega-loser Rhodes Scholar. At the Volokh Conspiracy, they have three of them guest bloging today. Two of them have seen fit to respond to Sullivan.

Mega-loser, er, Rhodes Scholar Josh Chafetz provides exhaustive linked analyses of every complementary thing Andrew Sullivan has said about his Rhodes Scholar peers, as well as a list of Rhodes Scholars and their stations in life, just to show how much "diversity" exists in Rhodes Scholar ranks. Mega-loser, er Rhodes Scholar II David Adesnik then writes for about 1,200 words on the "intense religiosity" (among other virtues) of his class of Rhodes Scholars. “While I have not had in-depth discussions with all of my fellow scholars, I sense that their awareness of a greater force above them places the significance of their resume in proper perspective.”

I suppose some may find it reassuring that Rhodes Scholars are “diverse” and some are humbled by constructs that no honest intellectual ought to believe in, but I do not. Yet as one in the ranks of today’s elected, Adesnik nevertheless struggles with it. Speaking of some conservatives' view that “equality is the hand-maiden of mediocrity,” Adesnik writes:

[W]hy (other than having such a large population) has the US been able to produce constantly such outstanding inviduals (sic) in all of these categories? Because the meritocratic order taps the vast potential inhrent (sic) in that great unwashed mass once consigned to irrelevance by the old aristocracies.
Not really. Perhaps freedom might have something to do with it. Freedom does not mean rule by those with merit. It means the rule of reason.

So as far as the Rhodes Scholars go, perhaps if William Jefferson Clinton, the scholars' most prominent member hadn’t attempted to overthrow the definition of a verb of being during a sexual harassment deposition, it would be easier to respect the intellectual integrity of the Rhodes Scholars. While the crimes of the one do not reflect on the many, the fact of the matter is Rhodes Scholars are allegedly the best products of today’s educational orthodoxy. In my field (political philosophy), the sooner that orthodoxy is overthrown and replaced, the better.

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:: Monday, September 22, 2003 ::

FTC News: Hurricane victims beware! 

:: Posted by Skip at 7:25 PM

You can't make this up:
The Federal Trade Commission has issued a Consumer Alert, “After a Disaster: Repairing Your Home,” that warns consumers of potential “home repair rip-off artists” who may overcharge, perform shoddy work, or skip town without finishing the job. After a natural disaster, the demand for qualified contractors usually exceeds the supply. Because many legitimate companies are booked for months, frustrated consumers may not take the necessary precautions when hiring contractors.
It's nice to see the FTC possesses a rudimentary understanding of supply-and-demand. Among the FTC's helpful tips to consumers: "Take your time before signing a contract. Get a written estimate that includes all oral promises made, but make sure to ask if there is a charge for an estimate. Do not automatically choose the lowest bidder. Obtain a copy of the final contract." Good advice. The FTC should follow it when they're prosecuting physicians and other businesses; the FTC gets very upset when producers refuse to offer the lowest price demanded by a consumer.

Beyond the superficial hypocrisy, however, the FTC's "consumer alert" is a fairly patronizing document that assumes consumers are blithering idiots who can't act in their own best interests without a government lawyer telling them what to look out for. Consider this gem: "Ask friends, family, or insurance agents for recommendations" of contractors. It's hard to imagine anyone who wouldn't think of this advice until going to the FTC's website and reading that.

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Antitrust News: What are the DOJ's priorities? 

:: Posted by Skip at 7:07 PM

The Wall Street Journal has been reporting that the Justice Department has more than 70 grand juries convened throughout the United States to investigate price fixing and other criminal antitrust violations. At a time when the nation is engaged in an ongoing war against terrorist organizations and the economy is recovering from a prolonged downturn, the Justice Department is running around looking to charge businessmen with criminal price fixing in industries such as glass and industrial chemicals. This is on top of the DOJ's massive civil antitrust enforcement regime that wins more than 90% of its cases by settlement.

Hewitt Pate, the Republican head of the DOJ's Antitrust Division, is steadfast in his belief that antitrust is the pillar of a successful market economy, despite all evidence to the contrary. Pate also is a leading advocate of expanding antitrust's international reach--he considers antitrust a leading "export" of American ideals. One wonders if Pate and company aren't prepared to introduce antitrust into Iraq. After all, if you accept Pate's philosophy, it's impossible to have a free market without antitrust.

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Rights and Reason: 'Why Anti-sweatshop Campaigners Should be Pro-logo' 

:: Posted by Nicholas Provenzo at 5:05 PM

Steve Hilton at brandchanel.com says branded merchandise will uplift the world. (Brandchannel.com is managed by Interbrand, one of the world's largest branding agencies).

If you are an intelligent, thoughtful person who cares about the developing world, there are two possible opinions for you to hold about brands and sweatshops.

The first was best articulated by the Harvard economist Jeffrey Sachs, well known in activist circles for his work with Bono on the Jubilee 2000 Drop the Debt campaign. In the New York Times in June 1997, Sachs wrote: “my concern is not that there are too many sweatshops but that there are too few…those are precisely the jobs that were the stepping stones for Singapore and Hong Kong, and those are the jobs that have to come to Africa to get them out of back-breaking rural poverty.” In other words, sweatshops and all they represent are a positive symbol of economic development, part of the reason that lives are getting better in those countries which have welcomed Nike, Reebok, adidas and all the other alleged globalization “exploiters.”

We may feel guilty about less well-paid people in factories on the other side of the globe producing consumer products on our behalf, but the truth is that working for a multinational corporation will almost certainly provide better pay and conditions than any other type of work that’s available. It’s frequently the only way that women can escape the second-class citizen status that is their lot in many traditional rural areas, and it creates not just jobs but a lasting legacy of new skills and technological expertise that is the foundation for future prosperity, leading to better educational provision, higher standards of public health and longer life expectancy.

If you take this robust view of the benefits of globalization, you will resist the simplistic bans, boycotts and bellyaching that so disfigures much discussion of this issue. You will resist them because you know that by trying to close down sweatshops and “eliminate” child labor (the vast majority of which occurs in the rural agricultural sector, incidentally), you will probably be throwing young women -- and yes, girls -- into poverty, oppression, the sex trade or all three. . .

But if this line of argument is too rich a sauce for your liberal sensibilities, try the second sensible opinion that you might hold about brands and sweatshops. The next time someone throws the Naomi Klein book at you, respond by saying: no logo, no knowledge of what’s going on in the developing world.” Global brands make the connection on a mass scale between consumer choices “here” and economic and social realities “there.” Brands are a battering ram for positive social change. In part, positive social change is a natural process that goes hand in hand with economic development, in the same way that social conditions in the rich West have improved since the Victorian era. But in the developing world today, it’s happening more quickly than it otherwise would specifically because of corporations’ need to protect brand value by meeting consumers’ expectations.

So whichever way you look at it, brands are not the enemy of those wanting to make world a better place, but their greatest ally.
Maybe the real problem is appealing to liberal sensibilities in the first place. The anti-globalization activists want workers to earn an income with no connection to the value that they actually produce. But just who then will produce the wealth that will go to the indigents of the world? What incentive will they have to produce this wealth? And by what right will this wealth be taken from its producers in the first place?

The anti-globalization activists say it is unfair that the third world does not enjoy the material benefits of the industrialized west. Yet they forget that these benefits were produced in the first place by businessmen and women who were left free to create the very markets that now supposedly exploit the third world. The anti-globalization activists are not just attacking corporations and brands--they are attacking capitalism and the capitalist principle that one has a right to only what he earns, or what is freely bestowed upon him by others.

Yet every social system that places the interests of others before the individual’s self-interest stagnates and suffers. Hilton overstates the impact of brands in lifting the poor from their poverty and misses the debate that really impacts the value of brands in the marketplace. Commercial brands are a product of freedom and economic success--they are not its cause. After all, collectivism went though great lengths to brand itself with posters, parades, and smooth-talking spokesmen, only to fail because of its moral bankruptcy. Commercial brands only have value because of the property they represent and the selfish interests that created them is protected. It is the fundamental protection of individual rights that most of the third world finds itself wanting--a condition the anti-capitalist activists seek to make worse.

Every third-world ‘sweatshop’ employee earns what he produces and for the first time in perhaps generations is in control of his economic destiny. Defend people’s freedom to pursue their rightful ambitions and they will--even the impoverished people of the third world.

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Rights and Reason: The Club for Neanderthals 

:: Posted by Nicholas Provenzo at 10:52 AM

Andrew Sullivan blogs on some alleged Republican bigotry:

The Club for Growth is a fiscally conservative organization with links to all sorts of Republicans. Its president, Stephen Moore, is not a homophobe, by all accounts. But like many tolerant conservatives, he has to work and cooperate with people who cannot abide homosexuals and will not tolerate them in any positions of authority. So he fires a gay man in charge of a state chapter, after complaints from "pro-family" (i.e. anti-gay) groups and leaders. This isn't a huge story in and of itself. But I think it does show how hard it is for any openly gay person to work or cooperate with much of the Republican apparatus. If you're closeted, you can rise to the very, very top. If you're honest and principled, you're finished. These people insist they're not prejudiced. They just support people who are.
If this story is true, it's a shame, but we shouldn't be surprised. The "fiscally conservative" movement has never been a sufficient alternative to the bible-beaters. One ought to say, as a first principle and as a means of identifying themselves, that they are for reason and individual rights. After all, the first question in forming a moral and just society is not how much money the government should spend.

I wonder when Andrew Sullivan is going to figure that one out.

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Rights and Reason: Sen. Clinton Bashes Bush Administration 

:: Posted by Nicholas Provenzo at 10:31 AM

This from the AP:

New York Sen. Hillary Clinton said the Bush administration is trying to impose a "radical right-wing agenda" on the United States and is attempting to dismantle social programs such as Medicare and Social Security.

Clinton made the comments at a fund-raiser for Providence Mayor David Cicilline.

Clinton targeted the president's handling of the economy, and said the Bush administration was out to extinguish the legacy of her husband, Bill Clinton, who was in the White House from 1993 to 2001, and other Democratic presidents.

"I've got to realize it's nothing personal," Clinton said. "They want to undo Johnson, Truman, Franklin Roosevelt. They want to undo the New Deal ... It boggles the mind."
Undo the New Deal and the Great Society? Heh. As a member of the radical right-wing, I can assure Sen. Clinton that President Bush is not doing much to impose my agenda.

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:: Friday, September 19, 2003 ::

Rights and Reason: Grasso Resigns 

:: Posted by Skip at 10:37 AM

National Review's Larry Kudlow analyzes the resignation of New York Stock Exchance CEO Dick Grasso with appropriate outrage:
kangaroo court of liberal-leaning journalists and Democratic state treasurers charged and convicted former New York Stock Exchange CEO Dick Grasso with an unpardonable sin — success.

This collection of class-envy warriors put such relentless pressure on the NYSE that Grasso was finally forced by his board to resign. Grasso, of course, was the man whose Herculean efforts were behind the reopening of the stock exchange only four business days after the terrorist bombing of downtown New York. But the so-called titans of finance who sit on the NYSE board were so mau-maued by the media and political onslaught that they actually sided against the man who inflicted the first major blow on Osama's terrorism.

There was no scandal here. Dick Grasso accepted a big pay package endorsed on two occasions by the NYSE board in return for 35 years of successful service. What is scandalous is that key Big Board officials — like Hank Paulson of Goldman Sachs, Philip Purcell of Morgan Stanley, and William Harrison of JP Morgan Chase — succumbed to the pressure of newspaper headlines and abandoned Grasso.

Not only did Grasso start America's economic recovery immediately after 9/11, he also saved the NYSE from a late-1990s assault by the Nasdaq. At the time, the technology stock market threatened to induce numerous Big Board companies to switch their listings, and at one point cautioned that it might even take over the NYSE. But it was the diminutive son of Italian immigrants who defended NYSE floor brokers and retail investors from a new era of impersonal electronic trading. Some thanks he got: Many of these same floor brokers helped push Grasso over the edge.

Let's be very clear about this: Grasso has done nothing wrong. Nothing, that is, except believe his own board when they offered him a large pay package for his long-term service.
The Grasso "scandal" has every appearance of hating the good for being good. Just like the federal indictment of Martha Stewart, the ouster of Grasso is not about corporate ethics or the rule of law, but about demonizing those who dare to earn and enjoy business success.

The most disturbing aspect of this story is the self-indulgent whining from numerous state treasurers--including California's--over Grasso's "unfair" pay package. You can argue the treasurers are a valid stakeholder, since state-administered pension funds are a major stock investor. That's true enough, but state treasurers are first and foremost politicians, not businessmen, so their criticism of Grasso is presumptively an act of political self-indulgence, not a rational criticism of NYSE's business practices. Especially coming from states, like California, that have financially mismanaged themselves into near-insolvency, the attack on Grasso's salary seems little more than an effort to deflect public attention from the genuine financial scandal of state budgets run amok.

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CAC News: Hurricane Update 

:: Posted by Nicholas Provenzo at 3:25 AM

From my perch looking north into metro Washington, power has just been restored in my immediate Alexandria neighborhood, while much of the surrounding area remains in darkness.

The dome of the Capitol remains illuminated. Our great institutions endure.

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:: Thursday, September 18, 2003 ::

CAC News: Hurricane Update 

:: Posted by Skip at 8:00 PM

CAC Chairman Nick Provenzo reports the power is out in his Alexandria, Virginia, neighborhood. The lights remain on from my Northwest Washington, DC, perch however.

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Foreign Policy: Saudis Think About the Bomb 

:: Posted by John Bragg at 7:34 PM

The Guardian says that Saudi Arabia is considering a nuclear strategy, either an alliance with a nuclear power, a plan to buy the bomb from Pakistan, or to somehow get Israel and Iran to give up their nuclear programs.

The Saudis provided a lot of money to Pakistan while Pakistan was developing their nuclear program. Saudi has also recently stationed F-15s in the northwest of the country, in striking range of Israel.

Selling a nuclear weapon for cash would also be very attractive for North Korea, in fact export is, in my opinion, the most likely reason that the North is developing nuclear weapons.

We must stop the proliferation of nuclear weapons to our enemies by any means necessary. We wasted a year dickering with diplomacy over Iraq that produced nothing. Time is not on our side.

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Celebrating Capitalism: Hurricane News 

:: Posted by John Bragg at 7:15 PM

According to phone reports, power is out in parts of Montgomery County, MD, (northwest of Washington) but Papa John's is delivering.

By the way, let's remember this storm next time someone starts prattling about the benefits of using public transportation and deriding our four-wheeled freedom machines.

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Foreign Policy: Crisis Micro-Management 

:: Posted by Nicholas Provenzo at 1:16 PM

Chess king Gary Kasparov has some sharp words on US foreign policy in a WSJ essay analyzing US relations with Russia:

Instead of offering us a new vision of global development, on the scale of Winston Churchill's historic 1946 "Iron Curtain" speech, the current administration has reduced its foreign policy to a vehicle of crisis micro-management.
Kasparov hit it right on the head. The US lacks a clear, coherent strategic vision, and the willingness to fight for that vision if necessary. Iran and North Korea are much greater threats to US security than Iraq, yet the administration seems unwilling to aggressively face down on either regime.

