Saturday, August 30, 2003

Foreign Policy: Six-Party Talks Produce DPRK-China split

The Bush policy on North Korea has recently enjoyed two limited successes. The Administration consistently demanded multilateral rather than bilateral talks with North Korea to dismantle the DPRK nuclear program. After much posturing, and much criticism of the Administration this spring at home and abroad, the North agreed, first to three-party talks with China (which, at the talks, became bilateral US-Chinese and Chinese-DPRK talks) and then to six-party talks with both Koreas, China, Russia, the US and Japan.

The talks were held, and nothing was agreed to. But the first partial victory is that the North Koreans, who desperately need foreign money, "blinked" and accepted the US terms for the negotiations. The US was not stampeded into a negotiation on the North's terms. The six-party talks also have the benefit of sharing the responsibility for the issue with the other Northeast Asian regional powers.

The second partial victory is that, by involving the Chinese in the diplomacy, the North Koreans have been split from their Chinese allies. After the talks, the Chinese statement was that all parties agreed that a second round of talks would be held sometime somewhere, that everyone wanted a nuclear-free Korean peninsula, and (more implied than stated) that the meeting was a constructive, limited success for Chinese diplomacy and prestige.

The North Koreans today declared the talks a failure, refused to give up their nuclear weapons or weapons program and either did or did not rule out future talks, depending on the translation. In response, according to ABC Radio Australia, China declared that all parties should continue meeting.

China is the country with the most significant leverage over North Korea, their historic ally as well as their largest contributor of subsidies, especially fuel oil for the army. North Korea's only source of fuel is a pipeline from China. The pipeline was shut down for a few days in March for allegedly technical reasons, which coincided with reports of Chinese messages to North Korea to enter negotiations with the US.

Keeping the option of war against North Korea on the table is paying dividends—there is increasing pressure on the Chinese to deliver a solution. The Chinese are certainly in a position to squeeze the Kim regime, and may be in a position to replace is with a more amenable, nonnuclear puppet state.

This was a good week for the Administration's North Korea policy.

Tuesday, August 26, 2003

Rights and Reason: Atheists Demand Equally Arbitrary Exemptions

As long as there are public schools, there will be public school rules. Children who go to public schools must follow public school rules. If you don't like the public schools, there are private schools. There is homeschooling in most states.

A lawsuit by a Pennsylvania atheist parent and the American Atheists group demands that an atheist child get a religious exemption from a school-uniforms policy. The lawsuit claims that the uniforms "hinder her children's creativity... and freedom of expression" and are militaristic, too, which the mother opposes.

As a public school teacher, I "hinder my students' creativity" every flipping day when I stop them from drawing Japanese-style fighting cartoons when they should be reading. I also hinder their "freedom of expression" by telling them when they may and may not speak and what they may and may not talk about. Schools have to be able to set rules and enforce them to function.

If there is a rule that anyone can opt out of for any reason they choose, then it isn't a rule. The Constitution protects the free exercise of religion--access to a public facility such as a school cannot be denied or limited as a result of someone's religion or the demands of that religion. That means that if someone's religion says that they wear all black without buttons, or a skullcap, or a turban, or a feathered headdress, then public facilities must admit those costumes and headgear. Atheists' personal views, however, are not religions, they are personal views. Personal views, if they are not religiously based, are not the free exercise of religion and they do not have to be accommodated in the public schools. A child who is a Jehovah's Witness does not have to stand for the Pledge of Allegiance. A child who simply hates America does. This is why we require the signature of a minister, to have a standard for denying frivolous exemptions.

The suit raises an equal protection claim, that anything religious folks get, atheists should get. Religious exemptions are exceptions to rules based essentially on the fact that a religion claims that to follow the rule would cause God to be angered and smite them. The religious exemption protects the believer from the smiting. Only incidentally does it exempt them from the rule. Whereas if God is going to smite an atheist, it's probably not because I didn't wear the proper hat. Reason does not enjoy the constitutional protection that religion does. Fortunately, we don't need it.

Rights & Reason: Exempting Rationality

Nick Provenzo is on vacation this week, and I remain on blogging recess until after Labor Day, but I did want to share one brief observation regarding Eugene Volokh's post on the constitutional limits of government-school dress codes:
Exemptions for religious observers: This story about a public school dress code raises the perennial constitutional question: May the government exempt religious observers from a generally applicable rule (here, a dress code, though it could equally be military conscription, a high school biology vivisection requirement, or a variety of other rules) but not extend the same exemption to conscientious nonreligious observers? If you're interested in this general question, you might check out this summary in an article of mine -- I don't take a stand on the subject, but I outline the issues. (As a policy matter, I think that secular conscientious objectors should generally be treated the same as religious objectors, but it's not clear to me whether, and to what extent, the Establishment Clause requires this.)

Note, though, that the dress code case also includes a different twist: Not all religious objectors are entitled to an exemption, but only those who can get a note from their religious leader. This, I'm pretty sure, is unconstitutional, because it privileges those religions that have organized clergy over those that don't, and those people whose religious beliefs match their leader's and those whose beliefs are more idiosyncratic. The Supreme Court held, in Thomas v. Employment Division (1981), that constitutionally mandated religious accommodations (when the Free Exercise Clause was interpreted as mandating such accommodations) turn on a person's own sincere beliefs; and I think the same principle would apply to religious accommodations that the government voluntarily creates.
My observation: How would an Objectivist get exempt from the dress code? Would they need a note from the Ayn Rand Institute, or would they need only submit a note proving the irrationality of the dress code according to Objectivist ethics? Not that Objectivism is a religion, mind you, but it is an integrated philosophy. It surely is entitled to the same legal protections as Christianity, Judaism, Islam, etc.

Monday, August 25, 2003

Capitalism and the Law: Fox News Drops Suit Vs. Franken Over Book

Erin McClam of the Associated Press reports it's the end of the line for the Fox News suit against liberal humorist Al Franken:

Fox News dropped its lawsuit against Al Franken on Monday, three days after a federal judge refused to block the liberal humorist from using the Fox slogan "Fair and Balanced" on the cover of his book.

The lawsuit had sought unspecified damages from Franken and Penguin Group, publisher of "Lies and the Lying Liars Who Tell Them: A Fair and Balanced Look at the Right."

"It's time to return Al Franken to the obscurity that he's normally accustomed to," Fox News spokeswoman Irena Steffen said.
The story of how Al Franken got Fox to plug his book for him for free has got to be one of the great tales of modern communication. Don't get me wrong--I think Franken is a big dumb idiot, but Fox's idiocy against him was bigger and more idiotic, and has to be one of the least savvy moves since new Coke.

Elections: How will you vote?

This in from Mike Walker:

California Taco Bell restaurants are offering their own election.

I'll just have a salad. To go.

Oh, the Humanity: From Wall Street to Mean Street

Don Luskin points us to this New York Times story:

In nearly every American city or town, you can find people like Peter Jaquith. He is 67 and has $150 in his checking account. He lives on $1,100 a month in Social Security and a little help from family members. To make ends meet, he has worked as a deliveryman and a toilet cleaner.

It hasn't always been like this for Mr. Jaquith. In the 1980's, he was a partner at Lazard Frères, the elite investment bank, and the right-hand man of Felix Rohatyn, its legendary deal maker. At his peak, Mr. Jaquith was worth at least $20 million.

Back then, he led the glamorous life of a major Wall Street player. For Thanksgiving, he thought nothing of spending $40,000 to fly 30 friends to his weekend home in Palm Springs, Calif. He paid their air fares, hotel and restaurant bills and golf fees.

But one night 10 years ago, an increasingly frustrated and heavy-drinking Mr. Jaquith discovered crack cocaine. Suddenly, Mr. Jaquith, who had earned millions advising corporate tycoons on deals, found himself begging dealers with names like "Cuffie" for drugs. At one point, he wound up homeless. "Part of me wondered if he was dead," his daughter Pamela recalled.
Can we really find, in every American city or town, ex-millionare crackheads? And if so, why did it take the New York Times so long to find one?

Rights and Reason: Political Debate Looms Over Obesity

Siobhan Mcdonough of the AP reports on the anti-obesity lawyers.

[W]ith obesity a growing health problem, lawmakers, lawyers and activists are lining up the way they do for most issues: on two sides.

The left's view is that the food industry and advertisers are big bullies that practically force-feed people with gimmicks and high-calorie treats. They say Ronald McDonald is the cousin of Joe Camel.

The right's argument has been dubbed: You're fat, your fault. They say people can make their own choices about food and exercise.
These two paragraphs outline why I think the chances are better for Objectivists to influence the Republican Party over the Democratic Party. In this case, the left sees individuals bereft of free will. The right sees otherwise. The left will claim that its view is scientific and rational. The right will claim common sense.

That’s not to say either side is consistent. The right certainly does not display common sense on questions like abortion (whereas the left does defend abortion, but I have a nagging suspicion that it does so the grounds that abortion is the only individual right that is gender specific.)

Yet when you think about obstacles to overcome, I do think, outside of Roy Moore and his ilk, that many on the right recognize at least vaguely that there is link between freedom and free will. The right has its economic conservatives. There are no such parallel creatures on the left.

Rights and Reason: In God I Trust

Alabama Judge Roy Moore explains his position in the Ten Commandments case in today's Wall Street Journal:

[W]e must acknowledge God in the public sector because the state constitution explicitly requires us to do so. The Alabama Constitution specifically invokes "the favor and guidance of Almighty God" as the basis for our laws and justice system. As the chief justice of the state's supreme court I am entrusted with the sacred duty to uphold the state's constitution. I have taken an oath before God and man to do such, and I will not waver from that commitment.

