»Home | »Philosophy  | »Advocacy | »Weblog  | »Contribute Online
:: The Rule of Reason ::

:: Wednesday, December 31, 2003 ::

The War: What's wrong with this picture? 

:: Posted by Nicholas Provenzo at 2:03 PM




















Here's a New Year's Resolution: Rather then witness the image of the Statue of Liberty under the barrel of a machine gun, we ought to endeavor to give the capitals of Iran, Syria, North Korea, and Saudi Arabia the benefit of such a sight.

This picture concretizes the failure of the Bush Administration's policy of "homeland defense" in no uncertain terms. Rather than pacify the governments that make terrorism against the US possible, rather then pacify their skies, the Bush Administration is pacifying our skies.

Yet can such a strategy hope to work? For example, could a policy of securing American borders and searching every container ship as it enters American harbors stop an attempt to smuggle a nuclear bomb into America better then destroying the facilities capable of producing such a bomb? I doubt it.

If there are enemies who aim to attack us, every effort ought to be placed on destroying them before they can even think about approaching our borders. I wonder though, even after the horror of 9/11, if the US has the stomach to truly fight all its enemies.

:: help support this website | link |



 

:: Tuesday, December 30, 2003 ::

Antitrust News: The Atlantic Divide 

:: Posted by Skip at 10:33 AM

Earlier this month the European Court of First Instance—the rough equivalent of the U.S. Court of Appeals for the D.C. Circuit—upheld a $8.4 million fine imposed in 1999 against British Airways. The European Commission found the airline guilty of antitrust violations, specifically that the company “abused its dominant position” by offering rebates to travel agents that sold the most British Airways tickets. Under European antitrust theory, such rebates are illegal because it’s just too darn hard for other airlines to compete against the dominant firm.

This case exposes a key difference between European and American antitrust theory. In the U.S., regulators focus on short-term consumer prices. If a particular action doesn’t substantially raise prices, the FTC and DOJ will usually let a company be. Europe, in contrast, considers any dominant firm to be inherently suspect, and thus any action they take to assert their economic dominance—regardless of impact on prices—is an antitrust violation. Put another way, U.S. regulators consider their mission to protect the competitive process, while European officials want to protect specific competitors from dominant firms. That’s precisely what happened to British Airways, as the case against them was brought by rival Virgin Atlantic.

The European antitrust view will become more problematic for the U.S., as American firms are targeted with greater frequency by Brussels. Microsoft is one such target. Another is Coca-Cola, which runs a rebate program similar to the one that got British Airways in trouble. The Bush administration has made a priority of increasing international antitrust cooperation. But will this cooperation force U.S. officials to adopt the more rigid, anti-capitalist stance of European antitrust regulators? Recent history suggests it will. The White House has allowed its own antitrust regulators to expand their scope and authority without oversight, and there is little indication the administration will stand up against European aggression in this area.

:: help support this website | link |



 

The Culture: All Children Left Behind 

:: Posted by Skip at 10:17 AM

Yesterday’s Wall Street Journal reported that the “No Child Left Behind” law has had an interesting (and for my money, predictable) consequence: States are cutting back on funds for gifted and talented programs to focus on making all students “proficient” in basic skills. NCLB doesn’t reward students for excelling, only for minimum competence. And because it’s a federal mandate, NCLB leaves little room for local variation or experimentation.

Now, the cuts to gifted and talented programs should not alarm or upset anyone. Such programs are inherently incompatible with public education, which must emphasize collective mediocrity over individual achievement in order to survive. Now if that concept upsets you, then you shouldn’t support government-run schools. But you can’t have it both ways: Demanding excellent achievement for some children while allowing others to languish. Government schools are about egalitarianism. Or, put another way, they’re about “socialization”.

The fundamental error in education policy is the confusion between socialization and education. The two are not coterminous. When men interact in a society, it is for two primary reasons: knowledge and trade. There are of course other purposes, such as friendship and love, but knowledge and trade form the foundation of social relationships. Young children, however, have not yet developed intellectually to the point where they can fully grasp those concepts.

The educators will tell you “socialization” helps children learn in a group setting. But this is a false identification. Nobody learns “in” a group. They can learn from a group, particularly those individual members with existing knowledge. But there is no group consciousness that can substitute for the work of an individual mind.

In a group, children do not form a society based on the exchange of knowledge and trade; they form a society based on peer pressure and force, such as bullying. William Alford, a student at George Mason University, recently offered these insights into this subject:
Children, Dr. Graham tells us, if left to devise their own society, would most likely come up with something resembling William Golding’s The Lord of the Flies. In other words, an 11-year-old’s social milieu is “crude… stupid… [and] savage.” Given the similar authority figure-to-inmate ratio and the detachment, it also resembles prison. G. Gordon Liddy, having spent five years in federal ‘correctional institutions,’ often says on his radio program that the prisons are actually run by the prisoners.

Children are not intrinsically this way, Dr. [Paul] Graham argues. Mongol teenagers or Renaissance apprentices probably did not engage in such bullying behavior because they were busy. Suburban teens are, he continues, instead warehoused in schools mostly for baby-sitting and being drilled information that is perceivably less and less relevant to anything applicable in the real world. Now that children are not working alongside adults as they learn their crafts, they have little identification with [or respect for] the adult world and thus devise their own:
“Since the group has no real purpose, there is no natural measure of performance for status to depend on. Instead of depending on some real test, one's rank ends up depending mostly on one’s ability to increase one's rank. It’s like the court of Louis XIV. There is no external opponent, so the kids become one another's opponents in an inexorable zero-sum competition.”
It is important to point out that the child specialists [in the cited and other researched materials] do not consider bullying to be ‘normal’ -- and certainly not acceptable. They almost universally characterize it as destructive unnecessary behavior that must be actively curbed – some even naming it as a disorder. Although the professional literature certainly demonstrates a clear grasp of what causes bullying, solutions are not as definitive. There are vague recommendations to mobilize parents and teachers to combat the problem. There is little evidence offered of any effective answers.
Bullying, like much of the drug abuse problem among teenagers, can be traced directly to the existence of government schools. This is an admission no government official will ever make. Even a Republican president like George Bush has no political interest in challenging the system’s fundamental premises. Instead he focuses on isolated concretes like raising test scores, themselves a somewhat arbitrary measure.

The biggest threat to the government education establishment is not any politician, but the people who’ve rejected the system—the home educators (I personally dislike the word “homeschooler,” since education and schooling are distinct concepts). Students taught at home by committed parents aren’t “left behind”; quite the contrary, they’re far ahead of their government-institutionalized peers. This is why in many states the establishment is trying to pass new laws to stunt the growth and success of home education. Again, we’re told these laws are necessary to ensure “socialization”. But as William Alford notes, both socialization and education prosper outside of the government’s watchful eye:
In this writer’s not-so-humble opinion, child socialization and education are in many ways incompatible, especially for juveniles. These should therefore be separate experiences, wherein the child is individually educated according to his/her abilities. Socialization should be carefully supervised, with the parents and other concerned adults deciding which children will be interacting with each other and under what circumstances -- not a government-run institution staffed by the likes of NEA members.
(Thanks to Daryl Cobranchi, a proud home educator, for pointing me to the Alford article.)

:: help support this website | link |



 

:: Monday, December 29, 2003 ::

Capitalism & Law: The Highest Court in the Land 

:: Posted by Skip at 10:50 AM

The Supreme Court’s workload has been decreasing for years under Chief Justice William Rehnquist. Steve Chapman, writing in Saturday’s Washington Times, notes that lawyers have started to complain about the Court’s lack of production:
Philip Allen Lacovara, [h]as argued numerous cases before the court. Writing in the December issue of the American Lawyer, he notes that in 1976-77, a typical year for that era, the court issued decisions after hearing oral arguments in 176 cases. In its 2002-03 term, by contrast, the number was 73, which is about the norm these days.

It's not that the court is strapped for the resources it needs to handle its caseload. Each justice now has four law clerks to provide assistance, up from one or two a few decades ago. Petitions to the court that used to be read by actual justices now are often left to clerks. It takes about $86 million a year to produce those 73 decisions.
Chapman and Lacovara both argue the Court ignores too many important cases worthy of attention. Most notably, the Court “has come to disdain cases that involve economic regulation.” That’s completely true. One example that comes to my mind is the Three O Realty case, which the Court declined to review. In that case, New York State blatantly abused its eminent domain power by falsely claiming “blight” as an excuse to take private property and give it to another private owner—the New York Times, as it turns out. This case screamed for review, yet like almost all eminent domain abuse cases, the justices couldn’t be bothered.

Chapman also echoes my longheld belief that the Court suffers from opinion glut:
The court's shrunken caseload only proves idle hands are the devil's workshop. As the justices have fewer cases to resolve, they spend far more time on gratuitous hairsplitting. Many of them often act like pop divas in concert — less intent on harmonizing than on outdoing each other in showy solos.

One fairly simple Fifth Amendment case last term somehow split the court more ways than a shattered windshield, yielding six different opinions, with few of the justices able to agree on much of anything. The recent decision on the Bipartisan Campaign Reform Act of 2002 was a law student's worst nightmare, running nearly 300 pages and requiring 26 lines of small type just to score the votes. If these nine go out to dinner together, you can bet they insist on separate checks.

Deciding fewer cases doesn't seem to produce happier justices. Nasty sniping is far more common than in previous decades. Justice Antonin Scalia is particularly prone to spice his disagreements with insults. Last term, he said a verdict striking down sodomy laws "is the product of a court, which is the product of a law-profession culture, that has largely signed on to the so-called homosexual agenda."
It’s almost like the Court has become a overpriced, underperforming NBA team—lots of star players who can’t come together as a team and win. The fact that the Court is now largely controlled by its star pragmatist, Sandra Day O’Connor, only makes things worse.

:: help support this website | link |



 

:: Thursday, December 25, 2003 ::

Merry Christmas . . . 

:: Posted by Nicholas Provenzo at 7:00 AM

. . . and to men of goodwill, Peace!

:: help support this website | link |



 

:: Wednesday, December 24, 2003 ::

Season's Greetings: Gone Fishin' 

:: Posted by Skip at 10:55 PM

I'll be on hiatus until Monday, December 29. If anyone needs me, I'll be at an "undisclosed location". Ask Nick, he knows where it is. Merry Christmas to all and to all a good night...

:: help support this website | link |



 

Capitalism & Law: A Tale of Two Professions 

:: Posted by Skip at 5:40 PM

The Major League Baseball Players Association has begun yet another investigation into whether baseball owners are "colluding" to illegally hold player salaries down. The average salary for all players is about $2.2 million per year. That's nearly double what it was just ten years ago.

Here's some perspective: Over the same ten year period, many of the nation's doctors have seen their managed care reimbursements cut or remain the same. When the doctors organize against this, they're nailed for antitrust violations. When millionaire baseball players do the same thing, it's legally protected union activity.

:: help support this website | link |



 

Rights & Reason: Campaign Finance in Practice 

:: Posted by Skip at 10:21 AM

A point that is often overlooked when discussing campaign finance “reform” is the ultimate objective of the alleged reformers: government financing of all political campaigns. John Lott of the American Enterprise Institute points out some of the many problems with this concept:
Campaign finance reform will undoubtedly also survive recent scandals — even the revelation of a New York City Council candidate who was apparently the first to realize that you could use donations to get matching funds and then hire those same donors as political consultants with the government money. With New York City offering four dollars of matching funds for every dollar raised, few legal investments provide that kind of return.

Others have noted that if former Vermont Gov. Howard Dean, Mr. Kerry and President Bush hadn't opted out of the public finance system, the program would be out of money now. Taxpayers have simply been unwilling to even redirect some of the taxes that they have to pay anyway into the system. When you have the Federal Election Commission just announcing that Lyndon LaRouche, the perennial conspiracy theorist candidate, will soon get a check from the government for $840,000, taxpayer distaste for the system is quite understandable.
The New York City story interests me. The city’s campaign finance board not only enforces the law, but tirelessly lobbies for its expansion to force candidates that opt-out of the public financing system to play by the board’s rules. Fredrick Schwarz Jr., the board’s chairman, is unapologetic about his egalitarian mission:
The purposes of the law are, among other things, to maintain an even playing field among candidates as much as is reasonable, to give serious candidates who do not have access to sources of wealth an opportunity to compete in a meaningful way, to allow candidates to compete successfully without reliance on special interest money, to give the public meaningful and timely disclosure of campaign finances, and to inform the public about issues relating to New York City campaigns. At all times, of course, guarding the public fisc must be at the front of our concerns as we study the potential impact of reform generally and of candidates’ use of public funds in particular.

I believe that the items I will discuss today support these goals and are necessary and appropriate in the continuing evolution of the New York City Program, to maintain that Program as the premier model for similar reform efforts across the country. Indeed, the Council should pride itself that by considering the proposals before you today—many of which will tighten restrictions on the very elected officials who are being asked to adopt them—the Council is once again setting an example for the rest of the country.
Mr. Schwarz, it should be noted, is senior counsel for the Brennan Center for Justice at New York University. The Brennan Center, I previously blogged, is leading the charge to defend Santa Fe, New Mexico’s “living wage” law from businessmen who consider the labor price control a violation of their rights. This is exactly the type of guy you want running campaign finance in New York—a man who opposes property rights and views the government as an engine of redistribution of wealth.

Indeed, the entire campaign finance board consists of lawyers, one of whom is also a rabbi. Until recently one of the board’s members was Pamela Jones Harbour, a former New York deputy attorney general who left the board to become a member of the Federal Trade Commission.

:: help support this website | link |



 

Rights & Reason: Driving Without Probable Cause 

:: Posted by Skip at 9:52 AM

Blogger Charles Austin discusses his recent experience with a “mandatory sobriety checkpoint” in Northern Virginia. These have become common features of suburbia around the holiday season. They’re also patently unconstitutional, despite the Supreme Court’s willingness to tolerate them. If stopping drivers and forcing them to go through a battery of sobriety tests without any probable cause isn’t a warrantless search in violation of the Fourth Amendment, then banning organizations from running television ads just before an election doesn’t violate...oh, wait, nevermind.

Eric McErlain, commenting on Austin’s situation, points out that in Virginia, the cops aren’t just out for drunk drivers, but for social drinkers as well:
Unfortunately for those of us who live in the Reston-Herndon area of Fairfax County, the sobriety checkpoint isn't all. Last Holiday season, police officers in both municipalities began crusing [sic] through local bars to administer breath tests and charge bar patrons with public drunkeness. Mind you, individuals weren't targetted [sic] for arrest if there [sic] were disruptive out on the street, the police simply walked into local bars and hauled people off their stools to be tested -- something I found to be a bit extreme.
Radley Balko, Cato’s point man on neo-prohibitionism, adds that Mothers Against Drunk Driving, as prominent a lobby as they come, wants all social drinking and driving outlawed. Meaning one beer could get you arrested. In other words, MADD doesn’t want anyone drinking at all for any reason. This makes me wonder if MADD has become a “sleeper cell” in John Banzhaf’s terrorist organization.

:: help support this website | link |



 

:: Tuesday, December 23, 2003 ::

Corporate Cowards: Dow AgroSciences  

:: Posted by Nicholas Provenzo at 5:54 PM

Rule of Reason readers will recall that last Monday CAC bestowed its "corporate coward" award on Dow AgroSciences. The Award was first in a new series designed to heap shame on businessmen when they fail to defend their rights in the face of injustice. Dow AgroSciences received our award for settling a plainly erroneous lawsuit brought against it by New York Attorney General Elliot Spitzer for advertising the safety of their pesticide products.

So guess what CAC received in its in-box today:

Nicholas Provenzo - I am the primary author of and contact for the press release that may have prompted your December 15 letter. I've been in the business of defending my company -- also my father's company, for that matter -- for 30 years, and for a variety of reasons derived from three decades of personal experience, I don't entirely share the philosophy or perspectives you've espoused. But, if you're willing, I would like two signed copies of that letter on your official letterhead instead of just a fax. I'd like to frame one and keep the other for my scrapbook. If you decide to send them, the address is:

Garry L. Hamlin
[Address omitted]

Merry Christmas.

P.S. This is a personal communication. I am not functioning in any official capacity on behalf of my company or any other organization and this communication should not be used to suggest or imply that I am.
Mr. Hamlin has respectfully asked me to send him a copy of the fax I sent his firm so he may frame it. Interesting, considering I called the executives of his company "sniveling bedwetters." And yet unfulfilling. I don't get the sense Mr. Hamlin grasped that CAC was accusing his company of a shameful crime against its own interests. Attorney General Spitzer's arguments against Dow AgroSciences were utterly bankrupt—literally legal nonsense on stilts. Yet by falling to defend its rights, Dow AgroSciences gave Spitzer's claims of false advertising (and the moral basis by which he made these claims) a legitimacy which they never could enjoy on their own. Mr. Hamlin's thirty years of experience and the pride he feels in following in his fathers footsteps does not negate that his firm that engaged in what Ayn Rand appropriately called "sanction of the victim." A victim's inaction only serves to aid injustice.

Businessmen are certainly within their rights to consider it more practical to settle a costly lawsuit then have their businesses endure a protected fight. Yet I can't help but think if the American founders used the same calculus as Dow AgroSciences did when it calculated the cost of fighting against Elliot Spitzer, we would be living in a much different and much darker world today. I will send Mr. Hamlin a signed copy of his firm's award. And for extra measure, I will be sending him a copy of Atlas Shrugged. If he won't read it, maybe his son will . . .

:: help support this website | link |



 

The Culture: You'll know Objectivism is winning when . . . 

:: Posted by Nicholas Provenzo at 4:28 PM

I was visiting one of my favorite gift sources and I noticed they had explicitly made a motivational poster that they say is "perfect" for me and my fellow Objectivists.

Hehehe. Hey, I'm just happy we're on the radar. ;-)

:: help support this website | link |



 

Capitalism and the Law: China to Consider Changing Property Law  

:: Posted by Nicholas Provenzo at 2:27 PM

There are some interesting developments taking place in the People's Republic of China:

Millions of Chinese who have plunged into capitalism by starting businesses and investing in stocks and bonds will be guaranteed their right to private property for the first time since the 1949 revolution under a constitutional amendment proposed Monday by communist leaders.

The change would give an official status to the entrepreneurs who once were considered the enemy of communism but now drive China's economy, creating millions of jobs and dotting the skylines of Beijing and other cities with office towers and apartment blocks.

After months of debate, party leaders submitted the proposed amendment Monday to the National People's Congress, along with a proposal to enshrine in the constitution the theories of Jiang Zemin, the former leader who invited capitalists to join the party. Approval by the legislature should be a formality.

The changes reflect the party's decision to cast off leftist dogma in pursuit of prosperity and national status — and to embrace the forces driving change in order to stay in control.

"The Chinese leadership understands that the private sector will be the engine for economic growth," said Joseph Cheng, a political scientist at the City University of Hong Kong.

In part the change is symbolic, bringing the constitution up to date with China's market-driven reality. But it will also likely strengthen the rule of law in a business environment where many common transactions go on without legal structure or regulation. [AP]
I have not read the proposed amendment nor do I know how much force the Chinese constitution has on day-to-day political life in China. Yet if China is attempting bring the rule of law and respect for private property to its political institutions, even small changes are welcome news.

:: help support this website | link |



 

:: Monday, December 22, 2003 ::

Capitalism & Law: Mountain Brief Filed 

:: Posted by Skip at 10:34 PM

Today I filed my brief with the U.S. Court of Appeals for the Fourth Circuit in United States v. Mountain Health Care. For those of you new to the program, let me recap: Last December the Justice Department forced a group of 1,200 physicians and healthcare providers in North Carolina to disband. The DOJ said the group, Mountain Health Care, illegally adopted a common fee schedule for use in negotiating contracts with managed care purchasers. The DOJ considers any fee schedule illegal because when doctors agree to set their fees in concert, the DOJ claims it harms consumers. The government said Mountain’s fee schedule “artificially” raised prices and denied consumers the “benefits” of competition for physician services. The implication is clear: the government claims physicians have no real right to set their fees. Despite denying any wrongdoing, Mountain agreed to disband because they couldn’t afford the cost of fighting the DOJ.

During the public comment period on this “settlement,” I objected the to the total lack of factual context in the government’s complaint. Basically the DOJ argued Mountain raised prices, but no outside observer knew what those prices were or what the “correct” market prices were, because the DOJ wouldn’t release that information. When challenged, the DOJ said they had no obligation to provide any context, and that asking them to do so would unreasonably impair their ability to promptly settle antitrust cases. The district court overseeing the case couldn’t be bothered to deal with my objections, and the judge rubber stamped the settlement without comment.

Fortunately there’s a provision in the antitrust law that allows malcontents like me to intervene in the proceedings and ask for appellate review. This now brings us to the Fourth Circuit in Richmond. I’ve asked the Court to decide whether the DOJ must disclose Mountain’s allegedly “anticompetitive” fee schedule. Seeing as it’s the sole piece of evidence referred to in the DOJ’s complaint, the public (and the district court) should have a chance to examine it. The antitrust laws require disclosure of any “materials or documents which the United States considered determinative” in an antitrust settlement case. The DOJ always argues that provision doesn’t really mean anything. Now the Fourth Circuit will decide if that’s really the case. The DOJ will file its reply to my brief in January. I can’t wait to see what distortions and lies they come up with.