It dosen’t get better. Kasparov continues:

President Putin was quick to phone George W. Bush after the 9/11 attacks. But as the Bush administration built its case for war against Iraq, he preferred the company of Jacques Chirac and Gerhard Schroder, not to mention the business of Saddam Hussein. Meanwhile, Russia continues to supply Iran with nuclear technology and has done next to nothing to thwart the North Koreans' pursuit of Russian technology to advance their intercontinental-ballistic-missile program.

Indeed, President Putin has been playing a clever game of reaping benefits from both sides of every major international crisis. While the Russian Foreign Ministry kindly offers the U.S. its mediating services, Russia's military and security wings work behind the scenes to bolster rogue regimes, thus adding value to Mr. Putin's bargaining chips at the geopolitical table.
Helping our enemies ought to come with a price. It’s high time the Bush Administration find some courage--and a policy to match.

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Antitrust News: More Postal Comments 

:: Posted by Skip at 11:24 AM

Two more amicus briefs were filed this week in the Postal Service antitrust case before the Supreme Court. Both the Washington Legal Foundation and the American Trucking Associations filed in support of the respondent, Flamingo Industries. The ATA's membership includes Postal Service competitors United Parcel Service and Federal Express.

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Antitrust News: Antitrust Ruling Upheld Against Visa, MC 

:: Posted by Nicholas Provenzo at 10:22 AM

Reuters reports Visa and MasterCard lost in court yesterday.

A federal appeals court on Wednesday upheld a lower court's antitrust ruling against Visa and MasterCard, dealing a blow to the credit card associations' efforts to prevent member banks from issuing cards from rivals American Express Co. and Discover.

Visa and MasterCard both said they would likely appeal the decision.

The decision was made by the United States Court of Appeals for the Second Circuit. The suit, which argued that a rule by Visa and MasterCard preventing banks from issuing credit cards from their rivals hurts competition and stifles innovation, had been brought by the U.S Department of Justice.

If ultimately upheld, the decision would be a major boost to American Express and Morgan Stanley's Discover, allowing them to put their cards in the hands of more consumers by striking deals with the tens of thousands of banks that Visa and MasterCard have as members.

"The defendants have failed to show that the anti-competitive effects of their exclusionary rules are outweighed by pro-competitive benefits," Judge Pierre Leval wrote in the 23-page decision by a three-judge panel.

"Today's decision means that consumers can enjoy the benefits of competition by having more choices for their credit needs," said Hewitt Pate, head of the Justice Department's antitrust division.

Visa and MasterCard have argued that even though banks do not issue the cards of American Express and Discover, those companies are not prevented from reaching consumers through their own marketing.
Visa and MasterCard's argument is true, but not primary. Why don't Visa and MasterCard enjoy a fundamental right to set terms for the use of thier products? That's the billion dollar question behind antitrust that Visa and MasterCard have yet to ask.



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Rights and Reason: Hurricane Isabel  

:: Posted by Nicholas Provenzo at 9:53 AM

This just in: The Citizens for Voluntary Trade filed emergency comments with the National Oceanic and Atmospheric Administration opposing the planned landfall of Hurricane Isabel, citing that the strong winds and rainfall was "not in the public interest". In anticipation of the storm CVT ordered a halt to non-essential voluntary trade on Thursday and the Voluntary Trade Alert System raised the national threat condition to Code Purple.

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:: Wednesday, September 17, 2003 ::

Rights and Reason: Where Cosmetology and Real Estate Converge 

:: Posted by Skip at 3:38 PM

Virginia Postrel blogs the story of a self-employed Texas beautician who, despite having the required state cosmetology license, is facing the government’s wrath over a supplemental licensing requirement:
Little did she know that the state requires an "independent contractor's license," which entails no additional qualifications, merely a $65 fee. This license is, as far as I can tell, purely a shakedown. You pay your money and give them your address. The license has nothing to do with either professional qualifications (that's the cosmetology license) or tax payments (that's another state department). But those $65 fees add up. And if you don't have the independent contractor's license, you get socked with a $500 fine--precious working capital Denise had planned to use for supplies. (Her landlord got hit with a $1,000 fine for each contractor who lacked the required license.) She is not a happy entrepreneur.

After a bit of rooting around, I managed to find some some mention of the independent contractor's license on the state cosmetology commission's website. But it would be very easy to overlook that information, which isn't featured on the home page. From a first glance, you'd think the commission was concerned with professional qualifications and protecting the public from bad perms and mangled manicures. But you'd be wrong.

This harassment is happening in business-loving, entrepreneur-celebrating Texas. It persists because this sort of petty bureaucratic hassle--and the associated hidden taxes--is so routine that it doesn't constitute "news" and hence never becomes a political cause. But it's stifling business expansion just when the economy most needs it, and it's punishing bold, productive people.
Licensing regulations exist under the state’s general “police” powers to protect the public’s health and safety. State legislatures, however, see few practical limits to police power, and state courts are reluctant to get in the way even when a requirement is clearly unconstitutional or unlinked to any rational health and safety justification.

A case I’m working on right now raises issues similar to the example cited by Postrel. In New York State, it is against the law for individuals to sell apartment rental listings without a special “apartment information vendor” (AIV) license, which is separate from a general real estate broker’s license. The AIV law was passed in the late 1970s to combat potential fraud in the rental market; for example, individuals might sell repackaged newspaper rental listings as original compilations. The AIV law places substantial burdens on legitimate businesses, however, such as mandatory refunds on request and a ban on advertising specific properties.

In 1992, LaLa Wang started MLX.com, an online multiple listing service (or MLS) for customers looking to rent apartments. In most markets, real estate brokers form an MLS to combine their individual listings into a single, shared database. The traditional MLS concentrates resources in the hands of the brokers. New York City, however, is one of the few major markets to lack an MLS (in part because New York’s notorious rent control laws create an artificial supply shortage that make high-commission rentals too valuable a commodity for brokers to share with one another). Wang’s service changed all that. Not only did MLX create a de facto MLS, it did so in a more open platform than a traditional service: Customers could directly access the MLX database via a password protected account.

New York officials, and their political allies in the traditional real estate industry, used the AIV law to try and shut Wang down. They claimed that Wang needs an AIV to operate her service. But the Internet-based MLX service is merely a forum to exchange rental listings, not the type of self-contained lists that were the intended target of the AIV law. Wang’s service is no different than a newspaper that runs apartment listings, yet New York officials acknowledge newspapers do not need an AIV license to operate.

Furthermore, the AIV law’s requirements make it nearly impossible for an Internet-based listing service to succeed. For example, the law requires brokers to refund all but $15 to a customer on demand, with or without reason. MLX charges about $249 for access to its database, meaning all but $15 would have to be refunded to a customer who searched the listings and didn’t find what they were looking for. Few businesses have a legal obligation to refund a fee after the service was used in full.

Far from protecting consumers, the AIV law serves as a practical barrier to entry, especially for newer technology-based services that look to compete with established real estate brokers, or even protected forums like newspapers.

When Wang refused to get an AIV on grounds that it would either make MLX’s business illegal or unprofitable, the New York secretary of state revoked her regular real estate broker’s license. It did so on the sole ground that she was “untrustworthy” to hold a broker’s license--the refusal to obtain an AIV license itself being “untrustworthy” behavior. Wang appealed the secretary’s decision to the New York courts, which turned a blind eye to her challenge. Wang is now considering a final appeal to the United States Supreme Court on federal constitutional grounds.

The most obvious constitutional defect with New York’s regime is the trampling of free speech rights. If Wang wants to offer a forum to exchange information, the state has no right to restrict or restrain such efforts under the First Amendment. There is no allegation of fraud or misrepresentation against Wang--only her failure to comply with an irrational licensing regime that arguably doesn’t apply to her business model in the first place. The state affords Wang a lesser degree of First Amendment protection based on the forum she chooses to operate; remember, if Wang started publishing a newspaper that contained the same type of listings she provides now, the state would not require the AIV license.

Like the recently settled Nike case, Wang’s battle with New York is a question of so-called “commercial speech” rights. The state is regulating speech based on economic motive. The First Amendment does not permit this, but most courts simply look the other way. The Supreme Court itself articulated a needlessly complex “commercial speech doctrine” to review regulations like New York’s, and even under that test, the AIV law has unjustly restricted Wang’s rights, not to mention her economic livelihood.

As Virginia Postrel notes, state regulatory abuse is so routine now that it doesn’t rise to the level of a political cause. But folks like Wang, who are battling the system despite the odds, show us that there may yet be a crusade to be waged (and won) against the ever-expanding abuse of “police” powers over the economic rights of Americans.

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History: Vote for your favorite Document 

:: Posted by Nicholas Provenzo at 3:31 PM

US News and Word Report is offering a poll for readers on which documents do they think were the most influential in American history.

Our vote: Needless to say, not the Sherman Antitrust Act.

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Rights and Reason: Masters of the blatantly obvious 

:: Posted by Nicholas Provenzo at 10:01 AM

In an unsigned op-ed that says that even if Yasser Arafat lives, the “idea of him” must die, the Wall Street Journal observed that even the Nobel Foundation website (Arafat was awarded the Nobel peace prize in 1994) says that Arafat is a dictator.

This agreement included provision for the Palestinian elections which took place in early 1996, and Arafat was elected President of the Palestine Authority. Like other Arab regimes in the area, however, Arafat's governing style tended to be more dictatorial than democratic. When the right-wing government of Benjamin Netanyahu came to power in Israel in 1996, the peace process slowed down considerably. Much depends upon the nature of the new Israeli government, which will result from the elections to be held in 1999.
So according to even the Nobel Foundation, Arafat is more dictator than democrat, but it was right-winger Benjamin Netanyahu that slowed down the peace process. No mention of Arafat’s broken promises and connection to terrorism prompting Israel’s right-wing reaction.

I agree with the WSJ. The idea of Yasser Arafat must die.

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Rights and Reason: Seattle Voters Nix 10-Cent Espresso Tax  

:: Posted by Nicholas Provenzo at 9:32 AM

Rebecca Cook of the AP reports Seattle's proposed excise tax on espresso fell flat in the voting booth yesterday:

After voters in this caffeine capital rejected a proposed 10-cent tax on espresso drinks, cafe owners celebrated with beer, wine and — what else? — lattes.

With 97 percent of precincts reporting early Wednesday, 69 percent of voters opposed the tax. The initiative served a jolt of controversy to an otherwise sleepy off-year primary election.

"You can't tax coffee. It just doesn't work," said coffee shop owner Jeff Babcock, celebrating the victory at a downtown espresso store.

The measure would have taxed espresso drinks a dime per cup, with the revenue going to fund preschool and day-care programs. The tax would have been levied on any drink with half an ounce or more of espresso.

Initiative sponsor John Burbank said people who spend $3 to $5 on coconut mochas or iced vanilla lattes could afford an extra dime for kids. "It's a disappointing vote," he said.
No it's not. Excise taxes are one of the most vicious taxes levied--they are a tax that target users of a specific item, rather then a broadly based tax on all consumption. Burbank's egalitarian premise was plain--people who have money for luxury items should be made to pay for "the kids." It's refreshing that even in Seattle, hardly a bastion of capitalist thought, capitalism won out the day. Bravo!

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:: Tuesday, September 16, 2003 ::

Antitrust News: Briefs Filed in Postal Service Case 

:: Posted by Skip at 2:31 PM

Yesterday Flamingo Industries, which sued the U.S. Postal Service for antitrust violations, filed a brief in support of its right to bring its case with the U.S. Supreme Court. The U.S. Court of Appeals for the Ninth Circuit previously held the Postal Service is a "person" that can be sued under the Sherman Act. Solicitor General Ted Olson, representing the Postal Service, appealed that ruling to the Supreme Court. Oral arguments will be held later this year.

CAC previously filed an amicus brief in support of neither party but endorsing the Ninth Circuit's judgment. In our view, while nobody should be subject to the antitrust laws, to exempt a government-sposnored monopoly from antitrust's reach is unreasonable. Private businesses are already at a legally mandated disadvantage when competing with the Postal Service, and the agency does not deserve, as a matter of law, a special antitrust exemption. At the same time, CAC takes no position on the underlying merits of Flamingo's case, which involves a dispute over the Postal Service's contract with the firm to provide mail sacks.

Joining CAC as an amicus in this case is PostalWatch, a nonprofit group that monitors and criticizes Postal Service activities. PostalWatch filed in support of Flamingo. You can access PostalWatch's brief here.

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Capitalism and the Law: Hypocrisy Watch 

:: Posted by Nicholas Provenzo at 12:00 PM

Neil Strauss and Bernard Chang of the New York Times don't like the RIAA's enforcement of its IP rights. Yet oddly enough, the New York Times copyrights their work (see the lower right below their cartoon).

Savor the irony.

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Antitrust News: Microsoft puts antitrust behind it 

:: Posted by Nicholas Provenzo at 11:16 AM

Townsend and Townsend and Crew LLP issued the following press release:

--Tomorrow millions of California consumers and businesses will begin receiving forms allowing them to claim up to $1.1 billion in benefits from the settlement of an antitrust class action lawsuit against Microsoft Corporation. Over 10 million forms will be mailed during the next 60 days. Claim forms may also be obtained immediately online at www.microsoftcalsettlement.com or by calling 1-800-203-9995.

California consumers and businesses will now have an opportunity to recover a substantial portion of the prices they paid for all of their Microsoft operating system, spreadsheet and word processing software purchased during a seven year period ending in December 2001. Consumers can recover the first $100 of their benefits just by listing their eligible Microsoft product purchases on a claim form and signing their names. Even larger recoveries will be obtained by those who provide documentation of more than five purchases of eligible Microsoft products.

The settlement is expected to provide substantial relief to the thousands of California businesses whose technology budgets have been cut drastically in recent years, according to Eugene Crew and Richard Grossman, co-lead attorneys for the consumer class. Grossman observed, "Medium and large businesses will recover tens or even hundreds of thousands of dollars in benefits. Even the smallest businesses are likely to recover thousands of dollars." He added, "A computer systems manager would be derelict in his duties if he passed up this opportunity to beef up his technology budget. The claims process is pretty simple so we expect business owners and executives to quickly file their claims and pass along the news of this fabulous opportunity to their colleagues."

After years of antitrust litigation directed at Microsoft, this is the first time that Californians will be able to recover the overcharges that Microsoft allegedly imposed upon its customers as a result of its monopoly in key software markets. While prior antitrust claims against Microsoft focused only upon its monopoly in desktop operating system software, the California class action settlement also covers alleged overcharges in word processing, spreadsheet and office productivity suite software.
It would be interesting to know what the total cost of Microsoft's decision not to publicly target the antitrust laws themselves as unfair and unjust when it first found itself under antitrust attack. Microsoft created and owns its "word processing, spreadsheet and office productivity suite software." It can charge any price its wants to consumers, or choose not to sell at all. Yet not once did Microsoft make this key point to the public. Not once did Microsoft itself challenge the premise of antitrust.

I encourage our California supporters to get their forms and get thier money from Microsoft. Why shouldn't they? Microsoft itself has sanctioned this $1.1 billion payout.

