Wednesday, April 30, 2003

FTC boss can see clearly now

For all their anti-capitalism bluster, the Federal Trade Commission does seem to like some large businesses, such as LensCrafters. In formal comments to the Tennessee legislature, FTC Chairman Timothy Muris urged legislators to reject proposed restrictions on commercial optometrists in the Volunteer State. The proposed bill, according to Muris, regulates without providing any tangible consumer benefits:

Senate Bill 855 begins with the statement that optometrists "shall be free from any influences that would interfere with their exercise of professional judgment," and that "optometrists shall not be associated with any person or persons in any manner which might degrade or reduce the quality of visual care received by the citizens of this state."

The next section then states: "A manufacturer, wholesaler, or retailer of ophthalmic materials who leases space to an optometrist shall not, directly or indirectly, control or attempt to control the professional judgment, manner of practice, or practice of an optometrist."

* * *

These restrictions would apply to all manufacturers or sellers of ophthalmic materials who lease space to optometrists, thus limiting the relations between optometrists and the optical store in which some may choose to practice.

Muris correctly recognizes that this bill would interfere in the private, voluntary relationship between optometrists and the commercial retailers they work for. On this ground alone, the bill should be rejected as contrary to the principles of individual rights and capitalism. But Muris, of course, is not a capitalist, thus his arguments against the bill are rooted in consumerist thought:

Restraints on competition from optical chains may make consumers better off if such restrictions improve the quality of eye care or lead to other consumer benefits that would not be produced by firms operating in a competitive marketplace. Senate Bill 855 would create net benefits for consumers if the value to consumers of any improvement in the quality of eye care attributable to the Bill is greater than the harm imposed on consumers by the reduction in competition. We respectfully urge the Tennessee legislature to weigh the impact on competition of the prohibitions in Senate Bill 855 against any benefits that the Bill's restrictions might create for consumers.

Muris goes on to cite “empirical evidence” gathered by the FTC which shows the proposed bill’s restrictions are pragmatically unnecessary. In other words, it’s okay on principle to violate private contract rights, but only if you can produce some data which demonstrates some potential “benefit” to consumers.

The “empirical evidence” argument is a hallmark of Muris’ FTC leadership. Superficially, it sounds appealing, as it seems to emphasize the importance of data in assessing antitrust claims. But in reality, the FTC usually treats “empirical evidence” as a series of random concretes which have no underlying concept to tie them all together. For example, in merger review cases, the FTC often manipulates “empirical evidence” to create market definitions that are not supported by objective facts. This happened last year when the FTC went after MSC.Corporation, arguing the software company monopolized a market which consisted entirely of MSC’s own product. The FTC ignored industry analysts—and even MSC competitors—who argued the actual market definition included a number of products arbitrarily excluded by the FTC’s so-called “empirical evidence.”

Indeed, I’m willing to bet that given the FTC’s data on optometry, I could fashion an “empirical evidence” argument in support of the Tennessee legislation. As the old adage goes, there are lies, damned lies, and statistics.

Iowa's highest-paid drunk

Larry Eustachy is the State of Iowa’s highest-paid employee, earning about $1 million annually to coach Iowa State University’s men’s basketball team. Eustachy holds a prominent leadership position which requires him to represent the university publicly in various capacities, most notably as a recruiter for the basketball program. Like all coaches, Eustachy must personally sell students (and their parents) on the value of attending Iowa State over other schools, including Iowa State’s various competitors in the Big XII Conference. For all these reasons, Eustachy’s personal integrity is essential to his ability to perform his duties to Iowa State University and, more generally, to the Iowa taxpayers who pay his salary.

This week the Des Moines Register reported Eustachy, on two occasions, attended late-night parties on the campuses of two Iowa State opponents after games. At one such party, held on January 23 at the University of Missouri, Eustachy was photographed drinking with students and kissing several female students on the cheek. That Eustachy did this as a 47 year-old married man with two children is bad from a personal standpoint. That he did so as a representative of Iowa State University is bad from a professional standpoint, given the importance of a basketball coach’s reputation and integrity.

A year earlier, Eustachy attended a party at Kansas State University, like Missouri a conference rival of Iowa State. The Des Moines Register reported this account of Eustachy’s actions:

In January 2002, the coach was at an early-morning fraternity party in Manhattan, Kan., hours after his team lost a game to Kansas State, students told the Register. On that occasion, a fraternity member said he wound up in an argument with Eustachy because he found the coach's arm around his 19-year-old sister.

The woman told the Register that Eustachy walked into the house and complimented her on her appearance, saying that she should be attending the University of Kansas, where the girls are "much hotter."
Under Eustachy’s contract with Iowa State, which runs through 2011, the coach is required to provide "positive representation of the university and the university's athletic programs in private and public." It’s hard to argue Eustachy’s actions at the two parties did not violate this requirement. Eustachy admitted his actions, but earlier today refused to resign.

Eustachy’s defense proved more interesting than the photos in the Register. Eustachy claimed his job should be saved on the grounds that he’s an alcoholic:

"For the rest of my life I will seek counseling for this illness,'' [Eustachy] said. "I have no excuses for my behavior. ... We'll see what happens in the future, but I am looking forward to the future as a sober person.''
Eustachy says he deserves a “second chance” and should not be fired. This is an unfathomable position. By his own admission, Eustachy has coached a college basketball team for several years with the knowledge that he has a drinking problem. Eustachy said he often drinks “10 or 12” beers during the average workday. Who knows how often the coach was actually drunk while on the job. Who knows what image he was projecting while visiting recruits, representing Iowa State at alumni events, or attending NCAA functions.

Any suggestion that Eustachy’s behavior should be excused because he’s an alcoholic is absurd. If a person has a deadly virus and, knowing he’s infected, fails to obtain treatment and then infects other people, such a person could not defend his actions on the grounds that he was sick. While alcoholism is not contagious, the principle still applies. If you know you have a problem and fail to seek treatment, you are responsible for your actions. The only question is whether Iowa State should fire Eustachy for his misconduct.

The university should fire him, and word late this afternoon is that’s what will happen. Iowa State athletic director Bruce Van De Velde suspended Eustachy this morning and, pending a required five-day appeals period, the university’s president will likely fire him next week. This decision should enjoy no serious dissent. To do otherwise would be an approval of Eustachy coaching college students while admittedly drunk. Most college basketball coaches are fired for far less serious offenses, and Eustachy should receive nobody’s sympathy for his disgraceful actions.

If Eustachy placed any value on his own integrity (to say nothing of the university or the state’s), he would have resigned. But he declined to do so, saying that despite his “poor judgment” and “bad decisions,” it was not “my way” to simply resign. Frankly, coach, it was doing things your way that got you into trouble in the first place. Indeed, had it not been for the pictures in the Des Moines Register, Eustachy would probably have continued to ignore his drinking problem. Asking for a second chance when you were caught in the act is disingenuous, to say the least.

As a post script, I would suggest Iowa State consider hiring Eustachy’s predecessor, Tim Floyd, to return to coach the basketball program. Floyd made a mistake when he left Iowa State five years ago to coach a wretched Bulls team. But unlike Eustachy, Floyd’s error is forgivable without having to go through the Betty Ford Clinic.

VMI loses again

Seven years ago, the Supreme Court declared the Virginia Military Institute’s male-only admissions policy unconstitutional. As a state-run school, the Court found single-sex admissions violated the Fourteenth Amendment’s Equal Protection Clause. This past Monday, VMI again found itself in constitutional peril, when a three-judge panel of the U.S. Court of Appeals for the Fourth Circuit ruled the school’s “supper prayer” violated the First Amendment rights of VMI students. Virginia state officials are now considering a further appeal to the full Fourth Circuit, although such an appeal is unlikely to succeed.

Circuit Judge Robert King, writing for the unanimous panel, rejected former VMI Superintendent Joseph Bunting’s argument that sponsoring a daily prayer during dinner (in a mess hall where nearly all students attend) effectively amounted to a state endorsement of religion. Two VMI students sued General Bunting, individually and as superintendent when he refused to abandon the supper prayer. These two students have since graduated VMI, which raised the issue of mootness before the Fourth Circuit. Judge King’s opinion answered that question as well as the underlying constitutional issue:

Because the Plaintiffs have now graduated from VMI, their claims for declaratory and injunctive relief are moot, and we vacate the district court’s judgment insofar as it awarded such relief. In assessing the Plaintiffs’ claim for damages, we agree with the district court that the supper prayer violates the Establishment Clause of the First Amendment, but that General Bunting is nevertheless entitled to qualified immunity.

It’s surprising VMI even contested the constitutional issue on appeal. Sponsoring an overtly Judeo-Christian prayer is suspect under normal circumstances. In the context of a military academy, which places great emphasis on social conformity and unit cohesiveness, the “supper prayer” was obviously a coercive attempt to inculcate religious values onto students. There is no other public college in Virginia which could ever get away with this, and VMI is certainly not entitled to any special constitutional waiver.

VMI’s only real defense was that the prayer reflected the school’s tradition and values. The Court noted General Bunting’s belief that the supper prayer "is a precious link to our heritage and an admirable practice for a school of our provenience and culture." As to the law, General Bunting’s attorneys cite Marsh v. Chambers, a 1983 Supreme Court decision upholding the right of legislative bodies to open their sessions with a prayer. Judge King’s opinion rejected any legal similarity between Marsh and General Bunting’s case:

General Bunting first suggests that we should view the prayer as a uniquely historical practice, in an approach similar to that employed by the Supreme Court in Marsh. In Marsh, though, the Court was specifically influenced by the fact that, in September of 1789, members of the first Congress voted to submit the First Amendment to the states in the same week that they voted" to appoint and to pay a Chaplain for each House" of Congress. In upholding the Nevada practice, Chief Justice Burger reasoned:"[t] his unique history leads us to accept the interpretation of the First Amendment draftsmen who saw no real threat to the Establishment Clause arising from a practice of prayer similar to that now challenged."