:: help support this website | link |



 

News: Uniting Commerce and Education 

:: Posted by Skip at 10:20 PM

Stephen Joel Trachtenberg, the president of George Washington University (which Nick Provenzo and I both attended), is the new chairman of the District of Columbia Chamber of Commerce. It’s interesting that the head of a nonprofit organization would be elected to this position, but in fact GW is the city’s largest non-government employer, quite a feat in the nation’s capital. Not surprisingly, GW and Trachtenberg are constantly vilified by malcontents in the community. I still live in GW’s neighborhood, and for years a small group of activists have managed to control local government advisory panels that carry inordinate political influence with D.C.’s zoning officials. Consequently, GW faces roadblocks and obstacles whenever it attempts any new construction project. Yet despite this, GW has managed to grow and prosper under Trachtenberg. The physical campus has improved 100% from when I first came to D.C. in 1996. Prior to Trachtenberg’s arrival in 1986, GW was little more than an urban commuter campus. Now it’s a bona fide national university. (You also have to admire GW’s ability to be nationally competitive without sinking millions into a Division I football program.)

That’s not to say I agree with everything Trachtenberg’s done. Far from it. But it does seem appropriate he’s assuming the leadership of the chamber of commerce. Few individuals have shown as much persistence in the face of constant political opposition to private property rights as old SJT. Now let’s see if he can stop the D.C. Council from banning smoking in restaurants and bars.

:: help support this website | link |



 

Rights & Reason: Googling Leftism 

:: Posted by Skip at 10:04 PM

The Adam Smith Institute, a British free market group, warns that Google will be the next major target of anti-corporate leftists. ASI’s Alex Singleton cites an interview with a reporter for the state-subsidized BBC, who bemoans the selfish motives of Google’s leadership:
BBC Online journalist Bill Thompson met Google co-founder Sergey Brin in 2000 and found the man "completely devoted to making a better search engine rather than making himself rich... Now his search engine is the equivalent of programmes on ITV, there solely to attract eyeballs for advertisers."
Thompson wants the British government to regulate Google and other for-profit search engines—he actually calls for an “Office for Search Engines”. Before you dismiss this idea as ridiculous, consider the British government’s record on protecting commercial speech rights. In November 2002, CAC’s second amicus brief in Nike v. Kasky discussed the UK’s campaign to cleanse public affairs television of commercial influence:
Recently, the British Government’s Independent Television Commission banned the further telecast of “The Wall Street Journal Editorial Board with Stuart Varney,” a current affairs discussion program produced in the United States, and initially aired in Britain on CNBC Europe. In a letter to CNBC Europe, the ITC “sharply reprimanded” the network for airing the program, because British policy prohibits current affairs programming from having commercial sponsors. The Wall Street Journal was accused of sponsoring the program in order to promote sales of their print newspapers. The ITC reasoned: “The finding against CNBC Europe has nothing to do with…‘the ability of a commercial TV network to exercise free speech,’ but everything to do with the right of viewers to have access to news and current affairs that is, and can be seen to be, free from commercial influence.”
The automatic association of commercial motives with intellectual corruption is a cornerstone of modern leftist ethics. It explains campaign finance reform, media ownership restrictions, and similar policies that the nation’s Founders would have condemned as naked assaults on individual rights. Sadly, the left has largely succeeded in convincing a large plurality of the western world that commercialism equals evil.

:: help support this website | link |



 

The Culture: New Tower Design for WTC Site Unveiled  

:: Posted by Nicholas Provenzo at 4:55 PM

I’m unimpressed with the recently revealed “Freedom Tower” now slated to replace the destroyed World Trade Center.

The signature skyscraper at the World Trade Center site will be a 1,776-foot glass tower that twists into the sky, topped by energy-generating windmills and a spire that evokes the Statue of Liberty, new plans revealed Friday.

Saying it will "dramatically reclaim" the Manhattan skyline on the plot where the twin towers once stood, Mayor Michael Bloomberg joined the architects and Gov. George E. Pataki in unveiling the plans for the Freedom Tower. Pataki said the building "will show the world that freedom will always triumph over terror."

The drawings and models show what will be the world's tallest skyscraper, supported by crisscrossing cables meant to resemble another nearby icon: the Brooklyn Bridge. The spire at the top suggests the torch-bearing arm of Lady Liberty lifted high in New York harbor.

The plan was produced after months of contentious negotiations between Daniel Libeskind, who designed the overall five-building site plan, and David Childs, the lead architect for the Freedom Tower.
In an interview with The Associated Press, Libeskind held the new building plan at arm's length.

"We have very different approaches and ideas," he said, calling the revised Freedom Tower "Mr. Childs' building." Still, he said the two were able to compromise on important aspects such as the building's height and the 276-foot spire at its peak.

"At the end we both came up with something that is strong," he said.

The new design eliminates some of the angular shapes in Libeskind's original drawings, replaces Libeskind's visions of gardens atop the office space with windmills, and gives the building more of a twisting shape.

Childs said the tower is "iconic, simple and pure in its form, a memorable form that will reclaim the resilience and the spirit of our democracy."

The plan would create an open area above 70 floors of office space, with observation decks and a reprise of the Windows on the World restaurant that once occupied upper floors of the trade center's 110-story north tower. The windmills would provide 20 percent to 40 percent of the building's energy. [AP]
Freedom Tower attempts to fill the void left by the destruction of the World Trade Center, yet falls woefully short. Two 110 story office buildings are not replaced by a 1,776 foot tall tower with only 60 floors of productive space and a bunch of windmills at the top.

First of all, the proposed design is ugly. The strong symmetry of the World Trade Center has been replaced by a host of confused angles. The latticework of the Central tower offers the appearance of a ghost of a building—not a real structure. The interior seems designed for the sole purpose of mystifying the visitor. The only notable exterior feature of the adjoining buildings is the angles of their loped-off crowns. And windmills? Their inclusion is laughable at best and a source of vibration and noise at worst.

Secondly, the architects seem to acknowledge the importance of creating a structure taller then the original World Trade Center, yet their design is only a tower, not a full, productive building. It is a shell of a building, serving to replace the original towers only in size, but not in function.

The destruction of the World Trade Center is a tragedy, and it deserves to be remembered appropriately on-site. But after all the contemplation and tears, the best way to remember those lost is to see a new building to emerge from the ruins like a phoenix—a full, proud building that does not abandon the original World Trade Center’s purpose, but expands upon it. To answer Bin Laden properly, the new World Trade Center ought to be everything the former World Trade Center was and more: a center for capitalism, art, remembrance and rededication. Such a building ought to say that we will never lose sight of those lost on 9/11, yet our spirit goes on, undeterred and unbowed.

:: help support this website | link |



 

:: Friday, December 19, 2003 ::

Sports: Another Coach Bites the Dust 

:: Posted by Skip at 5:08 PM

St. John’s University fired basketball coach Mike Jarvis today. I remember when Jarvis left George Washington University to take the St. John’s job six years ago. I was an editor at one of GW’s campus newspapers and covered the press conference introducing Jarvis’s successor, former Texas coach Tom Penders. At the time, both schools thought they were taking steps to solidify their programs. Today, neither Penders nor Jarvis are coaching. Penders lasted three seasons before a series of seemingly minor scandals brought him down. Jarvis apparently didn’t produce a strong enough record in the highly competitive Big East Conference.

Last month I defended Nebraska’s decision to fire football coach Frank Solich on strictly business grounds. I endorsed Nebraska athletic director Steve Pederson’s view that “mediocrity” was not a virtue in a competitive, moneymaking business like major college football. The same argument could be advanced for firing Jarvis. While Jarvis produced a winning record, the program was not maximizing its potential, given its recruit-rich New York City base and strong basketball tradition. The biggest criticism of Jarvis has always been his recruiting; at GW, he was often chided for relying on foreign players rather than aggressively recruiting local talent.

Then again, unlike Nebraska, St. John’s can’t seem to figure out what direction it wants to go in. Jarvis is now the third former head coach in nine years, following Brian Mahoney and Fran Fraschilla. And it made no sense to fire Jarvis in December—just at the start of conference play—while promoting his longtime top aide, Kevin Clark, to acting coach. That’s just throwing away the current season, which won’t send much of a message to recruits, fans, or current players.

One suspects St. John’s will press for a big name coach (Rick Pitino’s name has already come up), but that strategy may fall flat. This is what happened at GW when Jarvis left. The school went for the biggest name it could find, a name that happened to be good pals with the athletic director. GW overlooked the circumstances of Tom Penders’ departure from Texas, and within a couple years, they paid for that oversight. Now GW is rebuilding under a competent coach, Karl Hobbs, who was elevated from the assistant coaching ranks. Hobbs knows he holds a mid-major job just below the elite level. St. John’s is not at that same level, but may choose not to recognize that fact. This shows poor business management. Basketball is St. John’s chief revenue-producing sport; any attempt at a quick-fix will blow up in their face and do long term damage to the school.

And as I noted when Frank Solich is fired, it’s funny that universities will fire coaches for mediocre performance, but professors are considered untouchable due to tenure. Using Jarvis as an analogy, could you imagine an English professor getting fired before midterms because the students weren’t learning fast enough? Not that I would object to such a system. I just question why academia insists on the double-standard.

:: help support this website | link |



 

Antitrust News: FTC Strikes at Patent Rights 

:: Posted by Skip at 10:39 AM

The FTC has declared war on intellectual property rights, specifically patents. The FTC recently released a report that concluded patent laws are too generous -- meaning they protect patent holders rather than consumers. Some of the FTC's specific criticisms have merit, but ultimately it's Congress's job to decide what the patent laws are. But the FTC has never been an agency that waits for Congress to act. Thus, the Commission is already using its broad antitrust authority to go after patents they don't like. Yesterday this battle took a nasty turn.

In 1997, Schering-Plough, a drug company, sued two generic drug companies that allegedly infringed S-P's patents in developing a generic version of S-P's K-Dur 20 drug. These patent suits are routine in the pharmaceutical industry. At the urging of the trial judge, the companies settled their dispute. S-P made payments to the two competitors in exchange for agreements to defer introduction of the generic drugs. The court approved this deal, and that should have been the end of that.

In 2001, the FTC filed an administrative complaint, charging the deals violated the antitrust laws because they denied consumers immediate access to generic K-Dur 20. In June 2002, the administrative law judge assigned to the case dismissed the FTC staff's complaint on all counts. Today, nearly 18 months later, the five FTC commissioners unanimously reversed the judge and held the court-approved settlements were illegal.

You have to question the integrity of the decision making process. A neutral judge finds the FTC staff's arguments baseless. Then the five commissioners, political appointees having recently stated their personal agenda in opposition to intellectual property rights -- overrule the judge in favor of the position taken by staff appointed by the same commissioners. And we're supposed to tell the Iraqis how to try Saddam?

The timing of this decision is curious for another reason. Andrx Pharmaceuticals is currently fighting a class-action lawsuit challenging an agreement it made to settle patent litigation with Aventis. In this case, the Sixth Circuit held an interim settlement violated the antitrust laws. Andrx has filed a petition for review with the Supreme Court, and the plaintiffs must file a response by December 29. My group, the Center for the Advancement of Capitalism, is filing an amicus brief at Andrx's invitation. I have to think the FTC is trying to send a message with today's decision.

:: help support this website | link |



 

Capitalism & Law: Beware Jury Compassion 

:: Posted by Skip at 9:51 AM

The Association of Trial Lawyers of America (ATLA) publishes a guide on how to win tort cases. Included is a chapter written by lawyer David Wenner, who advises his brethren to weed-out jurors who believe in “personal responsibility”. Wenner argues that plaintiff’s attorneys should eliminate highly religious, “family values” people from juries, but his arguments also would exclude Objectivists and rationalists as well:
"It is helpful to divide the jurors into two groups: the personal responsibility group and compassion-altruistic group," Wenner wrote. "Jurors who are extreme on the personal responsibility bias, or who have a high need for personal responsibility, will strongly favor the defendant. In contrast, jurors who are extreme on the compassionate-altruistic bias, or who have a high need for compassion, will strongly favor the plaintiff."

Based on his research, jurors who believe in moral absolutes tend to have what Wenner called a "personal responsibility bias.

"The personal responsibility juror tends to see the world with bright line rules on how people should act," Wenner wrote. "People should be self-reliant, responsible, and self-disciplined. When people act irresponsibly and are not self-disciplined, there are consequences. People must be accountable for their conduct."

Such jurors, Wenner believes, are likely to question whether the plaintiff could have done something to avoid the injury they suffered.

"The motto of these jurors is that if a person is committed to personal responsibility, then he or she must first accept blame before blaming others. That means playing the blame game is unacceptable if the plaintiff was in the best position to avoid the injury," Wenner wrote. "If the plaintiff has not been completely responsible, do not expect the personal responsibility jurors to find for the plaintiff, even though the plaintiff may have been only partially at fault."
This may sound offensive to many of us, but Wenner is right on the money. Juries that find for plaintiffs and award unreasonable damages place altruism and compassion above reason and personal responsibility. And while Wenner is trying to guide plaintiff’s lawyers to victory, his comments provide a strong argument for eliminating the ability of lawyers to control jury selection. The judge, not the counsel, should exercise that responsibility. In fact, I’m starting to think civil juries should be abolished altogether.

:: help support this website | link |



 

Rights & Reason: Spurrier, Pragmatism & Democracy 

:: Posted by Skip at 1:56 AM

Although the presidential election is starting to awaken nationally, here in Washington much of the talk is centered around Redskins head coach Steve Spurrier and whether he’ll be back for a third season in 2004. Spurrier was an enormously successful collegiate coach at Florida, but has posted a mediocre 12-18 record to date in D.C. The key to Spurrier’s Florida success—pass first, pass often—has been his Achilles heel in Washington, where offenses and defenses are substantially more complex. Spurrier also can’t overwhelm opponents with talent in the NFL as he could in the Southeastern Conference.

I bring all this up because in recent weeks I’ve begun to notice a philosophical similarity between Spurrier and President Bush. Both men are agenda-driven. That is to say, both renounce comprehension of complex systems in favor of advocating a limited agenda. Spurrier came to the Redskins to see if his passing attack would work in the NFL; he was uninterested in the details—or even the organizational philosophy—of managing an NFL franchise. Similarly, President Bush came to office with a checklist of items—tax cuts, prescription drug benefits, “changing the tone” in Washington—but no genuine philosophy of government or interest in the details of daily governance.

Now, Bush’s supporters will argue he does have a philosophy: “compassionate conservatism”. I’ve expended a great deal of thought trying to figure out what that phrase means, but I’ve drawn nothing but blanks. Compassionate conservatism is a slogan, not an ideology. At best, it’s an approximation of a philosophy. It implies Bush believes in limited government, except when doing so is deemed uncompassionate. How we define compassionate is anyone’s guess. It has something to do with religion, but not to the point where it offends the nonreligious or people who hold different values from us. The President does recognize the need to identify and destroy evil, but so far he’s limited that to Saddam Hussein, Osama Bin Laden, and members of Congress who voted against the Medicare bill. This is hardly the work of a great moralist.

Bush succeeded as governor of Texas largely because the job did not require ideology, complex thinking, or for that matter opposable thumbs. The Texas legislature meets for a limited biennial session, while executive power is diffused among hundreds of boards and agencies. A governor can survive, indeed thrive, by promoting a limited agenda. Much like Spurrier at Florida, Bush ran up an impressive record by exploiting the natural advantages of his position’s limited demands. When both men went to the next level, however, their limitations caught up with them.

This leads me to Howard Dean, the Democratic presidential nominee (pending the outcome of the actual primaries). The other day John Rosenberg, a blogger specializing in diversity issues, cited an interview Dean gave in the summer on the subject of ideology and politics:
Dean describes himself as an anti-ideological pragmatist. "I'm not an ideologue," he said in an interview with In These Times. "I think the great problem with this president is that his is an ideological administration. Facts don't matter to them. I'm a complete pragmatist. I really believe that people who have ideologies that can't be bent and are insensitive to the facts can't govern."
Dean correctly describes himself as a pragmatist. He errs, however, in calling Bush an ideologue. This shows Dean doesn’t understand the concept of ideology or its implications. As noted above, Bush is driven by a limited, concrete agenda. Any idea or concept not on that agenda is irrelevant to him, just as defensive backs are irrelevant to Spurrier. This is why Bush signed campaign finance reform, imposed steel tariffs, and allows his antitrust enforcers to run amok. They’re not part of his agenda, so he need not be concerned with them. That is not the work of an ideologue.

Dean is a pragmatist, which means he rejects ideology for being ideology. He considers any moral absolute an abomination. (This must be why libertarians love him.) A pragmatist believes only in momentary whims, not universal abstractions. Thus, when Dean emphasizes the primacy of “facts,” he refers to assessing subjective desires, not identifying objective reality. For Dean, truth comes through the passion of his supporters. His facts are verified by the anger of the crowd: They oppose the war in Iraq, so the war had no justification; people are anxious about the economy, so Bush’s economic policies have failed. Ultimately, Dean seeks consensus for the sake of consensus, regardless of its objective truth and long-term implications.

George Bush too is a pragmatist, but he makes exceptions for things like tax cuts and the war. On his agenda items, he is inflexible. This makes him, I suppose, an “unreasonable pragmatist,” which is really shifting a paradigm without a clutch. Yet Dean insists that Bush is an ideologue. He does this because it sets up the presidential race as a clash between ideology and pragmatism; post-New Deal history suggests Americans will vote pragmatism. For his part, Bush’s supporters (especially among neoconservatives) also support this setup, because they believe Americans are ready for ideology again. The only problem is, the ideology they’re backing isn’t Objectivism or rationalism, but a leftism-conservatism hybrid that goes well beyond compassionate conservatism. I’m not sure what the final philosophical product will look like, but I suspect it will involve brown shirts and public loyalty proclamations.

But that’s just a small core of the Bush supporters. The president himself remains a big dumb guy without an ideology, which brings me back to Steve Spurrier. Spurrier will return next year if (a) the Redskins conclude he can put them on the path to the Super Bowl; or (b) the Redskins can’t find a better coach. Option (a) is probably not the way to go, and option (b) still needs to be explored. When it comes to the presidency, we know Bush won’t get us to the ideological Super Bowl—that is, he’ll never advocate a political philosophy that integrates reason, individualism, and capitalism—so the question becomes whether there’s a better president out there. Howard Dean’s continued existence suggests there isn’t. This means we’re faced with keeping a mediocre president who will, metaphorically speaking, lead us to back-to-back 7-9 seasons if nobody's injured. Hey, at least we’re not the Arizona Cardinals.

:: help support this website | link |



 

:: Thursday, December 18, 2003 ::

Sports: Union 1, A-Rod $25 million 

:: Posted by Skip at 10:37 PM

For weeks, the Boston Red Sox have pursued a trade with the Texas Rangers whereby Boston outfielder Manny Ramirez would be swapped for Texas’s Alex Rodriguez. The sticking point is money, though not in the usual sense. Rodriguez holds baseball’s richest contract, earning between $25 million and $32 million per year through 2009. The Red Sox want some relief from this high price. According to an unnamed baseball official, some of Rodriguez’s salary would be reduced and some would be deferred, and Rodriguez would be eligible for free agency earlier than the original contract provided. Both parties apparently agreed to this arrangement.

Unfortunately, the MLBPA, the union representing Rodriguez, effectively vetoes the deal. Union lawyer Gene Orza claims the current collective bargaining agreement (CBA) prevents any contract renegotiation that results in the player receiving less money. Rob Manfred, baseball’s chief labor lawyer, disputes Orza, arguing the CBA only requires a restructuring provide “an actual or potential benefit to the player”. The actual rule, as reported by Baseball Musings, seems to support Orza’s interpretation. It says, “The amount stated in paragraph 2 [i.e., Payment] and in special covenants hereof which is payable to the Player for the period stated in paragraph 1 hereof shall not be diminished by any such assignment, except for failure to report as provided in the next subparagraph (d).” This pretty clearly forbids any reduction or deferment in actual salary.

But the real issue here is whether it’s proper for the union to interfere with the contractual relationship between Rodriguez, his current team, and a team he has agreed to be traded to. No doubt Rodriguez is glad to give back some money in order to go from Texas, a perennial last-place team, to Boston, a World Series contender. Traditionally, the union cares first and last about increasing salaries. There are numerous tales of players pressured by the union to accept the highest bid, even when a lower offer from another club proved appealing to the player for other reasons. (For example, Andy Pettite recently signed with the Houston Astros, which play in his hometown, rather then resign for an allegedly higher salary with the New York Yankees.)

