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Crime and Punishment: Orrin Hatch, Computer Pirate!
Wired News confirms that Senator Orrin Hatch is using unlicensed software on his official website.
The senator's site makes extensive use of a JavaScript menu system developed by Milonic Solutions, a software company based in the United Kingdom. The copyright-protected code has not been licensed for use on Hatch's website.
"It's an unlicensed copy," said Andy Woolley, who runs Milonic. "It's very unfortunate for him because of those comments he made."
Hatch on Tuesday surprised a Senate hearing on copyright issues with the suggestion that technology should be developed to remotely destroy the computers of people who illegally download music from the Net.
Hatch said damaging someone's computer "may be the only way you can teach somebody about copyrights," the Associated Press reported. He then suggested the technology would twice warn a computer user about illegal online behavior, "then destroy their computer."
I wonder how much damage Sen. Hatch's career will suffer as a result of his hypocrisy. Like I said yesterday, Treble Damages! Treble Damages! Treble Damages!
::: posted by Nicholas Provenzo
at 4:24 PM | link
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Antitrust News: Connecticut Files Antitrust Lawsuit To Block Oracle Takeover Of PeopleSoft
It was Massachusetts vs. Microsoft and now it's Connecticut vs. Oracle.
The Nutmeg state filed an antitrust lawsuit to block Oracle's hostile takeover of PeopleSoft, according to a statement issued Wednesday.
The lawsuit, to be filed Wednesday in U.S. District Court in Hartford, charges that the proposed $6.3 billion acquisition would violate state and federal antitrust statutes, according to state officials.
A combined Oracle/PeopleSoft would boost prices for businesses and consumers by "significantly reducing competition in the markets PeopleSoft serves and forcing current PeopleSoft customers to replace their software with other companies' products," according to the statement issued by governor John Rowland, Attorney General Richard Blumenthal and Comptroller Nancy Wyman.
Connecticut is a PeopleSoft customer, according to the PeopleSoft's Web site.
Well, there you have it. Antitrust as a form of price control.
::: posted by Nicholas Provenzo
at 3:15 PM | link
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After a six-month investigation, federal regulators have cleared the $500 million acquisition of Pleasanton-based ProBusiness Services Inc. by payroll processing giant Automatic Data Processing Inc., or ADP.
In a statement Friday, ProBusiness said the Antitrust Division of the Department of Justice closed its investigation of the proposed acquisition and granted early termination of the mandated waiting period under the Hart-Scott-Rodino Antitrust Improvements Act on Thursday.
Because ProBusiness has a large share of Fortune 500 clients, experts worried that a merger with ADP would concentrate too much share in the payroll processing market. Shares of ProBusiness were trading well below the deal price earlier this year as Wall Street analysts speculated publicly about whether the deal would be blocked.
It's nice that the DOJ allowed the merger to proceed, but you have to question the efficiency of a process that takes six months to look for something wrong, yet turns up nothing. Once upon a time, we called that a "witch hunt," not law enforcement.
::: posted by Skip Oliva
at 1:31 PM | link
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Antitrust News: Carlsbad Completed
The Federal Trade Commission has officially ordered the dissolution of the Carlsbad Physician Association, a New Mexico physician group, for committing the "crime" of jointly negotiating with health insurance companies. CAC was apparently the only commenter of record. You can read CAC's comments here.
::: posted by Skip Oliva
at 10:17 AM | link
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Business software maker PeopleSoft Inc.'s Friday said its board unanimously rejected a sweetened hostile takeover bid by Oracle Corp. on the grounds that the combination would violate antitrust laws.
Normally it's the Federal Trade Commission's job to decide if a merger violates the antitrust laws. After all, they're the only ones who know for sure. Most antitrust analysts, in fact, think an Oracle-PeopleSoft merger would withstand antitrust scrutiny.
::: posted by Skip Oliva
at 8:56 AM | link
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Rights & Reason: The Food Wars, cont'd
If you need further empirical evidence to support my argument that John Banzhaf & Co. are indeed terrorists, take a look at the statements they've made via the Center for Consumer Freedom. And yes, CCF is funded by the food industry. But the quotes cited on this page are from third-party news sources.
::: posted by Skip Oliva
at 8:50 AM | link
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Lawyers will gather this weekend with public health officials to plan how to sue fast-food chains for obesity and make more money.
The Obesity Lawsuit Conference, which starts today in Boston, is aimed at putting fast-food chains on the defensive and "encouraging trial lawyers to become involved in lawsuits where they can make money," said John F. Banzhaf III, a professor of law at George Washington University and the activist spearheading the effort.
It is truly remarkable that John Banzhaf is allowed to practice law in this country, to say nothing of the fact he's paid to teach it to future generations of lawyers.
Banzhaf's war on the food industry is not about public health, and it's not even about making money for himself and his colleagues. Banzhaf is waging war against the basic individual rights this nation was founded upon. His ideology is that only a self-appointed elite—led by himself, of course—should have the unquestioned power to decide which personal choices are acceptable for American society as a whole. In this sense, Banzhaf is no different than thousands of men throughout history who have sought to employ force simply out of a desire to hold and exercise power over other men.
I've faced criticism—even from colleagues—for calling John Banzhaf a terrorist. But in the post 9/11 world, one lesson we should have learned is that when you're faced with evil, you must identify it and label it for what it is. This is not to say John Banzhaf is Osama Bin Laden. Far from it. But terrorism has different levels and categories. We won't need the Marines to occupy Banzhaf's GW Law School office. But we do need to stop Banzhaf and his co-conspirators before it's too late. This means we must use every rational and legal means available to not simply defend businesses against Banzhaf's attacks, but to put Banzhaf on the defensive, ultimately destroying his ability to earn a living if he does not end his war. By this, I mean that we should exhaust every reasonable avenue to secure Banzhaf's removal from the GW faculty and his disbarment from every court he is a member of. One of the principal reasons for the rise in litigation abuse in this country is the unwillingness of legal institutions to hold their member attorneys to rational—and moral—standards of conduct.