(Note: Judge King incorrectly describes Marsh as dealing with the Nevada legislature. In fact, the case dealt with the practice of Nebraska’s unicameral legislature.)

Marsh applies only to limited circumstances where the Framers’ intent could unmistakably be determined. These circumstances, however, do not include VMI’s supper prayer, for as Judge King notes:

Put simply, the supper prayer does not share Marsh’s "unique history." In fact, public universities and military colleges, such as VMI, did not exist when the Bill of Rights was adopted.

This is the money line of the entire opinion. Although Judge King does not belabor this point, it is nevertheless a critical identification. Many supporters of expanding religious expression in the public sphere—especially government schools—cite their interpretation of America’s founders as amicable towards the intermingling of church and state. Lost in this argument is the simple fact that the government created in 1788 was never intended to include many of the institutions created since that time. Government schools are foremost among these constitutionally illegitimate institutions.

In the absence of government-run schools, cases like this one never occur. Nobody would seriously question the right of a wholly private institution to require prayer, or any other religious exercise, as part of its curriculum. Thus, the VMI case should not only teach us a lesson about the separation of church and state, but a lesson about the separation of school and state as well.

FTC v. Rambus

Contrary to popular belief, not every company falsely accused by the Federal Trade Commission settles without a fight. Rambus, a California-based technology firm, is currently fighting FTC staff lawyers tooth-and-nail over charges they committed fraud. The Rambus trial opens later this morning before an administrative (i.e. FTC-appointed) judge. Here's a good summary of the case from George Leopold of EE Times:

Rambus Inc. heads to trial on Wednesday (April 30) before a Federal Trade Commission judge as the company digs in to defend itself against antitrust charges brought by the agency last June.

FTC lawyers will argue that Rambus (Los Altos, Calif.) violated U.S. antitrust laws “by deliberately engaging in a pattern of anticompetitive acts and practices that served to deceive an industry-wide standard-setting organization,” the Joint Electron Device Engineering Council (Jedec).

The group was developing an industry SDRAM standard. The U.S. alleges that during the four years Rambus participated in Jedec's deliberations it concealed patents and pending patent applications involving specific technologies that eventually become part of Jedec's SDRAM spec. The alleged non-disclosure violated the group's rules, and FTC attorneys charged Rambus with violating U.S. antitrust laws.

Rambus has denied it deceived the Jedec group. It has also continued to appeal an adverse 2001 ruling in a federal court brought by other Infineon Technologies AG and has steadfastly refused to settle the FTC complaint prior to this week's trial before Chief Administrative Law Judge James Timony.

“The fact that Rambus's founders believed they had conceived the inventions in question was public information,” the company said in a pre-trial statement. “The inventions were described in detail in publicly available patent documents that were discussed at Jedec and that were closely scrutinized by engineers and lawyers employed by Jedec members.”

In January, a federal appeals panel here reversed a lower-court ruling that Rambus had committed fraud. The decision also reversed a trial court ruling that Infineon hadn't infringed Rambus patents, sending the patent infringement issue back to the lower court.

Shareholders have also rallied on behalf of Rambus, accusing the FTC of harassing the company and urging lawmakers to call off the agency. Those efforts have so far attracted little congressional support.

The FTC trial could last from five to eight weeks.

The problem is not that Jedec doesn't have a debatable claim against Rambus. The problem is Jedec already went to court and lost (at the appellate level) on their claims. The FTC's case is nothing more than an effort by the federal government to interfere with a private breach-of-contract proceeding. If the FTC is successful, you can be sure more businesses in the future will seek FTC intervention instead of going through the normal judicial channels. This is particularly dangerous given the FTC staff's total lack of qualifications to judge industries like Rambus's. It's also a separation-of-powers problem, given that the FTC is attempting to undo a federal appellate court's ruling in favor of Rambus. You may believe the FTC has the better argument, but who should decide these legal questions, an impartial federal court or a politically-motivated group of FTC prosecutors?

I suspect Rambus will ultimately be vindicated, if for no other reason than the FTC's decision is subject to review by a federal court of appeals. The FTC's recent track record before actual judges is pretty bad, and the Article III courts in recent years have been particularly hostile to the FTC's efforts to invent new legal theory. Rambus will no doubt waste thousands on legal fees for the next couple of years, but in the end it's worth it if the FTC is stopped.

Tuesday, April 29, 2003

Frist Says Santorum's Post Not in Peril

Bad news: according to the AP, "Senate Majority Leader Bill Frist said Tuesday that Sen. Rick Santorum's leadership post is not in jeopardy, providing the Pennsylvania Republican with an important vote of confidence three weeks after his remarks about homosexuals."

"People who work with Rick day in, day out understand he's a man of caring, compassion and tolerance," Frist said. "Strongly religious, a man of great faith, an effective and strong leader. In terms of questioning his leadership ability or position, it's a non-issue."
Has anyone in the Republican Party actually read Santorum's remarks? Santorum attacked the freedom of all consenting adults to control their capacity for sex unless it fits within his view of the family. This is an appalling view.

Imagine if I was the third ranking Republican in the US Senate, and I said that I thought the state had no interest whatsoever in regulating the sexual activities between consenting adults. Then imagine if I said that the courts, under the Ninth Amendment, ought to protect the individual's right to his life and his privacy, as long as he does not initiate force upon another.

I wonder if Bill Frist would support my leadership position, and my 'strong rationality.' Somehow, I doubt it.

Forest Service Blocks E-Mail Comments

This AP story came in over the weekend and I haven't had the time to address it. The US forest service says it is going to ignore public comments on proposed rule changes when they come from certain e-mail servers or on preprinted post cards.

A spokesman said the agency is not barring all e-mail — only e-mail that goes through an outside server such as a business or environmental Web site. The agency is also barring other "duplicative materials" such as form letters, printed post cards and lists that include spaces for respondents to check off statements they agree with.

Such comments, whether electronic or on paper, can be overwhelming and provide little useful information, said Forest Service spokesman Joseph Walsh. The Forest Service has counted such comments in the past, he said, adding that the new policy is subject to review.
This is a terrible idea. The right to petition the government is fundamental. A citizen has a right to speak their peace at a regulatory hearing and that opinion taken into consideration. That a citizen’s efforts are part of a coordinated group effort is irrelevant. The government can easily separate substantive comments from non-substantive comments, just like it did for the Microsoft antitrust settlement public comment period, when the government received over 30,000 comments. Hundreds of CAC supports lodged their own comments with the Department of Justice opposing any sanction to be placed on Microsoft whatsoever. CAC's own comments were included in the 30 or so "major comments list," fittingly since CAC has followed the case since its inception. Are comments like these to be made irrelevant because they were part of an organized effort on the part of people choosing to communicate their principles to their government? I think not.

So while I vehemently disagree with most of the comments the Forest Service would ignore (they are mostly the product of environmentalists), I think there are better ways for the government to evaluate these comments than by simply ignoring them.

U.S. Forces Return Fire at Iraq Protest

Hot from the AP: FALLUJAH, Iraq - U.S. soldiers opened fire on Iraqis at a nighttime demonstration against the American presence here after people shot at them with automatic rifles, soldiers said Tuesday. The director of the local hospital said 13 people were killed and 75 wounded.

Just imagine if the Germans, after the Nazi surrender in WWII, took to the streets to protest the American presence. With guns.

This is why we can’t have "democracy" in Iraq. The principle of individual rights will have to be imposed by the US, whether the Iraqi people like it or not.

In his recent Ford Hall Forum lecture, America vs. Americans, philosopher Leonard Piekoff argued that the US should not be sqeamish when fighting a war with a mortal foe--the life of Americans must come before the life of the enemy--even enemy civilians. At first, I blanched at Piekoff's argument, which seemed to fall into the trap of fighting the last war. I was impressed with the fact that the US did not have to kill a whole lot of people in order to defeat Saddam. In four weeks of fighting, our solders were able to take control of a whole nation, with minimal loss of life. But now I'm staring to wonder if there is truth the the argument that the US did not kill enough of our enemy during the war. There are just too many instances where our enemies are not behaving like vanquished foes.

I love and respect those Iraqis that greeted our troops with open arms. But those that haven't, well, I don't have much time for them. And I certainly do not want to see the lives of our fighting men and women sacrificed to bring democracy to the liberty hating people of Iraq.

U.S.: Most Spam Contains False Claims

This just in from the AP: Internet users skeptical of junk e-mails promising easy money, miracle cures and dream dates are right to be wary: The Federal Trade Commission says two-thirds of the "spam" messages clogging online mailboxes probably are false in some way.

Like I really needed the FTC to tell me that it is unlikely that I could make make millions while working at home with a larger penis while capitalizing on secret investment opportunities from ex-Nigerian government officials.

Tell me, why do these people have a budget?

Fun with Surveys

I have some fun with a Republican fundraising survey at Initium.

I know, shame, shame, shame. But the Democrats don't send me their surveys.