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The War: Iraq Police Chief Dies in Roadside Ambush  

:: Posted by Nicholas Provenzo at 10:59 AM

The AP reports on another attack against Iraqi law & order:

The police chief in the dangerous "Sunni Triangle" town of Khaldiya was killed in a roadside ambush as he was returning to his home in Fallujah, scene of rising criminal violence and guerrilla resistance to the American occupation of Iraq. . .

Policemen from Khaldiya said they have frequently come under attack because of their perceived association with the American occupation force, despite the American withdrawal from inside the cities in July. Many in the town, they said, shunned policemen.

Monday's killing of Ali underlines the risks facing Iraqis in the area, and to a lesser extent elsewhere in Iraq, when they join U.S.-backed security forces that the Americans have set up with the aim of allowing them to gradually take over security.

In many cases, they are seen as collaborators who sold out in exchange for an income at a time when unemployment in Iraq is as high as 60 percent.

"We are not in the police to serve the Americans, but to protect our community," said Abdel-Salam Elaiwah, a policeman from Khaldiya. "Those who attack us are just thieves."
The right answer would have been to say that proper policing of the community serves everyone. But why are thieves getting more sympathy in Iraq then US supported policemen?

The primary US focus in Iraq must be on creating institutions able to restore law and order, yet I hear a lot more about Iraqi rebuilding infrastructure then I do about rebuilding law and order.

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Capitalism and the Law: Insurers Sue Over 9/11 Attacks 

:: Posted by Nicholas Provenzo at 1:08 AM

Law.com reports on a recent suit brought by five major insurance companies who have sued Osama bin Laden, al-Qaida, dozens of other terrorist organizations and five Middle Eastern countries, seeking $300 billion in connection with claims paid out to victims of the 9/11 attacks.

Lawyers from Cozen O'Connor filed the suit on Wednesday in the U.S. District Court for the Southern District of New York but eventually hope to consolidate it with separate suits filed in New York and Washington directly by the families of 9/11 victims, Cozen partner Elliott Feldman said. . .

Feldman said his clients have paid $4 billion in reserve claims and there are more than 300 wrongful-death claims and more than 100 personal injury claims. He said the potential damages from those claims are "dozens of billions" of dollars. That number is tripled because the money sought in the lawsuit can be trebled under RICO and antitrust legislation. And then Feldman said there is another increase when factoring in punitive damages, leading to the $300 billion figure mentioned in the complaint.
Antitrust? You have got to be kidding me.

Then again, one wonders what the world would look like if the DOJ went after al-Qaida as hard as it went after Microsoft.

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:: Monday, September 15, 2003 ::

Rights and Reason: A terrorist's nine lives 

:: Posted by Nicholas Provenzo at 3:32 PM

Reuters reports on the half-hearted war against terrorism, reporting that Israel has backed down to a threat to kill Yasser Arafat:

Foreign Minister Silvan Shalom Monday dismissed comments by a cabinet minister that Israel could kill Palestinian President Yasser Arafat, but the remarks served to increase international pressure for caution.

[* * *]

Israeli Foreign Minister Shalom, responding to Olmert's comments, told foreign journalists at a briefing:

"There will be no immediate action. It's not official policy of the Israeli government...We don't speak about killing (him). We didn't speak about it before, and we don't speak about it today."

RAGE THOUGH THE ARAB WORLD?

The United States has voiced opposition to any attempt to kill or expel Arafat, moves that Secretary of State Colin Powell said would spread "rage throughout the Arab world."
I'll repeat John Bragg's question from yesterday: Why is Arafat still alive? Would the Colin Powell accept as legitimate concerns that the death of Osama bin Laden at US hands would spread "rage throughout the Arab world"?

And rather worry about Arab rage, why doesn’t Powell worry about increased Arab intransigence that comes from knowing that the US does not have the stomach to let Israel fight its war against terror?

UPDATE: Colin Powell is not the only American voice condemning Israel for its assassination talk.

Former President [Jimmy] Carter on Monday criticized Israeli threats to kill Yasser Arafat saying they send "a wave of increasing animosity not only through the Palestinians but the entire world."

Carter told The Associated Press that statements by Deputy Prime Minister Ehud Olmert and other Israeli officials are "totally contrary to the position of the U.S. government" and U.S.-backed road map for peace in the Middle East even rules out a threat to exile the Palestinian leader.

Speaking by phone from his home in Plains, Ga., the former president said Arafat could be more forceful in condemning violence, but can't control Hamas, which is responsible for scores of suicide bombings in Israel. The State Department calls Hamas a terrorist organization.

"I don't think he is in charge of everything, but I know he can be a stronger leader," Carter said, however.
If Arafat can not control Hamas, what is he worth? What is the value of a leader who can not control huge terror cells within his own borders?

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Capitalism and the Law: Businessman Pits Principle Against Politics 

:: Posted by Nicholas Provenzo at 10:22 AM

Today at Initium Skip Oliva tells the story of Moshe Tal, a businessman who is taking on Oklahoma City's "economic development" scheme--a scheme that confiscates private wealth through taxation, then redistributes that wealth to businesses favored by local politicians.

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:: Sunday, September 14, 2003 ::

Foreign Policy: WTO Talks Fail 

:: Posted by John Bragg at 11:02 PM

Poor countries walked out of the Cancun trade talks demanding that America and Europe open their agriculture markets and reduce subsidies.

I'm not a WTO expert. I don't know if the countries who pulled out were honest about their reasons, or if this was an excuse to protect their protectionism. But it's a sad day.

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Foreign Policy: Why is Arafat still alive? 

:: Posted by John Bragg at 8:01 AM

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Foreign Policy: Iran  

:: Posted by John Bragg at 7:58 AM

Reuters reports that Iran is threatening to withdraw from the Nuclear Nonproliferation Treaty.

The most interesting part to me was this piece of analysis:

But Anoush Ehtesami, professor of international relations at Britain's University of Durham, said some in Iran's military wanted to quit the NPT and follow Pakistan and India's example.

"The lesson Iran has learned...is that you can have a clandestine program, and when you complete it you declare your nuclear status and after a little period of economic sanctions the world moves on," he told the BBC.


Which is why we need to preempt and blow up Iran's nuclear facilities. We must do whatever is necessary to prevent nuclear weapons from being in the hands of Islamist fanatics.

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:: Saturday, September 13, 2003 ::

Rights and Reason: UAW Demands Irrationality 

:: Posted by Skip at 3:25 PM

The United Auto Workers is currently negotiating with each of the Big Three U.S. automakers--an unusual arrangement, given that the union typically negotiates with one automaker first, than uses that contract as a model for the other two. The biggest issue facing the automakers is the rising cost of providing healthcare for UAW workers. The union is opposed to any proposal that would require its members to pay any additional share of health costs. This puts an enormous financial strain on the automakers and will likely result in some job cuts.

The UAW makes no apologies for its position. In fact the UAW's leadership supports abolishing the free market in healthcare altogether and adopting socialized medicine. It's an interesting position for a union to take: force healthcare providers to work for the government. No doubt if that were to happen, the UAW and its allies at the AFL-CIO would seek to unionize the physicians and further raise the cost of healthcare by holding the government hostage. As things stand now, neither the UAW nor the AFL-CIO have said anything in support of protecting physician rights under the present managed-care system.

The principal effect of today's government-sponsored managed care system is the widespread entitlement mentality seen by groups like the UAW. They feel they have a right to health care without having to actually pay for it directly. First they shift the cost to their employer. When that doesn't completely work, the costs are shifted onto the physicians through schemes such as the FTC's bogus "antitrust enforcement" policy that forces doctors to surrender their right to negotiate with HMOs. Ultimately, the costs get shifted to the taxpayers at-large, who are forced to subsidize the inefficiencies and losses of the managed care system.

The UAW, of course, feels no obligation to act rationally or responsibly. They have no need to. Unlike physicians, auto workers are represented by a union with monopoly bargaining power, entitling them to exercise political power over their employers. Where one can use force to obtain one's objectives, the need for rational action becomes moot. But that does not change the fundamental instability of the system. The sooner the UAW realizes its demands will only lead to economic collapse, the sooner they will act rationally.

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Crime and Punishment: Calif. Man Nabbed in SUV Dealership Fires  

:: Posted by Nicholas Provenzo at 10:45 AM

The AP reports fed's nabbed an alleged environmental terrorist:

Federal agents arrested a 25-year-old member of a co-op dedicated to peace and environmentalism in connection with arson fires and vandalism that did $1 million in damage to a Hummer dealership.

Joshua Thomas Connole, of Pomona, was arrested at home Friday, said Cpl. Rudy Lopez, a West Covina police spokesman. He was booked for investigation of felony arson and vandalism and jailed $825,000 bail.

The fires Aug. 22 gutted a parts warehouse and destroyed 20 Hummer H2 sport utility vehicles at a West Covina dealership. Another 20 Hummers and several Chevrolet Tahoe SUVs were badly damaged by fire and spray paint.

Three other dealerships and at least four privately owned vehicles in the area also were damaged during the vandalism spree.

Words such as "ELF," "Fat, Lazy Americans" and "I (heart) pollution" were painted on the SUVs.

"ELF" stands for Earth Liberation Front, a loose association of militant environmentalists. The group, which has taken responsibility for other acts of arson and vandalism, claimed in an unsigned e-mail that the SUV fires were "ELF actions."
If proven guilty in a court of law, I hope Connole gets the max. He will have deserved it.

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:: Friday, September 12, 2003 ::

Random Knowledge: Winning the Pulitzer 

:: Posted by Skip at 8:24 PM

Below Nick asks how one nominates someone for a Pulitzer Prize. Actually, all you have to do is submit a nomination form to the Pulitzer Prize Board. Anyone can submit a nomination, but the nominee's work must appear in a daily, Sunday, or weekly newspaper published in the United States. Pulitzer finalists and winners are determined by Columbia University on the advice of the Pulitzer Board.

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Rights and Reason: Two Years and Many Lawsuits to Go 

:: Posted by Skip at 6:51 PM

I'm not a fan of Gregg Easterbrook, who writes for The New Republic and ESPN.com. Easterbrook has a notorious anti-property rights streak that applies to any business that personally offends him (notably SUV makers and the NFL). Nevertheless, he makes an excellent argument about the latest round of litigation by survivors and families of New York's 9/11 victims:
Families who have taken the federal compensation have, so far, received average awards of $1.6 million, tax-free. Families of the United States personnel murdered by Al Qaeda in the Kenya and Tanzania terror attacks of 1998 received, on average, nothing. Families of the several hundred United States military personnel killed in Afghanistan fighting to destroy al Qaeda, and killed in Iraq fighting at least in part against terrorism, received, on average, $9,000, taxable.

Now some 9/11 families are saying $1.6 million isn't enough. Set aside whether they should be receiving anything from taxpayers, given the myriad other circumstances in which Americans die in various horrible events every bit as traumatic and devastating to their families, who receive nothing at all. Assume for the sake of argument that something about 9/11 justifies offering victims' estates a very large special payment. Yet some 9/11 families are saying very large is not large enough. This is greed; it is employing the memory of lost loved ones for gold-digging.

But we need a lawsuit to find out the truth, some families say. Every single person in the world already knows the central truth of 9/11, that United States airport and airplane security was poor. There isn't any hidden secret about how knives got through shoddy security checks, or flimsy cockpit doors were kicked in. We were all going through those checkpoints and riding on those planes, all as a society sharing the risk--including the federal judge who himself was getting on those planes though he now says it could have reasonably been foreseen they would be crashed into buildings. How odd he himself didn't foresee it.
And if Easterbrook hasn't offended you yet, just look at his conclusion:
If the families for whom $6.1 million is not enough persist in their avaricious desire to sue--and if the lawyers who would get shares of court awards, but get no shares of federal fund awards, persist in their ghoulish desire to encourage such suits--the country's two largest airlines, and largest aircraft manufacturer, may fail. This will cause significant harm the United States. And it seems unlikely that the dying thoughts of the noble victims of 9/11 were, "I hope my survivors really screw the United States for money."
A related issue is the question of whether any new structures may be built on the "footprints" of the two World Trade Center towers. The most vocal group of survivors and families want an absolute prohibition--including utility and support structures--on all development to preserve what they call the "sacred" character of the space. My position on this is that if these folks want to buy the land, buyout WTC leaseholder Larry Silverstein, and preserve the footprints as an eternal monument to death, then let them. But the government should not be using its power to force that outcome, as is happening now under the leadership of New York Gov. George Pataki and former city mayor Rudolph Giuliani.

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Antitrust News: Breaking the Glass Monopoly 

:: Posted by Skip at 6:29 PM

The Justice Department's Antitrust Division is cracking down on price-fixing in the glass market. Well, part of the glass market anyway:
Three Fort Worth companies, who own and operate retail automotive replacement glass stores, today were charged with participating in conspiracies to raise and maintain the prices of automotive replacement glass in the central North Texas and Lubbock areas of Texas, the Department of Justice announced.

Windshield Sales and Service Inc., Windshield Sales & Service of Dallas Inc., and Mesquite Auto Glass Inc. were charged in U.S. District Court in Lubbock, with conspiring with others in central North Texas from February 1998 until May 1998 to raise and maintain prices for the purchase of automotive replacement glass. Additionally, Windshield Sales & Service Inc. was charged with conspiring with competitors to raise and maintain the prices of automotive replacement glass in the Lubbock area from March 1998 until May 1998.

Automotive replacement glass is sold to retail customers for the replacement of windshields, side glass, back glass, and other types of automotive glass in pick-up trucks, passenger vehicles, and other vehicles.

"Today's charges reflect the Division's commitment to prosecute those who seek to deny the benefit of competition to American consumers," said James M. Griffin, Deputy Assistant Attorney General in charge of the Antitrust Division's Criminal Enforcement Program.
Griffin's statement needs emphasis. The Government has brought criminal charges against these companies on the grounds that they "deny the benefit of competition to American consumers." There is no law mandating corporations provide this benefit. The Sherman Act only prohibits restraints of trade, and by any objective standard, a restraint requires an act of force; here the only allegation is that the defendants voluntarily agreed to charge the same prices. Aside from the obligations of contract, no competitor could force another to take any action against their economic self-interest.

But even if you believe price-fixing is wrong or unethical, ask yourself whether it should be a criminal action. In this case, only corporations stand to be convicted, incurring a maximum fine of $10 million. But individuals have been convicted of criminal price-fixing in this market, and they received jail time. Can we really justify denying a man his freedom over how he chooses to price his own products for sale to consumers? Should the government invoke criminal law simply because it disagrees with the prices in a particular market?

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Communication Arts: Cox and Forkum 

:: Posted by Nicholas Provenzo at 4:45 PM

I grew up reading editorial cartoons. As a paperboy delivering the Buffalo News, first thing I did when I got a my load of papers was look to see Tom Toles' take on the world. Yet as an adult, it's been a long time since I found something Toles produced that I respected, and more often then not I find the medium to be little more then a vehicle to transmit a screed. That is, until Cox and Forkum.

Their latest is utterly brilliant in thought, form, and execution. I'll just leave it at this--it's more than a cartoon--it's an experience. You will be moved.