Remember one thing: John Banzhaf has no genuine client. He is not an advocate trying to right an injustice. He is seeking to use the courts as a tool of force against innocent private businesses. The government may enjoy a legal and moral monopoly on the use of force, but that monopoly's legitimacy is rooted in the basic understanding that such force may only be employed in the protection of individual rights. When individuals are allowed to hijack the government's power and use it to violate these rights, then we are faced with the prospect of tyranny.
If there's one encouraging sign in all this, it's that the food industry has given every indication they will fight back. Even small restaurant owners understand Banzhaf is not simply looking for shakedown money—he's looking to destroy them:
"Not only do the lawsuits ... fail to acknowledge the voluntary nature of the choices customers make, they also do not address the fundamental issue of personal responsibility," Washington restaurateur Christianne Ricchi of Italian restaurant i Ricchi testified yesterday.
"While I am confident we will overcome all of these obstacles, the prospect of dealing with the legal fees alone from a potential lawsuit causes me great concern for the future of my business, my employees and our industry as a whole."
Mr. Banzhaf dismissed suggestions that obesity is the result of profligate eating.
"Virtually everyone agrees obesity and obesity-related diseases occurred suddenly in the past 15 to 20 years," he said.
Mrs. Ricchi said personal accountability is the real issue, and that by taking aim at restaurants they are limiting freedom of choice for Americans.
"My view as a business owner is that we're here to offer options."
While the target of obesity lawsuits are fast-food companies, Mrs. Ricchi said that if the lawsuits continue, small businesses like hers will be hurt.
::: posted by Skip Oliva
at 8:38 AM | link
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Thursday, June 19, 2003 :::
The Culture: Random Thoughts
Am I the only one disturbed by the thought that it's apparently easier to add ten nations to the European Union than it is to add three (or four) colleges to the Atlantic Coast Conference? Of course, when the Czech Republic voted to join the EU recently, they didn't face a lawsuit from Connecticut Attorney General Richard Blumenthal.
::: posted by Skip Oliva
at 10:51 PM | link
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BRUSSELS, Belgium -- European regulators have opened proceedings against U.S. trading card marketer Topps Company Inc. for suspected anticompetitive practices in the distribution of cards and stickers featuring Pokemon cartoon characters.
The European Commission said Thursday it had found evidence that Topps' European subsidiaries and their distributors "put in place an elaborate strategy to prevent imports from low-price to high-price countries" at the height of a Pokemon craze among European children in 2000.
The Commission said the company had pledged in November 2000 to bring its distribution into line with EU rules and that there was no evidence of anticompetitive behavior since then.
One can only imagine the European Commission meeting where Pokemon cards were discussed. The French and German representatives no doubt wanted to create a centralized European Pokemon Authority, only to be thwarted by smaller nations who feared the potential dominance of French and German Pokemon characters. The British, of course, were committed in principle to a central authority but decided to retain Britain's Pokemon independence until certain conditions could be met. The U.S., meanwhile, was threatening a trade war unless the EU allowed genetically modified Pokemon to be imported into Europe.
I smell an Onion story in this...
::: posted by Skip Oliva
at 8:10 PM | link
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Rights and Reason: Antitrust and Morality
CAC has long maintained the antitrust laws, especially as applied today, violate numerous parts of the Constitution, such as the First, Seventh, and Ninth Amendments. But what about the Thirteenth Amendment, which prohibits slavery. George Mason University professor Tyler Cowen—the 14th Volokh conspirator—suggests essentially that in a post today:
Isn't the application of antitrust law almost a kind of slavery?
Take an athlete -- say Michael Jordan -- who monopolizes his own services and restricts his output to the market. It is hard to find a clearer case of market power, not to mention barriers to entry. Wouldn't it be a kind of slavery to go "trust-busting" and force MJ to do more commercials, or play another year of basketball? I say yes.
But is the corporate case really that much different? What if some people organize into a group and do the same thing? How can it be justified to force them to produce more output? Under some economic assumptions, the output restrictions of monopoly cause more factors of production to switch into other sectors (though then you have to wonder if anyone measures the net output restriction, the answer is they don't). Under other assumptions, there is no switching. Output restriction simply means that the monopolist and its employees work less hard.
And we are back to antitrust policy being a kind of quasi-slavery. In my view, you don't have to be a Bob Nozick to be worried about this.
This is an argument CAC raised in some of its earliest comment letters on the physician antitrust issue, but in recent filings we've decided to highlight the First and Ninth Amendment problems. But maybe more should be made of the "antitrust as slavery" argument, since it cuts right to the long-term impact of these policies on businessmen. Indeed, with the creeping reemergence of socialized medicine via prescription drug "benefits," the time may be rapidly approaching when people will need to look at the healthcare issue for what it is: The government trying to enslave healthcare producers for the sake of consumers. In a sense, it's really no different than the economic model of slavery employed by Southern plantation owners in the antebellum era.
This is not to suggest American doctors are facing the prospect of being physically bullwhipped into lifelong servitude, but keep in mind slavery was kept in the South principally for economic reasons. Plantation owners were simply unwilling to part with their cheap labor force kept in place by government policies which refused to protect the rights of the enslaved people. The same is rapidly becoming true of physicians, who find themselves with a "moral" obligation to provide services regardless of the economic cost to them.
::: posted by Skip Oliva
at 6:25 PM | link
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Rights and Reason: National Hispanic Policy Institute strikes again
Despite not even having a web page, the National Hispanic Policy Institute (NHPI) apparently has a budget large enough to pay for a host of full page newspaper ads opposing the merger between Univision and Hispanic Broadcasting Corporation. The latest “Open Letter to Theodore Roosevelt Republicans” appeared today in the Washington Times. Here's the angle, with appropriate Fisking:
Teddy Roosevelt: He was America’s Number-One crusader against business monopolies held by what he called the malefactors of great wealth.
Our twenty-sixth president was a Republican who believed in the idea that true free enterprise can only exist when independent entrepreneurs aren’t threatened with extinction by greedy corporations and trusts.
Believed it, fought for it, made it part of the Republican Party creed.
And was 100% wrong. Despite all the graft and political corruption around him, Roosevelt never recognized that free enterprise is not protected when government regulators are given the power to overturn the economic decisions of businessmen.