The MLBPA is certainly better than most unions. Unlike, say, the National Education Association, MLBPA supports a competitive salary structure that permits individual players to negotiate contracts within general boundaries set by the CBA. The NEA insists on the same contract for all workers, regardless of merit, tied only to seniority. But the MLBPA ultimately suffers from the same flaw as all unions: They’re power derives not from economic production, but from the CBA. The union must strictly enforce the CBA’s terms, even to the detriment of Rodriguez and two teams, because without the CBA, the union is meaningless.

Under U.S. law, a union enjoys monopoly bargaining power. Whenever a simple majority of workers vote to form a union, all workers immediately come under whatever CBA is negotiated. If not for this legal privilege, it’s doubtful the most recent labor disputes in baseball would have reached crisis points. If players were free to negotiate on their own without any CBA constraints, a large enough percentage would have broken union ranks to make a strike unprofitable for the holdouts. This outcome is impossible under labor law, however, and thus the union is able to veto Rodriguez’s trade despite the benefit to all parties in interest. The union’s interests are political, not economic.

This is not to suggest CBAs are inherently wrong. Many, if not most, private sector employers benefit from well-structured CBAs. If nothing else, they can make labor negotiations more efficient and productive. As the NEA example demonstrates, the worst abuse of CBAs and unionism come in public-sector unions, where both sides of the negotiation are subject to political control.

It’s regrettable that Rodriguez, the Rangers, and the Red Sox can’t work a deal that satisfies the union’s factually correct interpretation of the CBA. But it should also be noted that Texas originally offered Rodriguez the large contract that they are now unable to trade. As with most things in business, poor decision making will come back to haunt you, irrespective of outside legal and political pressures.

:: help support this website | link |



 

Politics: Interest Group Malaise 

:: Posted by Skip at 9:43 PM

I didn't think anyone could top "Libertarians for Dean" for the title of most self-defeating interest group. Then I heard about "Canadians for Clark". Looks like we have a new front-runner. Personally, I'm eagerly awaiting the formation of "Hashemites for Lieberman".

:: help support this website | link |



 

Capitalism & Law: Relief Needed From Oxley 

:: Posted by Skip at 12:08 PM

Donald Luskin points us to this statement from Rep. Mike Oxley, chairman of the House Financial Service Committee and co-conspirator in the Sarbanes-Oxley act:
“All mutual fund shareholders deserve lower fees. Not just shareholders who invested in funds that engaged in questionable trading practices; not just shareholders invested in one fund family; but all mutual fund shareholders deserve relief from fees that continue to rise.”
Oxley no doubt is trying to steal the thunder of New York Attorney General Eliot Spitzer, who has been trying to extort mutual fund companies into lowering their fees. Luskin incredulously asks, “But since when is it any of Congress’ goddamn business to give mutual fund shareholders ‘relief from fees’?” Heck, when is it ever Congress’ job to try and lower consumer prices in any industry. The answer is that it’s not. But that doesn’t stop Congress. Or the White House, for that matter. Just look at any antitrust case, and you’ll see the objective is usually to forcibly lower consumer prices that were “unreasonably” raised by producers.

:: help support this website | link |



 

Rights & Reason: Victory for Medicinal Pot 

:: Posted by Skip at 10:00 AM

On Tuesday, the U.S. Court of Appeals for the Ninth Circuit ruled California’s medical marijuana law trumped the federal ban on the drug, at least in a noncommercial, intrastate context. The case was brought by four people, two of whom use marijuana, while the other two provide it. The Court describes the medical necessity of the marijuana for the first two plaintiffs:
Appellants Angel McClary Raich and Diane Monson (the “patient-appellants”) are California citizens who currently use marijuana as a medical treatment. Appellant Raich has been diagnosed with more than ten serious medical conditions, including an inoperable brain tumor, life-threatening weight loss, a seizure disorder, nausea, and several chronic pain disorders. Appellant Monson suffers from severe chronic back pain and constant, painful muscle spasms. Her doctor states that these symptoms are caused by a degenerative disease of the spine.

Raich has been using marijuana as a medication for over five years, every two waking hours of every day. Her doctor contends that Raich has tried essentially all other legal alternatives and all are either ineffective or result in intolerable side effects; her doctor has provided a list of thirty-five medications that fall into the latter category alone. Raich’s doctor states that foregoing marijuana treatment may be fatal. Monson has been using marijuana as a medication since 1999. Monson’s doctor also contends that alternative medications have been tried and are either ineffective or produce intolerable side effects. As the district court put it: “Traditional medicine has utterly failed these women . . . .”
The other two plaintiffs cultivate the marijuana and provide it to Raich and Monson free of charge. Nevertheless, the Drug Enforcement Agency “seized and destroyed” the marijuana plants Raich and Monson relied upon. Attorney General John Ashcroft has made it very clear he will not respect state laws permitting medicinal use of marijuana. Accordingly, the plaintiffs filed suit seeking an injunction to protect their ability to grow and use marijuana. The Ninth Circuit granted the injunction, reversing a district court’s decision, because the use of marijuana described here falls outside Congress’s power to regulate interstate commerce.

This should be an obvious conclusion to anyone who understands the Constitution. If you grow a crop and give it away to someone within the same state, that is neither “interstate” nor “commerce”. Traditionally, however, common sense alone does not prevail in Commerce Clause challenges. Since the New Deal, the courts regularly uphold federal regulations that “affect” commerce, even if the rules deal with purely in-state activities. The idea is that Congress should be allowed to control any private activity that might influence a national regulatory scheme. One of the three judges in this case in fact cited that principle in dissenting from the court’s decision. Circuit Judge Arlen Beam argued that the government’s ban on medicinal marijuana was consistent with a New Deal-era ruling that permitted the government to prevent a farmer from growing crops in excess of a federal quota. Judge Beam sadly sees no problem with the government telling a farmer what to grow, which tells me he sees little bounds to federal Commerce Clause power.

The intent of the Commerce Clause was to enable Congress to ensure national markets for goods and services; that is, markets free of parochial state roadblocks. There is nothing to suggest the Framers intended Congress have the power to regulate every act that might “affect” commerce, and more importantly, nothing to support the view that Congress can simply ban whole industries (such as marijuana) from commerce simply because the government disapproves of its use. Think about it. If Congress can ban any product it wants from interstate commerce simply by passing a law, then why was a constitutional amendment necessary to enact national prohibition on alcohol? Prior to the New Deal, even prohibitionists understood Congress simply couldn’t tell people what they could own, buy, or sell in their own communities.

Of course it’s one thing to ban alcohol. It’s quite another to deny people use of a product that provides legitimate medical treatment. I wonder how the Justice Department responded to the Court’s statement that Angel Raich could die without continuing marijuana treatments. It’s sickening to think there is any circumstance where the attorney general of the United States—even a morally obtuse Christian like John Ashcroft—would let an American die to preserve an irrational federal law. It certainly makes you question President Bush’s commitment to preserving the American values he claims we’re bringing to Iraq. Torturing dying people is more consistent with the former regime of Saddam Hussein than with the Constitution written by James Madison.

Congratulations to the plaintiffs in this case, and to their attorney, Randy Barnett, a contributor at the Volokh Conspiracy.

:: help support this website | link |



 

The Culture: All the news that's fit to fake 

:: Posted by Nicholas Provenzo at 9:51 AM

Michelle Malkin is all over New York Times reporter Charlie LeDuff for fakery.

Looks like the New York Times has another ugly Jayson Blair-like scandal on its hands. This time, the young minority reporter is Charlie LeDuff, a part Native-American, part-Cajun writer, known as a rising star and favorite pet of former executive editor Howell Raines.

The hotshot LeDuff is now in hot water over his cribbing of anecdotes from someone else's book about kayaking down the Los Angeles River for his own Page One fluff story about — you guessed it! — kayaking down the Los Angeles River. An embarrassing correction published in the New York Times on Dec. 8 explained:

An article last Monday about the Los Angeles River recounted its history and described the reporter's trip downriver in a kayak. In research for the article, the reporter consulted a 1999 book by Blake Gumprecht, "The Los Angeles River: Its Life, Death, and Possible Rebirth." Several passages relating facts and lore about the river distilled passages from the book. Although the facts in those passages were confirmed independently-through other sources or the reporter's first hand observation-the article should have acknowledged the significant contribution of Mr. Gumprecht's research.
Gumprecht, an assistant professor of geography at the University of New Hampshire and a former newspaper reporter, told Slate's Jack Shafer he was "fairly shocked" by the similarities between his book and the Times's story, and that LeDuff's borrowing went beyond accepted journalistic practices.

Perhaps not coincidentally, LeDuff was a good pal of the disgraced Jayson Blair.
Malkin says this is not the first time LeDuff has been accused of lying.

In September, author and columnist Marvin Olasky reported that LeDuff attributed fake quotes to a naval officer in San Diego to fit the reporter's antiwar agenda.

Lieutenant Commander Beidler, 32, on his way to Iraq in January, was walking with his family toward the end of Naval Station Pier 2 when the Times's Charlie LeDuff asked him for his general view of war protesters. Mr. Beidler recalls stating, "Protesters have a right to protest, and our job is to defend those rights. But in protesting, they shouldn't protest blindly; instead, they should provide reasonable solutions to the problem." The LeDuff version had Mr. Beidler criticizing Los Angeles protesters but turning his guns at a complacent United States: "It's war, Commander Beidler said, and the nation is fat. 'No one is screaming for battery-powered cars,' he added." The journalist then turned to Commander Beidler wife's Christal: "'I'm just numb,' she said as she patted down his collar. 'I'll cry myself to sleep, I'm sure.'"

Mr. Beidler was at sea when he discovered how far at sea the Times's reporting was, but he sent off a letter to the editor stating what he had said and arguing that the quotes about national fatness and battery-powered cars "were completely fabricated by Mr. LeDuff in order to connect our nation's dependence on oil with the current military buildup in the Middle East."

Mr. Beidler also stated, "Mr. LeDuff continued his shameful behavior by attributing words and actions to my wife that were not her own. Not only did she not say she would cry herself to sleep, but she didn't pat down my collar either, which was impossible for her to accomplish with my civilian shirt hidden under my jacket and a duffle bag hanging on my shoulder closest to her."

In response, a Times editor shrugged off Beidler's complaint. LeDuff, he informed Beidler, "thinks that he accurately represented his interview with you and your wife, and therefore so do I. If you have another encounter some day with The New York Times, I hope its outcome is more satisfactory to you."
Hmmm. Which am I going to trust: the integrity of a US naval officer, or the integrity of a guy who writes about fake kayak trips?

Jayson Blair fakes stories. Maureen Dowd drops context as if the use of it physically hurts her. Paul Krugman twists facts with more routine then any pretzel maker. And now Charlie LeDuff. The question I ask is why does anyone continue to take the New York Times seriously?

:: help support this website | link |



 

Rights and Reason: Vatican slams handling of Saddam 

:: Posted by Nicholas Provenzo at 12:28 AM

The Vatican is loving our enemies:

A top Roman Catholic official has attacked the way Saddam Hussein was treated by his US captors, saying he had been dealt with like an animal.

Cardinal Renato Martino said he had felt pity watching video of "this man destroyed, [the military] looking at his teeth as if he were a beast".

The cardinal, a leading critic of the US-led war in Iraq, said he hoped the capture would not make matters "worse".

A senior US official has defended the decision to show the pictures.

The official said the broadcast of Saddam Hussein undergoing a medical examination was allowed under the Geneva Conventions in order to maintain peace and security.

There was no attempt to humiliate the prisoner, the official said.

A daughter of Saddam Hussein has said she believes her father was drugged before US soldiers captured him.

Rallies in support of the deposed Iraqi president have continued in central and northern Iraq along with attacks on security forces.

'Compassion'

Cardinal Martino said on Tuesday that the US "could have spared us these pictures".

"Seeing him like this, a man in his tragedy, despite all the heavy blame he bears, I had a sense of compassion for him," he told reporters. [BBC]
I feel neither sympathy nor compassion for Saddam Hussein. Compassion for Saddam is moral treason to all those his regime killed, maimed and raped. Yet it is footage of a medic delousing this man who slaughtered thousands of his own people and whose intransigence has led to the deaths of almost 500 of my countrymen that the Vatican finds disquieting.

The Vatican is free to offer love to the enemies of mankind if it chooses. I, however, prefer that they receive justice.

:: help support this website | link |



 

:: Wednesday, December 17, 2003 ::

Capitalism & Law: Regulatory Overkill 

:: Posted by Skip at 9:59 PM

The FTC is cracking down on a perennial scam: work-at-home envelope stuffing schemes. We've all seen the ads promising large incomes stuffing and sending envelopes. In reality, these are glorified chain letters that usually end up costing the work-at-home senders more money then they'll ever make. I certainly won't challenge the FTC's decision to go after the companies responsible for these scams, but I do question whether the FTC's presence is really needed. Consider this item from the FTC's own press release:
Targeting the sellers of work-at-home schemes who were taking money out of consumers’ pockets with their deceptive pitches, the Federal Trade Commission today announced a joint federal and state law enforcement sweep cracking down on purveyors of fraudulent envelope-stuffing business opportunities. Joining the Commission in announcing its two federal district court complaints in “Operation Pushing the Envelope” were the U.S. Postal Inspection Service, which announced five criminal and 22 civil cases; the Illinois Attorney General’s Office, which announced two state complaints; and 23 states and four other government agencies that participated in a nationwide consumer education and outreach initiative about the potential costs of such work-at-home opportunities.
If the Postal Inspection Service and 28 other agencies have a hand in this, then why do we need the FTC? The agency seems a redundant player here. And it's not like we needed the 4th Infantry Division to catch these scammers. A first-year lawyer at the Justice Department could have handled this case with a minimum of time and effort.

:: help support this website | link |



 

Politics: Naughty Legislation 

:: Posted by Skip at 6:00 PM

Rep. Doug Ose of California has introduced legislation to clarify the federal ban on broadcasting obscenity. Currently it’s a crime punishable by two years in prison to “utter[] any obscene, indecent, or profane language by means of radio communication”. The statute doesn’t specify what constitutes such language, however. Ose’s legislation boldly remedies that situation by defining “profane”:
As used in this section, the term `profane', used with respect to language, includes the words `shit', `piss', `fuck', `cunt', `asshole', and the phrases `cock sucker', `mother fucker', and `ass hole', compound use (including hyphenated compounds) of such words and phrases with each other or with other words or phrases, and other grammatical forms of such words and phrases (including verb, adjective, gerund, participle, and infinitive forms).
I’m all for legislative clarity, but this seems a tad, er, obscene. Keep in mind there are few, if any, criminal prosecutions for obscenity. Ose’s bill is more likely a reaction to the FCC’s recent whining about U2 singer Bono letting out a bad word during last year’s Golden Globe Awards telecast. Some folks decried the fact Bono and NBC weren’t tarred and feathered for that offense.

Ose also must realize this bill would never survive First Amendment scrutiny (unless, of course, Ose’s ban is intended to prevent the “appearance” of corrupting political campaigns). Which means this entire proposal is an exercise in grandstanding before the faux family-values crowd. Now there’s something that ought to be banned.

:: help support this website | link |



 

:: Tuesday, December 16, 2003 ::

Antitrust News: Daily Roundup 

:: Posted by Skip at 4:58 PM

Three antitrust updates this afternoon:

1. Later today the European Court of First Instance will decide whether to uphold a 6.8 million Euro fine imposed by European antitrust authorities against British Airways. In 1999, the EU sided with Virgin Atlantic, who claimed BA “abused its dominance” by giving travel agents rebates linked to the number of BA tickets sold. The EU said this was just plain unfair to Virgin, who couldn’t match the rebates.

For years, the EU has targeted rebate programs that reward a company’s loyal customers. The European Commission believes dominant firms must not take any action that might maintain or expand their market share. One antitrust lawyer told Dow Jones, “Dominant companies in Europe will continue to find themselves open to attack for pursuing anything but the most conservative pricing strategy”. On a positive note, the Court of First Instance has recently overturned a number of Commission antitrust fines. This case offers an opportunity to continue that trend, because BA presented a strong argument that the Commission botched the market definition. Lawyers familiar with the case say the EU confused the travel agent market with the air transport market, which exaggerated the actual dominance of BA.

2. Yesterday, the Supreme Court agreed to review F. Hoffman La Roche Ltd. v. Empagram, S.A., one of the many antitrust cases still pending against the worldwide vitamin industry. This case presents a curious question: Can foreign plaintiffs invoke U.S. antitrust laws over alleged infractions that occurred outside the U.S.? Obviously the answer should be “no,” but since when do antitrust laws make sense?

The plaintiffs in this case are nationals of Australia, Ecuador, Panama, and Ukraine. They claim to be victims of an international price-fixing conspiracy in the vitamin industry. Many of the defendant companies have already settled civil and criminal antitrust charges in the U.S. and abroad. These plaintiffs seek damages under the Sherman Act for their purchases outside the United States; they argue that because the underlying conspiracy affected American commerce, jurisdiction is proper here. Most federal appellate courts have rejected this argument in other cases, but the Court of Appeals for the District of Columbia went the other way, and ordered the case tried. The defendants, backed by the Solicitor General, the U.S. Chamber of Commerce, and the German government, have asked the Supreme Court to reverse that finding.

3. Finally, today’s “Corporate Coward” award goes to First Data Corporation for their last minute capitulation to the Justice Department. Earlier this year First Data, which runs ATM and debit card networks, agreed to buy competitor Concord EFS. The DOJ claimed the merger would illegally reduce competition in the market for PIN-based debit networks. This is an odd market definition, since debit networks consist of both PIN-based and signature-based models. Many debit cards actually work with both networks. Yet the DOJ insisted the markets were separate for antitrust purposes. First Data disagreed, at least at first, and vowed to fight the DOJ in court.

A hearing was scheduled for this week, but yesterday we learned the company had indeed settled. First Data will divest its interest in one of its debit networks to a third buyer chosen by the DOJ. This will protect consumers, according to the DOJ. In reality, this settlement protects the jobs of DOJ lawyers who go around imposing arbitrary market definitions. First Data’s capitulation essentially ratifies the DOJ’s decision to separate the PIN and signature debit markets, making it difficult for any other company in the field to argue the objective facts in the future.

:: help support this website | link |



 

Rights & Reason: Price Controls and Cosmetic Surgery  

:: Posted by Skip at 2:37 PM

In a Washington Post op-ed today, Jonathan Oberlander and Jim Jaffe argue the President’s Medicare bill will inevitably lead to price controls on drugs. Only they won’t be called price controls. This is not a new scheme, but rather an extension of how Medicare currently treats physicians and hospitals:
When Medicare was enacted in 1965, it barred the federal government from "exercising any supervision of control over the practice of medicine."

Partly to deter a physicians strike, doctors were promised that they'd be paid at the usual and customary rates that insurers such as Blue Shield had set over the years.

Hospitals got an even sweeter deal -- reimbursement that paid them essentially whatever their costs were, with a bonus on top.

In addition, Medicare spared both hospitals and physicians direct federal administration, instead allowing them to choose private administrative intermediaries that would pay their bills.

Since there was little reason why anyone offered a blank check would reject it, providers were fairly relaxed about provisions that locked them into the program over time. Now it is difficult and expensive for doctors to drop their affiliation, and nearly impossible for most hospitals to do so.

Will things go differently with drugs? Time will tell, but it seems unlikely. The government has habitually responded to budget stresses by changing the reimbursement mechanism and lowering payments. Whatever one thinks of government efficiency, this practice has worked well. Over the past two decades, physician and hospital payments have been regularly cut.

Because hospitals spent more, they were the first to get the bad news. In 1983 Congress enacted the Prospective Payment System. Instead of paying hospitals retrospectively for whatever they charged, Medicare imposed a system of administered pricing that allowed the federal government to set payment rates. Payments quickly declined precipitously.

A few years later the Medicare Fee Schedule for physicians was introduced. It was a terribly elaborate scheme that was based on measures of the complexity, time and resources involved in physicians' services. Its advertised purpose was to establish a fair and scientific basis for Medicare payments to physicians.

But ultimately it divorced doctors from their historical and customary fees. As with hospitals, Medicare imposed a system of administered pricing on doctors. By this time, of course, many physicians were dependent on their Medicare patient base and simply couldn't afford to walk away from the program, despite the lower reimbursement rates.
As CAC has explained at great length, antitrust policy is now a key tool in the Bush administration’s efforts to keep health care costs down by force. Any physicians that attempt to negotiate higher prices with private HMOs—a move that would begin to liberate physicians from below-market Medicare reimbursements—are labeled “anticompetitive” monopolists by the FTC. Republicans justify this naked attack on free market principles by arguing antitrust isn’t really regulation, merely an effort to ensure the market isn’t controlled by a single group of players. The fact that physicians generate the wealth that makes modern medicine possible is a contextual argument routinely dropped by the antitrust apologists. Since federal policy is concerned solely with the distribution of resources, not their production, the government is forced to eliminate any consideration for the economic rights of physicians.