How does one nominate someone for the Pulitzer prize? I really want to know. And why aren't these guys in every major paper in America?

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Capitalism and the Law: 'Nike' means ‘victory’ no more  

:: Posted by Nicholas Provenzo at 2:07 PM

Skip Oliva examines the Nike free speech case settlement at Initium.

In settling with Kasky, Nike has ratified the constitutional segregation of commercial speech, even if the settlement technically admits no legal fault and establishes no formal legal precedent. We have seen time and again how a single settlement empowers the parasites of the American trial bar to file greater and bolder complaints. It is only a matter of time, perhaps just days or weeks, before other major companies (including those that filed briefs in support of Nike) find themselves at the mercy of California’s citizens, each of whom possess the power under state law to sue any company they dislike for whatever reason.

Defenders of Nike’s decision will offer pragmatic arguments. They’ll claim the cost of refuting Kasky’s claim through discovery, trial, and another round of appeals is too much for Nike to bear, and that it’s in the best interest of Nike and its shareholders to pay Kasky off now and live to fight another day. This form of pragmatism is known as appeasement: If we give our enemy what he wants now, maybe he’ll leave us alone.

Yet reason dictates that appeasement almost always leads to more appeasement, and ultimately to wholesale capitulation. Whatever short-term benefit Nike gained from this settlement will be lost under the weight of the numerous lawsuits that are sure to come from other opponents of the company. Nike’s own press release justifying its settlement with Kasky underscores this point: Nike says that due to the difficulties posed by the California law, it has decided not to issue its corporate responsibility report externally for 2002 and will continue to limit its participation in public events and media engagement in California. What could possibly be more important to Nike than its freedom to participate in public events and media engagement in California, or any other state in the union?
If I owned Nike stock, I'd sell it, on the grounds that a company of Nike's resources that does not defend its right to communicate in a free nation does not take itself or its responsibility to its shareholders seriously. Nike's freedom ought to be a paramount concern. Nike's failure to see the case brought against it to its proper end is a serious moral breach that will wreak economic havoc against both it and anyone else who speaks from an economic motive.

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Rights and Reason: Essential Stern 

:: Posted by Skip at 1:53 PM

For once, Howard Stern won one before the Federal Communications Commission. The issue wasn't whether Stern's morning radio program contained obscenity, but whether Stern could interview Arnold Schwarzenegger without violating the "equal time" rule. Under longstanding policy, if a broadcast television or radio outlet interviews one candidate in a political race, it must offer equal time to all opposing candidates. This is allegedly done to protect the "public interest" in balancing political views.

The equal time rule does not apply to "news interview" programs, such as Meet the Press or the NBC Nightly News. Thus, Stern applied for classification as a "news interview" program to free him from the equal time rule. The FCC granted this request, incurring the wrath of self-proclaimed media watchdogs, such as the Media Access Project's Andrew Schwartzman, who told the Washington Post, "[The FCC has] removed the notion that a bona fide news interview show is supposed to apply to journalists. If Howard Stern is a real journalist, real journalists should be upset."

Schwartzman's argument is deftly handled by former Reason editor Virginia Postrel:
God forbid that people get their "news and information" (as the local news shows put it) from sources other than government-certified journalists. This contempt for unorthodox sources is particularly disingenuous coming from [Schwartzman] whose organization supposedly "promotes the public's First Amendment right to hear and be heard on the electronic media of today and tomorrow."

The very silliness of having to declare Howard Stern a journalist reveals how ridiculous and antithetical to the free flow of ideas our broadcast regulation is. As [CBS late night host Craig] Kilbourn points out in his [New York] Times op-ed, cable shows don't suffer from the same constraints. Like print, they're free to provide whatever interviews, information, and entertainment, they think will serve their audience, without government editors telling them what to include or omit. That's called freedom of speech and the press. It ought to apply to radio and over-the-air TV as well--with no Stern exceptions needed.
Because airwaves are still considered "public" property, rules like the equal time policy continue to exist. But that doesn't mean all non-broadcast media are immune from regulatory censorship. As I've discussed for months, the Justice Department's antitrust prosecution of Village Voice Media and NT Media was designed specifically to expand regulatory control over so-called "alternative" publications. In that case, the DOJ defined alternative media as akin to an "essential facility," which under antitrust doctrine means the Government can arbitrarily deny First Amendment protections to the acts of alternative newspaper publishers.

The theory is simple: Once a media form becomes profitable and widely-used, the Government seeks to regulate it as "essential" to the public interest. In other words, property rights exist until enough consumers demand access, then the "public interest" supersedes any private property right. And of course, the public interest can only be determined by government regulators, preferably lawyers, and not the public itself through the free market.

And as Postrel notes, the established media market often has an interest in supporting regulators. Holding certain programs to the equal time rule creates an effective barrier to entry for those who would compete with established media. If Arnold Schwarzenegger, for example, can't go on Craig Kilbourn's show to promote his candidacy, he's forced to use conventional media outlets that may not get his message across as effectively.

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Rights and Reason: Kennedy: I'll Defeat School Voucher Bill  

:: Posted by Nicholas Provenzo at 11:44 AM

Consider this lead from the AP:

Sen. Edward Kennedy plans to do everything he can to defeat the proposed use of school vouchers in the nation's capital, his spokesman said Thursday.
Leave aside whether or not you think vouchers are a good way to challenge the public school monopoly. Why is it you never read about a senator who "plans to do everything he can" to abolish the Department of Education or bring the free market to education? And why did the AP lead its story with Kennedy? Isn't the real prime mover of this story those who are pushing the school vouchers in Congress. Why, as a barrier to vouchers, does Kennedy lead, and not voucher proponents?

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Rights and Reason: Nike Settles Free-Speech Case 

:: Posted by Nicholas Provenzo at 10:06 AM

This has to be one of the most appalling, disgusting compromises I have ever seen:

(Reuters) - Nike Inc. said on Friday it will settle a lawsuit that had become a constitutional battle over whether free-speech rights protected a publicity campaign by the company to counter accusations that Asian sweatshops made its footwear.

Beaverton, Oregon-based Nike, the world's largest maker of athletic shoes, said it will pay an additional $1.5 million on workplace-related programs over the next three years. The sum will be paid to Fair Labor Association, a Washington D.C.-based group that promotes workers' education and economic welfare.

The lawsuit was filed in 1998 by Marc Kasky, a San Francisco consumer activist, under a California consumer protection law aimed at eliminating unfair competition and false advertising.

The lawsuit claimed Nike misled the public about working conditions for its Vietnamese, Chinese and Indonesian laborers, and that its statements amounted to false advertising.

The U.S. Supreme Court in June cleared the way for the suit to proceed by refusing to decide whether the U.S. Constitution's free-speech rights protected Nike's publicity campaign.
Nike was 100% in the right. There was no reason for it to settle. But by settling this suit, it has put speech with an economic motive into an intellectual ghetto.

What a bunch of cowards. I'll have more to say on this later.

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The War: The Other Sept. 11 

:: Posted by Nicholas Provenzo at 9:55 AM

Leave it to the New York Times to equate the motives behind the 9/11 attacks and US foreign policy:

Death came from the skies. A building --a symbol of the nation-- collapsed in flames in an act of terror that would lead to the deaths of 3,000 people. It was Sept. 11.

But the year was 1973, the building Chile's White House, La Moneda, and the event a coup staged by Gen. Augusto Pinochet. Now, after decades of silence, Chileans are protesting in the streets for the reversal of amnesty laws that block prosecutions for the killings after the coup. The face of Salvador Allende, the overthrown Socialist president, is everywhere, and now behind La Moneda is a new statue of him wrapped in the Chilean flag. Chile's president, Ricardo Lagos, is proposing a truth commission to look into reports of torture, special judges to find the disappeared, new pensions for victims' families and an amnesty program for former soldiers who tell where the bodies are buried.

Chile is not the only country in South America focused today on the crimes of decades ago. In Peru, the truth commission investigating the guerrilla wars of the 1980's and 1990's just released a report concluding that more than 69,000 people were killed or made to disappear. In Argentina, a new president has just annulled two amnesty laws that the military forced through Congress after the "dirty war" ended in 1983.

In the United States, Sept. 11 will forever be a day to remember our victims of terrorism. Yet our nation's hands have not always been clean, and it is important to recall Chile's Sept. 11, too.
I wonder what the position of the New York Times if its editors covered the American Civil War. After all, the Confederate states did democratically vote to secede from the Union. Would the Times acknowledge that racial slavery was immoral and no vote could ever legitimize it? One would hope. But why then does the New York Times refuse to grant the same premise to those who would use elections to establish socialist dictatorships?

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:: Thursday, September 11, 2003 ::

Remembrance and Resolution: Tonight in NYC 

:: Posted by Nicholas Provenzo at 11:16 PM


Photo found at Yahoo News.

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The War: Foreign Views of U.S. Darken Since Sept. 11  

:: Posted by Nicholas Provenzo at 6:32 PM

The New York Times reports the world is not so impressed with us.

In the two years since Sept. 11, 2001, the view of the United States as a victim of terrorism that deserved the world's sympathy and support has given way to a widespread vision of America as an imperial power that has defied world opinion through unjustified and unilateral use of military force.

"A lot of people had sympathy for Americans around the time of 9/11, but that's changed," said Cathy Hearn, 31, a flight attendant from South Africa, expressing a view commonly heard in many countries. "They act like the big guy riding roughshod over everyone else."
Riding roughshod over a poor soul like Saddam Hussein, a genteel man who never did anything to bother anyone.

Yet I’d be remiss if I didn’t point out that the Times found people who support the US.
Even at this low point, millions of people still see the United States as a beacon and support its policies, including the war in Iraq, and would, given the chance, be happy to become Americans themselves.

Some regions, especially Europe, are split in their view of America's role: The governments and, to a lesser extent, the public in former Soviet-bloc countries are much more favorably disposed to American power than the governments and the public in Western Europe, notably France and Germany.

[ * * * ]

Still, a widespread and fashionable view is that the United States is a classically imperialist power bent on controlling global oil supplies and on military domination.
Have you ever seen photos of what passes for fashion on the runways of Paris these days?

That mood has been expressed in different ways by different people, from the hockey fans in Montreal who boo the American national anthem to the high school students in Switzerland who do not want to go to the United States as exchange students because America is not "in." Even among young people, it is not difficult to hear strong denunciations of American policy and sharp questioning of American motives.

"America has taken power over the world," said Dmitri Ostalsky, 25, a literary critic and writer in Moscow. "It's a wonderful country, but it seized power. It's ruling the world. America's attempts to rebuild all the world in the image of liberalism and capitalism are fraught with the same dangers as the Nazis taking over the world."
Why am I not the least bit surprised that a Russian literary critic and writer sees liberalism and capitalism on par with the Nazi’s racial socialism? And I wonder if Dmitri Ostalsky has ever heard of Chechnya.

[W]hile the United States probably feels more threatened now than in 1989, when the cold war ended, Europe is broadly unconvinced of any imminent threat.

"There were deep structural forces before 9/11 that were pushing us apart," said John J. Mearsheimer, professor of political science at the University of Chicago and the author of "The Tragedy of Great Power Politics." "In the absence of the Soviet threat or of an equivalent threat, there was no way that ties between us and Europe wouldn't be loosened.

"So, when the Bush Administration came to power, the question was whether it would make things better or worse, and I'd argue that it made them worse."

"In the cold war you could argue that American unilateralism had no cost," Professor Mearsheimer continued. "But as we're finding out with regard to Iraq, Iran and North Korea, we need the Europeans and we need institutions like the U.N. The fact is that the United States can't run the world by itself, and the problem is, we've done a lot of damage in our relations with allies, and people are not terribly enthusiastic about helping us now."
I often hear that we must not blindly support the Neo-Cons because their vision is in fact to run the world. But is it? I think it is wholly legitimate for the US to respond aggressively to those who plot and act against it. After all, it is an axis of evil that threatens us. There is no honest motivation behind this axis. The Bush Administration has made things worse, not because it has unabashedly worked to protect America wherever she is threatened, but precisely because it hasn’t. The threat of North Korea remains unchecked. The threat of Iran remains unchecked. Al-Qaida is broken, but not eliminated. Our so-called allies in Saudi Arabia and Pakistan deal with to us with two faces. And we demand that Israel not defend itself from the terrorists that kill its citizens.

How did we slip so far out the world’s favor? I say, it is because of men like John J. Mearsheimer, professor of political science. One can forgive the man on the street though. One can not forgive the intellectuals—especially ours.

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The War: Going Full Roman 

:: Posted by Nicholas Provenzo at 4:40 PM

I contemplated writing a poetic tome to 9/11 so as to mark the day, but frankly, I just didn’t feel it in that way today. That hasn’t stopped others from trying.

The snip below is from a post by James Lileks, (whom I do not know) at his website that is getting a lot of mention in the blogosphere. Lileks writes about how he was once fooled into thinking that the world was coming to an end as a youth, and how he is "resigned, in advance, to the loss of an American city by a nuclear weapon."

Then he writes this:

I’ve no doubt that if Seattle or Boston or Manhattan goes up in a bright white flash there will be those who blame it all on Bush. We squandered the world’s good will. We threw away the opportunity to atone, and lashed out. Really? You want to see lashing out? Imagine Kabul and Mecca and Baghdad and Tehran on 9/14 crowned with mushroom clouds: that’s lashing out. Imagine the President in the National Cathedral castigating Islam instead of sitting next to an Imam who's giving a homily. Mosques burned, oil fields occupied, smart bombs slamming into Syrian palaces. We could have gone full Roman on anyone we wanted, but we didn’t. And we won’t.

Which is why this war will be long.

[. . .]

Two years in; the rest of our lives to go.
And what kind of lives will we lead?

Forget the poetry. I want to know why would it have been wrong for the president to stand at before the world and say that the militant calls for Islam, that is--submission--would not be headed by a rational, free, proud,and just people? Why would have it have been wrong to go "full Roman" against those who have dedicated themselves against us and brought battle to our people on our own shore? Better yet, for us to go full American.

And why, if Seattle or Boston or Manhattan stand threatened, don’t we hunt down those who threaten them? My days of personal deep reflections are spent wondering why I am not in the Marine Corps like I once was so I can personally bring battle to my enemies. Be in a place where I can use my mind and body to fight for and protect my home and my values. I read things like Lileks’ essay and it makes me fear for America. Not from what some enemy might do, but from the resignation of my own countrymen.

It has been said that America will go down not in a bang but a whimper. I wonder sometimes if we are hearing the first sniffs.

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The War: Scoring America's progress since 9/11 

:: Posted by Nicholas Provenzo at 2:06 PM

The Patriots for the Defense of America have released a scathing scorecard on the progress of the war, giving the Bush Administration’s efforts a D+.