Monday, April 28, 2003

Joey Tabula-Rasa

David Brooks has an interesting essay in today’s Weekly Standard where he examines the huge disconnect between rhetoric and reality in the Arab world. That’s really not news by itself; we are all quite familiar with Baghdad Bob’s rather tenuous dance with reality and the wake up he and the rest of the anti-American world received after America’s victory in Iraq.

Where the article gets interesting is when Brook examines a fictional 20 year old American college student he calls “Joey Tabula-Rasa.” Brook writes:

Joey doesn't know much about history; he was born in 1983 and was only 6 when the Berlin Wall fell. He really has no firm idea of what labels like liberal and conservative mean. But now he is in college, and he's been glued to the cable coverage of the war and is ready to form some opinions. Over the past months, certain facts and characters have entered his consciousness, like characters in a play he is seeing for the first time.

The first character is America itself. He sees that his country is an incredibly effective colossus that can drop bombs onto pinpoints, destroy enemies that aren't even aware they are under attack. He sees a ruling establishment that can conduct wars with incredible competence and skill. He sees a federal government that can perform its primary task--protecting the American people--magnificently. . .

. . .The American system of government, moreover, is clearly the best system. In Joey's eyes, the United Nations is a fractious debating society. The European Union is split. The French are insufferable, the Germans both hostile and pacifist. The Arab ruling class is treacherous. Billions of people around the world seem to hate us, and while Joey is aware that there are some reasons to be suspicious of the United States, he resents the way so many people are over the top in their resentment, fury, and dislike. In short, Joey does not look around and assume that the world is moving toward some world government or global unity. When the chips are down, there are very few nations you can trust. Joey is both more trusting of America, and more suspicious of the world, than he would have been if he had formed his worldview in the 1990s.

The second great character on Joey's mind is the American soldier. When Joey thinks of youthful idealism, he doesn't think of college students protesting in the streets, he thinks of young soldiers risking their lives to liberate a people. These are the men and women Joey saw interviewed by the dozen on TV. They seemed to enjoy being in the military. They seemed to believe in their mission. They seemed to be involved in something large and noble even at a young age.

In Joey's eyes, the people who get to do the most exciting things are not members of the meritocratic elite--Harvard and Stanford alums who start software companies. They are the regular men and women of the armed forces, or, as he remembers from the days after 9/11, they are firemen and cops. They are people without prestigious degrees and high income prospects.

Joey naturally feels that while those soldiers are liberating a country and talking about duty and honor, all he is doing is preparing for business school. That doesn't mean he necessarily wants to enlist, but he is aware that there is something lacking in his pampered private life. He also sees, in the example the soldiers set, that discipline, neatness, professionalism, and openly expressed patriotism are kind of cool.

The third character Joey sees is the terrorist. He sees the people who blew up the World Trade Center. In Iraq, people like that piled into pickups and suicidally attacked tanks. They wore those black fedayeen gowns. In Israel, they strap bombs to their waists and blow up buses. Joey is aware that there are a lot of people, especially in the Arab world, who are just batshit crazy. There is no reasoning with these people. They understand only force, and they must be crushed.

Joey sees that some regimes around the world are sadistic and evil. They torture and mutilate their own people. They ignore the basic rules of warfare and civilization. Conflict with these people is inevitable. They lurk in the dark corners of the globe, and for some reason they think they should take out their problems on us. You always have to be on guard, because there really is evil about. . .

. . .[N]ew categories are crystallizing in his mind. These categories--who is progressive, who is conservative, who is reactionary--do not comport with the categories in the minds of people who came of age during the civil rights era, or even the Cold War.

Joey isn't one of a kind. There are millions of Joeys, and variations on Joey. Inevitably, then, in ways subtle and profound, the events of the past month will shape our politics for the rest of our lives.
That’s a very interesting neocon view of the youth of America, but here’s my take on Joey: Joey is a kid who is adrift in a sea of contradictions. He has no reliable compass to guide him—he does not understand explicitly how the mind works, and exactly what the requirements for his personal survival and prosperity are. It doesn't mean a lick what Joey thinks about Iraq or the world at large because he’s utterly clueless on fundamentals.

Joey hears lofty statements said about freedom. He also hears lofty statements about sacrifice. He can’t navigate between them because he was never taught how to think in principle. Joey instead operates in a range of the moment expediency.

He sees an America of wealth and abundance, wants it for himself, but is conflicted by what he hears when he goes to church and when he listens to his professors. Now that he’s in college, he sees that it’s the pro-sacrifice, anti-wealth mentality that seemingly makes the consistent argument. But he also sees that these arguments only lead to horror or absurdity. Instead of realizing that ought to reject bad ideas out of hand, he turns off to ideas as such. He has been taught how to be a pragmatist. And it is precisely when the chips are down and the answers are far form academic that a pragmatist like Joey is no ally. Joey will float with the strongest tide, whatever tide that may be.

Where I do see eye to eye with Brooks is that there are millions of Joeys, and variations on Joey. And frankly, that’s what really worries me.

Antitrust news

Jury selection begins today in Brooklyn, New York, in an antitrust case pitting more than five million retailers against Visa USA. The retailers claim Visa's insistence that stores whch accept Visa credit cards must also take Visa debit cards violate antitrust laws. Specifically, the retailers are upset because Visa debit cards require signatures, a practice which costs the merchants more than accepting cards which only require a PIN number.

The lawsuit, first filed in 1996, also named MasterCard International as a defendant, but this morning the judge presiding over the trial announced MasterCard reached an "11th hour settlement" with the plaintiffs. U.S. District Judge John Gleeson ordered the settlement sealed while Visa goes to trial, so the terms of MasterCard's surrender are unknown. Still, it's reasonable to infer the MasterCard settlement is a good sign for Visa, especially considering Judge Gleeson has given the plaintiffs a relaxed burden of proof. According to Bloomberg News, Gleeson "ruled earlier this month that they don't have to prove that credit and debit cards are separate products, a key requirement to establish their antitrust claim. He also said Visa's credit-card market share was so large that one could infer it could force merchants to take an unwanted product."

Of course, "force" doesn't actually mean force. It's doubful the retailers will introduce evidence Visa officials put a gun to anyone's head to make them accept debit cards. Especially given that the plaintiffs include Wal-Mart, the world's largest retailer, it's hard to believe any of the plaintiffs suffered a true injury. But in the context of antitrust, simply possessing economic power is sufficient. The jury is unlikely to hear much about the difference between economic and political power, i.e. the difference between a true monopoly (such as the U.S. Postal Service) and a successful corporation like Visa. And given the recent string of antitrust jury verdicts, Visa seems certain to lose at trial. Thankfully any appeal will be heard by the New York-based U.S. Court of Appeals for Second Circuit, a tribunal that has a decent track record of rejecting novel and meritless antitrust claims.

Compromise & Controversy

Lest we be accused of only pointing out stupid remarks made by Republicans, here’s a sordid political tale from today’s Washington Post:

A senior member of the D.C. Democratic State Committee said yesterday that she plans to ask for the resignation of the city party's chairman, Norman C. Neverson, because he made a provocative statement in a newspaper article that does not represent the philosophy of Democrats.

Barbara Lett Simmons, the party's national committeewoman and a longtime Neverson detractor, said she is appalled that the head of the city's Democratic Party was quoted in the Washington City Paper as saying he would have voted for the three-fifths compromise, in which slaves were counted as three-fifths of a person for taxation and apportionment purposes when the U.S. Constitution was adopted.

"He has expressed a philosophical position contrary to the Democratic Party," Simmons said. "This is 2003. I don't think we can afford in this upcoming year of trying to reclaim the White House and Congress to have 17th-century-mentality leadership."

Simmons, who has been critical of Neverson since he took over the party three years ago, said Neverson has every right "to think, feel and believe exactly what he expressed." But she said he "can't be my leader, and he can't appropriately represent this Democratic body."

Neverson said he made the comments in an extensive article about his personal life and his political leadership. The article quotes Neverson as saying he would have supported the constitutional clause decreeing that each slave be counted as three-fifths a person because "to produce a republic you have to make sacrifices."

"If it offended anyone, I apologize," Neverson said. "It wasn't meant to say that Norm Neverson supports the three-fifths compromise. It was taken completely out of context. When you don't have all the facts and you don't have all the information, ignorance rules supreme. Get the information."

Now I don’t think for a moment that Neverson, who is African-America, actually supports the three-fifths compromise. He was making a point about political compromises in general. My question is, why didn’t he pick a different example? The Constitution had lots of compromises—such as the different apportionments for each houses of Congress—which would have illustrated Neverson’s point more clearly. Heck, as my friend Tom said to me earlier, Neverson could’ve brought up the Compromise of 1850 to make a point regarding slavery. That would have been a less inflammatory example.

Still, reading the Post article, one gets the clear impression that the move to oust Neverson is less about the specific remarks he made, and more about the internal politics of the D.C. Democratic State Committee. Neverson apparently made the classic error of handing his opponents the rope to hang him with.

Questions of State and Defense

Skip Oliva takes an in-depth look at former House Speaker Newt Gingrich's call for a “regime change” at the U.S. State Department today at Initium.

Sunday, April 27, 2003

'They're doing it to themselves'

It was amusing to watch Pat Buchanan attempt to defend the bloody self-flagellation of the Iraqi Shi'ites on the McLaughlin Group this morning. His argument: Christians have been doing the same thing going back to the middle ages, and "They're doing it to themselves."

So Buchanan supports freedom when it comes to perhaps one of the most bizarre of religious practices, but not when it comes to things like consensual homosexual sex. How typical.