The central contradiction of government healthcare policy is the inability to reconcile price controls with antitrust’s stated objective of improving consumer welfare. As Virginia Postrel notes in response to the Oberlander-Jaffe article, price controls tend to distort some parts of the market while leaving other, less essential areas untouched:
More insidious is a pattern my brother and sister-in-law, a family practice physician and an anesthesiolgist, observe in their area. The best general surgeons are going into cosmetic surgery, and they're luring the best anesthesiolgists into at least part-time cosmetic work. The dermatologists are telling patients with rashes to go elsewhere. Patients expect to pay for cosmetic work themselves, at market prices. They expect someone else to pay for health-related treatments, at lower prices. The result is predictable: the degradation of health care even as cosmetic care improves.

Applied to pharmaceuticals, this pattern would give us more skin care and baldness drugs, fewer treatments for complex diseases. We'll be good looking but sick. I'm all for cosmetic improvements, but that's not a tradeoff most of us would choose.
Another distortion occurs with uninsured patients and hospitals. All hospitals establish list prices for their services. Insurance companies, however, rarely pay that list price. Instead they negotiate a discount rate with the hospital, such as 7%, which applies to all prices. Earlier this year, the FTC went after a group of hospitals in Maine that jointly negotiated their discount rate with insurers. Each hospital still set its own list prices, but they agreed to only offer insurers a particular discount rate. The FTC said this was “anticompetitive” because it denied insurers the benefit of price competition. What the FTC left out was the fact that higher discount rates merely shift cost burdens to uninsured patients, who generally are poorer than their insured counterparts. Remember, the FTC does not consider whether price levels are rationally related to a producer’s operating costs; antitrust policy demands lower consumer prices regardless of context.

Thus, the FTC was not protecting all consumers, only those favored by existing public policy, meaning patients insured by HMOs. Such favoritism is rampant in antitrust, because all government interventions in the marketplace involve granting one group special favors at the expense of someone else. The healthcare issue also demonstrates a related regulatory principle: When regulation fails, the government reasons, it must be the fault of the market, not the policy. That’s why Medicare price controls were implemented in the first place, because government leaders would not admit the Medicare policy itself was responsible for higher costs.

:: help support this website | link |



 

Rights and Reason: Texas housewife busted for hawking erotic toys  

:: Posted by Nicholas Provenzo at 11:58 AM

Amazing.

A Texas housewife is in big trouble with the law for selling a vibrator to a pair of undercover cops, and the Brisbane vibrator company she works for says Texas is an "antiquated place'' with more than its share of "prudes.''

Joanne Webb, a former fifth-grade teacher and mother of three, was in a county court in Cleburne, Texas, on Monday to answer obscenity charges for selling the vibrator to undercover narcotics officers posing as a dysfunctional married couple in search of a sex aid.

Webb, a saleswoman for Passion Parties of Brisbane, faces a year in jail and a $4,000 fine if convicted. [sfgate.com]
I think it's the town police department and town officials who should be arrested for obscenity. This is what happens when you leave religious conservatives in charge.

:: help support this website | link |



 

Capitalism and the Law: The People v. Lala Wang 

:: Posted by Nicholas Provenzo at 9:30 AM

CAC's Skip Oliva offers a case study on the injustice of business regulation today at Initium:

Wang is the founder of MLX.com, an interactive portal site that allows customers to access a real-time database of real estate listings. In her years as a real estate broker, Wang never faced a single consumer complaint. But her perfect record and satisfied customer base did nothing to dissuade the New York Department of State from trying to shut down her business. The Department claimed Wang's Internet database was, in fact, an unlicensed AIV. Wang disagreed, arguing that a real-time, interactive web portal was about as far from the static AIV lists of the 1970s as you could get. Her service had none of the consumer fraud pitfalls of those older, largely extinct businesses. But the Department would not waiver, and they suspended her real estate broker's license until she agreed to rid herself of MLX.com. . .
What is impressiveve about this case is Ms. Wang had the courage to fight back. I wish her the best as her petition for certiorari goes before the US Supreme Court.

:: help support this website | link |



 

The War: Operation Red Dawn After-Action Report 

:: Posted by Nicholas Provenzo at 9:23 AM

Our military sources have provided us with a copy of the Combined Joint Task Force's official slideshow report on Operation Red Dawn. To download, click here (Microsoft PowerPoint, 5.91 MB)

:: help support this website | link |



 

:: Monday, December 15, 2003 ::

The War: Enola Gay Protesters Disrupt Museum Event  

:: Posted by Nicholas Provenzo at 10:07 PM

Some anti-nuclear protestors still fighting the 2nd World War.

A small group of protesters briefly disrupted the official opening of the National Air and Space Museum's new annex at Dulles International Airport Monday, spilling a red liquid supposed to resemble blood near the Enola Gay exhibit and throwing an object that dented the airplane.

Two men were arrested after security broke up the demonstration. Thomas K. Siemer, 73, of Columbus, Ohio, was charged with felony destruction of property and loitering, while Gregory Wright of Hagerstown, Md., faced a misdemeanor loitering charge.

Several elderly atomic bomb survivors from Japan also expressed dismay that information on the effects of the bomb dropped by the Enola Gay on Hiroshima Aug. 6, 1945, was not included in the exhibit.

"If they want to show these planes, that's fine but we can't help but also demand that they show the damage and the stories that take place behind these weapons," said Terumi Tanaka, 71, a survivor of the Nagasaki atomic bomb attack which occurred three days after Hiroshima. [AP]
Rather than display the Enola Gay in Northern Virginia, I hold that the aircraft should be displayed as part of the USS Arizona memorial. Along with the USS Missouri, the Enola Gay would show the Alpha and Omega of the Pacific Theater with an undeniable poignancy—and as an irrefutable argument.

:: help support this website | link |



 

Corporate Cowards: Dow AgroSciences  

:: Posted by Nicholas Provenzo at 4:17 PM

It is often considered axiomatic among advocates of the free market that all businessmen are heroes. On the contrary, all but a few businessmen fail to defend even their most basic rights, and their cowardice results in the destruction of untold amounts of wealth. As part of a new project, CAC is going to highlight these corporate cowards and expose them for their wealth–destroying ways. Appropriately, today's "Corporate Coward" award goes to Dow Chemical subsidiary Dow AgroSciences and its CEO A. Charles Fischer.

A subsidiary of Dow Chemical Co. will pay a $2 million court-ordered penalty to the state of New York for illegal safety claims in advertising of its pesticides.

"By misleading consumers about the potential dangers associated with the use of their products, Dow's ads may have endangered human health and the environment by encouraging people to use their products without proper care," New York Attorney General Spitzer said Monday.

Spitzer said the penalty involving the popular Dursban and other pesticides is the largest penalty in the nation's history for this type of case.

Dow AgroSciences agreed to the $2 million penalty, but admitted no illegal or erroneous advertising, said spokesman Garry Hamlin. He said the firm settled to avoid a costly court case.

Spitzer had alleged that Dow AgroSciences violated a 1994 agreement between the company and the state that prohibited advertisements touting the safety of its pesticide products.

"The 1994 agreement restricted our ability to support and defend our products," said Guy A. Relford, the company's head of litigation, "even if our statements were true."

For instance, Relford said, the old agreement was interpreted by Spitzer as prohibiting telling people that the federal Environmental Protection Agency had registered one of Dow's products as a reduced risk pesticide.

State Supreme Court Judge Joan Madden in Manhattan issued the consent order that requires the firm to pay the $2 million penalty, prohibits it from making safety claims about its pesticides, and requires it to start a compliance program. That program will include an internal review of all ads and future ads by Dow in New York state and removal of any safety claims. The company will also have to provide training to comply with advertising restrictions. [AP]
If Dow AgroSciences believed its advertising to be true, why didn't it fight for its right to make its claims until the bitter end? Why didn't it fight against New York corporate Czar Elliot Spitzer's plainly erroneous reading of its earlier settlement? (Spitzer lists every one of these claims as false and misleading. By Spitzer's apparent standards, every advertising claim could be held as misleading.) Does anyone truly believe that by giving Elliot Spitzer a $2 million settlement, Dow is not admitting to illegal or erroneous advertising?

There is no excuse for Dow AgroSciences capitulation. A businessman has every right to make truthful advertising claims. Such freedom is essential if a businessman is to be able to communicate the virtues of his products with potential customers. And every businessman’s commercial speech should be afforded the same 1st Amendment protections as his political speech—commercial motives should never be used as an excuse to place speech into an intellectual ghetto.

Yet it would seem Dow AgroSciences believes otherwise. The only justification Dow could possibly offer its investors and the public is that its executives are sniveling bedwetters too timid to defend their most basic rights. Given such cowardice, Dow’s investors would be well served to find themselves a CEO who is willing to fight for his business’s freedom of speech.

:: help support this website | link |



 

The War: Saddam Down, Iran Next? 

:: Posted by Nicholas Provenzo at 2:18 PM

The people of both the United States and Iraq can take great comfort in the news of Saddam Hussein’s capture by US forces. Yet without taking anything away from the greatness of yesterday’s milestone, Americans should not lose sight of the other challenges that remain to be faced.

One continuing problem with the Bush Administration’s Middle East strategy is that while the threat of Iraq has been answered, the larger question of the rising threat of Iran remains. It is no secret that Iran seeks nuclear weapons. Yet what exactly is the US position toward Iran? Will we seek to contain it, like we contained the former Soviet Union? Will we provide support and moral sanction to those in Iran who seek to overthrow the mullahs? Will we attack Iran, and place its terrorist-supporting leaders in cells adjoining Saddam’s? Or will we ignore Iran, like we ignored it in the years prior to 9/11? America’s strategy toward Iran remains to be seen.

And it ought to be noted that a consequence of the Bush administration’s strategy of delay as it begged the world’s favor in dealing with Iraq is that America is now perceived simultaneously as a hegemonist and a weakling. Our enemies know that Iraq was the easy target compared to Iran, yet it took us over a year after the shock of 9/11 to invade it. All that time, America’s leaders repeatedly genuflected toward international opinion. America’s leaders repeatedly attempted to appease untrue allies when the proper response would have been to act boldly and without the sanction of any body other than our own institutions. And America’s leaders repeatedly placed “Iraqi freedom” before “American security” as our primary purpose.

Yet despite the administration's missteps, the fundamental truth remains. If it is true that the US was right to apply force to Iraq to prevent a bloody dictatorship from obtaining WMD’s, the same holds true for Iran.

It has been said that the capture of Saddam was made possible by the successful integration of many different sources of intelligence. I hope our leaders will be capable of the proper moral integrations necessary to subdue Iran.

:: help support this website | link |



 

Rights & Reason: Sabotaging Affirmative Action 

:: Posted by Skip at 8:56 AM

The Foundation for Individual Rights in Education is up-in-arms because colleges are discouraging "affirmative action bake sales"—conservative-staged events where cookies are sold at different prices to customers depending on their race. It was a cute trick the first time it was tried, but the fact that they're still being staged tells me college conservatives aren't the most original thinkers. And while FIRE does nice work on free speech issues, I'd take them more seriously if they didn't defend anti-individual-rights militants like John Banzhaf.

An idea that's worth exploring, however, is the campaign started by a group called NoRace.org. Their objective is to encourage "civil disobedience" against affirmative action:
NoRace.org is an organized protest of affirmative action. More specifically, we're protesting college entrance racism by organizing people who wish to mark their race incorrectly on college admission applications. If enough people do it, then schools' racial statistics become unreliable. Colleges and Universities will be placed in the position of trying to turn away people when they show up for classes because of the color of their skin. And, once we get a sizeable number of people who have signed up, we'll post the number of people from each school who have signed the petition, effectively informing entrance administrators that their system sucks. All this will expose racial preferences for what they really are: racism.
I don't know if this will work, but it's definitely worth a try.

:: help support this website | link |



 

:: Sunday, December 14, 2003 ::

Politics: Saddam Captured 

:: Posted by Skip at 1:56 PM

My first thought when I heard U.S. troops found Saddam Hussein and a briefcase wih $750,000 in cash: Maybe Saddam's making a contribution to Howard Dean. "Ba'athists for Dean" does have a nice ring to it. And before you send me nasty e-mails, remember Dean and Hussein both support government control of the media and hiding behind the United Nations. Other than that, they're both fiscally conservative, pro-capitalist leaders.

:: help support this website | link |



 

Capitalism & Law: Mired in Judicial Quagmire 

:: Posted by Skip at 1:52 PM

This week’s Supreme Court decision upholding restrictions on free speech (aka “campaign finance reform”) should not be taken seriously by rational men. I say this not because of my particular disagreements with any of the opinions, but because the Court itself did not take this case seriously. Consider the head note announcing the justices’ vote:
Stevens and O’Connor, JJ., delivered the opinion of the Court with respect to BCRA Titles I and II, in which Souter, Ginsburg, and Breyer, JJ., joined. Rehnquist, C. J., delivered the opinion of the Court with respect to BCRA Titles III and IV, in which O’Connor, Scalia, Kennedy, and Souter, JJ., joined, in which Stevens, Ginsburg, and Breyer, JJ., joined except with respect to BCRA §305, and in which Thomas, J., joined with respect to BCRA §§304, 305, 307, 316, 319, and 403(b). Breyer, J., delivered the opinion of the Court with respect to BCRA Title V, in which Stevens, O’Connor, Souter, and Ginsburg, JJ., joined. Scalia, J., filed an opinion concurring with respect to BCRA Titles III and IV, dissenting with respect to BCRA Titles I and V, and concurring in the judgment in part and dissenting in part with respect to BCRA Title II. Thomas, J., filed an opinion concurring with respect to BCRA Titles III and IV, except for BCRA §§311 and 318, concurring in the result with respect to BCRA §318, concurring in the judgment in part and dissenting in part with respect to BCRA Title II, and dissenting with respect to BCRA Titles I, V, and §311, in which opinion Scalia, J., joined as to Parts I, II—A, and II—B. Kennedy, J., filed an opinion concurring in the judgment in part and dissenting in part with respect to BCRA Titles I and II, in which Rehnquist, C. J., joined, in which Scalia, J., joined except to the extent the opinion upholds new FECA §323(e) and BCRA §202, and in which Thomas, J., joined with respect to BCRA §213. Rehnquist, C. J., filed an opinion dissenting with respect to BCRA Titles I and V, in which Scalia and Kennedy, JJ., joined. Stevens, J., filed an opinion dissenting with respect to BCRA §305, in which Ginsburg and Breyer, JJ., joined.
Altogether the Court issued six opinions. Not being a lawyer or an academic, I find this judicial schizophrenia quite irritating and frankly dangerous. When Congress passes a law, it acts as a body to produce a single law reflecting the consensus of its members. Juries are required to pass unanimous verdicts on the most trivial of criminal offenses. Yet when we put nine highly qualified justices on the Supreme Court, they allow themselves to go off in a dozen directions without any commitment to sustaining the common law. That’s just sickening.

The nation’s third and most important chief justice, John Marshall, came to the Supreme Court having never served as a judge. Marshall was a politician, having served in the Virginia and federal legislatures, and as secretary of state for the first President Adams. When he took over as chief justice in 1801, the court still used the English practice of each appellate judge issuing his a separate opinion—known as a seriatim opinion—with the Court as a whole pronouncing a judgment. That practice effectively ended in 1803, when Marshall issued an opinion for the entire Court in Marbury v. Madison, the case that established judicial review of congressional actions. The concept of issuing a single common-law opinion for the Court was perhaps Marshall’s greatest contribution to American culture. It reflected, I believe, Marshall’s view that for the law to have true authority in a republic, the Court’s views must be clearly explained in a manner understood both by the immediate parties to a case and the public generally.

In many 19th century cases, it was common for justices to dissent from the Court’s judgment without issuing a separate opinion. That is obviously no longer the practice. More problematic, however, is the routine practice of issuing concurring opinions, which allow a justice to join the Court’s final judgment but not its reasoning. This practice has led to a breakdown in the common law. There are now cases where the parties and their attorneys don’t know what a court’s decision really means. In major cases, the Court has all but given up on trying to reach a five-justice consensus behind a single opinion. Indeed, the fact that so many major cases are decided by a 5-4 vote is cause for concern. The rights of American citizens should not routinely hinge on how Sandra Day O’Connor is feeling on a particular morning, yet that’s practically what the system has decayed into.

Opinion glut is not simply a matter of bad jurisprudence; it poses a direct threat to the foundation of an individual rights republic. The BCRA case is a prime example. Because of the opinion’s complexity, lack of clear principle, and fractured nature, the inevitable result will be hundreds if not thousands of additional cases designed to figure out just what the Court meant. This creates more work for lawyers, and if history has taught us anything, it’s that more work for lawyers means less individual rights for the rest of us. The common law only works when the common man can understand the rules without having to depend on lawyers. That’s why they call it the “common” law. But more and more, this country is turning into a pale model of the French civil system, where rights exist exclusively at the behest of state regulators.

:: help support this website | link |



 

:: Saturday, December 13, 2003 ::

The Culture: "Contraband Candies" 

:: Posted by Skip at 10:40 AM

This is the world John Banzhaf wants to create. The only question is, will you let him?

:: help support this website | link |



 

:: Friday, December 12, 2003 ::

Capitalism and the Law: Who's the real Christmas Grinch? 

:: Posted by Nicholas Provenzo at 3:45 PM

Businessmen get blamed for everything. Consider the following AP story:

Some bonus.

Hourly workers at Tower Automotive received $15 gift cards redeemable at Meijer grocery-retail stores before Thanksgiving. Then the automotive supplier decided the cards were "same as cash" gifts subject to federal and state income taxes totaling 36.75 percent.

That means the "gift" will take $5.51 out of the workers' next paychecks, the Traverse City Record-Eagle reported Friday.

"It's got a lot of people ticked off," said Donald McKee of Kingsley, a welding technician who's worked almost 13 years at the plant in Grand Traverse County's Garfield Township. "This is the lowest they've gone yet to give us something and then take it back."

A Tower manager who didn't want to be named told the newspaper the situation was "very unfortunate." Tighter accounting standards in the wake of Enron and other corporate scandals have prompted more scrutiny of employee benefits, including minor payouts like the gift card, he said.

United Auto Workers Local 5110, which represents about 300 hourly workers, has filed a contract grievance over the matter. Some workers also have returned the gift cards rather than pay the tax, Tower said.
Is there some new law out there that says when a company gives an employee money in the form of a year-end bonus, that money is exempt from taxation? Under the tax code, a payment like a gift certificate is taxed at its fair market value, which in this case, was $15.00. Just what was Tower Automotive supposed to do? Defy the Internal Revenue Service? Break the corporate accountability laws that promise businessmen criminal penalties if any part of a financial statement is false? Last I checked, there’s no exemption in the law for under the table gifts.

Yet notice how sniveling and whiny the report reveals Tower Automotive’s workers to be. And the leaders of United Auto Workers Local 5110 aren’t far behind them. What do they expect? That their contract grievance is going to hold because their employer had the audacity to follow the law?

What a bunch of idiots. If I ran Tower Automotive, I’d take the cards back and tell my employees to send a thank you letter to Congress.

:: help support this website | link |



 

Crime and Punishment: An insane definition of insanity 

:: Posted by Nicholas Provenzo at 1:01 PM

I’ve been casually following the trial of sniper suspect Lee Boyd Malvo. I came across the following in an AP report of the trial:

Lee Boyd Malvo was legally insane during last year's sniper spree because of intense indoctrination by sniper mastermind John Allen Muhammad, a defense psychiatrist testified Wednesday at Malvo's trial.

"Lee was unable to distinguish between right and wrong and was unable to resist the impulse" to commit the killings, said Neil Blumberg, who examined Malvo 20 times in jail. "From day one, I thought he met the legal criteria for insanity."

Psychiatrist Diane Schetky, who twice interviewed Malvo, also testified that the 18-year-old Malvo, 17 at the time of the killings, was unable to tell right from wrong.

Defense mental health experts have said Malvo was taught by Muhammad that right and wrong are artificial concepts and that the winner in a war determines who is right. Muhammad likened the sniper attacks to a war against the United States government, which he said oppresses blacks.

"He basically became a soldier in Muhammad's war against America," Blumberg said. "He was one with (Muhammad). He became absolutely convinced that what he was doing was a righteous cause."

Said Schetky: "He was merged with Mr. Muhammad. He was acting as his proxy. They were one and the same. He was like a puppet in his hands."

[ . . .]

Schetky diagnosed Malvo with a dissociative disorder, a mental illness that she said distorted Malvo's perception of reality, a result of indoctrination by Muhammad.

Blumberg said Malvo still has the disorder, citing as evidence the defendant's constant doodling during a trial in which he could be sentenced to die.
Believing that right and wrong are artificial concepts? Disassociation instead of integration? Constant doodling? Half of academia and all of France would be insane by that standard.

Not all are in agreement with such a standard though. Dr. Michael J. Hurd, a Washington DC-based psychotherapist and author says Malvo’s defense is nonsense.

There is no such thing as a psychological disorder which leads people to become so loyal that they're willing to kill. It's conjecture and excuse-making taken to a nearly incomprehensible extreme. Did it ever occur to the defense psychiatrist that Malvo's loyalty was not to Muhammad but to his own irrational, twisted code of values?
Exactly. Insanity means not being mentally responsible for one’s actions as a result of mental disease or defect. Nowhere has it been shown that Malvo suffers from any physical disease or defect. What Malvo suffers from is the consequences of his own wicked choices, including his choice to associate with John Mohammad. Yet Dr. Hurd’s voice is a lonely one. Too few of his profession are rushing to condemn Malvo’s defense as outrageous.