By telling the state of Alabama that it may not acknowledge God, Judge Thompson effectively dismantled the justice system of the state. Judge Thompson never declared the Alabama Constitution unconstitutional, but the essence of his ruling was to prohibit judicial officers from obeying the very constitution they are sworn to uphold. In so doing, Judge Thompson and all who supported his order, violated the rule of law.


The First Amendment says that "Congress shall make no law respecting the establishment of religion, or prohibiting the free exercise thereof." It does not take a constitutional scholar to recognize that I am not Congress, and no law has been passed. Nevertheless, Judge Thompson's order states that the acknowledgment of God crosses the line between the permissible and the impermissible and that to acknowledge God is to violate the Constitution.

Not only does Judge Thompson put himself above the law, but above God, as well. I say enough is enough. We must "dare defend our rights" as Alabama's state motto declares. No judge or man can dictate what we believe or in whom we believe. The Ninth and 10th Amendments are not a part of the Constitution simply to make the Bill of Rights a round number. The Ninth Amendment secured our right as a people. The 10th guaranteed our right as a sovereign state. Those are the rules of law.
Judge Moore speaks of individual rights in the same breath that he trashes them. Moore has an unquestioned right to place his monument to the Ten Commandments on private property. He does not have a right to place his monument on public property.

The basis for belief in the Ten Commandments is that they are an edict given to man by God, and that man must obey them or suffer God’s displeasure. Judge Moore specifically wants to use the statehouse to show what he believes is the link between the Ten Commandments and the constitution.

As the 11th Circuit Court of Appeals noted:

Thousands of people enter the Judicial Building each year. In addition to attorneys, parties, judges, and employees, every fourth grader in the state is brought on a tour of the building as part of a field trip to the state capital. No one who enters the building through the main entrance can miss the monument.
Yet there is no rational basis for belief in the Ten Commandments. They are not a refection of reasoned thought on the nature of man and his requirements of survival—such an analysis would reject intrinsic, other-worldly commandments out of hand. The Ten Commandments are an article of faith. The Founders were wise enough to recognize that while the freedom of individuals to their faith must be protected, the faithful do not have the right to use the power of government to establish their religion as the law of the land. In the public ream, reason must rule over all. The government and its agents have no place memorializing faith-based doctrine on public land.

Judge Moore has a right to his beliefs. He does not have the right to use the statehouse to transmit those beliefs to others.

Sunday, August 24, 2003

Proper Mission of Government: U.S. Troops Use Confiscated Iraqi AK-47s

This in from the AP:

An American soldier stands at the side of an Iraqi highway, puts his AK-47 on fully automatic and pulls the trigger.

Within seconds the assault rifle has blasted out 30 rounds. Puffs of dust dance in the air as the bullets smack into the scrubland dirt. Test fire complete.

U.S. troops in Iraq may not have found weapons of mass destruction, but they're certainly getting their hands on the country's stock of Kalashnikovs--and, they say, they need them.

The soldiers based around Baqouba are from an armor battalion, which means they have tanks, Humvees and armored personnel carriers. But they are short on rifles.

A four-man tank crew is issued two M4 assault rifles and four 9mm pistols, relying mostly on the tank's firepower for protection.

But now they are engaged in guerrilla warfare, patrolling narrow roads and goat trails where tanks are less effective. Troops often find themselves dismounting to patrol in smaller vehicles, making rifles essential.

"We just do not have enough rifles to equip all of our soldiers. So in certain circumstances we allow soldiers to have an AK-47. They have to demonstrate some proficiency with the weapon ... demonstrate an ability to use it," said Lt. Col. Mark Young, commander of the 3rd Battalion, 67th Armor Regiment, 4th Infantry Division.
So we just do not have enough rifles to equip all of our soldiers? Why not? Why is an armored regiment running infantry patrols? Why are our fighting men not already provided with a rifle they prefer for the mission they have been given? Why does the United Sates of America have to rely on captured weapons to put down its enemies?

I am disgusted. Any American casualty that results from one of our fighting men not having a proper rifle is an appalling and useless sacrifice. A nation that sends its men to fight for it without providing these men every necessary tool and every practical advantage has lost its moral compass.

Somebody once told me that defenders never get the support they need from those they protect. I hear stories like this one and I begin to wonder if that person was right.

Saturday, August 23, 2003

Rights and Reason: Schumer Faults Bush for Massive Blackout

Chuck Schumer plays the blame game in this week's Democratic radio address:

Under-investment in transmission lines and a weak oversight board controlled by utilities have created an unstable, unreliable and overloaded patchwork system for transmitting power from one place to the other.
Of couse, it could never be the fault of the regulators themselves.

Death by Environmentalism: Thousands Die in European Heat Wave

This summer, an abnormal heat wave struck Europe. We have been accustomed to thinking of Europe as part of the First World, and area where freak natural events did not automatically mean thousands of casualties. For example, flooding last year forced the evacuation of hundreds of thousands in Germany and in the recently Communist Czech Republic. There were no results of hundreds or thousands of deaths. But, surprisingly, this summer's heat in Europe has been linked to 10,000 deaths in France and uncounted deaths throughout Europe. (Numbers were obtained by French undertakers comparing this summer to last summer.)

Why? France is not Bangladesh, not Liberia, not even Mexico. France is a member of the G-7, with an industrial economy, and for all the jokes, a serious country. France has the economic capacity to deal with unexpected problems--or should.

So why are old and sick Frenchmen dying in droves just because it's hot? It's a heat wave, not a meteor strike. It's 100 degrees Fahrenheit, not Celsius. This is not a sudden, unexpected, deadly plague. It's hot, that's all. Why do temperatures in France kill people while the same temperatures mean a hot, but playable golf day in the US. Because Europeans do not, as a rule, have air conditioning.

Patrick J. Michaels, of, explains why. European governments tax energy heavily. Air conditioners are energy hogs, and so, in Europe, they are inordinately expensive. Since they cannot afford to run them, Europeans do not buy them. Since Europeans do not buy them, stores do not sell them.

Why is energy taxed heavily in Europe? To limit consumption. Environmentalism kills.

Note: I apologize for placing Mexico 2003 in the category of Third World states. I realize that Mexico is a member of the OECD and an outside shot for a Major League Baseball franchise in the relatively near future. However, many Americans still remember when Mexico was a Third World country.

Capitalism and the Law: U.S. Man Pleads Guilty to Music Piracy

Reuters reports on the conviction of an online music pirate:

Federal prosecutors on Thursday said a former leader of a group that distributed pirated music ahead of its commercial release pleaded guilty to criminal infringement of copyright laws.

Mark Shumaker, 21, of Orlando, Florida, faces a maximum sentence of five years in prison and a fine of $250,000, the U.S. Attorney for the Eastern District of Virginia said in a statement. A sentencing hearing is scheduled for Nov. 7.

Prosecutors charged that Shumaker headed Apocalypse Crew, a group that would recruit music industry workers, such as radio disc jockeys and employees of music magazines, to obtain pre-release copies of compact disks.

Released to the Internet, the advance copies would filter down to public distribution channels such as the file sharing networks of KaZaa and Morpheus, law enforcement officials charged.
I wonder if Shumaker will get off as lightly as David Smith.

Friday, August 22, 2003

Rights and Reason: 'We Can Do Better'

Vermont governor and presidential candidate Howard Dean spells out his agenda in today's Wall Street Journal:

Promising a "compassionate" administration, President Bush pledged to "recover the momentum of our economy," "reward the effort and enterprise of working Americans" and confront economic problems now, "instead of passing them on to future generations." Instead, he's offered tax cuts that don't address our needs, and saddled our children with debt for generations to come. On this president's watch, the federal debt has grown by over $1 trillion. That's the rough equivalent of putting $3,500 on the charge card of every American.

How did our nation come to this place? The answer is simple--the economic policies of this administration are aimed at ideological goals, not help for the average American.

We can do better. As president, my economic policies will be focused and clear. I will begin by repealing the 2001 and 2003 tax cuts, and using the revenues that result from the repeal to address the needs of the average American, invest in the nation's infrastructure and, through tax reform, put money in the hands of those most likely to spend it.

The task of meeting the needs of American families begins with health care. My plan will not only insure millions of Americans who are without adequate care today, it will reduce costs for small business, states and communities--freeing up funds that can be used to grow businesses and meet other national and local priorities.

An important part of my program for a full-employment recovery will be extending a helping hand to states and communities. My policies as governor kept Vermont strong fiscally; but all over America, the financial resources of other states and cities are strained to the limit. Teachers are being laid off, highways lack repairs, firehouses are closed. Instead of tax cuts that have not created jobs, we need to make investments in America. I will increase federal aid for special education, and provide more temporary help to the states--for homeland security and school construction and infrastructure modernization. And I will increase the availability of capital for small businesses, so that they can invest in new technology and create more jobs.
Dean believes that allowing the people who create wealth keep their fruits of their labor is a foolish ideological flight of fancy, but redistributing it to “average American[s]” is not. By Dean’s account, respecting the individual rights of wealth creators is not a “national and local priorit[y].” Nationalized healthcare is.

How does one defeat a candidate like Dean? I do not think it is enough to show that Dean is “impractical,” one must also show that he is immoral. Dean and his supporters do not understand humankind. Dean believes that one man’s need is a mortgage on the life of another, and that claiming this mortgage is the moral course. To thoroughly expose the viciousness of Dean’s proposals, one must name and attack its moral premise. One must defend egoism.