Saturday, April 26, 2003

Parody: Ye Newe York Times reports on postwar difficulties following victory at Yorktown.

This is funny.

'From His Cold, Dead Hands'

Actor Charlton Heston stepped down today after five years as president of the National Rifle Association. Heston, recently diagnosed with symptoms of Alzheimer's disease, was strong enough to raise an 1866 Winchester rifle over his head and deliver his trademark line, "From my cold, dead hands."

Heston was a great champion for the NRA and he gave the group a gravitas it could not have enjoyed without him. While philosophically there are several things I would like to see change in how the NRA presents its arguments, I would never deny the important victories it has won in defense of the Second Amendment under Heston's leadership.

And never mind the Michael Moore interview. Moore took advantage of a man clearly past his prime and used him as grist for his propaganda mill. I think Heston's legacy as an advocate for civil rights and the Second Amendment will easily stand the test of time.

Our man Skip got an Instapundit mention


Concerned Women for "Federalism"

Earlier, I discussed Concerned Women for America’s Robert Knight. CWA’s president, Sandy Rios, is now defending Rick Santorum and his anti-individual rights view of the Constitution. In a letter to the Washington Times, Rios replies to Santorum critic David Lampo, an official with the Log Cabin Republican Club of Virginia:

Now let's consider Mr. Lampo's truly distorted view of the Constitution.

Mr. Lampo contends that Sen. Rick Santorum, Pennsylvania Republican, erred by noting that the Constitution does not define any right to privacy, which it doesn't. Then Mr. Lampo concedes that "the Constitution doesn't say anything about sex at all." Yes, the framers left such matters largely to the states, which is why it would be a colossal act of judicial tyranny if the Supreme Court strikes down the Texas sodomy law.

Then Mr. Lampo says the Constitution was "meant to restrict government power." He neglects to note that the Constitution was designed to restrict federal power, leaving most matters to the states. If states decide that discouraging sodomy is good public policy based on public health and moral concerns, then it is no business of the federal government to usurp that power.

Rios’ view of the Constitution may have been valid in the antebellum era, but classic federalism was effectively abolished with the ratification of the Fourteenth Amendment in 1868. That amendment expanded the principles of limited, constitutional government to the states. Since that time, the mantra of “state’s rights” is invoked mostly by those seeking an excuse to subvert individual rights. Segregation, anti-abortion laws, and voting rights restrictions are just some of the more infamous abuses of state authority.

Furthermore, Rios’ constitutionalism completely ignores the Ninth Amendment’s protection of “unenumerated” rights. The Founders never intended the people to fight every question of individual rights out through amending the Constitution itself. It was presumed that reason would govern society’s definition of individual rights. Instead, rightists like Rios seek to narrow the government’s protection of rights to those practices which only she personally sanctions. In contrast, I doubt the Log Cabin Republicans would use the law to ban heterosexual sodomy if given the opportunity, despite their presumed aversion to the practice.

Nor does invoking the cry of “judicial tyranny” save Rios’ argument. It is not tyrannical for a court to enforce the Constitution over the unreasonable acts of a state legislature. Texas has no right to ban private, consensual sexual acts, and such a ban is factually unconstitutional regardless of a minority’s “moral concerns.” While it would be nice if the Texas legislature repealed the sodomy statute on its own accord, their failure to do so necessitates the intervention of the courts, which were designed to serve as the last line of defense against the tyranny of the government’s elected branches.

Consumers vs. Producers

Thomas Sowell is one of the best:

Overcoming adversity is one of our great desires and one of our great sources of pride. But it is something that our anointed deep thinkers strive to eliminate from our lives, through everything from grade inflation to the welfare state.

The anointed want to eliminate stress, challenge, striving, and competition. They want the necessities of life to be supplied as "rights" -- which is to say, at the taxpayers expense, without anyone's being forced to work for those necessities, except of course the taxpayers.

Nothing is to be earned. "Self-esteem" is to be dispensed to the children as largess from the teacher. Adults are to have their medical care and other necessities dispensed as largess from the government. People are to be mixed and matched by race and sex and whatever else the anointed want to take into account, in order to present whatever kind of picture the anointed think should be presented.

This is a vision of human beings as livestock to be fed by the government and herded and tended by the anointed. All the things that make us human beings are to be removed from our lives and we are to live as denatured creatures controlled and directed by our betters.

Those things that help human beings be independent and self-reliant -- whether automobiles, guns, the free market, or vouchers -- provoke instant hostility from the anointed.

* * *

The welfare state is not really about the welfare of the masses. It is about the egos of the elites.

One of the most dangerous things about the welfare state is that it breaks the connection between what people have produced and what they consume, at least in many people's minds. For the society as a whole, that connection remains as fixed as ever, but the welfare state makes it possible for individuals to think of money or goods as just arbitrary dispensations.

This is the philosophy which most federal bureaucracies—such as the Federal Trade Commission—operate under. The FTC believes consumers possess unlimited rights to demand from producers, while producers enjoy not even basic property or liberty rights. In almost every FTC case, the producer is found to "injure" consumers by taking actions to raise prices or reduce output. The fact that the producer is engaging in wholly voluntary trade is irrelevant to the FTC. If a consumer is inconvenienced or unhappy, the FTC immediately accuses the producer of committing a crime, regardless of the facts (or the law.)

A draft everyone can support

The NFL Draft is taking place today in New York. Approximately 220 recent college football players will be assigned to the NFL’s 32 franchises over the next two days. Many will become instant millionaires, while others will find themselves working to earn a roster spot come training camp. Hundreds of undrafted players, meanwhile, will either give up their NFL dream or seek to get signed as a free agent with a club.

I’ve often heard criticism that the draft is “socialist” because a selected player is prevented from negotiating with any team other than the one which selected him. Superficially, this is an appealing argument, but it ultimately misses the point. Far from being socialist, the NFL Draft showcases the capitalist system at its finest.

First, the draft rewards superior achievement and ability. Higher picks get more money, simple as that. In a socialist system, pay is never based on merit, but rather on an arbitrary factor tied to some egalitarian principle. Take a public school teacher’s union, for example. Teacher unions expect to be compensated solely on the basis of seniority—a largely irrelevant characteristic—and merit is almost never permitted to affect actual compensation. Despite the fact a new teacher can choose which school district to work for, her actual salary will depend on factors outside her control, whereas an NFL player can refuse to sign a contract with the team that drafts him if he does not approve of the compensation terms. Rookie “holdouts” are in fact common in the NFL. A teacher which tried such a tactic would fail, since the union’s interests in paying everyone the same overrules the individual’s needs or abilities.

Second, the draft helps the NFL remain profitable by containing overall labor costs. All player contracts, including that of drafted rookies, must fit with the NFL’s salary cap. The cap is another practice sometimes labeled “socialist.” Again, this is incorrect. The salary cap is nothing more than a budget for player costs. The cap is tied to general league revenues to ensure labor costs don’t outpace teams’ ability to pay. The draft helps this process by preventing teams from overbidding for talented, yet unproven rookies. If every rookie was subject to an open auction, a number of franchises would wreck their cap by “hoarding” college talent at a cost far above actual value. This would be bad for players as well as franchises, since the hoarding teams would likely cut more overpriced rookies after a year or so in order to restore room under the salary cap. The result would be far less labor stability, which in turn drives down salaries while raising overall costs. The draft, thus, prevents labor anarchy while still preserving a merit-based system for allocating rookie players.

(Indeed, the advent of free agency for veteran players proves this hypothesis, as franchises which hoard free agents tend to do so at above-market rates, resulting in a breakdown of the salary cap after a year or two. The Washington Redskins are an ideal example of this practice.)

Finally, the draft itself is a wonderful spectacle. It’s hard not to enjoy the pride on the faces of newly drafted rookies as NFL Commissioner Paul Tagliabue announces their names and the team which selected them. The whole event has the look and feel of a college graduation ceremony, which in many ways the draft is. And unlike most liberal arts graduates, these players know they will have an opportunity (if not a guarantee) of post-college employment where they’ll be rewarded for their achievement.

Campaign finance hijinks

Despite the fact lawyers enjoy a monopoly on the practice of law, some of them apparently don’t know basic campaign finance laws:

A lawyer for Tab Turner, the head of a Little Rock law firm under investigation by the U.S. Department of Justice, suggested Thursday that his client had not been aware of an election law that prevents him from reimbursing employees who contribute to U.S. Sen. John Edwards' presidential campaign.

"Mr. Turner learned about the campaign rules due to the media's calls to his office," said Ed Dowd of St. Louis. "Since then, he has been doing all he can to set this matter straight, and he will cooperate with the Federal Election Commission or other officials."

Turner and four legal assistants from his firm collectively gave $10,000 to Edwards' campaign during the first quarter of the year. One employee who gave $2,000 reportedly told The Washington Post last week that Turner said they would be reimbursed.

The Edwards campaign returned the money as a "precautionary" step.
I’m no aficionado of campaign finance laws, but even I knew you can’t “reimburse” an employee for a political contribution. John Edwards, himself a successful trial lawyer, probably knew this too. Mr. Turner had to know that as well. After all, why offer to reimburse your employees instead of just giving Edwards $10,000 outright? Obviously Turner knew there was a limit on individual contributions.