Question: What would Teddy Roosevelt say if he were alive today and saw his fellow Republicans in the White House and in Congress stand idly by while a federal agency paved the for a monopoly takeover of the nation’s Spanish-language media? A takeover engineered and advanced by a handful of media billionaires.
For all his errors, at least Roosevelt attempted to apply a reasonableness standard to antitrust. One has to wonder if Teddy Roosevelt would consider NHPI’s naked attempt to use antitrust to protect its racial fiefdom reasonable.
Fact: The Federal Communications Commission last week handed down a pro-monopoly edict on national media ownership.
Hardly. Re-regulation is not deregulation.
And that’s not all. The same FCC - controlled by a three-member Republican majority – is now being asked to approve a proposed merger of Univision and Hispanic Broadcasting Corporation that would hand-deliver 70 PERCENT of the countries Spanish-language media market to two media giants – Univision and Clear Channel.
That’s right, 70 PERCENT! A merger, in other words, that would allow a pair of NON-Hispanic billionaires, Jerry Perenchio of Univision and Lowry Mays of Clear Channel, HBC’s largest shareholder, to dominate the nation’s Spanish-language media market and in turn, Latino culture. It would allow wealthy major shareholders of HBC such as Warren Tichenor and CEO Mac Tichenor to benefit enormously, but not Hispanic citizens.
This is where NHPI’s racism and anti-wealth mentality reveals itself in full flesh. Just how would Jerry Perenchio and Lowry Mays continue to profit? Only by serving the interests of their customers. Does one have to be of the same race to provide goods and services to others of a certain race? The answer is no, but NHPI seems to say yes.
FACT: A poll taken by Opiniones Latinas shows that an overwhelming majority (87%) of Hispanic-Americans believe that Spanish-language radio stations owned by Latinos are better able to understand and respond to the needs of Hispanic listeners.
So what? 87% of any group does not have the right to violate the property rights of anyone.
Yet if a Univision-HBC merger is approved, independent Hispanic station owners across the country face a future of being devoured or crushed by an FCC-blessesed NON-Hispanic monopoly.
Another revealing statement. If the FCC blessed a “Hispanic monopoly” that was seen to play to the advantage of Democrats, would NHPI oppose the merger? Unlikely.
Question: Given the vital importance of this issue to the Hispanic media market, is it conceivable that the FCC would fast-track the Univision-HBC merger behind closed doors and without a single public hearing? And why, despite repeated professions of “outreach” has the Hispanic community not heard Republican voices raised against the threat of this monopoly to Spanish-language media? Who are these super-rich beneficiaries and why are their profits more important than the culture and will of Hispanic citizens?
Who are the beneficiaries of NHPI’s aggressive lobbying campaign? I suspect NHPI’s efforts have less to do with the Univision-HBC merger and more to do with the Democrats’ anger over Republican inroads with the Hispanic voters. The mere fact that Republican sympathizers are going to own a major player in Hispanic media represents a massive threat to Democracts.
FACT: Teddy Roosevelt’s portrait is prominently displayed at the White House. Isn’t it time to begin matching words with deeds?
I’ll make that one easy—let’s move Teddy Roosevelt’s portrait to a White House broom closet and replace it with the portrait of an American leader who defended the rights of businessmen. Anyone have any recommendations?
Sincerely, State Senator Efrain Gonzalez, Jr. (NY) President, National Hispanic Policy Institute
Gonzalez doesn’t mention that he is a Democrat, which one would think would be a pretty important fact in a letter addressed to Republicans.
NHPI’s lobbying campaign reveals the extent of the Democrats’ fear of Republican gains in the Hispanic community. The Univision-HBC merger is not a big deal, unless of course you believe the fate of your party hinges upon it. While it’s unlikely any Republicans are going to be swayed by NHPI’s attempts to derail the merger, one has to wonder about the lager forces in play here.
::: posted by Nicholas Provenzo
at 2:23 PM | link
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Public Service Announcement: Reporting Bad Spending
The House Budget Committee has setup a website to report waste, fraud, and abuse in government spending. The webpage contains a form for citizens to complain about specific incidents of bad spending. Interestingly, the form's list of government agencies does not include the Federal Trade Commission. I guess this means the FTC never engages in waste, fraud, or abuse...
::: posted by Skip Oliva
at 1:28 PM | link
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Crime and Punishment: Orrin Hatch, Computer Pirate?
Laurence Simon looked at the source code of Senator Orrin Hatch's website and well, what do you know, the good Senator is apparently using Javascript code for his web menus in violation of the developer's license agreement.
Treble Damages! Treble Damages! Treble Damages!
::: posted by Nicholas Provenzo
at 12:04 PM | link
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Connecticut v. Oracle: Reading Between the Lines
In reading Connecticut's antitrust complaint against Oracle, the following paragraph is worth noting, because it goes to the heart of antitrust philosophy. The paragraph in question discusses entry into the market Oracle and PeopleSoft are competing in:
Entry into the relevant markets by a new enterprise software provider would be extremely difficult, time-consuming, and expensive. The enterprise software industry serves enterprises through complex software that is often customized to serve a particular customer’s specific needs. Thus, costs and risks associated with switching providers can be extremely high. Moreover, enterprises will be reluctant to switch to a smaller or midsize financial or human resources software provider with untested scalability, performance and international effectiveness.
Notice the complaint does not say market entry would be "impossible." This is an important distinction. A "monopoly," classically defined, means that there is some barrier which effectively prevents any entry by a new competitor. The reason for this is quite simple: a monopoly once meant the governor was erecting some barrier to prevent marketplace entry. For example, in 16th-Century England, the Crown would often give a merchant exclusive rights to a line of commerce, thus legally excluding any other competitor who might try to enter the market. That is a monopoly. What we deal with in antitrust today, in contrast, is dominant private firms that lack these sorts of legal insulation.