That ought not to be hard in a nation dedicated to the individual’s right to life, liberty and the pursuit of happiness. The trouble is that Dean’s opponents, the conservatives, share that same premise as Dean at root. That makes me reluctant to write Dean off as the George McGovern of 2004. How can the conservatives attack Dean’s national health care plan when they themselves support things like prescription drug benefits for seniors? Both sides ultimately differ only in degree, and on that question, it is conservatives that looks like hypocrites. Dean’s candidacy is a strong candidacy, if only by the weakness of his opponents.

There is of course an antidote to today’s conservative impotence and that is Objectivism. Yet it remains to be seen if and when Objectivists will play the full role they ought to in the nation’s intellectual and political life. Will Objectivists sit out another election? Will they even attempt to set the terms of the debate to questions that ought to be debated? It remains to be seen.

If politicians like Dean are foolish and evilly inspired, what are those who do little or nothing to defend themselves against them?

Thursday, August 21, 2003

Capitalism and the Law: Spread of 'Sobig.F' Virus Is Fastest Ever

Anick Jesdanun, AP Internet Writer reports that the 'Sobig.F' virus is the fasted propagating computer virus ever.

MessageLabs Inc., which scans e-mail for viruses, said that within 24 hours it had scanned more than 1 million copies of the "F" variant of the "Sobig" virus, which was blamed for computer disruptions at businesses, colleges and other institutions worldwide.

The previous record was "Klez," with about 250,000 copies spotted during its first 24 hours earlier this year, MessageLabs chief technology officer Mark Sunner said Thursday.

* * *

Sobig does not physically damage computers, files or critical data, but it tied up computer and networking resources, forcing networks like the University of Wisconsin-Madison to shut down outside access to its e-mail system Wednesday.

"We were removing 30,000 bad e-mails an hour," said Jeff Savoy, an information security officer at the school.

In India's high-tech city of Bangalore, dozens of cybercafes shut down and home computers blacked out. Some cafes were hit because their service provider was affected, but others got the virus in their machines using Windows operating systems.

"Our cybercafe has been down since Tuesday night," said Afar, a cafe manager in north Bangalore who goes by a single name. "Customers are returning home disappointed."

The owner of one of the Internet's most popular e-mail lists, technologist David Farber, was livid about Sobig.

"I got 1300 junk e-mails `delivered' this AM," he said in a message to subscribers Thursday. "Find the person and put him/her in jail."
What exactly should the punishment be for unleashing a computer virus?

According to, in 2002, David Smith pleaded guilty to creating and unleashing the Melissa computer virus -- the first major virus spread by e-mail. Smith, whose virus caused more than $80 million in damage, was sentenced to 20 months in federal prison.

A computer virus is a pre-meditated attack on the property of others. 20 months for $80 million in property damage--how about 20 years?

The person who created the 'Sobig.F' virus, with its own e-mailing software, clearly hoped to disable the Internet as a whole. If the hundreds of infected e-mails I’ve cleaned off my computer are any indication of what others face, this person has done a good job of it. If this computer virus ends up being linked to Bin Laden, I would say that this was an attack on the civilized world. If this virus ends up being linked to a 40 year old man in his underwear working out of his mom’s basement, I’m almost inclined to hold him in the same contempt. You should not be able to destroy mountains of wealth and walk away from your crime in less than two years.

Foreign Policy: The Pipes Nomination

I found this from David Frum at NRO:

Can we have a moment of appreciation please for the characteristic gutsiness of President Bush’s expected recess appointment of Daniel Pipes to the board of the US Institute for Peace. Radical Muslim groups like the Council on American Islamic Relations had organized to defeat Pipes. Despite the modest importance of the Institute itself, these groups understood that the struggle over Pipes was a potentially decisive political event. For underneath the wild allegations against him (about which more in a moment), the argument over Pipes boiled down to this: is it an act of bigotry to notice that the terrorists we are fighting commit their acts of terror in the name of Islam

Pipes’ critics claimed that it was. All of their other slanders against him quickly collapse on examination into a pile of distorted quotations. Pipes has never impugned Muslims in general – on the contrary, he has been an eloquent voice in favor of the need for and possibility of democracy and liberty in the Islamic world. But he has eloquently and presciently sounded the alert for a decade and a half over the gathering menace of extremist Islamic ideology – and he has fearlessly and tirelessly struggled against that menace as it has tried to sink roots into American soil.

It is for these services to the American people that this scholar who has devoted his life to the study of Islamic civilization, and who has mastered modern and medieval Arabic for his studies, has been damned by CAIR and others as a bigot.

Some people might have feared that CAIR might succeed. President Bush has boldly and consistently championed the rights and good name of the American Muslim community, and he has taken his sympathy for American Muslim to the point of being willing to meet with some of that community’s least responsible members. This openness triggered a familiar pattern of conservative response to President Bush:

Bush speaks gently.

Conservatives panic.

Bush acts firmly.

Conservatives are surprised.

Now issn’t [sic] it past time to stop being surprised when this president acts in a principled manner?

Bush surely understood better than anyone what it was that the radical Muslim groups were claiming when they called for Pipes’ defeat. They were implicitly contending that anyone willing to name the enemy in this war thereby disqualified himself for a role in the prosecution of the war. They were demanding a veto over the conduct of the war for those people in American life who have shown the most sympathy for the enemy: It would be rather as if the leaders of the Communist Party USA asserted veto power over national-security nominations during the Cold War.
Huh? I've read this three times and I still can't figure it out. Does Frum mean that groups like the Council on American Islamic Relations are akin to the old Pinks? I agree with that. But when did President Bush say this? Can’t we applaud the Pipes nomination and still be appalled at the president’s utter failure to say that it is the consistent application of Islam that leads to poverty, murder, and suffering?

Oh, wait, we’d have to see that there is something wrong with faith to do that. And no one at NR is going to be fighting that battle any time soon.

Rights and Reason: The Northeast blackout

Jim Woods is the winner of the "find a parallel between the blackout and The Fountainhead contest" with his entry below.

The recent blackout is a concrete consequence of the elevation a secondhander’s values to governance.

In the electric utility industry, the producer is not free from coercive restraint to produce and trade value for value with his customers. Instead through government intervention, the productive capacity is checked by the requirement to consider the feelings and opinions of anyone and everyone regardless of the protection of individual rights. Thus the rational is subordinated to any arbitrary claim seeking to impose its voice upon the product of another.

Based upon demand for electricity, an electrical utility could plan to expand generating capacity, expand its distribution network, acquire the market of weaker utilities, or implement revolutionary new technology. But first, we must have public hearings, environmental impact studies, the consideration of arbitrary health concerns that lack scientific evidence, and baseless lawsuits appealing to the authority of non-objective law. Instead of profitable investment, capital is squandered on satisfying the whims of the non-productive.

Consequently, productive ability is thwarted while mediocrity reigns. And when the lights go out, the secondhander’s do not accept responsibility, while inflicting upon the productive the double burden of the blame and the shame of begging their inferiors for permission to produce.
Well, there you have it folks.

Wednesday, August 20, 2003

Our Favorites: Dr. Michael Hurd

I greatly enjoy the insight of Dr. Michael Hurd and his "Daily Dose of Reason". Here is a gem that fits perfectly with the EPA story below.

"I hope you still feel small when you stand beside the ocean."

So says a popular song. The implication, clear from the rest of the song, is that man should feel in awe of nature, because nature is far superior to anything human beings can generate.

I don't know about you, but I actually feel tall when I stand beside the ocean.

I feel tall because I belong to the human race, and I know that the human race can sail great ships, even aircraft carriers, on the ocean; I know that gigantic jetliners cross the ocean in the sky; I know the human race can develop sophisticated underwater cameras to photograph century-old shipwrecks with the clarity of a family portrait; I also know that the human race can build wonderful hotels and condominiums, not to mention candy popcorn and salt water taffy stands, to allow human beings to relax and enjoy the wonderful ocean air and sounds.

I feel tall beside the ocean because I am human, and humans can navigate, master and enjoy the ocean better than any fish, whale or bird ever could.

Many look at the ocean and exclaim how tiny they are. I look at the ocean and marvel at how great it is to be human.

Rights and Reason: EPA agrees to clean up scenic skies

Jane Kay, Environment Writer at the San Francisco Chronicle reports on a victory for "Banana* Environmentalists":

The U.S. Environmental Protection Agency signed a court settlement Tuesday intended to clear the skies and improve the views in national parks and wilderness areas.

The settlement with Environmental Defense, a national environmental group, places the EPA on a court-ordered schedule to curb by April 2005 haze-forming pollutants that threaten such national parks as Yosemite, Sequoia, Glacier, Big Bend, Great Smoky Mountains, Shenandoah, Big Bend and Acadia. The deal applies to 156 parks and wilderness areas in all.

Hundreds of industrial plants nationwide could be affected by the settlement, including cement plants, copper smelters and coal-fired power plants in the West that supply energy to California.

The settlement must go through a public comment process and requires approval by a Washington, D.C., court before it takes effect.

"This settlement is a big step toward cleaning up the air in our national parks and wilderness areas," said David Baron, attorney for Earthjustice, a nonprofit legal organization that represents Environmental Defense.

"The law sets a national goal of clearing the skies in these special places, for the enjoyment and inspiration of present and future generations," Baron said.

Under 1977 amendments to the Clean Air Act, industrial plants are prohibited from creating "regional haze" that spoils scenic vistas in parks and wilderness areas. The National Park Service has blamed fine particles created by emissions of sulfur dioxide and nitrogen oxides that blow hundreds of miles and impair visibility in many of its wild parks.
So the enjoyment and inspiration of a pretty view comes before the enjoyment and inspiration made possibe by cement plants, copper smelters and coal-fired power plants. Brilliant.