Contrary to the leading pro-war voices, we will find that on many important fronts, American policy is failing miserably. Contrary to those who characterize America’s war as overly aggressive or unilateral, we will argue that the war has hardly begun. And contrary to those who argue that war is anathema to morality, we will argue that at root, the American reluctance to commit fully to war stems from a failure of moral clarity.
I agree. Despite a clunky grading methodology (the Patriots acknowledge that questions of life and death can not be graded on a five-part scale, but employ it nevertheless) their report offers several astute observations. I found this point on the administration’s Iraqi reconstruction efforts to be perhaps the most salient:

[I]t is not the rebuilding of Iraqi economic infrastructure, but the rebuilding of a government charged with the protection of Iraqi lives and property that should be a concern for American occupiers. As recent attacks on oil pipelines have demonstrated, insurgents will destroy any rebuilt infrastructure in the attempt to foil American success. It is the insurgents, then, who need to be targeted by a strong, American-led, military government. It was wrong to portray the Iraq war by the moniker “Operation Iraqi Freedom,” because its aim should have been to protect American lives. But if we intend to stay in Iraq, it is a government protecting Iraqi freedom that will be required, not one concerned with the impossible and undesirable task of creating and running a centrally planned economy.
This point reminds me that historically, the Marshall Plan is overrated. While it is remembered for providing American funds for the reconstruction of Europe, what is forgotten was the importance of the American-led effort to reconstruct German political institutions in allied control and the importance of NATO. The Marshall Plan applied to East Germany would have born no fruit.

The Patriots are also critical of the Bush administration’s prosecution of the war in Afghanistan.

From the beginning, the United States chose to fight a proxy war in Afghanistan, by exploiting the assistance of the Northern Alliance, rather than taking direct military control of Afghan territory. The inevitable result of this policy has been continued control of the vast majority of the country by a hodge-podge of warlords. This has meant that the pro-American Karzai government controls little beyond the region of Kabul. It has meant that warlords have been free to oppose the central government, fight among themselves, and permit the presence of terrorist groups often under the influence of foreign powers. Examples of this last include the resistance of the Iranian-linked forces of Gulbuddin Hekmatyar in western Afghanistan, and the continued infiltration of Taliban forces into southern Afghanistan from Pakistan.
The Patriots go on further to examine US policy in Iran, North Korea, which either have or are on the threshold of having nuclear weapons, and Saudi Arabia, Pakistan, and Palestine, all breeding grounds of terrorism, as well as questions surrounding our military readiness and dealings with the UN and other nations.

The lesson of 9/11 is that the US can ill afford to underestimate the threats arrayed against it. Yet despite two years passing since the attacks, the US remains adrift with an ad hoc foreign policy without coherent theme or execution. Islamic theocracy and communist dictatorships still continue to threaten American safety. Both are animated by the use of brutal force to achieve their ends. The American response ought to be unequivocal—we must see every threat before us and refuse to yield in the face of it. Ultimately, this is a question of moral clarity, a clarity that at this point, America seems to lack.



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Rights and Reason: Protester Suicide Mars Cancun Trade Talks 

:: Posted by Nicholas Provenzo at 10:42 AM

This news report by Alistair Bell and Kieran Murray of Reuters shows the latest insanity offered by the anti-capitalist zealots:

A South Korean protester killed himself during a clash with riot police protecting ministers meeting on Wednesday in the Mexican resort of Cancun to jump-start stalled world trade talks.

The middle-aged farmer, named by friends as Lee Kyung-hae, climbed onto a high security fence during a violent protest against the World Trade Organization and waved a banner that read "WTO Kills Farmers."

He then stabbed himself in the chest and later died in hospital. A friend said his suicide was an "act of sacrifice" to show his disgust at the WTO and its policies.

About 5,000 activists joined the protest and about two dozen broke through eight-foot-high metal barriers to attack police on the edge of Cancun's upscale hotel zone.

"We are going in. We are going in," a South African trade unionist screamed through a loudspeaker, urging protesters to storm a long strip of beach hotels and fast food restaurants.

Demonstrators threw chunks of paving stones, sticks, metal bars and bottles at police, who fought back with batons and tear gas. More than a dozen people were inured as police held off the protesters.
The WTO kills farmers? The WTO is a series of negotiated agreements designed to open trade between nations. Suicidal farmers kill themselves.

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Foreign Policy: An Israeli Voice States the Obvious 

:: Posted by John Bragg at 7:07 AM

For the last year or so Arafat has been confined by the Israelis to his Muqata building in Ramallah. (Or, he could leave, but the Israelis wouldn't allow him to come back.)

The question of whether or not to exile Arafat is debated regularly in Israeli media. The argument against usually runs that Arafat, even outside the Palestinian territories, would still lead the terror war against Israel.

Finally, the Jerusalem Post offers a solution that would prevent Arafat from having any further contact with terrorists, (except maybe the ones who are done with their 72 virgins).

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:: Wednesday, September 10, 2003 ::

Intellectual Activism: Advance Capitalism--Intern with CAC! 

:: Posted by Nicholas Provenzo at 5:28 PM

The Center for the Advancement of Capitalism seeks motivated interns to assist CAC with its activism goals. We are looking for students to help with research, fundraising, web design, and grassroots activism. Digital internships are welcome and time commitments are flexible.

For more info, contact CAC here.

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Rights and Reason: Facing North Korea 

:: Posted by Nicholas Provenzo at 2:23 PM

I have written an op-ed on the North Korean crisis at Initium. It is in response to some criticism CAC has received for some of John Bragg's postings on the topic.

John's position was that negotiations and bribes with North Korea made sense if they led to even a reduction in North Korea's weapons capabilities. While North Korea has not been much of a focus for me, and without much thought, I agreed with John that talks that led to a reduction or postponement of the North Korean threat were a step in the right direction.

But after examining the past history of US-North Korean negotiations with my own eye, I have come to the position that it was the very act of our negotiating with North Korea that gave them the advantage they needed to consolidate their weapons program and their grip on power. So I now say this: North Korea can not be negotiated with by its very nature, period.

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:: Tuesday, September 09, 2003 ::

News of the Weird: FBI Probes Man Who Shipped Self to Dallas  

:: Posted by Nicholas Provenzo at 9:08 PM

This AP report takes the cake:

Charles D. McKinley had himself shipped from New York to Dallas in an airline cargo crate, startling his parents — and a deliveryman — when he broke out of the box outside their home.

"My husband asked him, `Man, what are you doing in this crate?' He said he was coming home," his mother told KDFW-TV in Dallas.

Federal officials want to know how the stowaway bypassed airport security.
Security? What security?

The dumb thing is the AP reports it cost $550 to ship the package--the cost of a first class ticket.

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Capitalism and the Law: Girl, 12, Settles Piracy Suit for $2,000  

:: Posted by Nicholas Provenzo at 8:55 PM

Ted Bridis from the AP reports:

A 12-year-old girl in New York who was among the first to be sued by the record industry for sharing music over the Internet is off the hook after her mother agreed Tuesday to pay $2,000 to settle the lawsuit, apologizing and admitting that her daughter's actions violated U.S. copyright laws.

The hurried settlement involving Brianna LaHara, an honors student, was the first announced one day after the Recording Industry Association of America (news - web sites) filed 261 such lawsuits across the country. Lawyers for the RIAA said Brianna's mother, Sylvia Torres, contacted them early Tuesday to negotiate.

"We understand now that file-sharing the music was illegal," Torres said in a statement distributed by the recording industry. "You can be sure Brianna won't be doing it anymore."

Brianna added: "I am sorry for what I have done. I love music and don't want to hurt the artists I love."

The case against Brianna was a potential minefield for the music industry from a public relations standpoint. The family lives in a city housing project on New York's Upper West Side, and they said they mistakenly believed they were entitled to download music over the Internet because they had paid $29.99 for software that gives them access to online file-sharing services.

The RIAA said this week it already had negotiated $3,000 settlements with fewer than 10 Internet users who learned they might be sued after the RIAA sent copyright subpoenas to their Internet providers. But lawyers negotiated those settlements before the latest round of lawsuits, and the RIAA had said any further settlements would cost defendants more than $3,000.

Even in the hours before the settlement was announced, Brianna was emerging as an example of what critics said was overzealous enforcement by the powerful music industry.

The top lawyer for Verizon Communications Inc., William Barr, charged earlier Tuesday during a Senate hearing that music lawyers had resorted to a "campaign against 12-year-old girls" rather than trying to help consumers turn to legal sources for songs online. Verizon's Internet subsidiary is engaged in a protracted legal fight against the RIAA over copyright subpoenas sent Verizon customers.

Sen. Dick Durbin, D-Ill., also alluded to Brianna's case.

"Are you headed to junior high schools to round up the usual suspects?" Durbin asked RIAA President Cary Sherman during a Senate Judiciary hearing.

Durbin said he appreciated the piracy threat to the recording industry, but added, "I think you have a tough public relations campaign to go after the offenders without appearing heavy-handed in the process."
Protecting your property rights is heavy handed? I wish I had an available 12-year old I could loose on Sen. Durbin. On the contrary, the RIAA's pursuit of young Brianna was a public relations coup. Now people will begin to grasp that IP theft is no laughing matter.


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Antitrust News: FTC Strikes Again 

:: Posted by Skip at 3:44 PM

Today the Federal Trade Commission announced its 13th settlement in the past 18 months with a physician organization over charges of illegal negotiating with health insurers. Actually, today's settlement is with nine groups of physicians and hospitals in "a large region of south Georgia" that acted together. There's nothing new in this settlement. The FTC does not allege any fraud, force, or actual coercion took place, only that the physicians (and hospitals) entered into voluntary negotiations with insurers. In some cases, the negotiations were successfully concluded as long as eight years ago. But no matter, the FTC has now decided any and all contracts negotiated by the Georgia groups are null and void, and from now on, physicians and hospitals will enjoy no right to act in their own economic self-interest without FTC permission.

You can access copies of the FTC's public records of this case here.

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Capitalism and the Law: "Hackers not Lawyers" 

:: Posted by Nicholas Provenzo at 9:28 AM

Andy Kessler has an article at the Wall Street Journal that I don't agree with:

As of yesterday, record companies--via the Recording Industry Association of America--have sued more than 250 of their customers, sent subpoenas to Internet service providers demanding the names of flagrant file-sharers and even threatened to unleash worms and viruses on file-sharing Web sites.

But c'mon, no one outside the insurance industry really thinks it's a great long-term strategy to scare your customers. Alienate 16-year-olds, and all you'll ever sell are Rolling Stones albums to boomers.
Isn't it the RIAA's point that the pirates they are pursing in the courts are not their customers?

Fifteen years ago, the software industry had a huge piracy problem, one of the main reasons being that Microsoft Word or Excel cost hundreds of dollars. Borland cut the price of its Quattro Pro spreadsheet program to $79, and people bought it instead of copying it. Sales went up. Economists call this elasticity.

The same thing may happen in the music biz. The vast majority of music listeners are honest, property-loving citizens, and my guess is we would all gladly pay a fair price for music. Ten dollars per album may still be high--who knows? The industry still needs to figure out how to transition to an online-only model. Without shiny discs, and the markup brigade, they can charge 50 cents a song and $5 an album and still make as much as they do today via stores. It shouldn't be that hard--the cellphone industry does $1 billion a year in ring-tone sales. Surely the music industry can sell songs online in even bigger numbers.

Long term, the music industry needs technology, not lawyers, to fix its problems. Hire a few of those hackers you are now threatening with jail time. Don't sell dumb data, sell software. Each song or album could eventually come with its own code, its own little operating system, to play the song on the next generation of players.
Yes, price, packaging, and quality affects record sales. But failing to find the price, packaging, and quality one desires does not give one license to steal.

I agree that the way music is sold will change, shifting from the album CD to the Internet single song model. Yet with either model, piracy will still be a problem. I know people with 1,000 songs on their hard drive. If under the Internet model, songs sell for $0.50 a pop, that’s still $500 dollars. I question why a teenager would pay $500 for something he can pirate for free, if he thinks he can get away with it. And it’s precisely that point that makes me think that RIAA’s strategy is correct--they need (and have a right) to protect their property from theft. That means little pimply pirates need to feel some heat, so as to remind them that theft is wrong and that it will not be sanctioned.

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On Politics: Libertarians Run Amok 

:: Posted by Skip at 12:21 AM

If you want an example of the difference between libertarianism and Objectivism, look at this website. I'm not saying all, or even most, libertarians think that way, but no Objectivist would ever support such a thing.

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:: Monday, September 08, 2003 ::

The War: Canada staging ground for terrorists 

:: Posted by Nicholas Provenzo at 3:17 PM

CBS's 60 Minutes reports Canada is a staging ground and fund-raising base for terrorists.

Last month, Canadian authorities arrested 19 foreign students suspected of ties to al Qaeda.

One of the students attended a Canadian flight school and liked to fly over the local nuclear plant. Others were apprehended outside a nuclear facility in the middle of the night.

With the second anniversary of 9/11 approaching, the arrests serve as a reminder that Canada and the United States share a 5,500 mile border that is largely unguarded.

As 60 Minutes first reported over a year ago, Canadian intelligence admits the country has become a sanctuary, staging ground and fund-raising base for hundreds of terrorists from all over the world.

They are drawn to Canada by its liberal immigration and refugee policies, and they have transformed Canada into a potential launching pad for attacks against the United States.
Read the whole report. Kinda kills Micheal Moore's claim that Canada's welfare programs keep it all warm and fuzzy while capitalist America is needlessly violent.

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CAC News: Media Appearance 

:: Posted by Skip at 2:43 PM

Tonight at 8:30 p.m. EDT I'll be a guest on the Steve Czaban Show on Fox Sports Radio discussing antitrust issues in college sports, notably Maurice Clarett's potential antitrust suit against the NFL, last week's congressional hearing on the Bowl Championship Series, and the NCAA's appeal of a federal judge's injunction of a college basketball scheduling rule.

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Capitalism and the Law: Recording Industry Sues File Swappers 

:: Posted by Nicholas Provenzo at 1:34 PM

David McGuire of the Washington Post reports the RIAA has brought suit against 261 people accused of trading copyrighted songs on the Internet.

The lawsuits, which were filed in federal courts across the country, are the RIAA's latest tactics in its war against the illegal file sharing that record companies blame for plummeting CD sales.

In June, the RIAA promised to sue hundreds of Internet users suspected of illegally trading music using file-swapping services like Kazaa and Morpheus. The association in August clarified that it only would target the most egregious file sharers.

RIAA President Cary Sherman in a teleconference today characterized the people who were sued as "major offenders" who distributed about 1,000 copyrighted music files on average.
Good. But I wonder what the average number of pirated songs there are per pirate. Is 1,000 songs all that much beyond the norm?

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Rights and Reason: The Green Disease 

:: Posted by Nicholas Provenzo at 11:21 AM

Steven Reinberg of HealthDayNews reports on the toll of West Nile virus:

The West Nile virus surged again across the western half of the United States last week, doubling its death toll and almost doubling the number of people infected by the mosquito-borne virus.

According to the latest U.S. government statistics reported Thursday, there have now been 43 deaths and 2,267 human infections in 35 states this year. Exactly a week ago, those tolls stood at 21 deaths and 1,442 cases of infection, which was double the numbers from the previous week.

Colorado remains the hardest-hit state, with 940 cases and 11 deaths, according to the latest figures on the Centers for Disease Control and Prevention Web site.