The cornerstone of capitalism is the recognition that the individual human mind is efficacious and must be left unshackled and protected from force if the individual is to prosper. In the Malvo case, the psychiatric profession is attempting to raise a criminal’s evil choice to use force to the level of a disease. In the process, it is working to undercut the very foundation of our free society.

I expect Malvo will be convicted and punished for his crimes. Nevertheless we should take pause to consider why the ridiculous arguments of his defense were ever offered in the first place.

:: help support this website | link |



 

:: Thursday, December 11, 2003 ::

Rights & Reason: Death by Living Wage 

:: Posted by Skip at 9:06 PM

A New Mexico state court has rejected an antitrust challenge to the city of Santa Fe’s decision to force certain business owners to pay employees a $10.50 minimum wage—a “living wage,” according to supporters. Various business groups, including New Mexicans for Free Enterprise, challenged the ban as an affront to businessmen’s rights. We all know how much courts love those arguments. The antitrust argument—the city was price-fixing by requiring the wage—struck me as particularly innovative. But the judge granted Santa Fe summary judgment on that point.

All was not lost, however. The businessmen’s case will still go to trial to decide whether the law violates the equal protection provisions of New Mexico’s constitution. The judge is concerned that the law may unfairly discriminate against certain business owners, since the “living wage” only applies to businesses with more than 25 nonunion employees, and other businesses may obtain a waiver from city officials, a sure sign that political favoritism will enter into the process.

Santa Fe was represented by lawyers from New York University’s Brennan Center for Justice, a leftist academic group. That should tell you everything you need to know about this case. But just in case you need more direct evidence, consider this statement from one of the Brennan Center lawyers: “The (New Mexico) Legislature specifically granted the city the power to enact the legislation it did. New Mexico gives enormous power to its municipalities. There's no question a living-wage ordinance promotes the health and general welfare of the people of Santa Fe.”

This statement should given even moderate Democrats pause. It says, without qualification, that any law tied to “health and general welfare,” no matter how impractical or repugnant to individual rights, should be treated as axiomatic by the courts. Not only must we have a “living wage ordinance,” we must not be able to question its objective truth or wisdom. If you accept this lawyer’s premise, you’ve effectively abolished the right to think for yourself. After all, what right does any individual have to question a policy that promotes “health and general welfare?”

Those of us who believe in reason and individual rights, however, can easily determine this statement is based on fraudulent premises. For one thing, whatever powers the State of New Mexico grants to its municipalities, those powers must derive in the first instance from the people. There is no divine right of bureaucrats. Granted, New Mexico already imposes a statewide minimum wage, but this practice is unconstitutional. The government may not impose conditions on private contractual relationships; it certainly has no valid authority to fix prices in private commerce.

Furthermore, there is no “living wage.” In theory, the living wage is the minimum amount of money a person must earn to support his family above the poverty line. But each individual has distinct economic needs. One person’s living wage is another person’s second job. Two centuries of economic experiences teaches us that fixing price levels does not stabilize demand or individual economic needs. Quite the opposite: Price controls reek havoc on the economy by destroying the natural connection between supply and demand. The living wage creates more economic uncertainty, not an egalitarian utopia.

:: help support this website | link |



 

:: Wednesday, December 10, 2003 ::

Sports: Diversity Patrol 

:: Posted by Skip at 5:31 PM

The Atlanta Falcons fired head coach Dan Reeves today. No surprise there. The question now becomes, how committed is Falcons owner Arthur Blank to “diversity”? Coincidentally, yesterday the NFL issued “a set of interviewing guidelines” designed to “assist clubs in implementing the NFL policy on equal employment and diversity.” Blank serves on the NFL’s Committee on Workplace Diversity—along with five other white, male owners—which drafted the guidelines. Now Blank will have to comply with its requirements.

And there are many requirements. The basic goal of the policy is to get more African-American candidates interviewed, and hopefully hired, for head coaching positions. There are currently three black head coaches in the NFL: Cincinnati’s Marvin Lewis, Indianapolis’ Tony Dungy, and the New York Jets’ Herman Edwards. The NFL’s lawyers are afraid that’s not enough. Civil rights agitators have been knocking on the league’s door in recent years (spurred on by sympathetic media commentators) demanding more, ahem, affirmative action on the lack of black coaches. Last year the league implemented its current policy, which failed the moment Detroit Lions general manager Matt Millen hired the coach he long sought, Steve Mariucci. Millen tried to jump through the league’s diversity hoops by calling in black candidates, but none of them would interview for a position that was already filled. The NFL fined Millen $200,000 to teach him a lesson. What that lesson was still escapes me.

So the lawyers went back to the drawing board and drew up a step-by-step guide to diverse interviewing practices. There are ten specific guidelines—maybe Roy Moore will display them in a two-ton monument—that break the hiring process down in excruciating detail. Here are two highlights:
First, prior to beginning the interview process, a club should prepare a job description that clearly and fully defines the role of its head coach and the qualities it is looking for in its head coach. Such basic questions as the extent of authority, reporting relationships to the owner and other club executives, responsibility for player personnel and salary cap management, and supervisory duties relating to other club staff need to and should be addressed before interviews begin. As the interviewing process proceeds, it may be appropriate to modify the job description.

* * * * *

Third, as part of the search process, clubs should make certain that they identify a deep and diverse -- by many different criteria -- pool of head coaching candidates. As part of this effort, clubs should be sure that they are knowledgeable about potential minority candidates for the head coaching vacancy both within and outside their own organization. The League Office can provide this information, and consideration should normally be given at the outset to using the League as a resource for helping to identify qualified minority and nonminority candidates.
The first requirement sounds like it was written by a first-year MBA student with no practical work experience. Do they expect NFL owners to put out a “help wanted” ad for head coaches? If you ask most owners what they expect from a coach, they’ll answer “win more games than you lose.”

The third requirement takes diversity as an anti-concept to a new plateau. First, it’s ridiculously pejorative to divide people into “minority and nonminority” classifications. It makes black coaches sound like they’re an endangered species that needs protecting from ravenous wolves. Just using such language gives your overall initiative the appearance of being a sham. Second, what precisely are the “many different criteria” teams are supposed to use in assembling a candidate pool? Couldn’t that conflict with the first requirement’s call for an explicit job description? For example, Washington Redskins owner Dan Snyder hired Steve Spurrier for a very specific set of reasons: Spurrier was an established name, he ran a particular offense that appealed to Snyder, and he didn’t ask for too much personnel authority. Snyder did not go out and interview candidates that fit the opposite profile, because he knew what he wanted. This means Snyder isn’t committed enough to diversity, right? Wrong. When he fired Norv Turner in 2000, Snyder offered the interim coaching job to two black candidates, one of whom declined. And today the Redskins have two black coordinators serving under Spurrier. Snyder gets called a lot of names, but racist isn’t one of them.

The “many different criteria” guideline is classic lawyer-speak: it sounds ominous, but is impossible to define in practice. It is the exact opposite of a well-thought out concept, which means it can only be assessed on a case-by-case basis, precisely what the lawyers intended.

Having said all this, I don’t want people to take the NFL’s action too seriously. This isn’t like the University of Michigan case, which involved taxpayer supported universities allegedly dedicated to education. For all the pomp and lawyering, the NFL’s policy applies to the hiring of 32 positions in a nation of 250 million people. This is not an issue anyone should be storming the barricades over.

Still, I am curious why the number of black head coaches isn’t higher. The first thing I’d like to know is what percentage of all football coaches—high school, college, and professional—are black. We already know the percentage of coaches that are black is lower than the percentage of players that are black. But overall, how many blacks go into coaching in the first place? I’ve never seen that question answered. Is it possible blacks simply aren’t as interested in coaching as whites? Many if not most coaches never play beyond the collegiate level. What happens to black college players who graduate but don’t go to the NFL? If someone knows of any data on these issues, please let me know.

The real scandal, if one exists, is the noticeable lack of black head coaches in Division I-A college football. There’s currently four or five, I can’t remember which, black coaches out of about 116 programs. That really makes you think, especially given the ferocity with which most major colleges defend general affirmative action programs. For example, the last time I checked, the University of Michigan had a white dude coaching their football team; yet when it comes to undergraduate admissions, the school insisted on strict racial quotas.

Another theme that the NFL’s policy tries to address is the notion, popularized by the media, that black coaches are waiting too long before getting their first head coaching job. This point was hammered home when Marvin Lewis was hired by the Bengals; after serving as Baltimore’s defensive coordinator during that team’s 2000 Super Bowl season, commenters spent three years bemoaning the lack of a head coaching offer.

But did Lewis wait that much longer than other coaches? Using the NFL Record and Fact Book, I calculated the number of years each of NFL’s 31 active head coaches (I excluded the fired Reeves and his interim successor) took to go from their first assistant coaching job to their first NFL head coaching job. The mean was 17 years. Lewis took 22 years. That would seem to support the media’s argument. But the league’s other two black coaches took less than 17 years: Tony Dungy took 14 years, Herman Edwards only 12. And some successful white coaches took as long or longer than Lewis to get their shots: Mike Martz took 27 years to arrive as coach of the Rams, which he led to a Super Bowl; Brian Billick needed 22 years to get the head coaching job in Baltimore, the same number of years as his former assistant Lewis.

One thing that seems to help potential head coaches rise to the top faster is extensive pro playing experience. Herm Edwards’ short 12-year rise was likely facilitated by his nine-year career. Mike Tice got the Minnesota job after just six years of coaching, but he also had 14 years of playing experience. In the NBA, far more coaches were pro players, which might explain why there are more black coaches. But most football head coaches didn’t have a pro playing career. Once again, this raises an interesting question: Do black football players want to coach?

Finally, I have to laugh when thinking about Arthur Blank following his own diversity policy. Before buying the Falcons, Blank made his fortune as a co-founder of Home Depot. Is this a man who needs to be lectured on hiring the best people regardless of race?

:: help support this website | link |



 

Rights & Reason: Campaign "Reform" Upheld 

:: Posted by Skip at 1:31 PM

This morning the Supreme Court ruled in McConnell v. FEC, the consolidated challenges to the Bipartisan Campaign Reform Act. By a 5-4 vote, the Court upheld most of the challenged provisions, notably the “soft money” ban. Two provisions were invalidated: one banning minors from making political contributions, and the other banned political parties from making expenditures to candidates they actually nominated.

Plenty of people will analyze the Court’s 298 page ruling (including a 19 page summary) to death, and I’m happy to leave that task to them. This case has never interested me. Yes, BCRA is a wretched violation of the First Amendment, the Court’s ruling to the contrary notwithstanding. But history has taught us that every time a government tries to regulate its citizens’ rights away, those committed to preserving individual rights will find a way around it. The Alien and Sedition Acts failed. Prohibition failed. The draft fell. Campaign finance reform too will pass.

I’m not even upset with the Court for its decision. Justice O’Connor joined the “liberal” voting bloc of the Court to swing the case, hardly a surprise. Remember, O’Connor is the most partisan of the justices, meaning she’s most likely to side with the wishes of a Republican administration. In this case, President Bush defended the law, which effectively locked up O’Connor’s vote. Also remember it was Bush who signed the BCRA despite declaring it unconstitutional during the 2000 campaign. George W. Bush alone bears the responsibility for putting BCRA into law.

:: help support this website | link |



 

Politics: The Election Ahead 

:: Posted by Skip at 1:16 PM

Bruce Bartlett perfectly describes the political problem with George W. Bush:
It is a fact of life that perception is often more important than reality. This is especially so in politics, where people can be dogged by impressions even when they are completely untrue. A classic example is the notion that former Vice President Dan Quayle is stupid, a view still widely held that I know to be false, having worked with him dating back to his days in the Senate. Nevertheless, once this idea took root, it became impossible to dislodge. Everything Mr. Quayle did was interpreted through this prism, magnifying any mistake he made, no matter how small.

I believe President Bush is in danger of creating a perception about himself that may prove equally hard to eradicate if it is allowed to continue. That is the view he is "Nixonian," having an approach toward politics and policy paralleling that of Richard Nixon. It is characterized by a willingness to subordinate everything to one's re-election — to say and do anything to advance this goal, with no concern whatsoever for the long-term consequences.

* * * * *

This is very dangerous for President Bush. Nixon is one of the few presidents in history reviled almost equally by left and right. The former will never forgive him for Watergate and bringing down Alger Hiss. The latter remains disgusted by Nixon's wage and price controls, his creation of the Environmental Protection Agency and other regulatory agencies, and his overtures to the Soviet Union and Red China.
On the other hand, President Bush exhibits no signs of the rampant paranoia that helped bring Nixon down. And when it comes to overall philosophy, President Bush may actually prove more dangerous than Nixon. This president advocates “compassionate conservatism,” a concrete-bound altruist muddle that mixes the worst of leftism and neo-conservatism. Nixon was just nuts. He was an obsessive-compulsive politician constantly seeking public adulation. The turning point for Nixon came when he lost the presidency in 1960 (under questionable circumstances) to John Kennedy. After that, Nixon became consumed with both avenging his defeat and becoming more popular than the Kennedys.

(One sees Nixon’s political personality revived in the form of Al Gore; his endorsement of Howard Dean—a candidate that bears little resemblance to the Clinton-Gore campaigns—suggests the former vice president is consumed with avenging what he considers a tainted defeat.)

And we should keep in mind that Nixon’s disastrous politics got him re-elected in 1972 by an overwhelming margin over a radical Democrat. Many have already drawn the Dean-McGovern parallel. But that too may miss the point. Dean is far better organized than McGovern ever was, and he will have far greater command of the Democratic Party when he takes the nomination next summer in Boston. McGovern was a candidate born of chaos; Dean, whatever his policy faults, is arguably the best organized candidate ever heading into the primary season. That doesn’t mean Dean will win the presidency; it just means he won’t be casually dismissed as a fringe lunatic. President Bush, on the other hand, is starting to lose control of his base. When that happened to his father eleven years ago, it was pretty much game over by the conventions.

The only saving grace for Bush is that he won’t face a primary challenge as his father did from Pat Buchanan. The only two postwar presidents to lose re-election—George H.W. Bush and Jimmy Carter—were irrevocably weakened by strong early primary challengers. A third president, Lyndon Johnson, pulled out of a re-election race when a number of strong challengers entered the field. Bush’s clear path to re-nomination gives him a strong incumbency advantage heading into 2004, and that may be enough to secure reelection. But the question remains, how much philosophical and economic damage will the president do on his path to reelection? The Medicare bill was the largest political attack on free market philosophy since Bill Clinton pushed through his tax increase in 1993. I shudder to think what Bush has in mind for a second term encore.

:: help support this website | link |



 

:: Tuesday, December 09, 2003 ::

Rights & Reason: Got Taxpayer Money? 

:: Posted by Skip at 11:40 PM

Institute for Justice is taking on government-mandated advertising. For those of you who don't know, the government routinely requires various agricultural producers to chip in for generic industry ads designed to boost interest in the product. Radley Balko explains:
So all of those "Got Milk?" ads you've seen aren't the result of milk producers getting together voluntarily to launch an ad campaign, they're the result of a federal mandate requiring every dairy producer to pay up, whether they want to or not.

IJ is representing a small dairy farm that wishes not to associate itself with its Big Dairy competitors.

I think there's another interesting angle to this story, too. The federal government is simultaneously requiring diary producers fund ad campaigns for milk, while cozying up to nanny-state organizations that criticize Big Dairy for promoting an unhealthy product in those very campaigns.

When the day comes that John Banzhaf finally launches his class action suit against Big Dairy or Big Pork, then, will he be able to name as co-defendant every dairy producer who was compelled by law to support the ad campaigns?
There's another connection that needs to be made: Banzhaf's lawsuits are predicated on the view that unhealthy habits, of any kind, injure society because of the extensive network of government spending on healthcare. In other words, if people eat too much and get heart disease, the public picks up the tab via Medicare, Medicaid, or indirectly through other healthcare subsidies. The simple answer is to get the government out of health care spending. But that's obviously too simple an answer for a "public interest" terrorist (er, lawyer) like Banzhaf.

Like the forced advertising requirement, forced taxpayer spending on health care imposes unnecessary costs on the marketplace, while creating a whole host of contradictions that never seem to get resolved.

:: help support this website | link |



 

Sports: BCS Musings 

:: Posted by Skip at 1:51 PM

My media patron, Steve Czaban, said last night on his national radio show that the BCS serves three purposes: to make a lot of money for the BCS conference schools, to prevent the creation of a playoff tournament, and to exclude non-BCS schools from sharing in the wealth. Czaban's view echoes that of most media commentators, whose reactions to this past weekend's Oklahoma-USC-LSU fiasco range from morally indignant to apoplectic. Like these folks, I agree the BCS is a dumb system that should be scrapped for the sake of all parties involved. However, I disagree with Czaban that the BCS schools are trying to sabotage the creation of a playoff tournament.

The major stumbling block to a playoff is not the BCS, but the NCAA. Keep in mind the NCAA is actually three different organizations: Division I, Division II, and Division III. Each division has its own board of directors and essentially maintains its own rules. Under current Division I rules, a school in Division I-A can only play in one "postseason" game. That's why the BCS hasn't created even a mini-playoff among just the major schools. Sure, the NCAA rule can be amended, but that's a complicated process that involves input from many interest groups. And if the rule is changed and a playoff allowed, NCAA leaders are going to want control over that tournament. Right now, the bowls are run by local host committees in association with the conferences. Neither of these groups are eager to hand the NCAA office in Indianapolis greater control.

BCS critics point to the success of the NCAA basketball tournament as evidence a playoff would improve college football. While the tournament is great viewing, it also comes with a terrible price. The NCAA controls the pot of money from the tournament, and so long as that's the case, the players will never see a dime, because the NCAA leadership remains steadfastly committee to "amateurism," an anti-capitalist, anti-individual rights philosophy. An NCAA-run football playoff would produce exactly the same problem. And what concerns me more about football is that subjecting top players to three or four more weeks of games (on top of the 12 or 13 regular season games most all schools play) substantially increases the risk of injuries that threaten a player's NFL draft status. In effect, the NCAA would be exploiting the players for short-term gain while risking destruction of their long-term financial health. This is hardly the message colleges and universities should be sending.

So my position is this: No playoff until we dismantle the NCAA and replace it with an organization that will pay the players. Until then, I'd be content to revert to the pre-BCS bowl system, where the games maintained strong regional and conference affiliations.

:: help support this website | link |



 

Politics: Budget Derailment 

:: Posted by Skip at 1:38 PM

This news brief in the Metro section of today's Washington Times caught my eye:
Prosecutors in the Washington Teachers' Union case said they are mired in evidence and have asked attorneys for the four defendants to waive their rights to a "speedy trial."

The problem is the government has 50 boxes of documents that could be introduced at trial, but federal prosecutors say they cannot pay to have much of the evidence photocopied because Congress has not approved the Justice Department's fiscal 2004 budget.
The federal government's 2004 fiscal year began on October 1, more than two months ago. So why doesn't the DOJ have its budget yet? In the federal budget process, Congress divides the government's appropriations into thirteen separate bills (each overseen by a separate subcommittee of each chamber's appropriations committee.) Thus far, Congress has only passed six: Defense, Energy & Water, Homeland Security, Interior, legislative branch, and military construction. Every other agency has been operating under a series of "continuing resolutions," which temporarily continue funding at levels from the previous fiscal year. There have already been six continuing resolutions; the most recent will keep everything open until January 31, 2004, nearly one-third of the way into the fiscal year.

Because of this backlog, the seven remaining appropriations bills have been smacked together into one giant "omnibus" appropriations bill. This one piece of legislation will spend about $375 billion on various programs. The House passed the omnibus yesterday 242-176. The Senate won't vote until January, however, because Democrats want more time to study and debate the measure.

I won't criticize the Democrats for this delay. Omnibus bills are notorious for including all sorts of riders and special projects designed to win votes. Frankly, we're better off under a continuing resolution, since that keeps spending levels lower than what the omnibus bill provides. Still, it's disturbing to think the DOJ can't fund a criminal prosecution—a basic function of government—because Congress can't pass a budget on time.

The outrageous thing is that with Congress and the White House in Republican hands, the budget process still broke down. The blame for this, in my view, rests squarely with the majority leaders in both chambers: Tom DeLay in the House and Bill Frist in the Senate. Both are first-year majority leaders, which may explain part of the problem. The first job of the leaders is running the schedule. Both men spent most of the year focused on placating the White House's demand for a prescription drug benefit and a pork-laden energy bill. The result was this end-of-the-year breakdown on appropriations. Frist in particular has done a lousy job, given his inability to move the President's judicial nominations through the Senate.

:: help support this website | link |



 

:: Monday, December 08, 2003 ::

Politics: Does Medicare Cover Context Dropping? 