In reading the paragraph above, one clearly understands that Oracle and PeopleSoft compete in a market where a new entrant can't simply setup shop tomorrow and be successful. Like most technology markets, this market requires a new entrant earn customers over a period of time. But Connecticut refuses to be that patient. Acting as a customer here, they want some guarantee that there will be a new entrant now, or they won't take the risk of allowing Oracle to buy PeopleSoft. That—not the prospect of a "monopoly"—is what drives this and every other antitrust case. In its modern application, antitrust is a glorified form of risk-spreading. A customer feels their short-term interests will be inconvenienced by the acts of a producer, so rather than risk that inconvenience, they use antitrust to place the blame squarely on the producer by infringing on his property rights.
The Golden Rule of antitrust is: The consumer is never responsible for their own decisionmaking. If a consumer makes a bad decision, it's because some producer is acting "anti-competitively."
::: posted by Skip Oliva
at 8:30 AM | link
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Antitrust News: Big East-ACC, continued
The ACC pulled a neat trick in their continuing expansion war by inviting Virginia Tech to join Miami, Syracuse, and Boston College in bolting the Big East. In reality, the ACC was put into this position by Virginia Gov. Mark Warner, who essentially forced the University of Virginia to vote against ACC expansion unless Virginia Tech was taken care of. This example demonstrates the folly of a state-run university "system": What do you do when two state-run schools have a conflict? Arguably, Virginia was being politically forced into voting against its interests for the sake of a smaller sister school. At the same time, Warner was in a tough position because he's legally responsible for the fate of all the government-run universities, and Virginia Tech would clearly suffer if they were left in a rump Big East. Thus, I'm not criticizing any particular actor here, merely stating the importance of removing universities from the political world altogether.
The other question is how the Virginia Tech invitation will affect the political lawsuit brought by Connecticut's rabid-dog attorney general, Richard Blumenthal, and the rump Big East schools against the ACC. Virginia Tech and the Commonwealth of Virginia are co-plaintiffs in that action. Does this mean that Virginia will now become a defendant? That's got to be a civil procedure nightmare. It's unlikely Blumenthal would drop the lawsuit, given that the University of Connecticut's alleged injuries would only be compounded if the Big East were further gutted by losing Tech.
::: posted by Skip Oliva
at 8:14 AM | link
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Rights & Reason: The New York, er Washington Times
The Washington Times continues their intellectual dishonesty on prescription drugs with yet another editorial telling us why there's nothing to worry about. I'm beginning to wonder if Tony Blankley is still running the editorial page over there, or whether he's yielded control to the former Iraqi information minister. Consider this poorly-reasoned paragraph:
Another reason why a Republican-driven prescription-drug law is beneficial to U.S. drug companies is that it will protect their patent rights. Foreign outfits ripping off U.S. patents pose one of the largest economic threats to the American pharmaceutical industry. Currently, there is measurable political support among liberals to bring in pirated drugs from Canada and Europe because they are cheaper. (Forgers avoid the high research and development costs of legitimate firms that actually create new medicines.) Take away the prohibitive pricing problem that exists now, as the developing legislation would do, and the pressure to import cheaper drugs disappears and U.S. patents are safe, at least in this country.
Drugs are cheaper in Canada and Europe because the government runs the healthcare system in those countries. The Times, in essence, is suggesting we join the fray by partially socializing our system with respect to prescription drugs. At the same time, the Times wants you to believe that by taking step one, we won't take steps two and three into actually socializing our system like Canada. But by surrendering the moral and tactical advantage on the drug issue, it will be substantially harder to resist calls for greater government intervention in the healthcare market in the future. The Times refuses to accept this reality.
Also note the Times said the "Republican-driven prescription drug law." If Democrats had proposed the exact same bill, the Times would likely look at the facts and oppose the measure. This is partisan editorializing at its New York Times-like worst. Indeed, the Times once again concludes an op-ed on this issue by making this utterly ridiculous claim:
Add these policy benefits to the political windfall passage of a prescription-drug law would bring, and Republicans have win-win legislation on their hands. With one less issue to demagogue, Democrats are worried — and should be.
Once again, I say: The Republicans have won the White House in four of the last six elections, and retained the House for five consecutive elections. They did that without having enacted a prescription drug benefit. Why exactly is it imperative to do so now? Nobody believes that passing the current bill will end Democratic demagoguery on this or any other issue. Does the Times think Ted Kennedy and Tom Daschle will be satisfied with anything less than full government control over healthcare? They'll continue to demagogue this issue until Republicans surrender unconditionally. And this prescription drug bill is a great place to start. Republicans—with the Times cheering them on—are preparing to surrender their basic political principles to score some cheap, quick political points.
In 1995, Bill Clinton famously claimed "the era of big government is over." Democrats obviously abandoned that mantra the minute Clinton was out of the electoral picture. But who would have thought Republicans would abandon it at a time when they were politically at their strongest.
::: posted by Skip Oliva
at 8:05 AM | link
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The Culture: Reforming College Sports
Earlier this month I proposed removing college football from the jurisdiction of the NCAA entirely by having the major colleges form a new for-profit entity. Robert Benne, a professor at Roanoke College, appears to be thinking along the same lines:
The athletic departments should simply be made auxiliaries of the universities. They would be severed from any academic pretense — becoming athletic organizations associated with the universities. They would be self-supporting with the revenue-generating sports subsidizing the others. Donors would support them to their hearts' content. Coaches would be paid the going market rate without any suggestion they were involved in the academic life of the university. Athletic departments would be free of Title IX craziness since athletes wouldn't be getting aid from the university. Athletes would be honestly recruited according to athletic prowess, not according to the illusion they are scholar-athletes, when in truth they have only minimal academic capacities. They would be paid modest sums — stipulated by the National Collegiate Athletic Association (NCAA) — for their labors. Those athletes who were really serious about academic life could take their pay in education vouchers, which could be used at the university whenever they wanted to use them.
My only major disagreement with Benne is his view that the NCAA should remain in the picture. It is the NCAA, in fact, which is the biggest stumbling block to genuine reform of major college sports because of its leadership's fanatical devotion to the immoral concept of forced amateurism.