*BANANA--Build Absolutely Nothing Anywhere Near Anything.

Rights and Reason: Ala. Ten Commandments Group Holds Vigil

Saw this report by Bob Johnson of the AP:

Supporters of Alabama Chief Justice Roy Moore held a candlelight vigil early Wednesday, hoping to convince state and federal leaders that his Ten Commandments monument should not be removed from the state judicial building.

Nine pastors led some 30 worshippers from across the country in prayer just after midnight.

"Even if they should remove this monument--and God forbid they do--they'll never be able to remove it from our hearts," said the Rev. Greg Dixon of Indianapolis Baptist Temple.

Moore later reiterated his refusal to move the 5,300-pound monument by the deadline, set by a federal judge, of midnight Wednesday.

"This case is not about a monument, it's not about politics or religion, it's about the acknowledgment of God," he said during an interview on CBS' "The Early Show."

"We must acknowledge God because our constitution says our justice system is established upon God. For (the judge) to say 'I can't say who God is' is to disestablish the justice system of this state."
That's an interesting statement by Roy Moore. I checked my copy of the constitution and found no mention of "God" (there is mention that the constitution was "done in Convention by the Unanimous Consent of the States present the Seventeenth Day of September in the Year of our Lord one thousand seven hundred and Eighty seven," but I don't think that establishes the Lord as the foundation of the American system of justice).

I did find this in Article III, Section One however:

The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish.
Maybe Moore thinks Congress is Lord almighty, as they "ordain and establish" the lower courts. Hmmmm . . .

Rights and Reason: The Northeast blackout

At CAC, we have come across more than one comparison between the blackout and Atlas Shrugged. Elementary, my dear Objectivists. Here's our charge to you: find a good parallel between the blackout and The Fountainhead.

Submit your entrees to Best integration gets bragging rights and their integration featured in tomorrow's Rule of Reason.

Tuesday, August 19, 2003

Rights and Reason: FCC to Allow Video on AOL Messenger

This from Jonathan Krim of the Washington Post:

The Federal Communications Commission has agreed to allow America Online to transmit video entertainment over its popular Instant Messenger system, ending a restriction imposed when it approved the merger of the online company with media giant Time Warner Communications in early 2001.

A source familiar with this week's decision said that the commission's three-member Republican majority decided in favor of lifting the ban while the two Democrats dissented. The result of the vote, which is not required to be conducted in a public session, is expected to be announced in the next 48 hours.

The decision is a victory for struggling AOL Time Warner Inc., which lobbied hard for the change and hopes to use instant messaging to promote its video content. AOL spokeswoman Tricia Primrose declined to comment on the decision before an official announcement from the FCC but said the company has been hoping for a favorable decision.

"We think that we made a compelling case," Primrose said.

FCC spokesmen declined to comment.

AOL and Time Warner were primarily in different businesses when they announced their merger in early 2000. But regulators were concerned about the marriage of the largest online service provider with one of the nation's most powerful media conglomerates.

They reasoned that a combined company that included a large cable television system, magazines, CNN, and Warner movies and music could dominate news and entertainment over the Internet and lock out competitors.
Well thank God our federal fathers were protecting us from video transmitted via Instant Messenger. Until they changed their minds, of course.

And I'm glad AOL spokeswoman Tricia Primrose is pleased with AOL's "compelling case" to the FCC. I wonder if anywhere in that case was there an argument that AOL has a right to its property and that was outright idiotic for the government to regulate IM in the first place. The Post article would indicate there was not.

When it approved the [Time-Warner/AOL] merger, the FCC said it would need to see convincing evidence that AOL's instant-messaging dominance had significantly lessened.

According to people familiar with the vote to lift the ban, AOL prevailed by demonstrating that since the merger, its share of the instant-messaging market had dropped from a percentage in the mid-sixties to the mid-fifties.
I wonder if it bothers AOL that their ability to improve their product and profit accordingly hinges not on their technological ability, but on their declining share of the market.

Crime and Punishment: E-mail virus attack

CAC's e-mail is being spoofed along with a virus. As much as I would like to see the perp's punished under the full weight of the law, there is not much we can do. E-mail spoofing is practically impossible to track.

Needless to say, if you get an e-mail attachment from CAC or someone claiming to be CAC and you don't know us, don't open the attachment.

Humor: Bride in Conn. Rages at Reception, Jailed

OK, this has nothing to do with capitalism, but . . . the AP reports:

A North Haven bride spent part of her wedding night in a jail cell, after police said she hurled things at reception hall workers who closed the bar.

Adrienne T. Samen, 18, was arrested on criminal mischief and breach of peace charges Saturday after police responded to The Mill on the River restaurant.

When workers there closed the bar, Samen allegedly began throwing things, including wedding cake and vases. Samen left the restaurant, and police found her walking down the road in her gown.

While being taken into custody, police said she kicked the door and window of the police cruiser and tried to bite an officer.
It's her mug shot that has me in tears. See here.

Foreign Policy: 'Bush Good, Saddam Bad!'

A motivated Marine Lance Corporal reports from Iraq in today's Wall Street Journal:

There's more to America than New York, Washington and Los Angeles. The same is true for Iraq; there's a vast country outside Baghdad and the "Sunni triangle" that's now the center of a guerrilla campaign. It's understandable that Western press reports are fixated on attacks that kill American soldiers. But that focus is obscuring what's actually happening in the rest of the country--and it misleads the public into thinking that Iraqis are growing angry and impatient with their liberators.

In fact, there is another Iraq that the media virtually ignore. It is guarded by the First Marine Division, and, unlike Baghdad, it has been a model of success. The streets are safe, petty and violent crime are low, water and electrical services are almost universally available (albeit rationed), and ordinary Iraqis are beginning to clean up and rebuild their neighborhoods and communities. Equally important, a deep level of mutual trust and respect has developed between the Marines and the populace here in central and southern Iraq.

I know because I'm one of those Marines. My reserve unit was activated before the war, and in April my team arrived in this small city roughly 60 miles south of Baghdad. The negative media portrait of the situation in Iraq doesn't correspond with what I've seen. Indeed, we were treated as liberating heroes when we arrived four months ago, and we continue to enjoy amicable relations with the local populace.
Well, what do you know. Jut!!

Antitrust News: Cellulose Antitrust Classes Certified

This from

A federal judge in Pennsylvania has certified three separate classes of purchasers to pursue antitrust claims against two of the world's top manufacturers of microcrystalline cellulose, or MCC, a binding agent used in pills and vitamins and as a food additive.

In a significant victory for the plaintiffs in the case, In re Microcrystalline Cellulose Antitrust Litigation, the judge applied the "Bogosian short-cut" -- named for a 1977 decision by the 3rd U.S. Circuit Court of Appeals -- in which the court presumes that all buyers of that product have suffered an antitrust injury where the anti-competitive behavior artificially raised the price of a product.

In the suit, purchasers allege that Chicago-based FMC Corp. set out to neutralize competition in the MCC market and to secure monopoly power for itself in North America by conspiring with a Japanese firm, Asahi Kasei Co., to divide the world MCC market into two territories.

The alleged conspiracy came to light in December 2000 when the Federal Trade Commission filed a complaint that said FMC had agreed not to sell any MCC product to customers in Japan or East Asia without Asahi's consent, while Asahi promised not to sell in North America or Europe without the consent of FMC.

The FTC suit also accused FMC of trying to secure agreements with three smaller Asian manufacturers of MCC in order to maintain its monopoly position.

FMC and Asahi settled the suit with a consent decree in which both companies offered no admission of wrongdoing but nonetheless pledged to end the practice.

Under the terms of the settlement, FMC and Asahi were prohibited from agreeing with competitors to divide or allocate markets; agreeing with competitors to refrain from producing, selling or marketing MCC; and inviting or soliciting other companies to enter into agreements not to compete.

The settlement sparked a flurry of lawsuits brought by purchasers of MCC -- pharmaceutical companies, vitamin producers and food manufacturers -- that said the illegal practice had inflated MCC prices since 1984. Now Senior U.S. District Judge Thomas N. O'Neill Jr. has certified the suit as a class action on behalf of three classes of FMC's customers -- vitamin producers, pharmaceutical companies, and companies that purchased MCC to be used as a food additive.
The lure of treble damages is a powerful incentive.

Rights and Reason: Majority Favors Law Against Gay Marriage

This from Will Lester of the AP:

More than half of Americans favor a law barring gay marriage and specifying wedlock be between a man and a woman, an Associated Press poll found.

The survey also found presidential candidates could face a backlash if they support gay marriage or civil unions, which provide gay couples the legal rights and benefits of marriage.

The poll, conducted for the AP by ICR-International Communications Research of Media, Pa., found 52 percent favor a law banning gay marriages, while 41 percent oppose it.

About four in 10 — 41 percent — support allowing civil unions, roughly the same level found in an AP poll three years ago. But 53 percent now say they oppose civil unions, up from 46 percent in the earlier survey.

The increase came largely from people who previously were undecided, the polls suggested.

Close to half those surveyed said they would be less likely to support a presidential candidate who backs civil unions (44 percent) or gay marriage (49 percent), while only around 10 percent said they would be more likely.

"I don't think it's a great idea, the whole idea of marriage is bringing up children," said Jim Martin, a 64-year-old engineer from Alexandria, Va. "If somebody was promoting it, I would vote against them."
Well, Mr. Martin from Alexandria is wrong. Marriage is whatever the parties involved choose to make it, and Mr. Martin's opinion on marriage is patently irrelevant. Not finding the raw poll data on the web, I can't comment on the question, but I'm intrigued as to exactly what was asked. I doubt it was "do adults have a right to set the terms of their relationships without restraint by others."