:: Posted by Skip at 11:04 PM

Cesar Conda, until recently Vice President Cheney’s top domestic policy aide, is going to bat for his old White House bosses by defending the Medicare bill. Like most Bush apologists, Conda insists we’re not seeing the virtue in a $400 billion expansion of a failed government program:
Conservatives have long had an uneasy relationship with health policy. Outside of their efforts to defeat "Hillary-care" and other Democratic initiatives to socialize our health-care system, the conservative movement rarely addresses health-care policy — a failure that has resulted in the issue being virtually monopolized by liberal Democrats in the eyes of both the media and voters.

The Medicare bill is not a perfect statement of conservative philosophy, to be sure. The cost is huge. But it does contain some good, meaningful, conservative policy reforms.

Conservatives will finally have an alternative to liberal arguments that the only way to cover the uninsured is by government fiat. This bill dramatically expands Medical Savings Accounts, now renamed Health Savings Accounts (HSAs). These accounts are owned and funded by individuals, just like IRAs, and are used to pay nearly any medical expense — all in tax-free dollars.

* * * * *

By definition, conservatives believe a market is preferable to a monopoly — and for the first time, a government entitlement program is losing its monopoly. While the legislation rejected the broad idea of all-out competition pushed by House GOP conservatives, it does provide for limited competition starting in 2010. Conservatives would be wise to support and protect this reform, because you can be sure liberals will try to kill it before it is even born.
Conda’s playing with smoke and mirrors. Yes, the Medicare bill does provide for expansion of HSAs, but it’s not as “dramatic” as he wants us to believe. As for “limited competition,” the political reality is that competition is not forthcoming in most markets. In fact, many Republican legislators conditioned their votes for the Medicare bill on receiving assurances that their districts and states would be exempt from “limited” competition six years from now.

What really galls me, though, is how Conda ignores a major problem with current health policy—the continued antitrust persecution of physicians. If doctors were free to jointly contract with HMOs and other payers, some semblance of free market order would return to health care. Repealing the 1993 FTC-DOJ policy banning physicians from joint contracting (in essence, a ban on making money) would do more to help “competition” and consumers than anything in the current Medicare bill.

And Conda knows about the physician antitrust problem. How do I know? Because I briefed him on the issue personally several months ago when he was still at the White House. A mutual colleague arranged the meeting so I could brief Conda on recent antitrust activity. I spent a good deal of my briefing on the physician antitrust issue. I have no idea if he ever followed up on our conversation before he left the White House, but his one-note defense of the Medicare bill indicates that he probably never gave my concerns serious attention. That’s a shame, because if Conda had spoken up within the White House, the FTC might have been reined in a bit. Now we have an aggressive FTC hell-bent on bankrupting the nation’s physicians, and a President with his head in the sand on the true consequences of his own Medicare bill.

:: help support this website | link |



 

Antitrust News: First Amendment Pricing 

:: Posted by Skip at 9:23 PM

Further proof that antitrust and the First Amendment can't play together:
WASHINGTON, D.C. — Hendrikus van Westenbrugge, a former co-Managing Director of JO Tankers B.V., based in Spijkenisse, the Netherlands, was charged in Philadelphia today with participating in an international cartel to allocate customers, rig bids and fix prices on parcel tanker affreightment contracts for shipments of specialty liquids to and from the United States and elsewhere, the Justice Department announced.

Van Westenbrugge has agreed to plead guilty and cooperate with the ongoing investigation. In addition, van Westenbrugge, a Dutch citizen, has agreed to serve three months incarceration and pay a fine of $75,000. The plea agreement and recommended sentence are subject to court approval. "This case demonstrates our ongoing commitment to prosecute high-ranking executives who participate in international cartels that victimize American businesses," said R. Hewitt Pate, Assistant Attorney General in charge of the Department's Antitrust Division.

Parcel tanker shipping is the transportation of bulk chemicals, edible oils, acids and other specialty liquids by compartmentalized deep sea vessels. The temperature and other specifications of the compartments in the vessels can be regulated according to the specific requirements of the type of liquid being transported. A contract of affreightment provides for the transportation of bulk liquids from one port to another and typically covers multiple shipments during a certain period.

According to the charges, van Westenbrugge joined the ongoing parcel tanker shipping conspiracy as early as January 2001 and participated until at least as late as November 2002. The criminal case charges that van Westenbrugge and his co-conspirators:

  • engaged in discussions concerning customers and prices of parcel tanker shipping of products to and from the United States and elsewhere;
  • agreed not to compete for one another's customers either by not submitting prices or bids to certain customers, or by submitting intentionally high prices or bids to certain customers; and
  • discussed and exchanged prices submitted to certain customers so as to not undercut one another's prices.
As a result, the Department said consumers in the market for international parcel tanker shipping services paid non-competitive and higher prices for parcel tanker shipping.
Notice that two of the DOJ's three charges involve simple acts of speech. The other charge, agreeing not to compete, involves the most basic of individual economic rights—the right not to engage in trade. Obviously, the DOJ begs to differ. They argue that speech is illegal when it relates to illegal activity and that no person may enter into a contract that "restrains trade." But these arguments miss the point. To say speech is illegal when it relates to a criminal activity is circular; under that reasoning, any act of speech may be banned (that is, subject to prior restraint) because it may lead to actions disfavored by the government. But more to the point, the speech at issue here involves discussions of prices and customers. It might involve defrauding customers—and if that is the case, the private tort system is the proper forum for resolving the issue—but there is no act of force warranting the government's intervention. At no point, according to these allegations, did the defendants conspire to deny any customer his legal rights.

Once again, the DOJ will protest, saying customers were denied their right to "competitive" prices. But that is not a right. First of all, how does one determine "competitive" prices? In a free market, prices are objectively determined by the agreements made by buyers and sellers. If a group of sellers (or a group of buyers, for that matter) join together to insist on a particular price level, then so be it. The resulting price still reflects market principles. The DOJ, in contrast, seeks to prevent sellers from exercising any control over pricing; accordingly, the government initiates antitrust prosecution whenever a buyer complains that he's paying more than he'd care to. By prosecuting the sellers, the DOJ replaces the free market with a government-run system where sellers have economic rights only at the government's discretion.

When you establish a "right" to a particular price backed by government order, you have a price control. The DOJ would never call it that, but that's what it is.

Cases like this demonstrate the necessity of repealing the Supreme Court's "commercial speech doctrine," which segregates "commercial" and "noncommercial" speech, assigning the former class lesser First Amendment protection. The result is a policy of treating commercial speech as inherently suspect, and the mere exchange of information a criminal act.

:: help support this website | link |



 

Rights & Reason: The Blind Guiding the Blind 

:: Posted by Skip at 9:08 PM

The Federal Trade Commission issued the following media advisory today: "The Federal Trade Commission will host a press conference Tuesday December 9, 2003 to unveil new media guidance for weight loss advertising claims."

Translation: the FTC will tell weight loss advertisers what they can and can't say; any deviation from the FTC's position will result in immediate prosecution. The antitrust assault on the First Amendment continues.

:: help support this website | link |



 

Antitrust News: Restricting "Anticompetitive" Speech 

:: Posted by Skip at 7:30 PM

With all the hysteria (some of it well founded) over the Patriot Act’s potential for curtailing civil liberties, I would hope the folks protesting that law take note of a more powerful threat to individual rights—antitrust:
A coalition of California telecommunications companies has asked the state attorney general to investigate whether some of the nation's largest phone companies violated antitrust law when they secretly discussed plans to build a war chest to lobby against government regulation.

In a letter to Attorney General Bill Lockyer, the coalition alleges that plans discussed at the October meeting "will harm competition in the state's telecommunications market and cost California consumers and businesses hundreds of millions of dollars per year.''

The letter was sent by the California Association of Competitive Telecommunications Companies (Caltel). It represents companies such as AT&T and Sprint that compete with local phone carriers, including SBC Communications and Verizon Communications. Several smaller telecom firms are also members.

The meeting of executives from SBC, BellSouth, Verizon and other companies took place last month in Washington, D.C. The executives asked their equipment suppliers to contribute to a multimillion-dollar war chest that would help "end government regulation of competition,'' says a memo that laid the groundwork for the meeting.
It should be axiomatic that lobbying the government is free speech, not illegal activity. But antitrust already is used to curtail free speech: Physicians cannot discuss HMO contracts with each other; newspapers are prosecuted for not presenting a diversity of views; media companies are punished for trying to reach too large an audience. While traditional antitrust doctrine still frowns upon prosecuting businesses for joint lobbying activities, all it takes is one or two enterprising state attorneys general to cross that threshold. Look for more than one or two to take action here. The phone company is too popular a target.

:: help support this website | link |



 

Supply & Demand: Vaccinating the Marketplace 

:: Posted by Skip at 4:46 PM

Today’s Wall Street Journal offers an explanation for this year’s shortage in flue vaccines—anticompetitive conduct by the government:
The report by the [Institute of Medicine], an arm of the National Academy of Sciences, noted that there has been a steady erosion in the number of vaccine producers over the past three decades. In the 1970s, there were 25 vaccine makers; today—because of slim profit margins and legislative and liability issues—there are just five. With such a small number of producers, shortages can develop quickly as a result of manufacturing problems or a bad guess on the expected demand.

* * * * *

For makers of all types of vaccines, the Institute of Medicine’s report traced the decline in manufacturers’ interest to the fact that the U.S. government—predominantly through the Vaccines for Children program run by the CDC—buys slightly more than 50% of the vaccines in the U.S. and keeps prices low.
The CDC program “negotiates” discounted vaccine prices with manufacturers, then the CDC makes that price level available to states to provide free vaccinations to uninsured children. This sounds like a perfect program if you’re a leftist or a “compassionate” conservative, but ultimately the system is designed to fail. For one thing, as the Journal points out, vaccines lack a solid distribution network. The government’s purchasing dominance makes it impossible for a thriving private market to develop, and vaccine manufacturers are consequently unable to respond to regional shifts in demand; this means some areas are left without vaccines during critical periods.

A second problem is that most vaccination costs are borne by health care providers, especially doctors and clinics. I spoke to a health care manager last year who told me physicians in her network lost money for each vaccination, since the insurance companies deliberately reimbursed physicians below cost. Of course, the doctors could get together and confront the insurers, but then they would be subject to antitrust prosecution by the FTC.

(Incidentally, note the name of the CDC’s program—“Vaccines for Children.” The name is intended to preempt any debate over the program’s objectives or function; after all, what pragmatist politician wants to be seen attacking “Vaccines for Children”).

All of this should give Bush administration apologists pause when they tout the recently passed Medicare bill. The President essentially wants to run the entire pharmaceutical market the way the CDC runs the vaccine market. It doesn’t matter whether it’s the CDC or government-subsidized HMOs doing the purchasing; when you introduce the element of coercion into the market, the market will cease to function properly. You wreck the very supply-and-demand mechanism that’s essential to the market’s survival.

:: help support this website | link |



 

:: Saturday, December 06, 2003 ::

Rights and Reason: Marijuana Ad On Metro Infuriates Lawmaker  

:: Posted by Nicholas Provenzo at 12:54 PM

I'm loath to spend much time focused on the drug war, but this Washington Post report has to be addressed:

An Oklahoma lawmaker is seeking to slice $92,500 from the federal government's annual payment to Metro because he is angry that the transit agency accepted advertising from a nonprofit group that wants to decriminalize marijuana.

Change the Climate Inc. has been using public service advertising space on the Metro system since 2001, but it was the latest round of advertising, this fall, that drew the ire of Rep. Ernest J. Istook Jr. (R-Okla.).

The ad showed a man carrying a tanned blonde in a short white dress, the two of them set against the azure sky of some tropical retreat. Under the picture appeared the declaration: "Enjoy better sex! Legalize and Tax Marijuana."

In a Nov. 10 letter to Jim Graham, chairman of the Metro board, Istook called the ad "shocking" and said the board had "exercised the poorest possible judgment, so I must assure that [Metro] will learn the proper lessons from this experience and will only accept appropriate ads in the future."

This week, Istook inserted into a bill language that would cut Metro's funds by $92,500 and prohibit any transit system that receives federal funds from running advertising from a group that wants to decriminalize marijuana. The money is just a fraction of the federal government's $164 million subsidy to Metro for capital projects.

The language is part of an omnibus bill expected to come before Congress for a vote in late December or January.

"Metro is using taxpayer facilities to promote illegal activity," said Micah Swafford, Istook's press secretary.
I think campaigns like the Change the Climate bus ad project are silly--they fail to address the real issues behind the misbegotten drug war, but it's Rep. Istook's conduct that shocks me. WMTA routinely donates ad space to nonprofit organizations. To demand WMTA deny Change the Climate ad space on the grounds that a congressman disagrees with their policy position is patently offensive. If CAC ran an advertising campaign calling for the abolition of the antitrust laws, would Istook seek to squelch CAC? What possible distinction can Istook draw between any citizen's group that seeks the repeal of any law they take issue with, and the Change the Climate ad campaign?

More and more, I grow weary of the Republicans. I'm sick of their utter contempt for the principle of individual rights, and I'm sick of how that contempt manifests itself in government encroachment after government encroachment of our most basic freedoms.

:: help support this website | link |



 

:: Friday, December 05, 2003 ::

Politics: Smith Recants... Under Pressure? 

:: Posted by Skip at 6:38 PM

Timothy Noah of Slate reports Rep. Nick Smith of Michigan has backed off his earlier claim that House Republican leaders tried to bribe him into voting for the Medicare bill:
Earlier this week, Chatterbox urged Rep. Nick Smith, R-Mich., to reveal who attempted to bribe him into voting for the Bush Medicare prescription bill, which he opposed on the grounds that it was too expensive. After the Nov. 22 vote, Smith had complained to the Associated Press that somebody—the AP report, in a paraphrase, said it was "House GOP leaders"—had exerted "the most intense and strongest pressure to change my vote that I've ever experienced." Subsequently, Robert Novak had reported in his column that "On the House floor, Nick Smith was told"—by whom, Novak didn't say—that "business interests would give his son $100,000 in return for his father's vote." Smith is retiring at the end of this term, and his son Brad is seeking the Republican nomination to succeed him.
Noah says we shouldn't believe Smith's recantation. I agree. Smith made repeated and specific references to specific offers of money to his son's campaign in exchange for the Medicare vote. Smith's change of position is likely the result of two watchdog groups filing complaints with the Justice Department alleging bribery based on Smith's earlier statements. It's hard to disagree with the statement of one of the group's leaders: "The attempted bribery and extortion of a member of Congress on the House floor destroys the heart of our democracy." Smith presumably doesn't want to get himself in any deeper with party leaders already fuming over his "betrayal" on Medicare.

:: help support this website | link |



 

Politics: A Merger of Equals... and Maybe Ideas... 

:: Posted by Skip at 6:26 PM

Assuming there are no antitrust issues (just teasing), Canada’s two right-of-center political parties will likely join forces this weekend. The Progressive Conservative Party, the party that formed Canada’s first government in 1867, will decide tomorrow whether to complete a merger with the Canadian Alliance, an insurgent group that started over a decade ago in response to western Canadian displeasure with eastern Canada’s political elite. The Alliance, originally called the Reform Party, supplanted the PCP during the 1990s as the chief national opposition party to the Liberal Party, which has governed Canada with an iron fist since 1993.

The PCP’s collapse is one of the great political tales of recent decades. Since Liberal Prime Minister Pierre Trudeau rose to power in the late 1960s, the PCP has been playing the sort of “me-too” politics we’re now seeing from President Bush and the Republicans in this country. In 1979, the PCP ousted Trudeau in an election, but the resulting government couldn’t pass a budget and dissolved less than a year later, returning Trudeau to power for a final term. The PCP did win elections in 1984 and 1988 under Brian Mulroney, but by then the Liberal ideology—national health care, resentment towards the United States, and high taxes—had taken hold. Mulroney would eventually become tripped up in a failed constitutional reform plan designed to placate always-insurgent Quebec secessionists. By the end, Mulroney’s popularity polled in single digits, and the PCP would be reduced to two seats in the 1993 election, possibly the worst showing for an incumbent parliamentary party in western history.

Liberal Prime Minister Jean Chrétien has governed Canada for a decade now as a pale impersonation of Trudeau. He will be principally remembered for being an arrogant prick who ran the country like his personal toy. There is no memorable foreign or domestic policy Chrétien will be remembered for, although the Quebec secessionists did fizzle politically under his watch, which I suppose is something.

The PCP-Alliance merger is an attempt to give the anti-Liberal electorate some hope of ousting Chrétien’s successor, Paul Martin. The merger does make sense. The Alliance brings a solid right-of-center agenda, while the PCP brings at least the vestige of national credibility. The Alliance has never made an electoral dent in Ontario, Canada’s largest province and still a PCP stronghold.

None of this means the newly christened Conservative Party will beat Martin in the next election. More likely, the Conservatives are one more election away from just being competitive. The question then becomes, how far will the Conservatives go to regain power? Will they become “compassionate” conservatives a la George W. Bush and offer a watered-down leftist agenda? Or will they try to build upon the free-market ideas that built the Alliance into a successful insurgent movement? The most important ideological objective for the Conservative Party will be to break the political malaise the Liberals have brought to Canada; Chrétien and company acquired their power by exploiting fear, envy, and class hatred. If not for the presence of the United States to the south, Canada could well be teetering on the brink of third-world status right now given their hostility to basic principles of individual rights. The Conservative Party must forcefully reject the Liberals’ exploitation by offering a positive, pro-capitalist message. That will not be popular at first—few revolutionary calls ever are—but over the long run, it will prove the first step into building a new political majority in Canada. Maybe then the Canadians can show America how it’s done.

:: help support this website | link |



 

Antitrust News: Building a Bridge Back to the 1980s (or Maybe the 1890s) 

:: Posted by Skip at 10:48 AM

In a recent speech, FTC Chairman Timothy Muris slammed the American Antitrust Institute:
Those who wish to expand enforcement in ways that would retard the progression in recent decades toward sensible substantive and institutional norms now have an organization dedicated to that end, the American Antitrust Institute (AAI). The group's leaders call for enforcement that would disregard the prudent limitations observed in recent decades. Recommended areas of expansion include fuller use of per se rules, a return to 1970's style attacks on distributional restraints, greater reliance on structural presumptions against mergers, resurrection of the incipiency doctrine in merger cases, unprecedented expansion of alleged monopsony in merger cases, more emphasis on condemning price cutting, and even a return to the use of non-economic values in antitrust decision making. Although some of these individuals have produced important contributions to the modern antitrust consensus, enactment of their enforcement agenda would shatter that consensus, and return antitrust to its pre-1981 imperialism.
The theme of Muris’ speech, given to the American Bar Association’s antitrust section, was how the Bush administration’s antitrust enforcement strikes—at long last—a proper balance. Muris dismissed pre-1981 antitrust enforcement policy as too rigid, and the Reagan administration (which he worked for) as too soft. Somehow I doubt the businesses that have been prosecuted by Muris' FTC staff find the current antitrust approach "just right."

There is some merit to Muris’ argument. AAI is a radical organization that wants all economic decisions to be made by antitrust lawyers. I don’t think the FTC endorses that position, although sometimes they act like they do. Muris has his pet projects: destroying physician rights, nitpicking mergers in the food industry, and weakening intellectual property. But Muris is still not as bad the AAI people would like him to be. I have yet to read about a single merger or competition case where AAI isn’t screaming at the top of their Ivory-tower academia lungs for blood.

But then again, it’s unfair to criticize AAI for wanting to return to the pre-1981 imperialist age of antitrust. Personally I’d like to return to the past as well—to pre-1890, before antitrust even existed.

:: help support this website | link |



 

Rights and Reason: 'Me too, pal' 

:: Posted by Nicholas Provenzo at 9:17 AM

The Hill reports all is not well in GOP-land:

Conservative Republican frustration over the failure of the Bush administration and the House Republican leadership to restrain federal spending has boiled over in recent days, producing a rare confrontation between GOP lawmakers and party leaders.

The internal conflict, fueled largely by recent passage of the $78 billion Iraq reconstruction effort and the $400 billion prescription-drug benefit for senior citizens that squeaked through the House on Nov. 22, came to a head last week when President Bush abruptly terminated a phone conversation with a Florida Republican who refused his plea to vote for the landmark bill.

Well-placed sources said Bush hung up on freshman Rep. Tom Feeney after Feeney said he couldn’t support the Medicare bill. The House passed it by only two votes after Hastert kept the roll-call vote open for an unprecedented stretch of nearly three hours in the middle of the night.

Feeney, a former Speaker of the Florida House of Representatives whom many see as a rising star in the party, reportedly told Bush: “I came here to cut entitlements, not grow them.”

Sources said Bush shot back, “Me too, pal,” and hung up the phone.
If this anecdote is true, how could President Bush possibly say that with a straight face? The only time he’s evidenced any willingness to say “Me too” is when it increases the size and scope of government. One measly tax cut an advocate of limited government does not make.

It gets even thicker:

At the same time, House Speaker J. Dennis Hastert (R-Ill.) castigated former House Majority Leader Dick Armey (R-Texas) after he wrote an op-ed article in The Wall Street Journal opposing the bill. Armey wrote that he opposed the bill even though he had voted for two similar bills as a member of Congress.