::: posted by Skip Oliva
at 7:48 AM | link
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Wednesday, June 18, 2003 :::
Antitrust News: Blumenthal Rides Again
Fresh off filing a lawsuit to prevent expansion of the Atlantic Coast Conference, Connecticut Attorney General Richard Blumenthal was first to the courthouse to stop the potential Oracle takeover of PeopleSoft:
SAN FRANCISCO - The State of Connecticut intends to file an antitrust lawsuit against Oracle in a bid to thwart its hostile takeover of PeopleSoft.
The lawsuit, which is expected to be filed in U.S. District Court in Hartford Wednesday, alleges that Oracle's planned takeover would violate state and federal antitrust laws and damage the state's economy.
"Oracle's hostile takeover bid has the potential to cost the state millions of dollars, and is a threat to the progress we have made in recent years in technology improvements," said Connecticut Governor John G. Rowland in a statement.
Oracle surprised the industry earlier this month by announcing a $16 per share offer to take over its business software rival. After swapping lawsuits with PeopleSoft, Oracle today upped its offer to $19.50 per share, or $6.3 billion.
The State of Connecticut has a personal stake in the acquisition. On July 8th, it is supposed to go live with the first stage of a five year, $100 million PeopleSoft installation, and the State Comptroller's Office, which is participating in the lawsuit, is concerned about the effects of an Oracle takeover.
"We're in the middle of a $100 million conversion, and the whole thing will probably be derailed, or at least severely hampered if we had to switch from PeopleSoft to another company," said Steve Jensen, a spokesman for the State's Comptroller Office.
It's one thing for Connecticut, as a consumer, to insist on protecting its private contractual rights with a company that might be subject to a takeover. That's simply responsible business practices. It's quite another thing, however, to interfere with the actions of other businesses on the grounds that you—as the consumer—might not like the outcome of that action. In this context, antitrust laws are basically a license to insert yourself into other people's business affairs at will.
And frankly, given Blumenthal's track record, my guess is that he's seeking publicity and political benefit as the "man who stopped Oracle" more than he's looking to protect his state's financial interests.
::: posted by Skip Oliva
at 7:06 PM | link
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Crime and Punishment: DirecTV Suing Consumers Directly
Thousands of satellite television "pirates" in Florida and across North America are under attack by lawyers for DirecTV who have filed hundreds of federal lawsuits against consumers who allegedly bought mail-order decoders enabling them to steal the company's digital programming.
In U.S. District Court in South Florida, more than 300 suits were filed in May alone against consumers in Miami-Dade, Broward and Palm Beach counties. And many more actions are on the way -- both locally and elsewhere, according to a spokesman for DirecTV.
The new wave of litigation is the latest move by Los Angeles-based DirecTV in the Internet war between the company and satellite pirates looking to tap in for free. So-called "pirate Web sites" that sell decoders and advocate their use sometimes cast the fight as a matter of freedom of access to information. One site even taunts DirecTV for its "ineffective" strategy to solve "their tremendous piracy problem."
"What they want is freedom to steal," said DirecTV spokesman Robert Mercer.
[ . . .]
DirecTV is demanding that violators be ordered to pay $10,000 in damages for each "pirate access device" purchased by a defendant, plus $850 in attorney fees. The $10,000 figure is the amount of damages that's provided for in federal law.
I can live with that. People who steal ought to be held accountable under the law.
::: posted by Nicholas Provenzo
at 11:54 AM | link
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Crime and Punishment: Orrin Hatch's A-Bomb against online piracy
Illegally download copyright music from the Internet once, or even twice, and you get a warning. Do it a third time, and your computer gets destroyed.
That's the suggestion made by the chairman of the Senate Judiciary Committee at a Tuesday hearing on copyright abuse, reflecting a growing frustration in Congress over failure of the technology and entertainment industries to protect copyrights in a digital age.
The surprise statement by Sen. Orrin Hatch, R-Utah, that he favors developing technology to remotely destroy computers used for illegal downloads represents a dramatic escalation in the increasingly contentious rhetoric over pirated music.
During a discussion of methods to frustrate computer users who illegally exchange music and movie files over the Internet, Hatch asked technology executives about ways to damage computers involved in such file trading. Legal experts have said any such attack would violate federal anti-hacking laws.
Protecting the property rights of intellectual property creators ought to be top priority in Washington. But frankly, has Hatch lost his mind? Does the chairman of the Senate Judiciary Committee remember the concept of due process under the law? I wonder.
UPDATE: Hatch is now attempting to back away from his statement (Thanks Instapundit). In a press release on his web site, Hatch claims
“I am very concerned about Internet piracy of personal and copyrighted materials, and I want to find effective solutions to these problems.
“I made my comments at yesterday’s hearing because I think that industry is not doing enough to help us find effective ways to stop people from using computers to steal copyrighted, personal or sensitive materials. I do not favor extreme remedies – unless no moderate remedies can be found. I asked the interested industries to help us find those moderate remedies.”
Hatch's statement is not really a retraction, but a blame shift. As a legislator, its Hatch's job to write constitutional laws that provide appropriate penalties against those who violate the property rights of others. That's it. Beyond that, he should keep his free advice to himself.
And in one last dig, if Hatch is so concerned about property rights, why does he continue to support the antitrust laws? Maybe if there were treble damages for IP pirates instead of successful businessmen, there would be less piracy and more successful businesses.
::: posted by Nicholas Provenzo
at 11:28 AM | link
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Rights and Reason: House Ways and Means Committee passes Medicare prescription drug bill
The AP reports that the Republican prescription drug bill passed its first major hurdel in the House after a 25-15 party line vote in the House Ways and Means Committee.
"The ideas in the proposed Medicare reform bills are based on government control," explained Richard E. Ralston, AFCM's executive director. "It's an attempt by the government to control health care costs by restricting medical treatment for the oldest Americans under the guise of prescription drug coverage. Patients have the right to choose and purchase the drugs they need in consultation with their doctors."
Citing Congressional Budget Office (CBO) analysis of the Bush-backed Medicare reforms, which estimates that many employers will drop their retired employees' drug coverage, Ralston pointed out that the medical profession will be deeply hurt by the changes.