Friday, April 25, 2003

Games cartels play

OPEC is nervous about the impending return of Iraqi oil to the world marketplace. On Thursday, OPEC leaders (i.e. government oil ministers) decided to cut production by 2 million barrels per day. This move comes as oil prices have fallen to around $25 a barrel, down from a high of about $40 just two months ago. Not everyone thinks OPEC’s move will accomplish much:

"It's not enough to stop a supply glut," said Michael Rose, director of trading for Angus Jackson Inc. He said prices may fall well below OPEC's $25 target, depending on how fast Iraqi exports return.

Given the profits oil producers have raked in this year as the result of high prices, many analysts question whether the cartel will be disciplined enough to stick to its self-imposed limits.

"OPEC often says one thing and does another," Mr. Rose said. "I think they will have a hard time getting all members to actually cut. They have a history of cheating."
Cartels are notoriously unreliable, especially when they consist of government-run oil companies. This is a good lesson for antitrust enforcers: Cartel arrangements may cause consumers a temporary inconvenience via price increases, but ultimately selfish market incentives will lead the cartel to undermine itself.

The "Unborn Victims of Violence Act"

The anti-abortionists are at it again, and this time they are using public outrage over the murder of Laci Peterson in an attempt to federalize the killing of an unborn fetus. According to the AP, today the White House urged Congress to pass the "Unborn Victims of Violence Act," which would amend the federal criminal code to create a separate offense if a defendant causes the death of, or bodily injury to an "unborn child" during the commission of a federal crime. The punishment for the separate offense would be the same as if the defendant had caused the death of, or injury to, the woman herself.

This is an dangerous proposal. Never mind that the Bush administration sees the need to federalize crimes that the states are more than capable of addressing. According to the Center for Reproductive Rights

By treating the "unborn child" as a separate and distinct victim of crime, the legislation would, for the first time, consider a fetus--and even a fertilized egg--an independent victim for purposes of federal law.

If a fetus, or a so-called "unborn child, at an earlier state of pregnancy, were later deemed entitled to the same legal protections as the woman, it would be impossible for a woman to obtain an abortion without violating the fetus's rights.

If a fetus, embryo, or other so-called "unborn child" is recognized as a "person" under the law, not only would the reproductive rights of women be eviscerated but a fetus--or even a zygote--could seek federal benefits, bring lawsuits, and otherwise claim civil rights.
I think that most murder and manslaughter laws are tough enough to punish those who murder a pregnant woman. And I think the penalty for assault is tough enough to accommodate those who cause the unwanted termination of the unborn fetus by attacking a pregnant woman. Creating special rights for fetuses separate and apart from the rights of the mother would be bad philosophy and bad law. Fetuses have no rights--rights belong only the women carrying them.

Maybe the Fed can lower ticket prices...

Edward Gramlich, a governor of the Federal Reserve, thinks Major League Baseball’s antitrust exemption should be repealed. At a Brookings Institution discussion of baseball’s business model this morning, Gramlich repeated the stock argument that repealing the exemption would not harm baseball, since, after all, antitrust laws don’t seem to harm the NFL, NBA, or NHL.

Gramlich apparently was unaware that all four professional leagues enjoy a separate antitrust exemption to jointly negotiate television rights contracts. In the absence of that exemption, the financial model for major professional sports could collapse, since television rights contracts enable low-revenue teams to remain viable.

Baseball’s peculiar exemption derives from a 1922 Supreme Court ruling holding the antitrust laws were never intended to apply to baseball. This was a sensible ruling, and one modern antitrust investigators should take to heart before expanding the antitrust laws to apply to the smallest, most economically insufficient market. The current exemption, enacted by Congress a few years ago, basically allows MLB to conduct its business free of antitrust second-guessing. True, baseball may be no more deserving of such an exemption than any other industry. But that’s precisely the point: Every industry should be exempt from the antitrust laws.

It’s not like baseball’s profiting unjustly from its antitrust exemption. MLB is doing far worse economically than the NFL and NBA, and Gramlich is correct in asserting that repealing the exemption would do little to improve or harm baseball’s financial picture.

I would add, however, that it’s humorous for a Fed governor to be complaining about monopoly. Not only does Gramlich manage a government banking monopoly, but the Fed Board of Governors itself is little more than a rubber stamp for Alan Greenspan’s presumed aura of infallibility.

CAC pioneers new web technology

Well, not exactly, but we now have public feedback running for the Rule of Reason. Now our visitors can leave their comments for all to see.

How cool is that? Totally Cool!

Dixie Chicks Redux

Imagine my non-surprise when I saw the not all that impressive, and strictly rated-G nudity of the Dixie Chicks on the cover of Entertainment Weekly, in an apparent attempt to highlight their plight after the backlash against vocalist Natalie Maines' comments criticizing President Bush at a concert in Great Britain.

The Chicks have now reduced themselves to the level of streakers--those people who use to pull stunts like running across a baseball field 'nekked' in the middle of the seventh-inning stretch. There you are at an event where people are happy and enjoying themselves, and some clown tries to ruin it all by bearing his fat ass in front of everyone.

Why, oh why must we suffer these women?

Misogynists and homophobes first...

Robert Knight, director of the Culture & Family Institute, thinks we need to turn the moral clock back to 1912:

This week marks the 91st anniversary of the sinking of the Titanic. In the wee hours of April 15, 1912, the great ship slipped into the deep waters of the North Atlantic, sending 1,503 passengers and crewmen to a watery grave.

The vast majority of the dead were men, many of whom stood bravely as they watched lifeboats full of women and children row away from the doomed ship.

During a U.S. Senate inquiry, First Officer Charles H. Lightoller was asked, “You discriminated entirely in the interest of the passengers – first women and children – in filling those lifeboats?” Lightoller replied: “Yes, sir,” to which the senator pressed, “Why did you do that? Because of the captain’s orders, or because of the rule of the sea?”

Lightoller answered simply, “The rule of human nature.”

Another witness, Canadian Army Major Arthur Godfrey Peuchen, described the action at one of the lifeboats: “Only women were allowed in, and the second officer stood there and carried it out to the limit. He allowed no men, except sailors who were manning the boat. I did not see one single male passenger get in or attempt to get in. I never saw such perfect order. The discipline was perfect. I did not see a cowardly act by any man.”

Watching America send some of its daughters to their deaths or capture in Iraq makes one aware of how far we have drifted from the ideal epitomized by the brave men of the Titanic: Women and children first.

More women are facing actual combat because the Pentagon weakened the “risk rule,” which barred the placement of women in areas likely to come under fire. Ever adaptive, the Navy introduced a program a few years ago in which men were conditioned to endure the tortured cries of women captives. Do we really want thousands of men to be indifferent to women’s screams? That’s a recipe for domestic violence and rape.

Not all men have abandoned their role to protect. As Pfc. Jessica Lynch lay wounded, a team of men who would have been right at home on Titanic’s deck boarded choppers. They gambled their lives because an Iraqi man reported that an American woman was being tortured at an Iraqi hospital. Later, our troops freed Army Spc. Shoshana Johnson and other P.O.W.s The mother of a 2-year-old, whose haunted photo reminded us of the cost of putting a woman in the hands of enemy male soldiers, Miss Johnson was rescued and is winging home with a bullet hole in each ankle.

Sending women anywhere near combat is wrong. It is bad enough for children to lose their father, but it is utterly unnecessary for them to lose their mother.

Unlike the sanity and honor that prevailed in 1912, we are not supposed to care that wives, daughters and sisters are killed, maimed or at the mercy of enemy troops.

Women have served honorably in the U.S. military through many wars. Their sacrifices and hard work have contributed mightily. But it is barbarism, not progress, to put women deliberately in harm’s way.

What would the men of the Titanic have thought, watching women kiss their toddlers goodbye, slap on a helmet and ship off to the front? They would say we have not only lost our minds but a good deal of our hearts.
I won’t spend a great deal of time picking apart Knight’s sexist, anti-individualist philosophy, but here’s one obvious flaw in his argument: What about women who are unmarried and without children? Is it moral to send them into a combat zone, or must they too be shackled by Knight’s arbitrary morals? Knight’s argument comes very close to saying women belong barefoot and pregnant, and no other condition is socially acceptable.

Knight’s Family & Culture Instititue is an affiliate of Concerned Women for America, a group which, not surprisingly, is vehemently defending Rick Santorum.

More on Santorum

This from Jonah Goldberg at "I think sodomy laws may well be constitutional. Since I'm not a big believer in a "living Constitution," the fact that they've been constitutional for decades makes me think they're still constitutional."

Jim Crow laws were along for a long time, and now most people understand that it was proper to renounce those laws as unconstitutional. Yet in defending the constitutionality of the sodomy laws (he later writes that he opposes these laws, but not on constitutional grounds), Goldberg falls into the typical conservative trap--he doesn't argue from fact, he argues from tradition. Intellectually, tradition has no bearing on an issue--either a thing is true and proper by the facts, or it is not.

A fallacious argument, even if held for a long time, is still a fallacious argument.

Thursday, April 24, 2003

Holding Taxol hostage

You often hear about the costs of developing pharmaceuticals to meet arbitrary FDA regulatory standards. But there’s also lesser known regulatory cost of paying antitrust ransom to manipulative state attorneys general:

[Ohio] Attorney General Jim Petro announced Thursday that Ohio and all other states have resolved an antitrust lawsuit with Bristol Myers-Squibb Co. involving the cancer-fighting drug Taxol.

Ohio, which led negotiations for the plaintiff states, will recover more than $1.5 million for state agencies and hospitals as part of a $55 million settlement to help compensate the state and consumers who overpaid for the drug, Petro said.