But whatever question was asked, it is disturbing that the rights of gays to the advantages of legal recognition of their relationships is denied them, simply because they are a pariah group in the eyes of many. The principle of individual rights has yet to animate this debate, and I find that appaling.

Monday, August 18, 2003

Rights and Reason: Recall Republicans Must Stand for Individual Rights

Scott Holleran hits it on the mark at Capitalism Magazine:

Not long ago, the GOP offered an alternative to Big Government: individual rights, which were once implicit as the Republican Party's premise. The Republican philosophy was represented by the late Arizona Sen. Barry Goldwater, who opposed Medicare, favored a woman's right to an abortion, and promoted a strong defense. With the election of Ronald Reagan in 1980, religion replaced individual rights as the guiding Republican philosophy.

To the extent Americans have resisted theocratic notions of government, the GOP's religious right domination is mixed with pragmatism, resulting in a Republican Party whose goal is a smaller welfare state under God. The arch proponent of this blend is the GOP's standard-bearer, faith-based President Bush, who is pushing the largest expansion of Medicare since it was enacted in 1965.

Contrary to Jefferson's contention that the best government is that which governs the least, today's Republicans increase public school subsidies. While Goldwater opposed Medicare, today's Republicans expand it. Individual rights -- the right to own property, to make money and to be left alone -- have no meaningful place in the Republican Party.

Goldwater's defiant cry that extremism in the defense of liberty is no vice and moderation in the pursuit of justice is no virtue, has been abandoned. Before the party that cheered Goldwater at the 1964 San Francisco convention recalls California's governor, the GOP must restore individual rights as their essential philosophical principle. Then, Republicans will win elections -- or, in losing, they will at least have been right.

The Culture: The Northeast Blackout

Do you remember the year 2000 bug? How civilization was supposed to come unglued when all the computers crashed. Didn't happen. Nor did the northeast come unglued despite being without power last Friday and Saturday. Makes you wonder what the motives of all they naysayers are.

Friday, August 15, 2003

Rights And Reason: Evolution and Intellectual Egalitarianism

The Bad News is that according to The New York Times, 72% of Americans are pig-ignorant.

The Good News is, the New York Times overstates our ignorance by about 20%.

The Bad News is, by my calculations, about 20% of Americans think that ignorance and science should both be taught in public schools as electives.

When I read the New York Times' Nicholas Kristof this morning, I had a mild case of panic. I wasn't surprised by the numbers on Americans' belief in the Virgin Birth(83%), but I was shaken by the low number of Americans Kristof cites as believing in evolution: 28%.

After a bit, I decided to check Kristof's sources. In his "Kristof Responds" section, Kristof says his 28% of Americans believe in evolution comes from "a Gallup poll." Way to footnote, Kristof. You're at the New York Times, can't you get a sucker, er, intern, to work for free at making your weblog not stink? Anyway, googling "evolution gallup poll 28" yields, which describes a Gallup poll from 1999 on teaching evolution and creationism in public schools. According to the press release, "only 28% say evolution should be a required subject in public schools, and 49% say it should be an elective." My guess is that some of this could be just crabgrass libertarianism—"whatever they want, it's a free country, different strokes for different folks" kind of thing, like allowing Christian Scientists to withhold lifesaving medical treatment from their kids, or allowing crazy people to wander the streets if they don't feel like taking their medication.

Since the Center has higher standards than the New York Times, I did a little bit of research before I put something out for public consumption, as well as supplying links for the interested or dubious to follow. I went ahead and found a description of a Gallup poll on evolution itself: When asked what they believe, rather than about what should be taught in school, America breaks down about 45-50% biblical creationists, 40% theistic evolutionists, 10% naturalistic evolutionists. Since, logically, if there is a God and if there is evolution, He's going to have a thumb in the evolution pie, we're talking about a 50-50 split between recognizable forms of rational thought and proud, militant ignorance.

The more I've thought about this, the more I've wondered just what I meant by "crabgrass libertarianism." What it really is, under the surface, is intellectual egalitarianism—the idea that any belief is as good as any other belief. This idea combines with our culture's abhorrence of judgement. It's rude, you know, to mock creationists. It's insensitive to ridicule snake-handlers, astrologists, that fraud who talks to dead people on the Sci-Fi channel, charlatans like Deepak Chopra who claims to levitate, Reverend Sun Yung Moon mass-marrying cultists, the Natural Law Party, recovered-memory therapists and their poor dupes, alien abductees, people who study the Book of Revelations for portents, wiccans who "cast spells", Scientologists, etc.

Think of the times in our culture today when open scorn for a religion is expressed. Usually, the targets are either the Catholic Church or conservative Christians, and the grievance is that their religion is homophobic and/or misogynist. In other words, the religions are attacked, not for their logical merits or lack thereof, which can be debated, but because they make women and homosexuals feel unwelcome.

The result is a large slice of the population that, while not ignorant themselves, recognizes no important distinction between their own knowledge and someone else's creationist delusion. This is the climate allows half of Americans to believe and state in public that humans were divinely created in the last 10,000 years, without fear of censure.

What will happen when, soon, unassimilated Islamic nutburgers in America start making demands? When Moslems in America demand to live under "Islamic law"?

People who believe indefensible or silly or false things are free to do so. But they should be held to account, and should have to defend their silly or false beliefs. If they are embarrassed, then good—hopefully they will act to correct their ignorance, and we will all be better off.

Rights and Reason: A 'Big Government Conservatism'

In today's Wall Street Journal Fred Barnes calls President Bush a "big government conservative" and writes the following:

The essence of Mr. Bush's big government conservatism is a trade-off. To gain free-market reforms and expand individual choice, he's willing to broaden programs and increase spending. Thus his aim in proposing to add a prescription drug benefit to Medicare is to reform the entire health-care system for seniors. True, the drug benefit would be the biggest new entitlement in 40 years. But if paired with reforms that lure seniors away from Medicare and into private health insurance, Mr. Bush sees the benefit as an affordable (and very popular) price to pay. Mr. Bush earlier wanted to go further, requiring seniors to switch to private health insurance to be eligible for the drug benefit. He dropped the requirement when queasy congressional Republicans balked. Now it's uncertain whether Congress will pass a Medicare bill with sufficient market incentives to justify Mr. Bush's approval. Should he sign a measure without significant reforms, he won't be acting as a big government conservative.

On education, Mr. Bush and Mr. Kennedy joined to pass the No Child Left Behind Act. Its only real reform was a mandate for states to test student achievement on the basis of federal standards. Many conservatives, including some on the president's staff, felt this wasn't sufficient reform to warrant boosting the federal share of education spending. Still, Mr. Kennedy and other liberals aren't happy either. They'd expected even more spending.

When I coined the phrase "big government conservative" years ago, I had certain traits in mind. Mr. Bush has all of them. First, he's realistic. He understands why Mr. Reagan failed to reduce the size of the federal government and why Newt Gingrich and the GOP revolutionaries failed as well. The reason: People like big government so long as it's not a huge drag on the economy. So Mr. Bush abandoned the all-but-hopeless fight that Mr. Reagan and conservatives on Capitol Hill had waged to jettison the Department of Education. Instead, he's opted to infuse the department with conservative goals.

A second trait is a programmatic bent. Big government conservatives prefer to be in favor of things because that puts them on the political offensive. Promoting spending cuts/minimalist government doesn't do that. Mr. Bush has famously defined himself as a compassionate conservative with a positive agenda. Almost by definition, this makes him a big government conservative. His most ambitious program is his faith-based initiative. It would use government funds to expand social programs run by religious organizations. Many of them have been effective in fighting drug/alcohol addiction and helping lift people out of poverty. So far, the initiative has had only a small impact, its scope limited by Congress.

Another trait is a far more benign view of government than traditional conservatives have. Big government conservatives are favorably disposed toward what neoconservative Irving Kristol has called a "conservative welfare state." (Neocons tend to be big government conservatives.) This means they support transfer payments that have a neutral or beneficial effect (Social Security, Medicare, Medicaid) and oppose those that subsidize bad behavior (welfare). Mr. Bush wants to reform Social Security and Medicare but not shrink either.

Mr. Bush has never put a name on his political philosophy, though he once joked that it was based on the premise that you could fool some of the people all of the time and he intended to concentrate on those people. An aide characterized Bushism as "an activist, reforming conservatism that recognizes it's sometimes necessary to use the power of the government to change the status quo." I doubt that Mr. Bush would put it that way, but at least it distinguishes him from the ordinary run of conservatives. He's a different breed.
So President Bush has never put a name on his political philosophy. I will. It’s pragmatism. Bush (and Barnes) think it’s hopeless to defeat the advocates of state power, so if you can’t beat them, join them. How uninspired. This from two champions—or semi-champions—of free enterprise.

Trouble is, you can’t have your cake and eat it too. You can’t have big government and freedom from big government simultaneously. Yet Bush (and Barnes) seem to think otherwise, and that they are "realistic" for thinking so.

The conservatives do not deserve the mantle of defenders of capitalism. More than anyone, it is the conservatives who represent the largest threat to capitalism—it is only though their half-hearted and inconsistent defense of capitalism and individual rights that capitalism’s enemies have power.

Not all of us are so easily disarmed, or so easily dissuaded, as the conservatives. It is not hard to defend individual rights—if you know how to argue. But frankly, where Objectivism fails is not the strength of its principles, but in the faint tone its adherents make as they state their case to the world.

Some think that Atlas Shrugged alone is enough to change the world. As powerful a force as Atlas can be, the history of the past 46 years shows us that it is not enough. If America—and the world are to change, we need more.