House leadership aides said Hastert and Majority Leader Tom DeLay (R-Texas) felt blindsided by Armey’s op-ed, which came at a time when they were trying desperately to round up the necessary votes.

“The Speaker is very disappointed about the article, especially because Mr. Armey voted for prescription-drugs bills that had even less reform than the conference report did when he was a member,” Hastert spokesman John Feehery told The Hill on Monday.
Tough. Hastert’s three hour vote revealed him to be willing to attempt almost any stunt to have passed this bill. Heck, the impeachment vote against Bill Clinton did not take as long. The GOP does not just deserve to be called out—it deserves to lose political power. The party no longer serves the interests of those who seek limited government. Consider the last bit of the article:

Republican aides said conservatives who voted against the bill, including Reps. Mike Pence (Ind.), John Culberson (Texas), Jeff Flake (Ariz.), Roscoe Bartlett (Md.) and Jim Ryun (Kan.), would suffer for their votes against the Medicare bill.

Leadership aides said those members “can expect to remain on the back bench” in the months ahead.
With a closely controlled Congress, even a group as small as 10 members could have a powerful impact on floor votes. If sentenced to the back bench, these congressmen should mount an all out attack against the GOP’s spendthrift (and rights violating) ways.

:: help support this website | link |



 

:: Thursday, December 04, 2003 ::

The War: They Get It, So Why Don't We?  

:: Posted by Nicholas Provenzo at 11:29 AM

Andrew Sullivan found this interview with Syed Munawar Hasan, the leader of Pakistan's largest Islamist political party in Asia Times Online:

ATO: "You reckon that there are so many contradictions between the West and the Muslim world, is there any chance of reconciliation and dialogue between the two civilizations?"

Munawar: "There is none. The basic concepts of both civilizations are in total contrast with each other. When I say this I do not address Western civilization as Christianity. I speak of a man-made system completely devoid of divine guidance. Our concepts of God, human beings, the universe, are totally in contrast with the concepts of the Western world. We cannot segregate human lives into private and public, our lives are ruled by divine guidance, not by man-made rules based on his own prejudices and specific mindset characterized by its own dilemmas and shortcomings. Our concept of the universe is not materialistic, and the result of an 'accident'. Instead, it was a very well thought out process envisaged by the creator of the universe with a plan. So these basic concepts have made the difference between ours and Western approaches."
Objectivists have long been arguing that the battle between the West and the Islamic world is drawn upon secular and theocratic lines even before 9/11. Yet we still have this fiction of Islam as a "religion of peace" and a foreign policy guided by it.

The Islamic militants see the real battle lines. It's about time we did as well.

:: help support this website | link |



 

Capitalism and the Law: NY Council Introduces 'Potty Parity' Bill  

:: Posted by Nicholas Provenzo at 10:56 AM

The AP reports GWU’s "public interest" lawyer John F. Banzhaf III has struck again:

Potty parity. Squatters rights. Go ahead, make fun of the fact that several City Council members introduced a bill Wednesday to have more restrooms set aside for women than men in most buildings.

To women — and one male law professor dubbed "the father of potty parity" — it's a matter of gender equity.

"Women need more restroom facilities simply because women take longer," said John F. Banzhaf III, a public interest law professor at George Washington University Law School during a telephone interview Wednesday.

Banzhaf, who was dubbed the "father of potty parity" for filing several court complaints — including the first one on the federal level — wrote recently that these legal cases show that women are standing up for their rights "even if they can't stand up while exercising those rights."

"We would never tolerate a system where women would routinely have to wait five times longer than men to have their blood tested, even if men's and women's blood were tested for different things," Banzhaf argues. "And we shouldn't tolerate a system where women routinely are forced to wait five or more times longer than men to perform a basic and necessary personal function."

So why might women take longer in the bathroom? Because they often have small children to tend to, they wear more clothes, and, as Councilwoman Yvette Clarke put it, there's that anatomical difference.

"We don't have the same type of equipment that men have," said Clarke, one of the main sponsors of the "Restroom Equity Bill."

And women don't use urinals, said Banzhaf, another reason why men can zip in and zip out of restrooms.

Still laughing? You should stop now, Banzhaf said.

"I think the courts are recognizing that restroom facilities are an essential important service," he said.
No, Prof. Banzhaf, I'm laughing. So a business offers restroom facilities to its customers, and now it has an obligation to build those facilities to ratio determined by law. What if a business only offered a unisex bathroom? What if a business refused to provide restroom accommodations at all, or to only one sex? In John Banzhaf’s universe, this is not an issue for customers to decide though their continued patronage, but for the government, though legal sanctions.

This is the logic of the American with Disabilities Act taken to its natural conclusion. The foundation of the ADA was that the government ought to have the power to compel businesses to offer certain accommodations under penalty of the law. If the government can mandate the size of bathroom stalls, why can’t it mandate the ratio of male facilities to female facilities?

I can see it now: “Whereas, it is the sense of the New York City Council that it takes a woman longer to pee than a man, and as women go to the restroom in pairs, there shall be two stalls for women for ever one stall for a man.” Think I’m kidding: Ohio already has such a law. Ohio's "potty parity" code provisions for public buildings dictate one toilet for every 50 women and one for every 100 men.

Banzhaf thinks he has the right to use government to lord over one of our life’s choices. I wonder how long it will take him to shift his targets from trivial matters to ones that substantively threaten our freedom.

:: help support this website | link |



 

Rights and Reason: Lieberman Seeks Probe on Snack Food 

:: Posted by Nicholas Provenzo at 9:31 AM

The AP reports Democratic presidential candidate Joe Lieberman is gunning after snack food.

The Connecticut senator, who led the fight to put parental warnings on movie, video game and music advertising, wants the Federal Trade Commission to determine whether there is a connection between junk food advertising and the rise in obesity among youngsters.

"We're talking about how the government can get back on the side of parents and families and support them in raising healthy children and giving them good values," said Dan Gerstein, deputy communications director for Lieberman's campaign. "Governments can't raise children. That's the job of parents. But we can help to pull with them and pull for them."

As president, Lieberman would push for three interim moves while the FTC conducts its study:

  • Require junk food advertisements to include nutritional information that
    somehow issues a warning to parents, much like movie ads are accompanied by
    parental ratings.

  • Ask Congress to require restaurant chains to include nutritional
    information on menus and mini-boards. There already is a bill pending in
    Congress to do this.

  • Empower the Agriculture Department to set standards for food sold in
    schools, primarily vending machines. The USDA currently regulates lunch menus,
    but there are no limits on what companies can sell kids through vending
    machines.

Lieberman's campaign officials said the senator will not define what junk food is, leaving that to dietary and health care experts.
Lieberman’s call is yet another attack on commercial speech. Lieberman would not dare call for an FTC investigation of political speech, yet because the snack food advertisers speak out of a commercial motive, he believes he has a right to target them for investigation. This should send a chill up the spines of every business that relies of advertising to communicate with customers.

The fact is that parents are responsible for the cognitive development of their children, including a child’s eating choices and how they respond to advertising. If a child is making inappropriate decisions regarding his food options, the responsibility rests solely with the parent. Children receive different and conflicting messages from a variety of sources every day. It is for the parent to teach the child how to evaluate these messages and act appropriately.

The idea that the government can oversee advertising on the grounds that people are somehow powerless before it is obnoxious. People are responsible for their choices, not the government.

:: help support this website | link |



 

:: Wednesday, December 03, 2003 ::

Rights & Reason: Victory in D.C.? 

:: Posted by Skip at 6:38 PM

Reports suggest the D.C. Council won't adopt a smoking ban. The key development: Mayor Anthony Williams said he'll veto a proposed ban. WJLA-TV reports, "The mayor says with the hospitality industry being so important to the city’s economy, he can’t support an outright smoking ban for bars, restaurants and nightclubs." Emphasis on "outright." It appears the mayor will back a proposal by Councilmember Carol Schwartz, a moderate Republican, to give a 15% tax credit each year to bars and restaurants that voluntarily ban smoking.

If I were on the Council, I would vote against Schwartz's "compromise." Businesses can already ban smoking voluntarily. I strongly disfavor using tax policy to encourage particular business decisions. That's how health care got screwed up in the first place—when businesses were offered a tax credit for offering their employees health insurance. That turned out to be the first step in the socialization of health care.

That said, I give Schwartz partial credit for trying to make the best of a bad situation. Schwartz's proposal won't inflict economic harm the way the proposed ban would. And presumably the mayor wants something to support rather than simply opposing a measure that's popular among the city's political elite.

:: help support this website | link |



 

Rights & Reason: Loco for Localism 

:: Posted by Skip at 5:18 PM

In Nick’s post below, he discusses Howard Dean’s desire to breakup large media companies. The thing that gets me about this debate is the “localism” argument, which Dean raises. Localism promotes the idea that programming is intrinsically better when it’s produced by a locally owned-and-operated station than by a national company. In Dean’s example, he bemoans the lack of locally-produced news in his home state of Vermont.

First of all, I always thought a key objective of the federal Constitution was to protect national markets from local discrimination. The Articles of Confederation failed precisely because states were not playing nice with each other to the detriment of commercial interests. Broadcast localism reverts us back to the 1780s, however, by automatically labeling nationalized markets inferior to local ones.

Of course, there were no national media companies in 1789, and most cities had dozens of newspapers competing for public attention. But the same is true today. Most cities may only have one major commercial newspaper, but “alternative” media of all stripes is thriving, such as the Internet, blogs, specialty magazines, alternative newsweeklies, and so forth. No individual is confined to just one source of information and entertainment.

Second, if large national networks are so harmful, why should the government permit them at all? Consider the recent FCC media ownership debate; the argument came down whether national broadcasters like Fox should be able to own stations reaching 35% of the nation or 45% (Congress and the White House settled on 39%). Right away you see the problem. Fox television doesn’t just reach 45% of the country; the FCC’s regulations only govern stations owned directly by Fox, not the hundreds of other stations that may be affiliated with the network. Affiliates are the lifeblood of national broadcasting. Yet under localism, they are an affront to diversity in media. After all, a Fox affiliate must carry a package of programs scheduled by the network; an affiliate generally can’t run some programs and not others, or run programs in a different order than the network’s schedule.

Or put another way, a network program provides identical content to the entire country without regard to “local interests.” If one applied antitrust theory to networks, they would be ordered broken up into regional competitors. Just imagine six regional NBC networks each forced to produce a “local” version of “Friends”—you could have one version for Atlanta residents, another for Denver, and yet another for Seattle.

:: help support this website | link |



 

Rights and Reason: Howard Dean's Capitalism 

:: Posted by Nicholas Provenzo at 11:23 AM

This Monday, Democratic presidential frontrunner Howard Dean vowed to "break up giant media enterprises" out of a concern over "how deeply media companies can penetrate every single community" while a guest on Hardball with Chris Matthews. Dean says this is wholly compatible with capitalism.

DEAN: [F]irst of all, 11 companies in this country control 90 percent of what ordinary people are able to read and watch on their television. That’s wrong. We need to have a wide variety of opinions in every community. We don’t have that because of Michael Powell and what George Bush has tried to do to the FCC.
MATTHEWS: Would you break up Fox?
(LAUGHTER)
MATTHEWS: I’m serious.
DEAN: I’m keeping a...
MATTHEWS: Would you break it up? Rupert Murdoch has “The Weekly Standard.” It has got a lot of other interests. It has got “The New York Post.” Would you break it up?
DEAN: On ideological grounds, absolutely yes, but...
(LAUGHTER)
MATTHEWS: No, seriously. As a public policy, would you bring industrial policy to bear and break up these conglomerations of power?
DEAN: I don’t want to answer whether I would break up Fox or not,
because, obviously
(CROSSTALK)
MATTHEWS: Well, how about large media enterprises?
DEAN: Let me-yes, let me get...
(LAUGHTER)
DEAN: The answer to that is yes. I would say that there is too much penetration by single corporations in media markets all over this country. We need locally-owned radio stations. There are only two or three radio stations left in the state of Vermont where you can get local news anymore. The rest of it is read and ripped from the AP.
MATTHEWS: So what are you going to do about it? You’re going to be president of the United States, what are you going to do?
DEAN: What I’m going to do is appoint people to the FCC that believe democracy depends on getting information from all portions of the political spectrum, not just one.
MATTHEWS: Well, would you break up GE?
(APPLAUSE)
DEAN: I can’t-you...
MATTHEWS: GE just buys Universal. Would you do something there about that? Would you stop that from happening?
DEAN: You can’t say-you can’t ask me right now and get an answer, would I break up X corp...
MATTHEWS: We’ve got to do it now, because now is the only chance we can ask you, because, once you are in, we have got to live with you.
(LAUGHTER)
DEAN: No.
MATTHEWS: So, if you are going to do it, you have got to tell us now.
(CROSSTALK)
MATTHEWS: Are you going to break up the giant media enterprises in this country?
DEAN: Yes, we’re going to break up giant media enterprises. That doesn’t mean we’re going to break up all of GE. What we’re going to do is say that media enterprises can’t be as big as they are today. I don’t think we actually have to break them up, which Teddy Roosevelt had to do with the leftovers from the McKinley administration.
(CROSSTALK)
MATTHEWS: ... regulate them.
DEAN: You have got to say that there has to be a limit as to how-if the state has an interest, which it does, in preserving democracy, then there has to be a limitation on how deeply the media companies can penetrate every single community. To the extent of even having two or three or four outlets in a single community, that kind of information control is not compatible with democracy.
MATTHEWS: How-how far would you go in terms of public policy?
(APPLAUSE)
MATTHEWS: This is not-what you describe is not laissez-faire.
It’s not capitalism.
DEAN: It is capitalism.
MATTHEWS: How would you-what would you call it?
DEAN: I am absolutely a capitalist. Capitalism is the greatest system that people have ever invented, because it takes advantage of bad traits, as well as our good traits, and turns them into productivity. But the essence of capitalism, which the right-wing never understands—it always baffles me-is, you got to have some rules. Imagine a hockey game with no rules.
(LAUGHTER)
MATTHEWS: Would you-would you
(CROSSTALK)
DEAN: Nobody benefits. Nobody benefits. So you have got to have reasonable rules. And the rules have to protect everybody in the game.
So Howard Dean’s definition of capitalism includes using the presidency to break up News Corporation and other media companies (but not GE) on “ideological grounds.” Whether this means Dean would break up these companies because he disagrees with them ideologically, or that he simply believes he has the right to shatter corporations that violate his vision of “democracy,” Dean has again revealed that he intends to put yet another part of the American economy under his boot.

Let’s reduce Dean’s statement to exactly what it is. A capitalis earns his customers by persuasion. The scale of his operation is determined by the degree he provides his customers with value. In the news media, success is determined by the businessman’s ability to provide his customers with relevant and accurate content. The trend toward broadcast media consolidation is driven by a simple dynamic: it is more cost effective if unprofitable duplication in broadcast media is eliminated.

Yet Howard Dean believes he can act as Caesar (or more accurately, Teddy Roosevelt) over media businesses, on the grounds that he is displeased with the content they generate. So much for the First Amendment right to speak free from government coercion. And, as Dean revealed on Hardball, the principle that drives him is based in large part on his personal whims (i.e, News Corporation is a target, GE is not).

The argument that media consolidation somehow threatens local coverage is bankrupt. In the age of the Internet and desktop publishing, where the costs to creating a niche media presence are so low as to be almost negligible, it is within practically anyone’s grasp to cover any news story that interests them.

The idea that government has the right to check one business model in the favor of another is also bankrupt. No business has the right to exist at the cost of the political destruction of its competitors. The only people who have a right to decide the fate of a business are a business’s owners, by choosing to stay in business or not, and its customers, by choosing to patronize the business or not.

And what has been forgotten in the media consolidation debate is that broadcast spectrum is a property deserving of the same protection afforded any other property. Rather then treat broadcast spectrum as a public good, the broadcast spectrum should be treated as a private property owned by those who develop it. Just because the broadcast media uses radio waves to communicate with its customers does not mean that it forfeits its rights.

Dean’s campaign is not the first time an anti-capitalist has presented himself to the electorate in capitalist’s clothing. Like Teddy Roosevelt before him, Dean attacks the alleged "malefactors of great wealth." And just like Roosevelt, when Dean speaks of the “bad traits of capitalism,” he means nothing less then self-interest. What else motivates a capitalist? It is not avarice that creates new ideas and innovations and brings them to market. It is pride, productivity and reason.

Yet it remains to be seen whether America’s proud, productive and rational will mount a better defense of their freedoms then their forbearers did under Roosevelt. Rather then worry about how deeply media companies penetrate every single community, as Howard Dean cliams, we ought to worry about how deeply government squelches the rights of every single individual.

:: help support this website | link |



 

Rights & Reason: What is Bloomberg (Not) Smoking? 

:: Posted by Skip at 9:29 AM

Life in Michael Bloomberg's New York City:
As some New Yorkers have learned the hard way, the mere existence of an ashtray in a place where smoking is prohibited can lead to a summons. It doesn't matter if the ashtray is stored well away from public areas. It doesn't matter if it is used as a decoration, or to hold paper clips or M & M's. No ashtrays are allowed, period.

The reason is simple, said Sandra Mullin, a spokeswoman for the city's Department of Health and Mental Hygiene. The presence of an ashtray might be taken by some people as an invitation to light up.

"Not having ashtrays and putting up no-smoking signs are two of the strongest ways to discourage smoking and to let people know what the current law is," Ms. Mullin said.

Since May 1, when the Health Department began to enforce the law in earnest, about 2,300 summonses have been issued, she said. A little more than 200 were for ashtray violations.
It's nice to see the mayor and his administration have completely lost perspective post-9/11. It's good to know the mayor is dedicated to the destruction of personal property rights at every conceivable level. It's comforting to realize he puts his personal crusade against smoking over the economic health of his city.

For all the talk of New York rebuilding stronger after 9/11, the terrorists have won. And I don't mean the virgin-seeking morons who flew their planes into the World Trade Center. And if you think comparing 9/11 to a smoking ban is out of line, I'm only following Mayor Bloomberg's lead. He said, "Think about all the press attention to 9/11. That number of people die every year in the city from secondhand smoke." Of course that's false, but facts don't get in the way of those who oppose individual rights.

UPDATE: The Washington, D.C., city council is holding a hearing this morning to discuss its own smoking ban. Or as I like to think of it, they're passing a nice economic subsidy for Northern Virginia bars and restaurants; with Maryland and D.C. on the anti-property rights bandwagon, smokers will now flock to Arlington, Alexandria, and Fairfax. And there's little chance a tobacco state like Virginia will turn down the free revenue by enacting their own ban. Only jurisdictions like D.C. are stupid enough to intentionally inflict harm on their own businesses.

For more on the D.C. ban, check out BantheBan.org, a local grassroots movement against the D.C. smoking ban.

:: help support this website | link |



 

:: Tuesday, December 02, 2003 ::

Rights & Reason: Getting Sick on Health Care "Reform" 

:: Posted by Skip at 10:15 PM

Robert Novak reports on the lengths the White House and House Republican leaders went to in passing the Medicare bill:
During 14 years in the Michigan Legislature and 11 years in Congress, Rep. Nick Smith had never experienced anything like it. House Speaker Dennis Hastert and Health and Human Services Secretary Tommy Thompson, in the wee hours last Saturday morning, pressed him to vote for the Medicare bill. But Smith refused. Then things got personal.

Smith, self term-limited, is leaving Congress. His lawyer son Brad is one of five Republicans seeking to replace him from a GOP district in Michigan's southern tier. On the House floor, Nick Smith was told business interests would give his son $100,000 in return for his father's vote. When he still declined, fellow Republican House members told him they would make sure Brad Smith never came to Congress. After Nick Smith voted no and the bill passed, Duke Cunningham of California and other Republicans taunted him that his son was dead meat.
.The Republicans stole the Medicare vote pure and simple. A majority of the House went on record during the vote against the bill, but House Republican leaders kept the vote open an embarrassing three hours to switch already-cast votes. House Speaker Dennis Hastert should resign for allowing this travesty. He had an obligation to protect the House majority—meaning the majority that voted against the bill, not the Republican majority—from this abuse of process. The House was essentially kept in session until they yielded to the White House’s demands, robbing the chamber of its constitutional independence and integrity. Frankly, the House GOP’s misconduct mirrors the Democrats’ shenanigans in Florida three years ago. It was wrong then, and it’s certainly wrong now.

But then again, maybe it’s appropriate the GOP resorted to Democratic tactics. After all, the bill is largely indistinguishable from what Democrats wanted; they only voted against the bill to deny President Bush a political victory. Similarly, the White House’s decision to steal the victory reflected the President’s final descent into pragmatist Hell. We knew the White House had abandoned the façade of protecting individual rights a long time ago—witness campaign finance “reform,” backing down on affirmative action, and expanding antitrust regulation—but the Medicare bill was an outright attack on free-market principles.