"Pharmaceutical firms are one of the primary reasons why the United States has the best health care in the world," Ralston declared. "Their ability to research and produce the best drugs for treatment of catastrophic diseases will be seriously inhibited if the President signs Medicare reform. There will be practically no incentive for drug companies to produce drugs for older Americans."
True. Compassionate conservativism is not all that compassionate.
::: posted by Nicholas Provenzo
at 11:12 AM | link
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Tuesday, June 17, 2003 :::
The Courts: Defining "International Law"
I despise Robert Bork's political philosophy, but he makes a good argument against the proliferation of "international law" in today's Wall Street Journal:
Courts also look to the writings of scholars for evidence of what international law is. Compared with 1789, we now have a plethora, one might say a surfeit, of professors of international law, and they, by and large, support the notion that the law of nations deals with individuals and corporations as well as nations. They also seek aggressively to expand what international law covers, everything from the right to a healthy environment to the right to organize and bargain collectively in all countries. So much for sovereignty.
There could be no more anti-democratic way to make international law than to rest it upon the opinions of professors. That process is not only anti-constitutional and undemocratic, it is class oriented. The professoriat in social matters is well to the left of the American public; the international law they claim exists is not one Congress would define under its constitutional power. Judge Robb, concurring in Tel-Oren, put it well: courts "ought not to serve as debating clubs for professors willing to argue over what is or what is not an accepted violation of international law."
That is not the worst of it. When American courts undertake to decide what is lawful and what is unlawful in foreign countries, they risk interfering with the foreign relations of the U.S. There is certain to be resentment when a foreign nation is told by an American court that actions their courts allow are nevertheless illegal. In many of these cases, of course, there is no possibility that damages will be paid, though there may be when American corporations are held liable under a vague and constantly evolving customary international law. But a judgment that international law has been violated constitutes a propaganda victory for one view of appropriate world-wide social policy. That is a misuse of our courts to award professors and advocacy groups a moral and legal legitimacy that is not rightly theirs.
As leftist groups find their objectives thwarted at the ballot box and in traditional American common law, they are more frequently seeking refuge behind "international law," a term which practically speaking means the socialist policies of European elitists.
::: posted by Skip Oliva
at 10:39 AM | link
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Rights & Reason: Resisting Educational Tyranny
The latest battle in the cultural war between the state education monopoly and individualists is taking place in Waltham, Mass., and things may get worse before they get better:
Two homeschooled teen-agers in Waltham, Mass., have consistently refused to take a mandatory assessment test demanded by the local school district, and their parents have backed up the kids' decision – a six-year stance that culminated in an early-morning standoff with government and law-enforcement officials outside their home.
According to a report in the MetroWest Daily News, social workers from the Department of Social Services and police officers confronted the family at 7:45 a.m. Thursday, demanding that George, 15, and Nyssa, 13, complete a standardized test.
As they have done in the past, the children refused to go, even though the government now has legal custody of them.
"There have been threats all along. Most families fall to that bullying by the state and the legal system," dad George Bryant Sr. told the paper. "But this has been a six-year battle between the Waltham Public Schools and our family over who is in control of the education of our children. In the end, the law of this state will protect us."
DSS worker Susan Etscovitz tried to use the fact that the Bryants technically don't have custody of their own children in her plea.
"We have legal custody of the children and we will do with them as we see fit," Etscovitz told the Bryants, according to the Daily News. "They are minors and they do what we tell them to do."
Four police officers were also at the scene and attempted to coax the Bryants into complying with the DSS worker.
One of the law-enforcement officers told the paper: "We will not physically remove the children."
According to the report, the Bryants contend that no government entity has the legal right to force their children to take standardized tests, even though DSS workers have threatened to take their children from them.
There is no other way to say it: The state’s actions here crossed the line from merely abusing power to outright tyranny. Ms. Etscoivitz’s statement makes it perfectly clear the state’s principal interest here is exerting force over the minds of the Bryants and their children without any regard for the objective merit of the state’s pretextual goal. The Bryants are completely right in defying the state’s demands, and they should continue do so by any rational means available (which means I’m not suggesting they precipitate a Waco-like siege.) Indeed, if they voluntarily allowed their children to be coerced by the state into taking these tests, the Bryants themselves would be committing moral treason against their children, and the Bryants appear to understand this.
Mrs. Bryant made a statement that particularly impressed me. She said that her children’s education was their “intellectual property.” That’s an important identification, and one we don’t hear about much. The educational debate in this country, more often than not, treats children as mere pawns or property (as Etscovitz’s statement demonstrates.) Educational policy is directed towards appeasing politicians and teachers unions. Politicians want standardized tests, while unions seek control over as many students as possible to enhance their bargaining power with school districts. Little of this policy has anything to do with teaching children to become rational adults.
Viewed in this light, the Bryants should be applauded for their courageous, principled, and moral stand. The state’s goal here is to harm the education of the Bryants’ children; that is to say, it’s an effort by the government to destroy the educational process these children have learned under, despite their merits or successes. This is not simply a random state action, but a deliberate attack on the principles of individualism and, ultimately, on the mind itself.
The question is how will this situation resolve itself. If the Bryants continue to defy the state’s tyranny, will the state respond with force by removing the children against their will? I know that if I were a police officer caught in the middle, I would not obey such an order. We all remember the horrifying images of Elizan Gonzalez being forcibly taken and shipped back to Cuba. If such a thing were to happen to two American teenagers in the name of standardized testing, I suspect the public’s reaction would be substantially more inflamed.
::: posted by Skip Oliva
at 9:14 AM | link
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Rights & Reason: Intellectual Dishonesty at the (Washington) Times
We've all been paying so much attention to the institutional dishonesty at the New York Times, that it appears an outbreak of intellectual dishonesty at the Washington Times, at least on the issue of government-funded prescription drugs. The Times editorial page supports President Bush's effort to create a new entitlement for subsidizing drug costs for most Americans, and in doing so makes an argument which can only be described as bizarre. Compounding this new pro-entitlement mentality was an editorial today attacking the Wall Street Journal, which stands squarely behind capitalism:
We read with interest yesterday's Wall Street Journal editorial on prescription-drug legislation developing on Capitol Hill. From top to bottom, from the theoretical to the practical, Journal editors skewered the Republican direction as bad policy and politics. Their opposition to new entitlements and ever-bigger government is principled — and we agree in large part on their textbook distrust of the welfare state — but the Journal missed the mark on a few aspects of this specific issue. In 2000, George W. Bush campaigned, and in last year's election a majority of Republican House and Senate candidates promised, to deliver a prescription-drug law. A medicine subsidy for seniors is an example of politicians keeping their promises to voters.