Thursday, August 14, 2003

Rights and Reason: Stair-Climbing Wheelchair Gets FDA's OK

This from the AP:

It's complicated and carries a hefty pricetag, but the federally approved iBOT wheelchair promises to give some of the nation's 2 million wheelchair users new freedom of movement, even allowing them to climb stairs.

The Food and Drug Administration (news - web sites) on Wednesday authorized the sale of the iBOT, which uses sensors and gyroscopes to climb up and down stairs. It also shifts into four-wheel drive to navigate grassy hills and can lift its occupant to standing height.

Doctors have called the technology potentially revolutionary and the FDA termed it a breakthrough, but one so complex that, unlike other wheelchairs, it will require a doctor's prescription and special training before patients can buy an iBOT.
It's a wheelchair. Where does the FDA get the authority to approve a wheelchair? Where does it get the authority to require a prescription for a wheelchair? Why aren't people rioting in front of the FDA? Why aren't they burning their representatives of Congress in effigy?

This in a nation whose founders rioted over tea.

Rights & Reason: On Pricing

Virginia Postrel has a superb column in today's, cough, New York Times on prices and how regulators fail to understand the true context of price competition:
Prices capture the relative value people put on intangibles. The price system lets individuals make trade-offs among goods, without having to articulate a "good reason" for their preferences. It rewards value you cannot easily count.

Some critics find that wasteful. "Addiction to a strict and unremitting valuation of all things in terms of price and profit" leaves executives "unfit to appreciate those technological facts that can be formulated only in terms of tangible mechanical performance," Thorstein Veblen wrote in 1921 in "The Engineers and the Price System."

Veblen's critiques still influence both intellectual opinion and practical policy. His intellectual heirs, like the economists Robert Frank and Juliet Schor, treat the intangible pleasures of style as either deceptive "salesmanship" (Veblen's term) or wasteful status competition.

Public policy often regards aesthetic value as illegitimate or nonexistent. This oversight comes less from ideological conviction than from technocratic practice. Unlike prices, regulatory policy requires articulated justifications and objective standards. So policy makers emphasize measurable factors and ignore subjective pleasures.
The FTC and DOJ, of course, have mastered (if not monopolized) the talent of reducing price competition to technocratic factors. Take the Justice Department's response in the Mountain Health Care case to several customers' complaints that they were pleased with the service--and by extension, the pricing--of Mountain. The DOJ dismissed the consumer's "subjective" judgment by declaring "they could have received lower prices and better service with competition." This statement was not accompanied by any factual evidence such as a study or even a description of the marketplace. The DOJ simply decided that no reasonable consumer could want to receive medical services from Mountain, and that the only reason they did patronize the group was because of Mountain's "coercive" power over the marketplace.

I do, however, quibble with Postrel's theory that regulators do not emphasize "ideological conviction" over technocratic practice. While that's true in many cases, there is, at least in antitrust, a core regulatory principle--competition as a primary. Time and time again, the FTC and DOJ state their premise that competition--not individual rights--is the organizing principle of society, and that all government action must be directed at protecting competition from those who would harm it. This means that individuals and businesses that do not "compete", i.e. lower prices to the government's satisfaction, are committing a heretical offense against society. Capitalism and individual rights are to the FTC what gay marriage is to the Family Research Council, an abomination that should never be spoken about, let alone implemented.

And with that, I'm off on a blogging recess. Expect to hear from me again sometime after Labor Day.

Wednesday, August 13, 2003

Rights and Reason: President Bush can undo his worst economic mistake

The Wall Street Journal has a good op-ed on the wrongheadedness of President Bush's steel tariffs.

The President has been quiet about his tariffs ever since he imposed them in March 2002, and with good reason. The evidence is that they've done far more economic harm than good, especially to American manufacturing. Designed to help only a single industry, the tariffs have instead punished the far more numerous industries that use steel.

In the wake of the tariffs, domestic steel prices have risen by 30% or more. The price of hot-rolled steel, a major industrial commodity, nearly doubled from late 2001 to July 2002. Shortages in specific products abound, as foreign steel makers have sent their steel to suppliers in other countries. Many steel consumers have struggled to find reliable, quality product at prices that keep them competitive with foreign manufacturers.

This has all cost American jobs. A study done this year for the Consuming Industries Trade Action Coalition found that higher steel prices cost some 200,000 American jobs and $4 billion in lost wages from last February to November. That compares to employment in the entire domestic steel industry of only 188,000. No fewer than 16 states lost at least 4,500 steel consuming jobs, including the key Presidential election states of Pennsylvania and Florida that each lost nearly twice that number. (Karl Rove, see Electoral College map.)

The specific job consequences were laid out in illuminating detail on the Senate floor last month by Tennessee's Lamar Alexander. The Republican noted his state is now home to 900 auto supply companies that employ 100,000 workers. When those companies couldn't raise prices to cover increased steel costs, they "suffered losses and began to lay off employees. In a few instances entire plants closed." Auto supplier ArvinMeritor closed a plant employing 317 in Gordonsville. A plant in Pulaski laid off 100 more.
Exactly. And as the Journal observes:

Rarely do American Presidents get such a clean chance to amend their economic blunders as Mr. Bush now has with steel. Lifting the tariffs would do more to help workers and create jobs than all of the media road shows and economic summits from here to Election Day.

Tuesday, August 12, 2003

Rights and Reason: Man Sues Bureaucrats in China Over Name

This report from Elaine Kurtenbach, AP Business Writer:

SHANGHAI, China - An aspiring businessman hoping to tap China's growing enthusiasm for capitalism is suing communist bureaucrats who vetoed his plan to register a company whose name includes the once-taboo word, "capitalist."

Lu Yuzhang tried to register his "Shanghai Capitalist Competition Capability Consulting Co. Ltd." as a private company earlier this year, but he said officials rejected the name as "politically sensitive" and detrimental to national interests.

Seeking recourse through the courts, Lu sued the city commercial bureau officials, demanding they reverse their decision and approve his company name.

"Capitalists and capitalism exist in China. That's a fact," said Lu, a recent college graduate. "The calling of capitalism is absolutely legal and in line with the national benefits."

Lu's suit has prompted a minor debate in Shanghai's state-run media, with some experts accusing the young businessman of seeking publicity and others backing his demands as reasonable and legal.

"Western multinationals have been asked to invest in China to `exploit' Chinese workers. Leading capitalists from those countries are serving as advisers to the mayors of Shanghai and Beijing," noted a commentary in the Shanghai Star.

"All these things would have been regarded as sheer capitalism three decades ago," it said.

Lu said he plans to appeal if he loses.

"I will insist," he said.
He should.

Antitrust News:Indie Music Retailers Sue Best Buy

This report in from Ed Christman at Billboard:

A group of independent music retailers has filed a class-action lawsuit against Best Buy Co. Inc., alleging that the chain violates U.S. antitrust laws, as well as California state laws, that govern loss-leader selling, the strategy of pricing product below cost.

In the lawsuit -- filed Aug. 6 in U.S. District Court for the Central District of California, Western Division -- the plaintiffs charge that Best Buy uses its clout to receive benefits from the major labels that are not generally available to the chain's competitors. The plaintiffs in the case are Mad Rhino, Boo Boo Records, Lou's Records, Dimple Records and Rand Foster of Fingerprints.

The lawsuit says Best Buy is "able to extract from the major record companies an additional 10% discount vis-a-vis other purchasers" and receives advertising and other allowances not generally granted to other merchants. According to the complaint, these favorable prices, terms and conditions allow Best Buy to sell new albums as loss leaders, diverting massive amounts of business away from its competitors.

The complaint alleges that Best Buy has knowingly received favorable and discriminatory prices on new albums, a practice that violates the Robinson-Patman Act. Also, the complaint says that Best Buy's below-cost pricing is a way of injuring competitors or destroying competition, in violation of the California Business and Professions Code. California has a state law that merchants must price product at least 6% above cost.

The lawsuit asks for treble damages and legal fees.
But wouldn't Best Buy's purchasing leverage benefit consumers? Oh, I forget. Under antitrust, a business can be punished for selling too high, too low, or the same as others. I'm glad antitrust law is of sufficient breadth to cover all these instances.

Strange But True: The air gets thin in Denver

This from the AP:

Voters will get to decide this November whether the city should do more to reduce stress.

City council members said Monday they were forced to put the question on November's ballot because resident Jeff Peckman collected 2,462 certified signatures, slightly over the required number.


Peckman said the council members should favor his proposal because it supports their duty under the U.S. Constitution to provide for the common defense and ensure domestic tranquility.
Er, sure. Consider this snippet from the proposed initiative:

According to one promising theory, warfare and other social violence are caused by social stress. If the stresses in the social atmosphere mount too high - if political, economic, religious and ethnic tensions reach the breaking point - then they erupt as crime, warfare and terrorism. To reduce social violence, therefore - to reduce crime, warfare and terrorism, social stress and tension must be reduced.

One example of a peace-creating program: Many approaches exist for reducing stress in individuals, families and communities through proper behavior, wholesome food and herbal medicines, natural healthcare and exercise, holistic education and specific types of meditation and music, etc. At least one program for dissolving social stress on a national and global scale, as well, has already been scientifically validated. This consciousness-based approach has worked every time - as measured by reduced crime, accidents, fires, substance abuse, warfare and terrorism, and yet in a completely peaceful way.

Medical science has already accepted that meditation by any one individual will dissolve stress in that individual. The result is reduced anxiety, heart disease and other stress-related disorders. The new research - 50 demonstrations written up in 23 scientific studies published in peer-reviewed academic journals - shows that meditation by large groups dissolves stress in society as a whole, and even around the world. The result: reduced crime, war and terrorism.
With logic like that, who could ever vote "no"?