"This is a significant victory for Ohio because Bristol Myers-Squibb Co. has agreed to much more than just financial reparations," Petro said. "The company will also provide free quantities of Taxol to DEA-approved health care facilities, provided the recipients meet eligibility guidelines, and will abide by a strong agreement prohibiting anti-competitive conduct in the future."

While the ultimate allocation among the litigating states has not yet been determined and must be approved by the court, more than $37.5 million will be set aside to be divided for this purpose. An additional $12.5 million will be set aside to reimburse consumers for some of their out-of-pocket payments.

How does providing free Taxol remedy an antitrust violation? Shouldn’t compensating the customers who, ahem, “overpaid” for Taxol be sufficient? This settlement seems to send a bad message: If states don’t want to pay market price for drugs, they can simply bring an antitrust suit and force the company to provide the drug for free as part of a “settlement.”

Monopoly v. Monopoly

Antitrust officials often resort to shameful tactics, but arguing that a lawful company is intentionally “harming” children by acquiring another company is a new low, even for the Justice Department. Yet that’s just what top DOJ antitrust enforcer Hewitt Pate did today in announcing his decision to try and undo an already consummated merger between two dairy companies.

Last year, the Dairy Farmers of America acquired Southern Belle Dairy. Because the acquisition didn’t meet the minimum value required by statute, the merger was not subject to advance review by the Justice Department for antitrust concerns. Congress enacted the threshold (and later raised it) to ensure the DOJ spent their time reviewing only large mergers. Since taking power, however, the Bush administration antitrust leaders decided to ignore Congress’s mandate, and instead target smaller mergers in order to make examples out of certain companies. This seems to be what led the DOJ to the DFA-Southern Belle merger.

The major harm, according to Pate, is that DFA’s acquisition leaves only one milk supplier to about 50 government school districts in Kentucky and Tennessee:

Prior to the acquisition, the competitive rivalry between these two dairies produced lower prices and higher quality service, to the benefit of schools and school children. By acquiring Southern Belle, DFA has eliminated or reduced that competition for many school districts in Kentucky and Tennessee. The [Antitrust] Division seeks to restore this competition.

Pate says DFA’s acquisition “threatens increased prices and poorer services” for these school districts. He cites no evidence in support of this theory, and we’re unlikely to see any such evidence in the future. Even if true, higher prices do not constitute a legal injury to anyone, unless a contractual arrangement is violated, which is not the case here. The DOJ is simply trying to protect school districts from the inconvenience of potentially higher prices, which is not the same thing.

There is, of course, a sick irony in this case. The DOJ claims that DFA’s “milk monopoly” will harm school children, yet nobody at the Antitrust Division thought to point out that the government’s monopoly over local schools is a problem. Nor does the DOJ see the school districts’ status as monopoly buyers to be of any particular concern. Competition, it seems, is only valuable when it comes to milk.

The Greenspan aura lives on

President Bush will likely nominate Alan Greenspan for a fourth term as chairman of the Federal Reserve, and Greenspan will accept said renomination. This may please defenders of the status quo, but the president’s passive action here will do nothing to help the economy, either in the short term or in the long run.

The theory for renominating Greenspan is stability: Since the economy remains jittery following the Iraqi war, it’s best not to disturb the steady hand at the Fed. This is just plain nonsense. No one man is invaluable to the nation, certainly not Greenspan. We constitutionally limit presidents to two terms without problem, so it’s hard to argue that the Fed chairman must remain in office close to 16 years.

But that’s not the reason to dump Greenspan. The reason is that the chairman’s continued presence forecloses any debate over the function of the Federal Reserve itself. Few institutions have contributed more to the decline of capitalism in America than the Fed. Central banking itself is an inherently wealth-destroying mechanism, as any nation that’s ever dealt with the World Bank and IMF can attest to.

Now, obviously, simply replacing Greenspan is no guarantee of radical reform. Given President Bush’s preference for pragmatism, Greenspan’s successor might prove to be a bigger obstacle. But that said, there is no possibility of meaningful discussion over the Fed’s future while Greenspan remains in power. Washington officials have simply become too deferential to the mythical “aura of Greenspan” to seriously challenge him. It’s nothing personal, really, just the predictable effect of giving one individual too much unchecked power for too long.

Contrary to urban legend, the economy runs itself with or without the Fed’s intervention. The nation experienced plenty of economic booms (and busts) long before Greenspan came along, and it will continue to do so long after he finally is turned out of power. Best to learn that lesson now, before the Greenspan aura swallows what’s left of the current economic recovery.

Rick Santorum's Moral Outrage

I write about it at Initium.

You know, conservatives are little better than hippies—they just throw you off because they dress nice and stand next to the flag.

Wednesday, April 23, 2003

Remember Elian?

Scott Holleran does at Capitalism Magazine.

I think if there was one day that forever changed my view of America, it would have to be April 22nd, 2000.

The gay divide

Eugene Volokh thinks Rick Santorum's bigotry isn't that big a deal. Arthur Silber thinks it's a very big deal. I'm inclined to go with Arthur on this one.

Tuesday, April 22, 2003

Total Bureaucratic Awareness

The Federal Trade Commission has some sort of vendetta against private trade associations. Last year, they went after the National Academy of Arbitrators and the American Institute of Conservators of Historic and Artistic Works. In the past month, they’ve added the Indiana Household Movers and Warehousemen and the Institute of Store Planners to their target list. Collectively, these groups have about as much economic power as a Starbucks franchise, yet the FTC views their actions as akin to the political machinations of Tammany Hall.

Think I’m exaggerating? Here’s the FTC annual report on these trade association cases:

The FTC pursued significant investigations involving the rules of conduct for various professional associations. Agreements among professionals that limit competition among themselves, often under the guise of professional association by-laws or codes of conduct, harms consumers much like 'smoke-filled room' conspiracies.

What we’re talking about here are professional ethics codes, documents which are well publicized. In the case of the National Academy of Arbitrators, the ethics code challenged by the FTC was in force for more than 30 years. That’s hardly the product of a “smoke-filled room,” which by inference refers to a conspiracy to keep information from the public. Quite the contrary, ethics codes are designed to alert the public as to common rules adopted by a given profession. Only dangerously unqualified FTC staff lawyers could find a conspiracy in this.

And if you think the FTC staff is intelligent, consider this line from their report vowing to persecute more trade associations in the future:

The FTC is pursuing other potentially harmful restrictions imposed by professional associations, or boards, using means including sophisticated 'spider' software to search the Internet for restrictions of this kind.

Yes, kids, the FTC just said they’re using Google to seek out new antitrust cases. If this doesn’t convince you antitrust is nothing more than a government witch-hunt, nothing will.

Today is Earth Day. . .

. . .and I don't care.

Sanctioning Santorum

Leave it to the conservatives to equate the state respecting the rights of consenting adult homosexuals to have sex to the state allowing incestuous sex with minor children.

In an AP interview published Monday, Senator Rick Santorum, R-Pa., was quoted as saying, "If the Supreme Court says that you have the right to consensual (gay) sex within your home, then you have the right to bigamy, you have the right to polygamy, you have the right to incest, you have the right to adultery. You have the right to anything."

According to the AP, Santorum spokeswoman Erica Clayton Wright said the lawmaker's comments were "were specific to the Supreme Court case," that case being Lawrence v. Texas.

Ms. Clayton Wright’s explanation doesn’t help Santorum. The Texas case that she claims his comments were focused on is a case where a state government asserts that it may criminalize activity between consenting adults in the privacy of their home for the sole reason that it believes that activity immoral.

But what is the basis of such a moral claim? Like most religious conservatives, Santorum equates the consistent protection of individual rights with pell-mell anarchy. If the state breaks from the Holy Bible’s prohibition on homosexual conduct and respects homosexual rights, it only follows that men will seek to have several wives, married couples will wantonly cheat on each other, and sex with one's own children will be an everyday occurrence. Throw in a couple lines about the End Times and one can easily see how disconcerting a pro-homosexual outcome on the Texas case would be for religious conservatives.

Yet America is not a nation governed by the Holy Bible. Each citizen is free to live by the moral code of his own choosing, but when it comes to affairs of the state, only the acceptable guide is reason. The religious faith of some citizens, however passionately held, is not a substitute for a rational legal code.

Yet the Texas law is a prime example of irrational law. It does not protect anyone from the initiation of violence or fraud, but instead seeks to impose an antiquated and mystical moral view on a portion of the population despised by people of a certain faith.

A homosexual has every right to use his or her sexual capacity as he sees fit without interference from the state. Homosexuals don’t have a right to “anything,” but they do have a right to their lives, which Santorum does not seem to respect.

Some have called for Santorum’s removal from the leadership of the Senate due to his bias against homosexuals. I call for it due to his bias against individual rights, and his unwillingness to defend simple truths or protect the innocent victims of government abuse.

The indoctrination begins early

Don Luskin points us to this article by Neal Bortz on how an Easter Egg Hunt was turned into a lesson in wealth re-distribution.

Drafting reality

There’s an interesting debate in NBA circles over who should be the top pick in June’s draft, Carmelo Anthony or LeBron James. Anthony, a freshman at Syracuse University, recently led his team (almost single-handedly) to a NCAA title. James led his private high school team to an Ohio state championship despite being technically ineligible under state amateurism rules. For almost two years, James has been hyped by various media pundits as the next basketball Messiah, a successor to Michael Jordan and Kobe Bryant if you will. Anthony’s NCAA title run, however, may complicate things.