It is important to emphasize that Republican support for a prescription-drug entitlement is not a cynical and expensive attempt to buy votes. The new policy would improve the lives of millions of Americans no longer in the workforce whose budgets are squeezed by the rising price of prescriptions
This is a breathtaking position coming from one of the nation's premier conservative newspapers, and may it be an indicator of just how morally and ethically bankrupt modern conservatism has become. Not once in its editorial today did the Times argue why a prescription drug entitlement would be good (or moral) policy—only why it would be good politics. The editorial's concluding paragraph removes any doubt where the Times' interest lay:
Seventy-five percent of voters think prescription drugs for seniors are a good use of taxpayer funds. In a country with a representative form of government, that counts for a lot. However, the political machinations do pay off, with good policy in the short-term and promise for real reform down the road. If Republicans pass a prescription-drug bill and win increased seats in Congress, they will have a more solid base that can be used to reinvent the failing health-care system along more market-oriented lines. That promise alone is worth the price of the current legislation.
Does anyone seriously believe this? Certainly, what principled free-market voter would want to give the Republicans greater political clout when—with the White House and both houses of Congress already in their hands—the GOP committed itself to an expansion of the federal government's role in healthcare that is far more likely lead down the path of Canadian-style socialize medicine than a restoration of the pre-1960s free market in healthcare. The Times is being cynical if they think principled voters are that stupid.
In contrast, yesterday's Wall Street Journal editorial—the one that was too principled for the Times editors—makes simple yet compelling arguments:
Let's start with the amusing irony that the supporters of this giant new prescription drug benefit are many of the same folks who were only recently moaning that a $350 billion tax cut would break the budget. That tax cut will at least help the economy grow. But the new Medicare entitlement is nothing more than a wealth transfer (from younger workers to retirees) estimated to cost $400 billion over 10 years, and everyone knows even that is understated.
The real pig in the Medicare python doesn't hit until the Baby Boomers retire. Social Security and Medicare Trustee Tom Saving told us last week that the "present value" of the Senate [prescription drug] plan—the value of the entire future obligation in today's dollars—is something like two-thirds the size of the current $3.8 trillion in debt held by the public.
The Journal editorial also notes that many employers who sponsor health plans with better prescription drug benefits will drop those benefits once they figure out the government will now pick up the tab. That's why they call it an "entitlement" after all; it's something you can receive without having to earn. And as the Journal correctly states, that makes this issue moral as well as practical:
A universal drug benefit is neither necessary nor morally justifiable. Some 76% of seniors already have some prescription drug coverage. The average Medicare beneficiary spends an affordable $999 a year out of pocket on prescription drugs, and less than %% have out of pocket expenses over $4,000.
The Times, of course, has no answer for these facts, since they're entire argument is political: It's popular with voters, so Bush should do it so he can bolster his re-election, and maybe then we can actually reform the system. But what the Times ignores, from a policy perspective, is how creating any prescription drug entitlement will inevitably lead to government price controls. We saw this after Medicaid and Medicare were created: Without spending caps, beneficiaries tried to milk the government's coffers for all they could. When policymakers figured that out, their response was not to abandon or "reform" the entitlement program, but to shift the blame to service providers (i.e., doctors) by arbitrarily restricting their income. This is why you have doctors leaving the healthcare system in droves. Medicare and Medicaid's reimbursement structure restricts their income by replacing the marketplace with government mandates. And thanks to the antitrust laws, physicians are effectively barred from stopping allegedly private health plans from setting their fee levels too far above the Medicaid-Medicare rates (which the FTC now considers "market price.")
This is the objective reality we face with prescription drugs if we enact even the Senate plan. The Times should be smart enough to know this, but apparently they have so little trust in their Republican friends that they must genuinely believe the GOP cannot retain power without giving seniors additional entitlements. Of course, even that notion has been disproven: We've had five straights Republican House majorities without a prescription drug benefit, and President Bush didn't exactly make this issue the centerpiece of his 2000 campaign. For all the attention it generates, the majority of Americans will not lash out at the Republicans if the current Congress fails to enact prescription drug legislation.
Tony Blankley, the Times' editorial page editor, needs to seriously reconsider his position on this issue. For two days straight now, the Times has run intellectually dishonest editorials that could not withstand even a minimal amount of rational scrutiny. Blankley needs to decide whether his paper's credibility is more important than his influence with Karl Rove and other GOP pragmatists.
::: posted by Skip Oliva
at 8:46 AM | link
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Monday, June 16, 2003 :::
Rights & Reason: Group Self-Respect?
American conservatives are up in arms over a recent ruling by the Ontario Court of Appeal which redefined the common law concept of marraige to, in essence, require the legal recognition of gay unions. I won't comment on the merits of this decision right now, since I've not had a chance to review the case and the relevant Canadian constitutional documents. But on first glance, I noticed a passage cited from a Canadian Supreme Court opinion which merit some general comments:
Human dignity means that an individual or group feels self-respect and self-worth. It is concerned with physical and psychological integrity and empowerment. Human dignity is harmed by unfair treatment premised upon personal traits or circumstances which do not relate to individual needs, capacities, or merits. It is enhanced by laws which are sensitive to the needs, capacities, and merits of different individuals, taking into account the context underlying their differences. Human dignity is harmed when individuals and groups are marginalized, ignored, or devalued, and is enhanced when laws recognize the full place of all individuals and groups within Canadian society.