Sports: Remembering the Miracle Worker

Eric McErlain posts a fitting tribute to the late Herb Brooks on his blog:
I never knew Herb Brooks. I never saw him in person, and after the 1980 Olympic Games in Lake Placid, never rooted for a team he coached.

Then why have I been walking around all evening feeling like I've been gut punched?

It may be hard for readers even just a few years younger than me to understand, but even back then as a 12-year old, I could tell that things just weren't right in America. The nation was locked in a recession, with gasoline rationing a recent memory. Our nation seemed impotent in the face of a radical Islamic regime in Iran that invaded our Embassy and took its staff hostage. The Cold War was real, and we didn't know if the good guys were going to win.

Enter Brooks and a team of college kids he had molded into a fiery squad that at times may have hated and resented him more than the Olympic opposition. Brooks had taken the 1980 team on a brutal pre-Olympic tour that culminated in an exhibition against the powerful Soviets at Madison Square Garden just a week before the start of the Games in Lake Placid.

I can still remember begging my father to take me. And I should feel lucky that he didn't, as the Russians cruised to a 10-3 victory, hardly noticing the Americans at all. Heading to Lake Placid, expectations couldn't have been lower.

Which made what happened next all the more delightfully improbable. The Olympic Tournament started quietly enough, as the team salvaged a last-minute tie with Sweden, then rolled through the rest of the preliminary round without a loss and earned another date with the Soviets in the medal round.

In a 300-channel universe with satellite tv and digital cable, can anyone still understand the concept of tape delay? But that's what the geniuses at ABC served up for us on that February evening, not starting the telecast until 5:00 p.m. in the East, several hours after the game had already begun.

But this was a miracle we're talking about, and the weekend would be magic. Even today, nearly a quarter century later, when I watch the highlights of Al Michaels counting down the final seconds of the 4-3 win over the Soviets the tension all comes flooding back, as if the Soviets might actually be able to tear a rift in time and come out on top.

But it wasn't over yet. Team USA still had to beat Finland on Sunday morning in order to win the gold medal. How Brooks was able to bring his team down from such an emotional high on Friday, and then have them focused for success on Sunday has to be one of the greatest coaching achievements of all time.

But bring them down he did, and a 4-2 win secured the gold for the Americans. And then, over the next few weeks, something equally improbable happened. All over the country, after being out of fashion for some time, it became ok to say you loved your country again. Full throated, flag waving patriotism was back, and it was Brooks and 20 kids with names Eruzione, Schneider, O'Callahan, Craig, Christian, and all the others, that made it happen.

Yesterday, on a highway outside of Minneapolis, America lost a hero. A team lost it coach. A family lost its father. And I said goodbye to a cherished piece of my childhood. Rest in peace, Herb Brooks. And thank you. Thank you for more than you could ever know.

Rights and Reason: Automakers Settle With Calif. Regulators

Brian Melley of the Associated Press reports that three automakers have settled their lawsuits challenging California’s auto emissions regulations:

Under terms of the deal, General Motors, DaimlerChrysler and Isuzu will not challenge new regulations for creating low-polluting and nonpolluting cars. In turn, the state will drop its appeals of lawsuits brought by automakers, said Jerry Martin, an Air Resources Board spokesman.

The settlement, scheduled to be announced Tuesday, strengthens the possibility that automakers will be forced to build cleaner cars rather than continue fighting to weaken the emissions rules.

"We get to start getting the cars on the road so California breathers can get what they expect from us, cleaner air," Martin said.

A GM spokesman in California who spoke on condition of anonymity confirmed the settlement and said it depends on the air board adopting the rules as they now stand. The board changed its emissions regulations in April, but they are still in a public comment period and subject to change.

The automakers and car dealers in the San Joaquin Valley successfully challenged California's landmark 1990 requirement that 10 percent of cars sold in the state this year — about 100,000 vehicles — be nonpolluting.

They charged that the state overstepped its authority and was setting fuel efficiency policy that can only be set by the federal government.

A federal judge in Fresno agreed in June last year and ordered the state to put the regulations on hold. Automakers also won a round in state court.

The air board appealed the federal ruling, claiming they enacted sound air pollution control policy and that any improved mileage was a benefit to drivers. Environmentalists joined state regulators in the appeal, while the Bush administration sided with automakers.
The California auto emissions regulation is a troubling mandate. It places the responsibility for smog on automakers, instead of drivers. It forces drivers into smaller, lighter cars, despite their obvious preference for larger vehicles. It also treats the state as a homogeneous whole, instead of specifically targeting smog afflicted areas, and drivers who drive during periods of smog risk.

There also is the larger question of just who are the victims of smog and what damages do they suffer. Not being able to see 100 miles on a summer day is not an actionable tort. Asthma, if proven to be caused by smog, probably is.

At rough glance, I think the question of smog could be alleviated if roads were private and we approached the problem from the common law instead of regulation. Road owners would charge tolls, and those tolls could be raised during periods of high smog. If there are victims of smog, their damages could be compensated by common law torts and paid out by the road tolls.

Vehicles could also be given a smog rating that would be the basis for computing their tolls. If you drive a non-polluting vehicle, no responsibility for smog is placed on you. If you require a polluting vehicle, and you do drive it during periods of smog risk, you are assessed your toll based on your level of culpability.

Under this system, pollution generators pay when their pollution impacts others, and are left free when it doesn’t.

I put this out, not on the grounds that I have a fully formed answer to this problem, but that I think the principle of individual rights ought to drive the debate. Environmentalists have owned the smog problem for too long. The simple fact is that if smog does impact people’s lives for the negative, it ought not to be taken as metaphysically given. People who burn fuel inefficiently produce smog. In smog afflicted areas, we ought not to give up civilization to alleviate smog, but, even if the contribution is infinitesimal, those responsible for creating smog are still responsible for the negative effects of their actions. I think it stands that they be held accountable under the common law.

Rights & Reason: Copps v. FCC v. Consumers

FCC Commissioner Michael Copps is the FCC:
Last August WNEW-FM in New York ran an Opie & Anthony show which allegedly contained a broadcast of sexual activity at St. Patrick’s Cathedral as part of an on-air stunt. The Federal Communications Commission (FCC) received numerous outraged e-mails and phone calls complaining that this broadcast violated a federal law against indecent programming.

One year later the FCC has failed to even address these complaints. Commissioner Michael J. Copps reacted: “When we allow complaints to languish for a year, the message is loud and clear that the FCC is not serious about enforcing our nation’s laws. Congress expected action from the FCC, but all too often our citizens’ complaints are ignored.”

Copps continued: “I wonder when the FCC will finally take a firm stand against the ‘race to the bottom’ as stations continue to push the envelope of outrageousness even further.” Recently, the FCC proposed a mere $27,500 fine against another station owned by this same company – on WKRK-FM in Detroit – after it aired some of the most vulgar and disgusting indecency that the Commission has examined.

Copps stated: “Nothing has changed over the past year in the FCC’s enforcement of the indecency laws. And at the same time, the Commission’s actions have ensured that things will get even worse.” Instead of enforcing indecency laws, the FCC recently rewarded giant station owners by dismantling the FCC’s media concentration protections. The FCC took this action without even considering whether there is a link between increasing media consolidation and increasing indecency on our airwaves. Copps explained: “It stands to reason that as media conglomerates grow ever bigger and control moves further away from the local community, community standards go by the boards. It is a time to increase, not diminish, our vigilance and our enforcement of the law.”

Copps concluded: “The time has come for the Commission to send a message that it is serious about enforcing the indecency laws. Yet, we continue to turn a deaf ear to the millions of Americans who are fed up with the patently offensive programming coming their way so much of the time.”
This is a clever attempt by Copps to take another swing at the FCC's decision to raise the media ownership cap--a move Copps voted against--by trying to introduce the "indecency" card. You would think someone who is allegedly an expert in the communications market would realize "community standards" is an antiquated and ultimately irrational standard to apply in the modern media age. After all, what "community" gets to decide the standards? By Copps' way of thinking, it should be the most puritanical, easily offended, pro-regulation types who get their way.

Opie and Anthony may be crude--I certainly don't listen to that sort of programming--but if enough people tune-in to make the show profitable for their host station, than the FCC shouldn't get in the way. Unless the FCC thinks itself to be the proper judge of what consumers should want to listen to. Remember, the people who complain the loudest about "indecent" programming are generally not the ones actually listening to the offending programs. But if you accept regulation, rather than individual rights, as the moral basis of society, you believe that your tastes and preferences must be statically imposed upon the national as a whole--in the name of the "public interest" of course.

Antitrust News: North Carolina's Ink Problem

It must have been a slow legislative session this year in Raleigh, as North Carolina legislators felt an insatiable need to meddle in the inkjet cartridge market:
Shares of printer-maker Lexmark International Inc. fell sharply Monday morning after a news release was issued praising North Carolina Gov. Mike Easley's decision to sign into law a bill giving printer users in the state the right to refill any inkjet cartridge. The law essentially voids contracts or purchase agreements that ban some cartridges from being remanufactured.

The law stems from lawsuits between Lexmark and Greensboro, N.C.-based Static Control Components over rights to refill some inkjet cartridges manufactured by Lexmark for its printers. Lexmark has accused Static Control of selling chips that disarm Lexmark's "technological controls" and infringe on its patents.

Static Control alleges that Lexmark has attempted to monopolize the market for toner cartridges that are used in Lexmark printers and contends the Lexington company is in violation of antitrust laws.

Officials with Lexmark could not immediately be reached for comment.