Nebraska now has 326 cases and has had eight fatalities. South Dakota has the third-highest number of cases, 250, but only three deaths. Texas and Wyoming round out the Top 5 list, with 164 cases each.
Bin Laden killed 2700 on 9/11. How many people have died as a result of environmentalist policies, and just how many will have to die before the DDT ban is lifted?

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The Culture: 'Lazy' Germans Urged to Work More to Revive Growth 

:: Posted by Nicholas Provenzo at 11:14 AM

Reuters reports that Germans are lazy:

Long lauded for their Teutonic efficiency and hard work in rebuilding the country after World War II, Germans are now among the world's top slackers and politicians and industry leaders say that must change to kickstart the sagging economy.

"We need longer and more flexible weekly working hours -- 40 hours instead of the average of 37 hours is more reasonable than lower income. It would improve the competitive position of firms and bring more innovation and investment," said Ludwig Georg Braun, president of the German Chamber of Industry and Commerce.

According to International Labour Organization statistics, the average German worked 1,444 hours in 2002, compared to 1,815 hours for the average U.S. worker and 1,707 for the average Briton. Only the Norwegians and Dutch worked fewer hours.

Germans also have more holidays than most other nations -- 30 days leave is standard plus about 12 public holidays.

The Cologne Institute of the German Economy (IW) estimates the average German takes off about another 12 days a year due to sickness, training, maternity and other leave entitlements, meaning most people work the equivalent of a four-day week.

Noting that German growth could be 0.5 percent higher than usual next year as several public holidays fall on weekends, Economy Minister Wolfgang Clement has said Germany is at the limit of what it can afford in holidays and working hours.

Hagen Lesch, an IW labor expert, said if the working week were extended by an hour, economic growth next year could be 3.1 percent, double the institute's current expectations.

Hans-Werner Sinn, head of the influential Ifo institute, says an increase in the average working week to 42 hours would restore German competitiveness lost in the past two decades.

Trade unions have slammed such calls, saying an increase in the working week of just an hour could cost hundreds of thousands of jobs and that the debate ignores productivity.
Why does the state (German or US) regulate how many hours a person may work in the first place? Clearly that ought to be freely negotiated between employers and workers. Rather than lobby for a longer work week, the German Chamber of Industry and Commerce ought to simply lobby for the right to define your own work habits, free from regulation. I wonder the odds of the lazy Germans figuring that one out.

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Capitalism and the Law: U.S. Colleges Institute P2P Education 

:: Posted by Nicholas Provenzo at 11:05 AM

Bill Holland of Billboard reports on efforts to educate college students on IP rights:

Incoming freshmen at colleges across the U.S. are getting a primer this month in an unexpected subject: The legal ramifications of file sharing.

It's a clear sign that last year's Recording Industry Assn. of America initiative to work with U.S. colleges and universities on combating campus peer-to-peer piracy is bearing fruit.

During a conference call Sept. 2, the co-chairmen of the Joint Higher Education and Entertainment Group cited as a sign of progress the P2P education and enforcement policies initiated this year by university administrators across the country. The joint group kicked off last December.

Recent newspaper stories have documented freshman orientation programs that include P2P policies and warnings at several universities, including American University in Washington, D.C., and many University of California campuses.

In addition, Colby College, University of Denver, Stanford University, University of Utah, Columbia University, University of Rochester, University of North Carolina and Harvard and Yale have instituted education initiatives or e-posted campus P2P policies.

"Just a year ago, you didn't see these efforts," says group co-chair Graham Spanier, president of Penn State University. "The progress in charting solutions and in awareness has been dramatic in recent months."

Spanier shares chairman responsibilities with RIAA president Cary Sherman. The two attribute greater campus awareness of the issue to better communication between the RIAA and higher-education institutions.

But certainly the greater responsiveness has been motivated in large part by the RIAA lawsuits this spring, some of which were directed at students on college campuses. At least 10 universities have been served with subpoenas calling for the identity of egregious infringers.

"Universities don't want their students to be sued," Spanier says. "We're working hard to prevent that. We're also sympathetic to the losses in the music industry."

Sherman said he is gratified by the attention copyright violations are getting on campuses. "There's a world of difference this year just a year ago in terms of the seriousness universities are taking this issue," he says.
It's high time universities take IP theft seriously. I see this though and it makes me wonder:

Spanier says that at Penn State, which has a student body of 83,000, the policy is to warn a student twice about what officials consider serious infringement, and, if it occurs again, "we shut them off." Further violations could lead to expulsion.
"Could lead to expulsion?" The theft of IP means one does not have respect for the principle that ideas are property. How can such a fundamentality corrupt view be so tenderly punished? I suspect Penn State is showboating. If it were really serious about IP theft, it would expel students on the second violation, no questions asked.

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The War: Last Service Held for 9/11 WTC Fireman  

:: Posted by Nicholas Provenzo at 10:54 AM

Lukas I. Alpert of the AP reports:

Firefighters in formal dress and others in work attire were among hundreds of people who gathered Sunday to pay respects to Michael Ragusa, the last firefighter killed in the Sept. 11 attack on the World Trade Center to receive a memorial service.

The 29-year-old's remains have never been identified, so his family chose to bury a vial of blood he had donated to a bone marrow center. A funeral was scheduled for Monday.
I find the vial of blood of the lost firefighter to be a powerful statement. Let not one drop of blood shed on September 11th go unpunished.

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Antitrust News: Sanction of the Victim 

:: Posted by Nicholas Provenzo at 10:35 AM

On Friday Microsoft settled an antitrust suit with Be Inc. which was pending in the United States District Court for the District of Maryland in Baltimore. Be will receive a payment from Microsoft, after attorney's fees, in the amount of $23,250,000 to end further litigation, and Microsoft admits no wrongdoing.

Be contended that Microsoft violated California and federal antitrust laws by negotiating deals with computer manufacturers to use Microsoft's operating system exclusively, cutting out Be's competing operating system.

According to Microsoft's press release, "both parties are satisfied with the agreement and believe that it is fair and reasonable".

Business leaders deserve great credit for the wealth and opportunities they create. The also deserve to be held to task when their actions destroy wealth. Microsoft just paid $23 million in rent to a bankrupt competitor to settle a baseless suit. It makes one wonder just how practical Microsoft's strategy of fighting antitrust suits against it without fighting the antitrust laws themselves.

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Rights and Reason: Bush's Ideology 

:: Posted by Skip at 10:02 AM

Virginia Postrel on the president's speech:
Bush's rhetoric continues to have two major problems, neither of which is likely to disappear. The first, and most obvious, is that he says the enemy is terrorism rather than Islamicism using terrorism as a weapon (including against Muslims). The second, less obvious, is that he says we are fighting to defend democracy, when in fact we are fighting to defend liberalism (or liberal democracy). Iran is a democracy, in the normal sense of holding real elections, but it is not liberal.

The fundamental conflict is over whether the systems of limited, non-theocratic, individual-rights-bsed governments that developed over centuries in the West are good or bad. Outside of the academy and other intellectual circles, however, American political discourse has literaly lost the words to describe what the "civilized world" has in common. We think "liberal" means Hillary Clinton, when it also means George Bush.
These problems, however, are not simply rhetorical. The administration's inability to take on certain sources of Islamicism--most notably Saudi Arabia--has hampered America's credibility since the start of the post-9/11 era. As for democracy-vs.-liberalism, the truth is President Bush has not demonstrated he supports individual rights as the moral basis of society. His domestic policies have been largely geared towards ratifying the destruction of individual rights in key areas, such as health care and education, and he has done nothing to curb the one major governmental abuse under his direct control, the tyranny of regulators (such as the FTC).

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:: Sunday, September 07, 2003 ::

Rights and Reason: High Noon for Campaign "Reform" 

:: Posted by Skip at 2:43 PM

Tomorrow the Supreme Court will hold a special session (technically the last meeting of the October 2002 Term) to hear McConnell v. Federal Election Commission, the umbrella name for numerous challenges to the Bipartisan Campaign Finance Reform Act (aka McCain-Feingold). The Court has scheduled four hours of oral arguments. Former Solicitor General Kenneth Starr will open for the law's opponents. Incumbent Solicitor General Ted Olson and his predecessor, Seth Waxman, will lead off for the law's defenders. Tomorrow's arguments are essentially the All-Star Game of appellate jurisprudence.

For all the lawyers and briefs the BCRA challenges have attracted, the fundamental issue is quite simple. Congress claims the right to restrict and regulate political speech on the grounds that it prevents the "appearance of corruption," and that such motive is itself a valid governmental objective. This argument is completely without merit for numerous reasons, the key one being that the "appearance of corruption" is nothing more than a faith-based standard. In other words, it permits the government to initiate force in the absence of objective proof that rights are being violated. BCRA grants government agents the power to decide what acts of political speech are valid and which offer the "appearance of corruption". Such a standard can never be reasonably enforced, because it is facially non-objective. Speech and activities that I would consider illegal under BCRA will radically differ from that others, including the law's enforcers, would consider illegal. This is the trap America fell into with antitrust, and unlike the Sherman Act, the Supreme Court should not try to invent a rationale after the fact to justify Congress's clearly unconstitutional act. BCRA should be struck down, and the precedents giving rise to its creation should be overruled without delay.

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Rights and Reason: Monsanto's French GM Maize Crop Attacked 

:: Posted by Nicholas Provenzo at 12:12 PM

This from Reuters:

An experimental genetically modified (GM) maize crop in southern France, owned by U.S. seeds giant Monsanto, has been attacked and destroyed, police said on Saturday.

Police did not say who was behind the attack on the approximately half hectare field, isolated in a forest in Magnesq, but added that it had occurred a few hours after an anti-GM demonstration on Friday.

Another of Monsanto's GM fields, also in the southwest of France near Toulouse, was destroyed in July.

While GM crops are common in the United States, France and other European countries are dubious about using the new genetic technology in agriculture. France grows experimental GM crops on around 100 sites, all approved by the farm ministry.

Supporters say the crops could lead to the development of hardier strains to help feed the world's poor. Opponents say they could trigger an uncontrolled spread of modified genes, harming the environment and people's health.
Supporters of the crops also say the opponents claims are utterly without merit. Yet here we have the spectacle of environmentalists committing thousands of dollars of damage in the name of their specious philosophy.

Greens out-fundraise pro-technology advocates by several orders of magnitude, enjoy popular sympathy, and have people to lobby every level of government. This criminal act is but the tip of the iceberg. I expect things to get much worse.

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The Culture: Defining Media 

:: Posted by Skip at 12:05 PM

Matt Welch, an associate editor at Reason, pens a telling article for the Columbia Journalism Review on the state of "alternative" media, specifically the so-called "alternative newsweekly" papers such as the Village Voice and the Washington City Paper. Welch finds an industry that has matured to the point of stifling uniformity:
This February, I attended my first Association of Alternative Newsweeklies conference, in the great media incubator of San Francisco. It's impossible to walk a single block of that storied town without feeling the ghosts of great contrarian media innovators past: Hearst and Twain, Hinckle and Wenner, Rossetto and Talbot. But after twelve hours with the AAN, a much different reality set in: never in my life have I seen a more conformist gathering of journalists.

All the newspapers looked the same — same format, same fonts, same columns complaining about the local daily, same sex advice, same five-thousand-word hole for the cover story. The people were largely the same, too: all but maybe 2 percent of the city-slicker journalists in attendance were white; the vast majority were either Boomer hippies or Gen X slackers. Several asked me the exact same question with the same suspicious looks on their faces: "So . . . what's your alternative experience?"

At the bar, I started a discussion about what specific attributes qualified these papers, and the forty-seven-year-old publishing genre that spawned them, to continue meriting the adjective "alternative." Alternative to what? To the straight-laced "objectivity" and pyramid-style writing of daily newspapers? New Journalists and other narrative storytellers crashed those gates long ago. Alternative to society's oppressive intolerance toward deviant behavior? Tell it to the Osbournes, as they watch Queer Eye for the Straight Guy. Something to do with corporate ownership? Not unless "alternative" no longer applies to Village Voice Media (owned in part by Goldman Sachs) or the New Times chain (which has been involved in some brutal acquisition and liquidation deals). Someone at the table lamely offered up "a sense of community," but Fox News could easily clear that particular bar.

No, it must have something to do with political slant — or, to be technically accurate, political correctness. Richard Karpel, the AAN executive director, joined the conversation, so I put him on the spot: Of all the weeklies his organization had rejected for membership on political grounds, which one was the best editorially? The Independent Florida Sun, he replied. Good-looking paper, some sharp writing but, well, it was just too friendly toward the church. "And if there's anything we all agree on," Karpel said with a smile, "it's that we're antichurch."

I assumed he was joking — that couldn't be all we have left from the legacy of Norman Mailer, Art Kunkin, Paul Krassner, and my other childhood heroes, could it? Then later I looked up the AAN's Web site to read the admission committee's rejection notes for the Florida Sun (which was excluded by a vote of 9-2). "The right-wing church columnist has no place in AAN," explained one judge. "All the God-and-flag shit disturbs me," wrote another. "Weirdly right-wing," chimed a third.
Welch's description of AAN's ideology is especially interesting in light of the Justice Department's recent antirtust settlement with Village Voice Media and NT Media, the nation's two largest alternative newspaper chains. In that case, the DOJ defined an "alternative newsweekly" as a paper that exhibits an "anti-establishment" viewpoint, although that phrase is never itself defined. This was one of several hints in the DOJ's filings that they considered a newspaper's ideological slant grounds for inferring market power, a standard that contradicts the traditional First Amendment requirement that government regulation be "content neutral" with respect to speech.

In my own filings in the Village Voice-NT Media case, I questioned the government's vague market definition. According to the final judgment, an alternative newsweekly need only meet two of the following requirements: published in a market already served by one or more daily newspapers, published weekly and at least 24 times annually, distributed free of charge, not owned by a daily newspaper publisher, and a not focused exclusively on one specific topic.

I argued that blogs would be considered alternative newsweeklies by these standards, a point the government never refuted or denied. Welch, however, understands my argument, and elaborates in his CJR article:
The average blog, needless to say, pales in comparison to a 1957 issue of the Voice, or a 1964 Los Angeles Free Press, or a 2003 Lexington, Kentucky, ACE Weekly, for that matter. But that's missing the point. Blogging technology has, for the first time in history, given the average Jane the ability to write, edit, design, and publish her own editorial product — to be read and responded to by millions of people, potentially — for around $0 to $200 a year. It has begun to deliver on some of the wild promises about the Internet that were heard in the 1990s. Never before have so many passionate outsiders — hundreds of thousands, at minimum — stormed the ramparts of professional journalism.