Here’s what gets me. A number of pundits, many of them seasoned NBA beat writers, argue that the team with the #1 pick should select James even if they believe Anthony is the better player. The argument goes like this: James has more hype, so he’s more likely to sell tickets during his rookie season. This conveniently ignores the fact that few NBA players who came directly from high school ever amount to much before their third season in the league. For all the hype, there’s nothing which indicates James is any more likely to have an immediate impact than other now-greats like Bryant or Kevin Garnett, both of whom required several seasons to achieve their potential. Anthony may only have one year of college experience, but that experience showed he could lead a team against top competition. Most knowledgeable NBA scouts (who seem to have less influence than the pundits) would take Anthony over James.

Even the business argument doesn’t make much sense. James may sell out arenas early on as a curiosity, but if he’s warming the bench for a non-playoff team, a likely assumption, his effect on attendance will be temporary. Even Michael Jordan didn’t become Michael Jordan overnight. Heck, Jordan wasn’t even the top pick in his draft year.

Frankly, if I was an NBA owner, and the general manager told me “Anthony is the better player, but we have to take James or the media will rip us,” I would fire that GM on the spot. Anytime you make a decision based on something other than objective facts, you betray your obligation to act in the best interests of your business. When it comes to the NBA draft, that means you take the best player available, period. If that player doesn’t fit your immediate needs, you trade him or trade the pick. You don’t take a player based simply on hype or media acceptability. If businessmen in other fields behaved that way, they’d find themselves hauled before a federal regulatory agency of some kind.

Proclaiming ignorance

Arizona Governor Janet Napolitano doesn't think much of home-schoolers. The governor recently refused to sign a ceremonial proclamation declaring "Home Education Week" in Arizona:

Kevin and Frances Scroggins home-schooled their youngest child, 8-year-old Michael, for two years. They sent him back to a public school this year.

And they have decided to home-school him again next year.

The governor does not agree with that decision. She has criticized programs like vouchers and home-schooling. "While I support choice, I believe choice must be accomplished within the public school system," she said last year in a candidate questionnaire.

Napolitano this year refused to sign a proclamation declaring "Home Education Week." Staff members were concerned that signing the proclamation's timing was "inappropriate," that it might offend other education "stakeholders."

Those stakeholders apparently do not include Michael Scroggins.

The proclamation was not an ideological manifesto. It was perfunctory, just recognizing the excellent job some parents have done with their children, a fact beyond dispute.

"Whereas, the State of Arizona is committed to excellence . . . and recognizes the importance of family participation and parental choice in pursuit of that excellence . . . and individualized preparation for citizenship and life work is provided by home education . . . Now, Therefore, I, Janet Napolitano, do hereby proclaim the week of February 3rd as Home Education Week in Arizona."

It's amazing a politician in this country can say, in effect, "I support choice, but only choices determined by the government," and still hold office. Yet when it comes to education, such a quasi-fascist position is not just acceptable, but mainstream, especially in the Democratic party.

For their part, home educators shouldn't take the governor's snub too seriously. In this case, they should consider it an affirmation that they are putting their children before altruist political concerns.

Monday, April 21, 2003

The Last Word on Augusta?

This from Instapundit who quotes Mark Steyn:

In the last nine months, the New York Times has run 95 stories on Martha Burk and Augusta. So, aside from being outnumbered by police and reporters, Burk's 40 supporters were outnumbered more than two to one by New York Times stories on Burk. Every time the Times mentioned this allegedly raging furor, it attracted approximately another 0.4 of a supporter to her cause. . . .

The Times' carpet bombing of Augusta has proved a pathetic bunker-bust. This is supposed to be the most influential newspaper in America, the one whose front page all but dictates the agenda of the network news shows. And its most fiercely sustained campaign can't fill a single school bus?
Hehehe. Maybe we could turn this into a new show on Fox: "When Leftist Causes Implode."

UPDATE: Alright, I'm having more fun with this than I should. But can you just imagine that guy with the obvious cop hair helmet going, "Martha Burk and her friends at the New York Times thought they had national attention for Martha's little intimidation game, but at Augusta, they play golf, not social engineer."

Nike v. Kasky has an article on the Nike free speech case going into oral argument before the Supreme Court on Wednesday. (CAC supporters will recall the Center filed an amicus curie brief to the Court on both the Certiorari petition and the merits stage of this case.) Although Skip Oliva has attended many oral arguments before the Supreme Court, I've never attended one, so I plan on making the pilgrimage with him this Wednesday to hear the argument.

What I'll be looking for is indications that the Court is examining this case in fundamental terms. Justice Thomas threw a bone to the defenders of businessmen's right to free speech when he wrote in his concurring opinion in 44 Liquormart v. Rhode Island. Justice Thomas wrote that he "do[es] not see a philosophical or historical basis for asserting that ‘commercial’ speech is of ‘lower value’ than ‘noncommercial’ speech.” CAC formed its amicus brief to the court on the Nike case precisely along the lines outlined by Justice Thomas.

What also will be interesting is if our challenge to Justice Scalia has an impact with the other Justices on the Court. In 44 Liquormart, Justice Scalia wrote that he wanted historical reports on the practices of the state legislatures in interpreting their own free speech guarantees before he would be willing to abandon the commercial speech doctrine. Typical Justice Scalia reasoning--he's a Supreme Court Justice who hates to think in any principle beyond what others think. In our brief, we directly attacked Scalia's view, arguing that the Ninth Amendment alone provides sufficient justification for the Court to protect the rights of businessmen to self-interest speech.

CAC argued the following:

The yearning for historical context misses the point. It should not be necessary for Nike to prove the existence of its First Amendment rights by identifying specific historical statements in support of “commercial” speech. Indeed, where would one find such “dispositive” evidence? Presumably, not every state legislature—at any given time—holds identical views regarding commercial speech, the Fourteenth Amendment, or any other identifiable topic. It has never been necessary in other First Amendment contexts for a challenged party to demonstrate positively that their expressive acts represent a “long accepted practice.” Under such a requirement, this Court would never have recognized First Amendment protections for flag burning, the distribution of adult magazines, or student expression on school grounds.

In short, a lack of historical evidence must not foreclose protection for “commercial” speech. But if evidence were needed, the Ninth Amendment provides it. The amendment provides “The enumeration, in this Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.” Historically, the Court has been reluctant to read much into this amendment, choosing to uphold non-enumerated rights under the Fifth and Fourteenth Amendments instead. Then, in June of 1965, the Court handed down its radical decision in Griswold v. Connecticut, wherein the Court upheld the unenumerated right of a married couple to use contraception, availing itself of the Ninth Amendment in rendering its holding. In a concurring opinion, Justice Goldberg, joined by Justice Brennan and Chief Justice Warren, wrote:

Nor am I turning somersaults with history in arguing that the Ninth Amendment is relevant in a case dealing with a State’s infringement of a fundamental right. While the Ninth Amendment—and indeed the entire Bill of Rights—originally concerned restrictions upon federal power, the subsequently enacted Fourteenth Amendment prohibits the States as well from abridging fundamental personal liberties. And, the Ninth Amendment, in indicating that not all such liberties are specifically mentioned in the first eight amendments, is surely relevant in showing the existence of other fundamental personal rights, now protected from state, as well as federal, infringement. In sum, the Ninth Amendment simply lends strong support to the view that the “liberty” protected by the Fifth and Fourteenth Amendments from infringement by the Federal Government or the States is not restricted to rights specifically mentioned in the first eight amendments. Cf. United Public Workers v. Mitchell, 330 U.S. 75. 94 – 95.
In the case now before the Court, the Ninth Amendment provides the key to understanding the scope and reach of the First Amendment.
That's right. It’s the Court's job to check the government's role in protecting individual rights and the Ninth Amendment gives them the power to do it. If the Ninth Amendment’s importance is acknowledged by the Court, CAC will have won a major victory.

Is a Fisking of Frist in the air?

With several members on Congress none too happy with Bill Frist's handling of the Bush tax cut in the Senate, it might be says Robert Novak.

Is there a secessionist tide swelling in San Francisco?

Andrew Sullivan notes G. Pascal Zachary's slightly less than tongue-in-cheek whine that their ought to be independent San Francisco in an article in yesterday's San Francisco Chronicle. Zachary notes that German computer programers who oppose the Bush administration's stance in Iraq feel plenty at home in San Francisco.

"[Yet,] the views of these Germans -- and my own views of official American power -- are heretical in America, highlighting the wide gulf between the iconoclastic Bay Area and the rest of the United States. This gulf, always present, seems more intensely felt now. There are no American flags waving on my street, or any of the streets I pass each morning when I bring my children to school.
Zachary goes on with the usual Leftist whine: no one outside of the Bay area appreciated the vomit-ins, everyone else in America is a money-grubbing capitalist, only the Europeans understand us, bla, bla, bla, bore, bore, bore. . .

But let's take Zachary seriously for a moment. The thing about a San Francisco secession movement is that there are nice parts to San Francisco that the decent people who built them shouldn't have to give up. I say the lefties should get smart and ship themselves to Europe. Why should poor Mr. Zachary have to suffer being a disaffected San Franciscan when he could easily be a disaffected Frenchman? I can't think of any reason.

I used to joke with friends about the "Go directly to North Korea" fund, a project where the deserving would be offered a one-way ticket to their dream state of a nation. But since North Korea is such a hard sell, even to budding Stalinists, why not just ship them off to France and Germany? We just want them gone, right?