You can argue political arm-twisting is part of the process. I can accept that if the process itself is geared towards the ideological debate of issues. But here the Republicans’ openly stated objective was to stifle any debate on Medicare in favor of political expediency. Rep. Smith’s objections were based in facts and principles, two things that are foreign to the Bush administration.

Novak said renegade Republicans “were warned that if this measure failed, the much more liberal Democratic bill would be brought up and passed.” This is curious. Why would the liberal Democratic bill pass? Republicans still have a House majority; did the leadership mean to suggest it would vote for a Democratic bill just to get something passed and spite the principled conservatives? If that’s the case, the Republicans aren’t just irrational, but suicidal.

:: help support this website | link |



 

Antitrust News: California AG Moves in for the Kill 

:: Posted by Skip at 9:37 PM

The first rule of California government—When businesses are down, make sure to kick them as hard as possible:
California's attorney general is investigating whether the nation's three largest grocery chains have broken antitrust laws by forming a financial pact.

Safeway Inc., Kroger Co. and Albertsons Inc. were issued subpoenas Monday by Attorney General Bill Lockyer's office, demanding they reveal details of a mutual-aid pact, which the companies reportedly made to share revenue so they could reduce losses in the event of a labor strike. Some 70,000 Southern California workers are in the eighth week of a strike and lockout.

Meanwhile, the grocers agreed to arbitrate a suit filed by a union seeking health-care benefits for striking members.
This takes antitrust to a new low. Now businesses can’t act in self-defense to stem potentially crippling financial losses. Lockyer, of course, wants to protect unions from any pressure to settle on terms favorable to grocers. This is particularly galling since labor unions enjoy a federal antitrust exemption, which gives them a substantial political advantage over employers in labor negotiations. On top of that, the grocery strike is not about wages or working conditions, but whether employers will continue picking up the entire tab for health benefits, something which bears no relation to employment in the first place. But once again, federal law practically obligates employers into providing health care to employees.

Lockyer’s actions show just how hollow antitrust is. The states objective of antitrust is to “protect consumers,” yet how does adding to the economic woes of grocers’ aid consumers? It doesn’t. Consumers have already suffered immense harm because of the grocery strike and the parallel public transit strike. If the unions break the grocers on health care, the result will be higher labor costs, which translates into higher prices, the traditional scourge of antitrust enforcers.

A final note: Kroger, one of the grocery companies targeted by Lockyer, is itself a plaintiff in the Andrx antitrust lawsuit, which I discuss in the post below. There, Kroger is using antitrust to try and force lower cost generic drugs onto the market. When you put this in context, you realize Kroger is forced into this position because of the government-union alliance's demand that the company finance employee healthcare without restrictions. This doesn't justify Kroger's suit against Andrx, but it does explain it.

:: help support this website | link |



 

Rights & Reason: The Latest Battle for Intellectual Property 

:: Posted by Skip at 3:46 PM

CAC is preparing an amicus brief to the Supreme Court in Andrx Pharmaceuticals v. Kroger Company, a case that mixes a dangerous cocktail: antitrust law and patent infringement. The case started a few years ago when Andrx, a generic drug manufacturer, asked the FDA for permission to market a generic version of Cardizem, a hypertension medication made by Hoechst Marion Roussel (HMR). Like many generic drug applications, this one became embroiled in a patent infringement dispute when HMR sued Andrx. Under federal law, the infringement suit triggered an automatic 30-month stay of Andrx’s FDA application, during which time the generic Cardizem was kept off the market.

As the 30 month period was expiring, the two companies reached an interim settlement whereby Andrx agreed to keep its drug off the market until the patent dispute was resolved, and in exchange HMR would make quarterly payments (of several million dollars) to Andrx. These interim settlements are common in patent litigation disputes, and in fact are encouraged as a means of helping obtain quicker resolutions.

This is where the antitrust lawyers come in. A group of antitrust plaintiff’s attorneys, backed by a group of businesses and drug purchasers, sued both Andrx and HMR, claiming the interim agreement “harmed” consumers by denying them quicker access to cheaper, generic Caridizem. Like the interim settlements, these antitrust suits are now commonplace, as trial lawyers seek to exploit the public outrage over prescription drug costs. The case was tried in Michigan, and the trial court held the Andrx-HMR interim settlement was a per se violation of the antitrust laws. Essentially, the court found the companies conspired to deny consumers access to cheaper medication. The U.S. Court of Appeals for the Sixth Circuit affirmed, holding that any attempt to put the agreement into its proper context was forbidden by the antitrust laws; after all, the whole point of the per se antitrust rule is to permit courts to declare actions illegal without having to bother with context or evidence.

A few months after the Sixth Circuit’s decision, the Eleventh Circuit in Atlanta ruled on a case brought by essentially the same lawyers and plaintiffs against another interim patent settlement, and that court reached the opposite conclusion. The Eleventh Circuit found the interim settlement did not violate the antitrust laws. Hence we have a disagreement between two courts of appeal, and Andrx seeks to have the Eleventh Circuit’s ruling adopted as the national standard.

CAC’s amicus brief will obviously support Andrx’s petition to have this case heard. We’ve seen firsthand what the per se rule can do to an industry. In 1982, the Supreme Court held the per se rule applied to agreements among physicians regarding fees, and the result is the current FTC-DOJ policy of preventing physicians from engaging in any meaningful negotiations with government-backed managed care companies. The Sixth Circuit’s ruling against Andrx and HMR has a similarly disastrous effect, since it effectively outlaws any effort to settle a patent case without considering the subjective desires of third-party consumers.

This will be the fifth amicus brief filed by CAC with the Supreme Court in the past two years. You may wonder what the value of these briefs is, since it’s difficult to measure their precise impact, if any, on the Court’s decision-making. Amicus briefs are often superfluous, restating arguments made by the parties, and in high-profile cases, the sheer volume of filings renders an individual brief’s contribution worthless. Seventh Circuit Judge Richard Posner, a notorious stickler for judicial efficiency, claims 99% of amicus briefs are a waste of time and money. I would not go that far, but I do believe that amicus briefs must have clear ideological and practical objectives in order to be worth the time and cost.

In the Andrx case, CAC’s ideological motive is obvious: We disapprove of the antitrust laws, and the Sixth Circuit decision, left undisturbed, would vastly expand the reach of antitrust into intellectual property law. But CAC is hardly the only critic of antitrust out there, nor are we a group of career antitrust lawyers who can debate the finer points of particular antitrust theories. Thus, our practical (or political) objective here is to try and shape the debate to our unique organizational strengths.

Here, CAC’s advantage is its substantial experience with the FTC, an agency that is not scrutinized by most other advocacy groups. The FTC plays an important, though not immediately obvious, role in the Andrx case, because the Commission has been laying the groundwork over the past two years to mount a major assault on intellectual property rights. The FTC views patents as a necessary evil—rather than a necessity of capitalism—because consumers are inconvenienced by higher prices for patented goods. The Commission actually investigated the Andrx-HMR agreement in 2001, but settled after concluding it didn’t have a strong enough case. A Supreme Court ruling affirming the Sixth Circuit would strengthen the FTC’s power to scuttle future patent settlements, making it more difficult for firms to file infringement suits defending their property rights. At the end of the day, property rights are an anathema to the “consumer rights” the FTC is sworn to protect.

Our amicus brief will provide the Court, and the general public, with a broader context to this case then the parties themselves will present. This is especially important because appellate courts are notoriously pragmatic—they take every measure to avoid public policy context, preferring to issue narrow rulings outside of any broad principle. Even if the Supreme Court does not accept Andrx’s case for review, CAC’s brief will set the stage for the larger debate over the FTC’s role in balancing property rights with “consumer rights.” This debate affects the nation at-large, and hopefully those of you reading this entry will be motivated to contribute to CAC so that we can remain at the forefront of the discussion.

:: help support this website | link |



 

:: Monday, December 01, 2003 ::

Sports: Firing Frank for Capitalism 

:: Posted by Skip at 9:08 PM

The University of Nebraska fired football coach Frank Solich yesterday after posting a 9-3 record in 2003, and an overall 58-19 in six seasons. At first glance, it’s odd that a coach who won 75% of his games while competing in the Big 12—arguably the toughest football conference in Division I-A—would be dismissed in the absence of any misconduct. But Nebraska athletic director Steve Pederson said he needed to make a change because, in his words, “I refuse to let the program gravitate into mediocrity.” Pederson argued Nebraska was not moving in the right direction compared to conference rivals Oklahoma and Texas. Presumably, Nebraska’s 31-7 loss to Texas (and a wretched home loss to Kansas State) this season didn’t help Solich any.

Pederson’s criticism of “mediocrity” is noteworthy. The AD’s description of Nebraska’s football program is unusual for a college administrator: “The byproduct of excellence in every area of your program is winning, and I don’t apologize for having high expectations.” You wouldn’t hear a college president or dean talk that way about an academic department. Nobody criticizes a math department chairman for allowing his program to “gravitate into mediocrity,” or the political science’s lack of commitment to “excellence in every area.”

If anything academia—especially at state-run schools—is a monument to mediocrity. Tenure, a core principle of almost every college and university, ensures mediocrity is an institutional standard. Professors are not held to individual standards of excellence, but to communal standards of conventional wisdom. Challenging the establishment is disfavored, and competing for the sake of self-improvement is practically sacrilege. In most academic departments, office politics is the key to success.

College football is criticized for being more about business than academics. Some of that criticism is justified. But then again, what’s wrong with being a business? Business recognizes the pursuit of selfish objectives as a moral calling. That doesn’t mean business can’t corrupt; it can and often does (especially in college football, where players are expected to work for free because the academics have wrongly declared “amateurism” a moral virtue.) But competitive, market-based business models do not promote mediocrity as a virtue. Innovation and accomplishment are the foundations of profit.

I don’t know whether Frank Solich’s firing was a good decision from an academic standpoint. If Solich were a math professor, he’d be encouraged to plod along for twenty years as a mediocre academic. And without greater knowledge of the specifics, I won’t say Steve Pederson’s decision makes sense from a football standpoint. But I do think Pederson made a responsible business decision—he saw the company going in the wrong direction, and decided to shake things up at the top. Frankly, there are Fortune 500 companies that wouldn’t make a CEO change when presented with clearer evidence of management failure. Pederson’s decision certainly entails risk, but it’s a risk worth taking.

Situations like this confirm my belief that college football needs to segregate itself completely from the fraudulent, anti-capitalist world of academia. A few months ago on the “Steve Czaban Show,” I proposed creating a for-profit college football association, where the 60-plus schools now in the five major Division I-A conferences would transfer their football teams to limited liability companies (controlled either directly by the school or through boosters) that would run the football programs as businesses. The players would get paid regular salaries, and profits could be returned to the investors. This not only divorces college football from the unreasonable, immoral mandates of the NCAA; it also removes football from campus politics. (In theory, this would also remove football rosters from Title IX calculations, thus relieving major schools of some budgetary and political pressure while pissing off those radical feminists who detest capitalism.)

:: help support this website | link |



 

The Courts: The Post Office--Floor Wax or Dessert Topping? 

:: Posted by Skip at 1:37 PM

This morning I attended oral arguments at the Supreme Court in United States Postal Service v. Flamingo Industries, a case where CAC filed an amicus brief. The case presents a simple question: Is the Postal Service a “person” subject to suit under the antitrust laws. Flamingo Industries brought an antitrust claim against USPS over a procurement dispute. USPS said the antitrust laws only applied to persons—including corporate persons—organized under the laws of the United States; agencies of the United States itself are not persons but rather sovereign entities. The always-contrarian U.S. Court of Appeals for the Ninth Circuit disagreed, holding USPS, as presently structured, was a person amenable to antitrust lawsuits. The Solicitor General, acting on USPS’ behalf, asked the Supreme Court to reverse.

Deputy Solicitor General Edwin S. Kneedler represented USPS. His advocacy was unremarkable, and consisted largely of laundry listing the various ways USPS was a traditional government agency. His central theme was that USPS carries out an essential sovereign function—delivering the mail—and subjecting the Service to antitrust laws would inevitably compromise that sovereign function.

Harold J. Krent, dean of the Chicago-Kent College of Law, argued on behalf of Flamingo Industries. Krent’s argument mirrored Kneedler’s, only he laundry listed the ways USPS acted as a commercial business. Krent conceded that the First Class mail monopoly carried out a sovereign function, but that USPS also competed with private businesses in areas not related to that monopoly. Much of Kneedler’s discussion with the justices dealt with the precise nature of USPS’ private-sector competition and the need for antitrust protection.

Most of the Court’s questions came from the left side of the bench. I don’t mean ideologically; I mean seating. Justices Ginsburg, Souter, and Scalia—all of whom sit to Rehnquist’s left from the audience’s viewpoint—did most of the questioning. Ginsburg focused largely on how to apply precedent. Souter sought to understand the commercial-vs.-sovereign debate. Scalia largely mocked everyone, especially Kneedler. Scalia was particularly amused when Kneedler asserted Congress’ intent in reorganizing the Post Office in 1970 was to remove politics from the department’s operations. Scalia noted the conundrum of trying to insulate a government agency from the government itself.

Scalia also indirectly raised the issue discussed in CAC’s amicus brief—whether USPS’ management structure is constitutionally consistent with a sovereign entity. We argued that under the Court’s prior decision in Morrison v. Olson, a properly constituted executive department must have its head appointed by the President with the consent of the Senate. The USPS’ chief executive is appointed by nine presidentially-appointed governors, but not by the President himself. In our view, this means either USPS’ structure is unconstitutional, or that it is not genuinely an executive agency entitled to sovereign status. For purposes of this case, we argued the latter conclusion. Scalia never directly raised our argument, but he did ask Kneedler several questions about USPS’ structure and how it might affect the Service’s sovereign status. Kneedler once again argued that Congress wanted to retain USPS as a sovereign entity while depoliticizing its control. But, as Scalia noted before, this makes no sense; any agency under government control is inherently political.

Justice O’Connor had the most telling comment of the morning. At one point, the famed pragmatist asked with some exasperation why this wasn’t a question for Congress. In other words, if Congress wanted to apply or exempt USPS from the antitrust laws, they should just say so. Of course, if Congress were clear in the construction of its laws, we probably wouldn’t need appellate courts. Still, O’Connor raised a good point. The postal organization laws do not clearly determine whether USPS should be treated like a regular business for antitrust purposes; given the economic importance of USPS, Congress should be clear about such things.

The entire back-and-forth on was USPS a business or a sovereign agency reminded me of the old Saturday Night Live commercial for Shimmer—was it a floor wax or a dessert topping? Unfortunately, none of the justices seemed willing to play the Chevy Chase part and declare USPS was both a business and a sovereign agency. That is, after all, the right answer. But the Solicitor General would not concede that point, and the justices seemed inclined to vindicate his position.

Krent certainly gave the justices enough solid arguments in favor of his client’s position. But my overall sense was that the Court wanted to overturn the Ninth Circuit and spare USPS the burden of defending itself in antitrust lawsuits. Kneedler effectively countered many of Krent’s arguments, and if I were scoring this like a debate tournament, I would give Krent at best a draw. If the justices saw things that way, they are likely to resolve the tie in favor of the government’s position. This could end up being a unanimous reversal. There wasn’t one justice, not even Scalia, that I would consider a definite vote for Flamingo.

:: help support this website | link |



 

Rights and Reason: President To Drop Tariffs On Steel  

:: Posted by Nicholas Provenzo at 8:03 AM

This Washington Post reports it's the end of the line for steel tariffs:

The Bush administration has decided to repeal most of its 20-month-old tariffs on imported steel to head off a trade war that would have included foreign retaliation against products exported from politically crucial states, administration and industry sources said yesterday.

The officials would not say when President Bush will announce the decision but said it is likely to be this week. The officials said they had to allow for the possibility that he would make some change in the plan, but a source close to the White House said it was "all but set in stone."

European countries had vowed to respond to the tariffs, which were ruled illegal by the World Trade Organization, by imposing sanctions on up to $2.2 billion in exports from the United States, beginning as soon as Dec. 15. Japan issued a similar threat Wednesday. The sources said Bush's aides concluded they could not run the risk that the European Union would carry out its threat to impose sanctions on orange juice and other citrus products from Florida, motorcycles, farm machinery, textiles, shoes, and other products.

Bush advisers said they were aware the reversal could produce a backlash against him in several steel-producing states of the Rust Belt -- including Pennsylvania, West Virginia and Ohio. That arc of states has been hit severely by losses in manufacturing jobs and will be among the most closely contested in his reelection race.

The sources said that Bush's aides agonized over the options to present to the president and that they considered it one of the diciest political calculations of this term. A source involved in the negotiations said White House aides looked for some step short of a full repeal that would satisfy the European Union but concluded that it was "technically possible but practically impossible."
This decision comes about 20 months too late. The steel tariffs were yet another sacrifice of the rights of businessmen in the name of the Republican’s short term political expediency.

:: help support this website | link |



 

Rights and Reason: 'Master' and 'Slave' 

:: Posted by Nicholas Provenzo at 7:59 AM

Los Angeles just keeps getting weirder and weirder. Consider this AP report:

A county official has asked computer and video equipment vendors to consider eliminating the terms "master" and "slave" from equipment because they may be considered offensive.

"Based on the cultural diversity and sensitivity of Los Angeles County, this is not an acceptable identification label," according to an e-mail sent to vendors on Nov. 18. The memo asks manufacturers, suppliers and contractors to change or remove any labels on components "that could be interpreted as discriminatory or offensive in nature."

The county's 39 departments also were told to identify equipment with offensive labels.

"We got a note back from IBM saying thank you for bringing this to our attention and we'll take a look at this," said Joe Sandoval, who wrote the memo. Sandoval is division manager of purchasing and contract services for the county's Internal Services Department.

The term "master" and "slave" --when applied to electronic equipment-- describes one device controlling another.

In May, a black employee of the Probation Department filed a discrimination complaint with the county Office of Affirmative Action Compliance after noticing the words on a videotape machine.

"This individual felt that it was offensive and inappropriate ... given the experiences that this country has gone through in respect to slavery," office director Dennis A. Tafoya said.
I can’t help but marvel at the thought process of the black employee. Did this person look at the “slave” hard drive and think to himself, “All I want to do is work, yet the peripherals remind me of institutional slavery, paralyzing my ability to be productive.” And notice that the employee focuses not the slavery that exists in Africa today, but on “the experiences that this country has gone through.”

Such victimhood! I see a new lobby group here: The National Association for the Advancement of Subservient Peripherals.

Since the LA county Office of Affirmative Action Compliance is obviously home to frivolous discrimination complaints, if I were an employee, I’d file my own complaint. I’d say that the culture of black victimhood that permeates LA government and attempts to make me feel guilty for the actions of my white forbearers and tries to remind me of it in every stupid little thing is offensive and inappropriate.

:: help support this website | link |



 

 

» Recent Posts

» The Saga of Ted Haggard's Anti-Gay Bigotry
» The Scientist and the Preacher: Disintegration v. Misintegration
» The Objectivist Election Controversy (and Its Causes)
» Founders votes with its feet
» A Great Divide
» Please take our totally unscientific poll
» Which is worse?
» Hope for a 'Do-Nothing' Congress
» The Atlas Shrugged movie challenge
» Objectivists and Politics

» RSS Feed

» Archives


» Capitalist Book Club
Purchase the essential texts on capitalism.


» Feedback
Send us a comment or ask a question—we want to hear from you!


» Contribute
The Center's advocacy programs are not free—we depend on you to support our efforts. Please donate today.


Blogs We Love:
» Acid Free Paper
» Alexander Marriot
» American Renaissance
» Andrew Sullivan
» ARI MediaLink
» Armchair Intellectual
» Bahr's House of Exuberance
» Best of the Web Today
» Conspiracy to Keep You Poor & Stupid
» Charlotte Capitalist
» Cox & Forkum
» Daily Dose of Reason
» Dithyramb
» Dollars & Crosses
» Ego
» Ellen Kenner
»
EnviroSpin Watch
» GMU Objectivists
» Gus Van Horn
» Harry Binswanger List
»
How Appealing
» Illustrated Ideas
» Intel Dump
» Instapundit
» Liberty and Culture
» Literatrix
» Little Green Footballs
» Michelle Malkin
»
Mike's Eyes
» NoodleFood
» Oak Tree
» Objectivism Online
» Outside the Beltway
» Overlawyered
» Political State Report
» Quent Cordair's Studio
» Randex
» Reclaim Your Brain
» Sandstead.com
» SCOTUSBlog
» Scrappleface
» Separation of State and Superstition 
» Southwest Virginia Law Blog
» The Dougout
» The Ivory Tower
» The Objective Standard
»
The Primacy of Awesome
» The Secular Foxhole
» The Simplest Thing
» The Truth Laid Bear
»
Thrutch
» Truck and Barter
» Truth, Justice and the American Way
» Washington Re-Post
» Witch Doctor Repellent
» Words by Woods
 

» Link Policy

 


SPONSORED LINKS


 

Copyright © 1998-2006 The Center for the Advancement of Capitalism. All Rights Reserved.
Email: 
info-at-capitalismcenter.org · Feedback · Terms of Use · Privacy Policy · Webmaster