And these amateurs, especially the ones focusing on news and current events, are doing some fascinating things. Many are connecting intimately with readers in a way reminiscent of old-style metro columnists or the liveliest of the New Journalists. Others are staking the narrowest of editorial claims as their own — appellate court rulings, new media proliferation in Tehran, the intersection of hip-hop and libertarianism — and covering them like no one else. They are forever fact-checking the daylights out of truth-fudging ideologues like Ann Coulter and Michael Moore, and sifting through the biases of the BBC and Bill O'Reilly, often while cheerfully acknowledging and/or demonstrating their own lopsided political sympathies. At this instant, all over the world, bloggers are busy popularizing underappreciated print journalists (like Chicago Sun-Times columnist Mark Steyn), pumping up stories that should be getting more attention (like the Trent Lott debacle), and perhaps most excitingly of all, committing impressive, spontaneous acts of decentralized journalism.
Antitrust lawyers are obviously not trained in the art of thinking dynamically; their principal job in fact is to conjure narrow, arbitrary market definitions in the pursuit of new cases. In the Village Voice case, the DOJ argued that readers were denied their right to receive the benefit of competing alternative newsweekly content. The DOJ never, for one second, considered that consumers were already receiving superior content via blogs or other decentralized media outlets.

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Rights and Reason: Whose Money is It? 

:: Posted by Skip at 11:51 AM

The union representing D.C. teachers is up-in-arms after the school board rescinded a 9% pay raise due to budget constraints. Local politicians are falling over each other to defend the union, a major source of political support in the nation's capital. One of the more telling statements of union support came from Adrian Fenty, a member of D.C.'s city council, who suggested the city should abandon efforts to provide private school vouchers to parents (a policy backed by Congress) in favor of reinstating the teachers' raises:
"At a time when the city struggles tremendously to give its public school teachers the pay raises they deserve, I cannot understand why the mayor wants to divert public money to private schools."
What Fenty is saying, essentially, is that the money belongs to the teachers. But "public" money is by definition funds taken from citizens through forcible taxation. The proposed voucher plan would put the disposal of some of those funds in the hands of parents to decide what school is best for their children. Fenty and the union, however, view the confiscated tax dollars as their property, to be disposed of despite the wishes of parents or what's best for their children.

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The Courts: Estrada Withdraws 

:: Posted by Skip at 11:43 AM

Miguel Estrada's decision to withdraw his nomniation to the U.S. Court of Appeals for the D.C. Circuit was long overdue; not because Estrada should not have been confirmed, but because it's been obvious for months that Senate Majority Leader Bill Frist would not break the Democratic filibuster preventing a Senate vote. Estrada--and every other Bush judicial nominee now being held up--should have withdrawn from consideration months ago, both for the sake of their personal integrity and to deny the Senate Republicans and the White House the use of a political issue they refuse to act upon.

Frist remains unwilling to use the so-called "nuclear option" to bring filibustered judicial nominees to a vote. This option entails simply calling for a vote despite the Democrats' announced filibuster. Under the normal rule, a filibuster continues until three-fifths of the Senate, 60 votes, invokes cloture. But Frist and the Republican majority could simply override that requirement and bring a nomination to an immediate vote. When the Democrats object, the Republican president pro tem of the Senate overrides the objection, and the majority sustains that decision on appeal. Then the majority votes, presumably to confirm the nominee.

Frist won't employ this option because it threatens to destroy what remains of the Senate's "collegiality". Much of the Senate's ordinary business requires unanimous consent; Democrats could bring the Senate to a halt simply by objecting to otherwise routine procedures. Frist is unwilling to risk this.

But what exactly is Frist trying to preserve? His biggest legislative priority right now is the Medicare prescription drug benefit plan now in a House-Senate conference committee. Frist considers this bill more important than confirming a single judge, or even a handful of judges. But this is poor prioritization. Confirming judges is an essential function of the Senate, in that it permits the continued functioning of the nation's judicial system. The prescription drug benefit, in contrast, is an unconstitutional redistribution of wealth designed to bolster the president's reelection prospects with a narrow interest group.

More importantly, Frist's nonaction on Estrada tells the country that he is willing to tolerate the type of collectivist profiling the Democrats are now using against the president's judicial nominees. Estrada was targeted for filibuster because he met a certain profile: a young, conservative Hispanic with Supreme Court potential.

The Democrats argue they opposed Estrada on ideological grounds. But there was no ideology present in the dispute over Estrada's nomination. There were some vague allusions to single-issue litmus tests, like abortion, but no Democratic senator ever offered an integrated ideological argument against Estrada's confirmation. Instead, there were repeated statements that Estrada is an "extremist," but that's a smear, not an argument.

The Democratic filibuster of Estrada violated the basic principles of parliamentary law. The filibuster exists to prevent the majority from imposing its will without adequate time for debate. The Democrats, however, never debated Estrada's nomination; they merely smeared it as part of a public spectacle. For that reason, the Republican majority was under no duty to protect the minority's debate rights under Senate rules, and accordingly should have forced a vote despite lacking the three-fifths majority to invoke cloture.

There are, of course, several more judicial nominees under filibuster. Unless Sen. Frist and his colleagues are willing to risk their personal political agendas to do their constitutional jobs, these nominees should follow Estrada's example and get out while they still can.

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:: Friday, September 05, 2003 ::

The Culture: Contrasting Values 

:: Posted by Skip at 10:18 AM

Anyone who flipped around the television dial last night witnessed a telling contrast: ABC, one of the nation's top commercial networks, aired an opening night celebration for the NFL, the nation's most successful professional sports league; meanwhile PBS, a network supported by government funds and leftist ideology, ran the Democratic presidential debate. The former showcased wealth creation and individual achievement; the latter featured a discussion of how best to destroy wealth and collectivize society.

Anyone want to wager what show got the higher rating?

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Rights and Reason: Price Controls by Another Name 

:: Posted by Skip at 10:08 AM

The Bush-Cheney reelection campaign is touting the president's "six point plan for the economy." Point #1 is quite telling:
Making health care costs more affordable and predictable. President Bush proposes to allow small businesses to pool together to purchase health coverage for workers at lower rates.
On first reading, this sounds rather uncontroversial and pro-free market. But that's only if you don't grasp the context. If health care consumers want to combine their purchasing power, that's perfectly fine. The problem is that healthcare providers--physicians and hospitals--don't enjoy the reciprocal right to join their economic power to negotiate with consumers. The FTC and DOJ claim it's "unfair competition" when physicians exercise the right Bush wants to expand for consumers.

The Bush administration gets this. That's why their message is that healthcare costs will be "more affordable and predictable" under his plan. Of course it will. If the government prevents physicians from negotiating in a free market, the costs will be kept down simply by force of law. This is what we used to call a "price control"; but in a Republican White House, it's given the name of "market reforms."

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Rights and Reason: Bill Moyers goes Green 

:: Posted by Nicholas Provenzo at 10:05 AM

Consider this line from PBS's Bill Moyers on the anti-enviromentalists:

Their god is the market -- every human problem, every human need, will be solved by the market. Their dogma is the literal reading of the creation story in Genesis where humans are to have "dominion over the fish of the sea, and over the fowl of the air, and over the cattle, and over all the Earth, and over every creeping thing ..." The administration has married that conservative dogma of the religious right to the corporate ethos of profits at any price. And the result is the politics of exploitation with a religious impulse.

Meanwhile, over a billion people have no safe drinking water. We're dumping 500 million tons of hazardous waste into the Earth every year. In the last hundred years alone we've lost over 2 billion hectares of forest, our fisheries are collapsing, our coral reefs are dying because of human activity. These are facts. So what are the administration and Congress doing? They're attacking the cornerstones of environmental law: the Clean Air Act, the Clean Water Act, NEPA [the National Environmental Policy Act]. They are allowing l7,000 power plants to create more pollution. They are opening public lands to exploitation. They're even trying to conceal threats to public health: Just look at the stories this past week about how the White House pressured the EPA not to tell the public about the toxic materials that were released by the September 11th attacks on the World Trade Center.
Then Moyers says he's a capitalist:

It stuns me that the people in power can't see that the source of our wealth is the Earth. I'm an entrepreneur, I'm a capitalist. I don't want to destroy the system on which my livelihood and my journalism rest. I am strongly on behalf of saving the environment [in no small part] because it is the source of our wealth. Destroy it and the pooh-bahs of Wall Street will have to book an expedition to Mars to enjoy their riches. I don't understand why they don't see it. I honestly don't. This absence of vision as to what happens when you foul your nest puzzles me.
It puzzles me that Moyers has the audacity to say he's a capitalist while simultaneously damming the free market. Moyers claims the corporate ethos is “profits at any price.” Any price? That’s news to me. And why does Moyers believe that the pro-reason position is that man does not have dominion over the earth? What else, according to Moyers, comes before man?

If Moyers was even remotely a capitalist, he would argue for individual rights--that is, that the individual has a right to his life. He would argue for property rights. He would not smear the individual’s right to profit from his labor. He would argue that the standard for judging so-called environmental damages would be proof of actual harm to humans from pollution, proven in a court of law.

And more fundamentally, Moyers would argue for reason. He would not glibly dismiss the mountain of evidence against global warming theory. He would argue against the faith based arguments of the environmentalists and the religious leftists.

Yet the chances of all this happing are about as great as Moyers leaving PBS to air his programs on greedy capitalist-dominated commercial TV.

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Capitalism and the Law: Judge Nixes Lawsuit Against McDonald's  

:: Posted by Nicholas Provenzo at 9:20 AM

This from the AP:

For a second time this year, a federal judge threw out a class-action lawsuit Thursday that blamed McDonald's for making people fat.

U.S. District Judge Robert Sweet said the plaintiffs failed to show that the fast-food chain misled consumers into believing its food was nutritious and part of a healthy diet.

Sweet tossed out an earlier version of the lawsuit in January that claimed McDonald's food causes health problems in children.

On Thursday he rejected a request that the plaintiffs be permitted to file a new version, which claimed that McDonald's violated New York's consumer protection laws and engaged in deceptive advertising.

The Oak Brook, Ill.-based company called the ruling a "total victory" and said its menu options can fit into a healthy, well-balanced diet.

A message left for the plaintiffs' lawyer was not immediately returned.

In a statement, the National Restaurant Association said Sweet's decision demonstrated that "reason and common sense have prevailed."

The judge said the lawsuit failed to back allegations that any injuries resulted from McDonald's representations about its french fries or hash browns.

In his earlier ruling, Sweet said consumers cannot blame McDonald's if they choose to eat there.

"If a person knows or should know that eating copious orders of supersized McDonald's products is unhealthy and may result in weight gain ... it is not the place of the law to protect them from their own excesses," Sweet wrote at the time.
Needless to say, it's a good thing this utterly irrational crusade is getting its just "desserts" in court.

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:: Thursday, September 04, 2003 ::

Rights and Reason: Disconnect on gas prices 

:: Posted by Nicholas Provenzo at 12:58 PM

Bruce Bartlett observes California Lt. Gov. Cruz Bustamante's call for price controls on gasoline yesterday at the Washington Times:

Last week, Mr. Bustamante proposed amending the California state constitution to allow the Public Utilities Commission to regulate gasoline prices. "Californians are being gouged," he charged. His proposal would require oil companies to justify price increases and regulate their profits in the state.

The price control plan has universally been condemned on economic and legal grounds. "It's a terrible idea," says energy expert Philip Verleger. He warned that it will lead to gas lines as oil companies export gasoline production from California refineries to other states and reduce imports of gasoline from Canada, the Caribbean and others places that now serve the California market.

The state would have no power, even if the constitutional amendment were adopted, to compel oil companies to keep supplies in the state or bring gasoline in from elsewhere. Any effort to do so would be a violation of the commerce clause of the U.S. Constitution and surely be thwarted.

Says law professor Anthony Sabino, "Gasoline and the business of selling gasoline is part of interstate commerce that belongs to Congress to regulate, if at all." He added that Mr. Bustamante "is either very ignorant of the law or he's getting incredibly bad advice from his advisers or it's a publicity stunt."
The first thing I thought of when I read this story was how such a proposal would violate the rights of the oil producers. Too bad that wasn't the first thing on Bruce Bartlett's mind. This is how Bartlett tackles the pro-price control premise:

Unfortunately, the movement to control gasoline prices is not limited to California. Last year, Hawaii enacted a law giving it the power to regulate gasoline prices. It is scheduled to go into effect next year. In Washington, Rep. Edward Markey, Massachusetts Democrat, and Sen. Joseph Lieberman, Connecticut Democrat, have been pressuring the Energy Department to take action against high gasoline prices.

Apparently, neither has bothered to learn the facts of the situation before lashing out at the oil companies — always convenient whipping boys for liberal politicians. If they checked, they would see that real (inflation-adjusted) gasoline prices are about where they have been for most of the last 20 years. The recent runup is from a historically low level. Even so, they are still substantially lower than they were in 1981: $1.79 per gallon now versus $2.74 then. And contrary to popular belief, oil company profits are not rising. According to Business Week, the profit margin in the oil industry is only 5.4 percent, compared with 6.4 for all industries.

The main reason why gasoline prices rise and fall is because of fluctuations in the world price of oil, which oil companies have little control over since they import most of it from places like Saudi Arabia. California, however, has deliberately imposed higher costs on itself by requiring that gasoline sold there be specially formulated to reduce pollution. With a limited number of refineries able to produce the kind of gasoline California demands, prices there have long been higher than in the rest of the country.
Note the absence of a moral argument. Bustamante and like-minded others are wrong, but only in so much as they don't understand that oil companies earn less profits on average than other industries.

What if oil companies earned 50% profits? What if oil prices were, on average, higher today then they were in the past? Would it then be acceptable for Bustamante and his ilk to regulate the price of gas? I think not.

Bartlett is right more often then he is wrong, but this most recent column of his was little more than a waste of ink.

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Antitrust News: Attacking producers and consumers 

:: Posted by Skip at 12:22 PM

The Associated Press reports on the latest target of antitrust enthusiasts:
A lawsuit against bookstore chains filed five years ago by a former independent book store owner in North Carolina is expected to reach a courtroom this fall.

Wallace Kuralt, the brother of the late CBS newsman Charles Kuralt, filed a federal lawsuit in 1998 seeking $38 million in damages from Barnes & Noble and Borders Books. The former owner of a Chapel Hill independent bookstore said the Intimate Bookshop, which at one point had grown into a nine-store regional chain, was a victim of industry competition as big-box bookstores sprouted in area shopping centers.

Kuralt accused the chains of bullying publishers into providing deep discounts not available to smaller stores. He alleges the companies are violating the Robinson-Patman Act, enacted in 1936 to keep large businesses from using their buying power to get volume discounts.

The chains will answer the antitrust charges in the Southern District of New York on Nov. 10 before Judge William Pauley.

Borders and Barnes & Noble state in documents filed with the U.S. Securities and Exchange Commission that they plan to "vigorously defend the action."

"I believe that if we had all the benefits that they [sic] the big chains had, we could have done incredible things," Kuralt said Tuesday.

Kuralt said the chains illegally pressured publishers to give breaks not available to the smaller bookstores, including what he alleges were illegal promotional fees, rebates of shipping charges and inflated discounts.

Two years ago, the American Booksellers Association settled a similar lawsuit filed on behalf of 26 independent bookstores in California for $4.7 million. The settlement with Borders and Barnes & Noble represented about a quarter of the ABA's legal fees.

The ABA also won a consent order in 1998 that kept publishers from favoring certain retailers.
You wonder why the large retailers settled with the ABA. They should have realized that settling, for any amount, would only encourage more litigation in the future. No doubt the retailers' lawyers assured them that settling was the safest option. Indeed it was--for the lawyers. They get paid no matter what simply for advising their defendant clients.