Hey, it could work, ;-)

Media ethics vs. media critic ethics

Phil Mushnick, the New York Post’s sports media critic, must be gunning for a position on the Federal Trade Commission. He’s certainly mastered the art of taking a fairly trivial event and interpreting it in a wholly irrational light:

WHAT used to be known within TV networks as "standards and practices" forms, must've been turned face-down, stacked in a corner and now serve as scratch paper.

Dick Vitale, ABC and ESPN's lead college basketball analyst, recently revealed that he, along with Louisville head coach Rick Pitino, is the co-owner of a two-year-old thoroughbred, named Awesome Baby.

Of course, this creates both a per se and an outrageous conflict of interest, one that ABC and ESPN surely can't dismiss unless they choose to ignore - or trash - the most basic tenet of broadcasting ethics: You don't do business with those you cover.

But this is 2003, when the indefensible is, at best, ignored, and, at worst, given full approval.
The conflict of interest is not as self-evident—and certainly not as outrageous—as Mushnick proclaims. Pitino and Vitale make their living in college basketball, not horse racing. Vitale is also not a news reporter, but an analyst. In a given season, Vitale can be expected to cover only a handful of games coached by Pitino, whose Louisville Cardinals are hardly mainstays of national television. If there was a conflict, it could be solved by recusing Vitale from covering Louisville games. But there’s not even that much of a conflict. Since, as I just said, Vitale is an analyst, not a reporter.

Consider this: Most colleges hire their own broadcasters for basketball games. These broadcast teams, usually a play-by-play man and an analyst, are expected to provide objective (if somewhat partisan) coverage of games. Applying Mushnick’s logic literally, all of these college-paid broadcasters must resign as a matter of ethics, since their very employment constitutes a conflict of interest. Of course this is ridiculous. In this context, the conflict is irrelevant, since the viewing public is aware of the broadcasters’ employment status. Similarly, the publicity given the Vitale-Pitino endeavor mutes whatever minor conflict exists. It’s just not that important.

Mushnick’s explosive rhetoric further undermines his cause. To say Vitale’s action is a “per se” unethical act is irrational. In legal parlance, “per se” means guilty regardless of fact or context. It’s a favored tool of administrative agencies, like the FTC, which prefer to win their cases without having to actually prove their facts. In Mushnick’s case, it amounts to a smear—a unilateral declaration that no debate or discussion of Vitale’s conduct is permissible, since he’s been found guilty at summary judgment.

Having read Mushnick’s ravings for a few years now, I think his ethical condemnation of Vitale has little to do with any alleged conflict of interest. Consider this passage from Mushnick’s article:

Then again, perhaps ESPN's accustomed to indulging such conflicts. Vitale once had a sneaker deal with Nike, then, when his friend and Nike college basketball influence peddler, Sonny Vaccaro, left for adidas, Vitale switched to adidas, too.

But such a deal would never prevent Vitale from delivering one of his hard-hitting commentaries on the insidious role that sneaker companies and their oily reps play in the continued corruption of college basketball.
Vitale, in fact, has consistently taken the position that players should stay in college, rather than turning professional early. This position puts Vitale in opposition to the sneaker companies, which regularly attempt to influence players to enter the NBA early. Now, while I happen to share Mushnick’s disdain for the sneaker companies in this context, this has no bearing on an ethical discussion of Vitale’s business partnership with Pitino. What this sneaker example actually demonstrates, in my opinion, is Mushnick’s own biases: He’s upset with Vitale for not sharing his viewpoints on given issues, and thus he’s fair game for ethical condemnation on unrelated matters, regardless of actual context. If you ask me, that’s hardly responsible media criticism.

Sunday, April 20, 2003

Olson & Tribe, together again...

The U.S. Supreme Court will hear oral arguments on Wednesday in Nike v. Kasky, the corporate speech case which CAC joined as a “friend of the court” on Nike’s behalf. The argument will take place from approximately 11 a.m. to Noon. In an interesting twist, the case for ruling in Nike’s favor will be presented by Harvard professor Laurence Tribe and U.S. Solicitor General Theodore Olson. Tribe represents Nike, while Olson will argue for the federal government in general support of Nike’s position. The last time both men appeared before the Supreme Court together was December 2000 in Bush v. Gore, with Olson representing President Bush and Tribe representing Vice President Gore.

As detailed elsewhere on CAC’s website, this case involves Nike’s right to defend itself publicly against anti-capitalist activists who oppose the company’s labor practices. The California Supreme Court held Nike could be held to strict liability for their statements, while Nike opponents enjoyed categorical First Amendment immunity. Marc Kasky, one of the anti-Nike activists, sued the company under California’s generous definition of standing, which anoints every California resident a “private attorney general” for purposes of consumer fraud actions. Thus, Kasky is the plaintiff despite alleging no injury to himself, nor even a personal knowledge of the facts regarding the truthfulness of Nike’s statements.

Arguing Kasky’s case on Wednesday is attorney Paul Hoeber, a sole practitioner affiliated with the San Francisco firm of Bushnell, Caplan & Fielding. Hoeber is a former law clerk to the late Justice William Brennan, ironically a great champion of First Amendment liberties.

Growth, taxes & France

The Club for Growth is running ads against Republican senators George Voinovich of Ohio and Olympia Snowe, chastising the lawmakers for opposing President Bush’s full tax cut proposal. The ads feature America’s favorite whipping boy, France:








This approach—comparing Voinovich and Snowe to Jacques Chirac—strikes me as somewhat simplistic. France, after all, engaged in duplicity, first promising to support the disarming of Saddam Hussein, then turning against the U.S.-led effort to actually do so. Snowe and Voinovich, in contrast, are politically consistent in their opposition to the president’s tax proposals. Both senators are so-called deficit “hawks” who consider substantial tax cuts too risky. While I don’t support this approach to fiscal policy, I also know that Snowe and Voinovich are not hypocritical or duplicitous in holding their views.

That said, the Club for Growth’s intent is admirable. Lower taxes is supposedly a core principle of the Republican Party, and the Snowe-Voinovich position does politically undermine the agenda of a Republican president. But Club for Growth could have formulated an ad which focused on the intellectual error of their opponent’s position—attacking the notion that lower taxes is the cause of higher deficits, for example—rather than on America’s fleeting disdain of France.

Rumsfeld Stands Tall After Iraq Victory

Light bloging for today, but the Washington Post has an interesting article on the rise in Secretary of Defense Donald Rumsfeld.

Key paragraph:
He now is in position as never before to reshape the U.S. military along the lines he has talked about since taking office, "transforming" it into a more agile and precise force built not around firepower but around information, and willing to take risks to succeed.

Saturday, April 19, 2003

Making a list, taxing it twice

Human Events, a conservative weekly, compiled a list of the “Ten Worst Federal Tax Laws.” The list was chosen by a prominent panel of judges, including Nobel laureate Milton Friedman, Stephen Moore of Club for Growth, and Americans for Tax Reform’s Grover Norquist. The estate tax (a.k.a. “death tax”) came in at #1, followed by double taxation of dividends, and the alternative minimum tax. There are no glaring omissions that I can see on the list, though I would have given at least an honorable mention to certain federal fines, such as the Hart-Scott-Rodino fee companies must pay as tribute to have their mergers approved by antitrust authorities.

A matter of inches

Georgia’s efforts to create a new, Confederacy-free flag hit a snag:

Legislation that would clear the way for the new flag is up for a vote Tuesday. The bill does not list specific measurements for the flag, but it does define proportions for three stripes and a blue square that encompasses the state seal and 13 stars.

A historian says those proportions would throw the state flag out of proportion with the standard American flag by making Georgia's a foot longer.

Supporters are afraid to change the legislation because then it would have to return to the Georgia House with just two days left in the legislative session.

It amazes me this is still an issue. No state should be permitted to have the Confederate emblem in their flag, for the simple reason that the Confederacy was a rebellion against the United States government. That the rebellion was, in large measure, motivated by a desire to preserve slavery makes the moral issue that much clearer. Congress, in my judgment, possesses the authority to require the removal of the Confederate symbol from a state flag, pursuant to the federal power to suppress insurrections against the national government.

It's not always about the children...

For all the unconstitutional laws passed in the name of “protecting the children,” some basic acts of child abuse continue to be legal, as evidence in this report from Pennsylvania:

A woman and her male partner - a psychologist who works with autistic children - do not belong on a state list of alleged and confirmed child abusers for punishing her 13-year-old son by paddling him with a plastic serving spoon, a state court ruled.

Even if the boy suffered bruises and had trouble sitting for a couple days, the injuries did not justify keeping the two on the list, a three-judge Commonwealth Court panel said Thursday.
Now, I question the wisdom of child abuser “lists” as a means of law enforcement, but that’s a secondary issue here. The question is whether paddling a child with a spoon constitutes abuse. There’s no question in my mind that it is. If you believe the initiation of force against others is immoral, then you cannot justify harming a child in such a cruel manner. The notion that this is “discipline” is irrational on its face. You do not teach someone good behavior by resorting to a wanton act of violence.

The Pennsylvania court concluded the paddling here was legal because there was “no malicious intent and no evidence of negligence by adults or severe injury to the boy.” None of these rationalizations justifies the paddling. Intentionally harming a child—or any human being for that matter—is malicious regardless of whether you consider the act to be disciplinary rather than punitive. As to negligence, a parent who resorts to paddling her own child, it seems to me, is simply taking a shortcut rather than taking the time to actually teach their child right from wrong. That certainly approaches the line of negligence. Finally, the severity of the injury should not be a determining factor for legal purposes. Is rape not a crime if the woman is not severely injured? Of course it’s not.