Company officials previously have defended the company's "prebate" program, which sells discounted printer cartridges to consumers who agree to return empty cartridges to Lexmark to be refilled.

Tim King, director of corporate public relations at Lexmark, told Business First in March that rather than stifling competition from competitors, the prebate program "adds another layer of choice" for Lexmark customers. He said that competitor companies still are able to refill basic Lexmark printer cartridges that are not discounted.

On Monday, Static Control issued a news release touting the North Carolina law as a victory in its battle with Lexmark.

"I think the issues are extremely simple," Static CEO Ed Swartz said in the release. "Does the (original-equipment manufacturer) have the right to tell as a matter of public policy that their product cannot be remanufactured and therefore it must go into landfills? I am glad that the legislature intervened to protect the jobs of North Carolinians and our environment."
The invocation of "public policy" is predictable, if not misleading. If you're a rationalist, it's good "public policy" to enforce voluntary private contractual agreements. If you're a mixed-economy proponent, as Lexmark's competitor appears to be, "public policy" is a subjective matter of getting some state legislators to pass a law favoring your company's interest over your competitors.

Here's what the North Carolina law in question says:
Any provision in any agreement or contract that prohibits the reusing, remanufacturing, or refilling of a toner or inkjet cartridge is void and unenforceable as a matter of public policy. Nothing in this section shall prevent any maintenance contract that warrants the performance of equipment under the contract from requiring the use of new or specified toner or inkjet cartridges in the equipment under contract.
It's worth noting the legislature felt no need to address Lexmark's allegation that Static Control was illegally infringing upon its patents. Obviously protecting valid intellectual property rights--or private contract rights--are not a matter of "public policy" in North Carolina. No wonder the Justice Department was able to destroy Asheville-based Mountain Health Care without a word of protest from state officials.

Antitrust News: DOJ Loses to Dentures

Contrary to popular myth, a government antitrust prosecution does not inevitably result in a government victory, as one company happily found out last week:
A judge in the U.S. District of Delaware recently ruled in favor of Dentsply International’s distribution practices of artificial teeth.

The decision came down late Friday afternoon and the outcome is positive for the company and its shareholders, said John C. Miles II, chairman and CEO of the dental product designer and manufacturer.

Though artificial teeth represent about 5 percent of the company’s business and don’t have a great impact on earnings per share, Miles said the decision removes a level of uncertainty and could save legal fees if the government decides not to appeal.

Gina Talamona, spokeswoman for the U.S. Department of Justice, said it’s too soon to say if the department will appeal.

The Antitrust Division of the United States Department of Justice began investigating the company for antitrust violations in 1995, Security and Exchange Commission documents state.

Within the company’s Trubyte Division’s distribution clause, Dentsply maintains the right to pull its products from the distributor if the distributor decides to carry competing products.

In 1999, the federal government filed suit against the company saying that this clause affected 80 percent of dealers nationwide because they don’t carry brands that compete closely with Dentsply’s products.

In April and May 2002, a trial took place leading to the recent decision.

On Monday, Miles said the company holds the distribution policy because it invests time and money into training the distributor’s employees on the products, which are similar among competing products. If it allowed its distributors to carry other products, it would be training them for free, he said.

Monday, August 11, 2003

Sports: Miracle on Ice Coach Killed

WTEM-AM in Washington is reporting that Herb Brooks, the coach of the 1980 U.S. Olympic hockey team, was killed in an automobile accident in Minnesota. That 1980 hockey team was of course the "Miracle on Ice" team that upset the top-ranked Soviet Union in the semifinals en route to a gold medal at Lake Placid, New York. It was one of the great moments in sports history, if not contemporary American history, which makes Brooks' life all the more worth remembering in light of his passing.

Antitrust News: J. Thomas Rosch Named Antitrust Lawyer of the Year

This from Latham & Watkins and the Antitrust and Unfair Competition Section of the State Bar of California:

California State Bar's Antirust and Unfair Competition Law Section is proud to announce that Latham & Watkins' San Francisco partner J. Thomas Rosch, has been named Antitrust Lawyer of the Year for 2003. The State Bar will officially honor Rosch at its 13th Annual Antitrust Lawyer of the Year Award Dinner on October 23, 2003.

"We're very pleased to honor Tom with this award. His work and achievements of the past thirty-eight years clearly show Tom is a leader in the field," said James E. Herman, President of the State Bar of California.

Rosch, internationally regarded as one of the preeminent practitioners in the areas of antitrust and trade regulation law, has been with Latham for nearly a decade. He has been lead counsel in more than one hundred federal and state court antitrust cases. He has successfully tried many of them and has won summary judgments in many more. Additionally, Rosch has acted as antitrust counsel in the planning and implementation of numerous joint ventures, mergers and acquisitions.

* * *

"This richly-deserved award recognizes Tom's exemplary career," said Robert Dell, Chairman and Managing Partner of Latham & Watkins. "Tom's encyclopedic knowledge of the antitrust laws combined with his years of experience in the courtroom make him a treasured resource among clients and colleagues alike."
Talk about dubious achievement. In recognition of Mr. Rosch's role as an antitrust practitioner, CAC offers its congratulations, but needless to say, our summary judgment is that Rosch will not be awarded "Capitalist of the Year" from us any time soon.

UPDATE: According to Skip, Rosch is not as bad as his press release might indicate. Perhaps. But as with most members of the antitrust bar, we won't be hitting the links together any time soon.

Education: Fun with Numbers

The Associated Press reported last week on the decline of Germany's completely government-run school system. This passage caught my attention:
Once in college — government funded and free of charge like lower schools — students take an average of seven years to earn a degree. And 32 percent of them actually do so, well below the average of 48 percent for industrialized nations.

Germany has relatively few private schools, and they are expensive. Private universities are almost nonexistent.
To put this number in further perspective, consider the plight of American college students who play Division I-A sports. Years of negative press would lead you to assume major college "student-athletes" are among the lowest academic performers in all of civilization. In fact, the NCAA's most recent numbers for the 120-or-so Division I-A schools show 60% of student-athletes who entered school during the 1995-1996 academic year graduate within six years, as opposed to the 32% of all Germans who graduate within seven. The 60% figure is consistent with the average for the last four classes studied by the NCAA, and it's on par with the overall graduation rate of U.S. students under the same NCAA formula.

Now, when it comes to the big sports—football and men's college basketball—the numbers start to slide into German-like territory. Football players graduated at about a 50% rate, while male basketballers only averaged about 35%. Still, that is higher than the national German average.

Capitalism: Taxing Yourself into Prosperity

My esteemed colleague Daryl Cobranchi debunks a particularly nasty anti-capitalist theory of wealth creation:
Dennis Redovich's latest weekly column is particularly inane. He first predicts a world-wide depression similar to the Great Depression. No data are provided to back up that prediction (NOTE: data "are", right?). It then goes from bad to worse, promoting g-schools as an engine of prosperity. Or, more precisely, promoting the money spent on the schools as creating wealth.
Government spending on programs that benefit largely low and middle class income citizens for education, health and welfare is the greatest stimulus for an expanding and prosperous economy and “also” improve the quality of life for individuals and the entire population. The Milwaukee Public Schools is the largest employer in Milwaukee, and with a budget in 2002-2003 of more than $1 Billion is the largest single source of money for consumer spending in the entire southeastern area of Wisconsin. Public school systems and universities are the largest employers in many communities in the State of Wisconsin. (Education jobs are stable and better than average paying jobs. Better in most cases than the jobs created with millions of corporate welfare that may be gone tomorrow when someone offers a better deal)

Sure, except for the fact that the money for those high-paying education jobs came from TAXES. Last time I checked, taxes were a drag on the economy. So, schools are just a form of welfare for educrats? Good to know. The rest of the column is no better. Give it a click only if you want to see how the other half thinks.
Redovich, of course, does nothing more than reiterate the core of Keynesian economics—government spending drives the economy. While that theory has been wholly disproven at every turn, the Keynes mantra continues to hold sway over government officials, especially the permanent bureaucracy that depend on high taxes and spending. Indeed, the most popularly reported measure of the economy, the Gross Domestic Product (GDP), reflects an anti-capitalist bias, as Club for Growth's Stephen Moore and Phil Kerpen explained last week in the Washington Times:
The headline-grabbing number of 2.4 percent growth, immediately applauded throughout the media as strong, is about double the real rate that the private economy grew. While the private economy grew at about 1.3 percent, the federal government component of GDP increased by a staggering 25 percent, the largest quarterly increase in more than three decades. The increase was due almost entirely to the high cost of the war in Iraq. But even domestic agencies saw growth in their budgets far surpassing private sector growth.

The important word here is "cost." Wars are a cost, not an asset.

You fight wars because you have to — because there are bad people in the world. But to suggest the war was good for the economy would be as dimwitted as suggesting Saddam Hussein deserves a medal of honor for helping revive the U.S. economy.

Defending U.S. interests militarily is a legitimate and necessary function of government, but it eats up resources and reduces growth, rather than enhancing it. So to a large extent, the growth reported this past quarter is a statistical mirage. The way we currently measure GDP makes billions of dollars spent on military expenditures look like productive economic activity.
The war example is actually quite telling. After all, pro-government spending leftists rarely call for more military spending to drive the economy, even though military spending arguably makes the GDP-with-government go up a lot faster than than it would with spending on education and public welfare.

Moore and Kerpen suggest, quite sensibly, that future GDP be calculated solely as a function of private sector spending. Such an act would deflate a lot of the pro-government spending bias now seen in the media, since GDP would no longer be subject to wholesale political manipulation. It certainly won't solve the problem of big government, but an honest GDP will at least allow the people to receive better information.