On the merits of the Kuralt claim, it should strike even antitrust advocates as odd that the argument here is against a business practice that benefits consumers--namely volume discounts to large purchasers. A market composed largely of small, independent retailers generally doesn't bode well for lower consumer prices. If it did, Wal-Mart wouldn't be the world's largest retailer. Volume discounts more often than not encourage the precise type of competition antitrust wonks claim is good. Yet here Kuralt is suing, in essence, because consumers benefitted at his expense, and he wants the courts to punish the consumers for preferring his competitors' business model.

It reminds me of a Dilbert cartoon where Dogbert states the two basic rules of business: First, the customer is always right; second, they must be punished for their arrogance!

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Wry Observations II: DC is worse for a reason 

:: Posted by Skip at 12:15 PM

Nick cites a post below arguing that young black males are more likely to die on the streets of D.C. than serving in the armed forces in Iraq. I can think of one reason this is the case: a black male soldier is allowed--indeed required--to carry a firearm while stationed in Iraq. A law-abiding black male in D.C., however, is banned from owning a private handgun under the local law. D.C. policy is to make sure the criminals are armed while the population is effectively helpless.

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Antitrust News: Congress Takes on College Football 

:: Posted by Skip at 12:11 PM

As I write this the House Judiciary Committee is holding a hearing on "Competition in College Athletic Conferences and Antitrust Aspects of the Bowl Championship Series". If it sounds like a political effort to exploit popular discontent with college football's postseason format, that's because it is. Testifying at this morning's hearing is NCAA President Myles Brand, Big Ten Conference Commissioner James Delany (speaking for the BCS), former San Francisco 49ers quarterback Steve Young, and Tulane University President Scott Cowen, who heads a coalition of non-BCS, Division I-A football schools.

The Judiciary Committee's press release notes: "The projected revenue for the four 2004 BCS games is $90 million. An estimated $6 million of this will go to the 55 non-BCS schools while over $80 million will go to the 62 BCS schools." What is left out is that it's the 62 BCS schools that generate that revenue. ABC is not paying to televise a matchup between Tulane and Montana. They are paying to see Michigan, Notre Dame, Miami, etc., the major football schools. The real problem is that under the current NCAA structure, you have half the schools producing revenues, while the other is spending themselves into debt to try and compete. If the non-BCS schools would come to their senses and scale back on their money-losing athletic programs, all this talk of antitrust and the BCS would cease.

Of course, the BCS schools could force the issue by taking their football programs out of the NCAA entirely. Somehow I doubt that option will please would-be congressional regulators.

It's also worth noting that Tulane's Cowen, the anti-BCS leader, has said he doesn't want Congress involved, that it was up to the NCAA members to figure this out for themselves.

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Wry Observations: DC is worse than Iraq 

:: Posted by Nicholas Provenzo at 12:01 PM

Saw this on Instapundit and thought it was interesting:

Stefan Sharkansky notes that the District of Columbia is a quagmire of violent resistance to peaceful government, despite the efforts of American authorities:

According to this week's story from Scripps Howard News Service, there are 140,000 troops in Iraq, and there have been 286 fatalities from all causes since the war began in March (about 24 weeks ago). That gives us an annualized death rate of 443 per 100,000. Only about half of these deaths (147) were in combat, for a combat death rate of 228 per 100,000.

According to Center for Disease Control / National Center for Injury Prevention and Control, there were 21,836 young black men (age 18-30) in Washington DC in 2000, the latest year that mortality data is available. The total number of deaths in this group from all causes was 132, with 95 homicides. i.e. the death rate for this group was 604 per 100,000 and the murder rate was 435 per 100,000.

In other words, a young black male soldier from Washington DC would have been 36% more likely to die by staying at home than by serving in active duty in the Iraq war, and almost twice as likely to be murdered at home than to be killed in combat. Yes, that's horribly sad, but it puts a few things in perspective.
This exercise misses the ratio of black troops to white troops in Iraq, but the point is well taken nevertheless.

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The Culture: Business 2.0 Magazine Unveils 'The Books That Matter' List of Best & Worst Books 

:: Posted by Nicholas Provenzo at 10:35 AM

I've never heard of them before, but there is this magazine that calls itself "Business 2.0". Apparently they see themselves as an improvement over regular old business. Business 2.0 recently released its list of the best and worst books on business. This from their press release:

The following is a sampling of book selections by category from Business 2.0's list of the "The Books That Matter":

Pillars of Capitalism: The Wealth of Nations, by Adam Smith (1776)
Management: The Principles of Scientific Management, by Frederick W. Taylor (1911)
Strategy: The Art of War, by Sun Tzu (c. 300 B.C.)
Innovation: The Structure of Scientific Revolutions, by Thomas S. Kuhn (1962)
Leadership: Moby-Dick, by Herman Melville (1851)
Marketing: The Theory of the Leisure Class, by Thorstein Veblen (1899)
Investing: The Intelligent Investor, Benjamin Graham (1949)
Booms and Busts: Extraordinary Popular Delusions and the Madness of Crowds, by Charles Mackay (1841)
The Business of Technology: Fire in the Valley, by Paul Freiberger and Michael Swaine. (1984)
Greed: Liar's Poker, by Michael Lewis (1989)
Working Life: Seize the Day, by Saul Bellow (1956)
Biography: Wheels for the World, by Douglas Brinkley (2003)
Envisioning the Future: The Foundation Trilogy, by Isaac Asimov (1951-1953)

"Before businesspeople take that last long weekend of the summer over Labor Day, we thought we'd help them choose a great business book," said Josh Quittner, editor of Business 2.0. "At first glance, some of our choices may seem unusual--such as the inclusion of Moby-Dick--but each of the selected books spotlights examples of business savvy and ideas that we're sure will resonate with our readers."
Leadership from Moby Dick? Gimmie a break. You doubtless know the outlines of the "story": a mentally unbalanced whaling captain hunts a white whale which had once bitten off his leg. He finds it and dies fighting it. That's it. No adventures, no close calls with the white whale, no deep exploration of the captain's obsession. Nada. There are few events in this dark, malevolent novel. It's mainly rambling.

One book Business 2.0 felt would not resonate was Atlas Shrugged.

Titles that made the editors' "Remainder Bin" of overrated business books include the best-selling Who Moved My Cheese?, Ayn Rand's classic Atlas Shrugged, the management blockbuster In Search of Excellence, and Mark Twain's first novel, The Gilded Age.
Atlas Shrugged overrated? Heh. I think I'll wait for the Business 3.0 philosphic bug fix rather then buy into the current version.

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:: Wednesday, September 03, 2003 ::

Light blogging today 

:: Posted by Nicholas Provenzo at 2:35 PM

Light blogging today--I'm on the road. In the mean time, I recommend you take a look at Dollars and Crosses.

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:: Tuesday, September 02, 2003 ::

The Culture: People Shocked by Maddona 

:: Posted by Nicholas Provenzo at 7:56 PM

Call me amazed, but there are people out there who are still shocked by Maddona.

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Rights and Reason: Colleges Move to Stop File-Swapping 

:: Posted by Nicholas Provenzo at 6:39 PM

Alex Veiga of the AP reports that colleges are moving to prevent intellectual property theft on campus:

Students arriving for fall classes at colleges across the country are facing technological hurdles and stern warnings aimed at ending swapping of music and movie files over high-speed campus Internet connections.

Several of the universities are responding to a recording industry campaign to control the rampant copying of files over peer-to-peer networks.

Among other things, campuses are distributing brochures, running ads in student newspapers and devoting school Web pages to information on copyright infringement.

Some are even using software to choke the amount of data that can flow in or out of a computer when students use Kazaa and other file-sharing programs.

"We're feeling a great deal of pressure as a result of what the entertainment industry is doing, and we're stepping up a lot of activities to address it," said Jim Davis, associate vice chancellor for information technology at the University of California, Los Angeles.
As they should, because it is their networks that students use to loot IP.

No college could long exist if intellectual property was not protected. That some of the most egregious IP theft takes place on college networks should be reason enough for colleges to take the lead to address the implications of this theft.

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Foreign Policy: North Korea's Nuclear Program 

:: Posted by John Bragg at 6:38 PM

National Review Online's Stanley Kurtz notes the key difficulty in negotiating with North Korea--that they cannot be trusted. Two points must be kept in mind by the Administration team:

1. The success of the negotiations must be measured in pounds of plutonium handed over. The North Korean program must be rolled back, not frozen.
2. Any success is temporary, buying time. North Korea will continue to pursue nuclear weapons and psychotic adventures as long as it is run as a demented hellhole. Even if they hand over the plutonium and the enrichment machines they have today, they will go back and cheat tomorrow.

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Communications: Breaking News 

:: Posted by Nicholas Provenzo at 5:16 PM

It seems bloggers don't just analyze the news--they break it. Case in point: Howard Bashman.

At this very moment, the CNN.com Web site has the following banner headline across the top in white letters on a red background: "BREAKING NEWS: Federal appeals court in San Francisco overturns an estimated 100 death sentences. Details soon." Of course, I posted that news online here at "How Appealing" approximately two hours ago.

Update: The Associated Press, at least, was only an hour and a half behind me in reporting on the news[.]
There is no free service that covers the appellate courts as attentively as Howard Bashman. Period.

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Foreign Policy: Déjà Vu All Over Again 

:: Posted by Nicholas Provenzo at 10:02 AM

Cato's Charles V. Peña writes that Iranian nuclear weapons are not a threat to the US:

The bottom line, however, is that Iran, like Iraq, is not a direct military threat to the United States, even if it possesses weapons of mass destruction. The terrorist groups Iran supports are anti-Israeli and do not currently target the United States. And the allegations of linkages to al Qaeda are as tenuous as the claims made about Iraq. As Yogi Berra said, it's déjà vu all over again.

It would be folly for the United States to wage another war against another Muslim nation after Afghanistan and Iraq. Such action would likely be interpreted as a war against Islam by the rest of the Muslim world. If anything, the United States needs to avoid turning the war on terrorism against al Qaeda into a larger holy war against Islam and the more than one billion Muslims around the world.
Iran's Islamic government issued a fatwa against British novelist Salman Rushdie calling for his murder on the grounds that his 1989 book The Satanic Verses blasphemed Islam. This fatwa, a threat against the free exchange of ideas--the very cornerstone of western civilization--has never been rescinded by Iran.

The Rushdie fatwa alone is justification for war with Iran. The prospect that the same power that believes it has the right to kill writers it doesn’t like is developing nuclear weapons ought to be cause for serious pause. So what if Islam interprets a war with Iran as a war against Islam? Islamic militants have no qualms over waging war against us. Yet even post-9/11, it seems people in the US still have qualms with our waging a defense.

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The Conduct of War: Israel vs. The Arabs 

:: Posted by Nicholas Provenzo at 8:50 AM

Joel Mowbray writes from Israel:

Dozens of men—mostly with long beards and either skull caps or strange-looking hats (the likes of which I had never seen before)—approached me. This was understandable since not only had they never seen me before, but I was dressed in long khaki pants and a casual blue button-down shirt—a far cry from the black slacks and pressed white dress shirts almost everyone else was wearing. But rather than scorning me as an outsider, they embraced me and welcomed me to their house of worship.

Less than 48 hours later, at a funeral for a Hamas terrorist responsible for repeatedly plotting mass murders of innocent Israelis, this was the scene as described by the New York Times:

“‘We want martyrs, more sacrifice,’ blared a voice amplified through loudspeakers as more than 1,000 Palestinians marched through Gaza City today during the funeral procession.”
This reminds me of a point Chip Joyce made about "angry" Arab funerals. What kinds of people have angry funerals? What kinds of people turn an occasion of grief and morning into an angry demonstration?

I suspect angry funerals are the product of people who don't care so much for the memory of the dead as they do for their joy in killing.

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Rights and Reason: Dealing with the mixed economy 

:: Posted by Nicholas Provenzo at 8:36 AM

I leave for a couple days and I miss a real debate. Skip and John's discussion over the rights of atheist students in public schools reads to me like a classic case of finding the right in a mixed economy. The schools ought to be private. Teachers, to be effective, must be free to control the focus of their students and to serve as what Leonard Peikoff once called "total cognitive authorities" in the classroom.

Yet most elementary schools in America are not private, and being government-run, are bound by the First Amendment, which protects religious freedoms. Do I think public school teachers ought to genuflect before the irrationality of their religious students, such as, for example, exempting students from requirements to understand the theory of evolution or allowing them to don religious dress if they so wish? No. No one has a right to the irrational. Yet people do have a right to their freedom of choosing and exercising their own philosophy, which, in its 18th century language, is what I believe the First Amendment serves to protect. Again, we have the inevitable conflict between freedom and controls that the mixed economy begets.

And this conflict yet again underscores the pressing need to privatize public education. Public school teachers are given an impossible task: instruct, but be neutral, teach, but without authority. However public teachers attempt to accommodate the different philosophic and religious beliefs of their charges will always be inadequate. We see this. We need to ask ourselves why our opponents don’t.

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Foreign Policy: Tell that to the Marines 

:: Posted by Nicholas Provenzo at 8:07 AM

Paul Wolfowitz says the war in Iraq is part of the war on terror in today's Wall Street Journal.

Anyone who thinks that the battle in Iraq is a distraction from the war on terror should tell it to the Marines of the 1st Marine Division who comprised the eastern flank of the force that fought its way to Baghdad last April. When I met recently with their commander, Maj. General Jim Mattis in Hillah, he said that the two groups who fought most aggressively during the major combat operations were the Fedayeen Saddam--homegrown thugs with a cult-like attachment to Saddam--and foreign fighters, principally from other Arab countries. The exit card found in the passport of one of these foreigners even stated that the purpose of his "visit" to Iraq was to "volunteer for jihad."

We face that poisonous mixture of former regime loyalists and foreign fighters today.
I agree, but the failure to identify militant Islam as the force that drives our enemies continues to be a dangerous and negligent omission.

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:: Monday, September 01, 2003 ::

Capitalism and the Law: Junk e-mail  

:: Posted by Nicholas Provenzo at 8:23 PM

I took a few days off to head to the ocean and recharge the batteries. Like most of us, I came back to check the inevitable mountain of e-mails. In less than one week, I received over 1,500 junk e-mail messages.

1,500. That's incredible. And frankly, there ought to be a law. I should be able to indicate via my e-mail sever whether I want unsolicited e-mail, and if I don't, those that spam me should pay.

I don’t buy that it is too hard to defeat spammers. Spammers have no moral right to my time, or my computer. If not, e-mail is dead as a medium.

It is said that dealing with spam costs in the billions. Those that generate that unwanted spam should be made to foot the bill.

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What It's All About: Labor Day 

:: Posted by John Bragg at 9:46 AM

On Labor Day

Today we celebrate productive labor. Either we work at jobs and careers which are our primary joy in life, or we work for money so as to pay for that which is our primary joy. Raise a glass, and if the weather permits grill a steak, in honor of our dedication to our happiness, and the work we do in devotion to it.

Happy Labor Day.

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