The phrase "individual or group" makes this passage highly suspect. A group cannot, rationally speaking, enjoy "self-respect and self-worth," since those are concepts exclusive to, well, the "self" or individual. One cannot claim self-respect based solely on the actions or thoughts of a group. This is how one comes to believe in anti-concepts like "diversity." Objective law is concerned only with individual rights, and permits groups to form as individuals dictate, taking into account whatever factors they value. Some groups are based on ideas (i.e. Objectivists, Communists, et al.) while others are based on more superficial characteristics (i.e. race). It is not the state's place to promote group self-respect or self-esteem, just as it is not the state's place to prevent every act which may harm "human dignity."
Of course, when you accept the state as being a social engineer, as most Canadians do, nonsense like the Supreme Court passage cited above make perfect sense. But far from promoting individual human rights, this kind of muddled, almost non-conceptual thinking accomplishes precisely the opposite. As the Court appears to see it, government must enforce egalitarian values upon all individuals and "groups," lest anyone in society think they're better than anyone else, even on merit or capacity.
::: posted by Skip Oliva
at 7:54 PM | link
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Antitrust News: The PeopleSoft Rorschach Test
PeopleSoft, a software company recently targeted for a possible hostile takeover by Oracle, took out a full page advertisement in today's Wall Street Journal to explain that their Board rejected Oracle's offer, among other reasons, because such a merger might not pass antitrust merger. The operative word is "might," as there's hardly a consensus as to whether PeopleSoft-Oracle pose all that grave a threat to "competition":
According to academics and antitrust attorneys, Oracle's $5.1 billion tender offer for PeopleSoft could indeed trigger a lengthy review in the U.S. and Europe, as PeopleSoft's board argued Thursday morning when it rejected the $16- a-share bid.
But these experts found little in the prospective combination that would lead regulators to block the combination of the two software makers.
Antitrust examiners look at whether a merger will bring higher prices to customers or restrict choice and the ability of new competitors to enter a business. Many experts agree the extensive news coverage of Oracle's tender offer will leave regulators with little choice but to conduct a thorough inspection.
"In some sense, (PeopleSoft) might be making a self-fulfilling prophesy," says Andy Klevorn, a partner and antitrust attorney at Eimer Stahl Klevorn & Stolberg, referring to company's claim of a lengthy process. Regulators "will take a good look at this given the level of publicity."
In other words, like all antitrust cases, everything is subject to the whim of federal regulators. Since there's no objective way to determine whether a merger is "anticompetitive," you're essentially gambling when you submit your merger review paperwork to the FTC and DOJ. That alone should tell you why antitrust laws need to be abolished immediately.
::: posted by Skip Oliva
at 7:40 PM | link
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West Virginia's attorney general has agreed a settlement that would end his appeal of the landmark Microsoft Corp. MSFT.O antitrust settlement, leaving Massachusetts as the final hold-out pushing for stricter sanctions, the software giant said on Monday. West Virginia Attorney General Darrell McGraw agreed to drop out of the appeal as part of a broad agreement that would also settle suits filed under state laws by state authorities and class action attorneys in West Virginia, Microsoft said.
Massachusetts and West Virginia had asked a federal appeals court to strike down the settlement deal and impose more stringent sanctions against Microsoft.
Last year, a lower court judge approved the settlement deal between Microsoft, the U.S. Justice Department and other states that had joined the case.
::: posted by Skip Oliva
at 7:37 PM | link
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Sunday, June 15, 2003 :::
CAC News: It's All About Price
The Rule of Reason is listed on Blogshares at $47.36 a share, at least as of today. We're down from our peak price of $59.40 on June 10, but I'd still say we're not doing that bad.
::: posted by Skip Oliva
at 9:20 AM | link
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Rights & Reason: The Star-Chamber Mentality
John Samples of Cato has an excellent column in today's Washington Times on the subject of administrative agency abuse:
The Star Chamber Court of England stands as a symbol of arbitrary government. It operated outside the normal processes that guarded the liberty of an English subject even under the monarchy. Eschewing trial by jury, the Star Chamber arbitrarily imposed punishments like imprisonment, fines, the pillory, whipping, branding and mutilation. Parliament closed the infamous institution in 1641 but the memory of its misdeeds should never die.
In 1983, the chairman of the ABA's Administrative Law Section in congressional testimony likened the Federal Election Commission to the Star Chamber Court. The ensuing 20 years have shown the accuracy of that depiction.
The FEC oversees the regulation of American elections. No task could be more central or potentially more dangerous for a nation dedicated to self-government and the rule of law. If abused, the power of the FEC could be used to punish Americans who seek to participate in politics. Critics of the agency will scoff and say the FEC is a "toothless tiger" that is too gentle on those charged with violating election laws. If only that were true.
Defendants before the FEC have few due-process safeguards. When a complaint comes before the FEC, its general counsel makes the case against the alleged lawbreaker who has no right to appear before the commission. The general counsel gives the commission a report that summarizes and criticizes the legal arguments of the accused and answers any questions from the commissioners. This report is not given to the accused even though it may contain new arguments or information. The accused also has no right to see the documents that were the basis of the general counsel's case. The FEC does not have to reveal the witnesses against a defendant, or allow that defendant to attend witness depositions, much less provide an opportunity for cross-examination.
The FEC has long said that the normal rights accorded Americans should not apply at its agency because if an enforcement action were taken to federal court, the normal rule of law standards would apply. That is strange reasoning indeed. An enforcement agency whose work implicates vital rights should be free to ignore the rule of law during a protracted investigation because a court might later honor the rights of a citizen? This justification for exempting the FEC from the rule of law suggests the agency is arrogantly out of control.
Administrative agencies that combine regulatory and judicial functions—the FEC, FTC, and FCC, to name a few—are inherently unconstitutional. Not only do such agencies violate the Constitution's separation of powers by, in essence, combining the executive, legislative, and judicial powers of government, but as Samples eloquently describes, the very nature of agency proceedings compels regulators to ignore due process rights. No agency could function if it had to actually adhere to the standards of the independent judiciary.
The political culture has obviously become accustomed to this unconstitutional form of government-by-Star Chambers. What's more appalling is how the so-called academics—like the beloved Judge Richard Posner—have bought into this. Pragmatists like Posner disfavor reducing the power of agencies on the grounds that it would simply increase the work of the courts, and that agencies composed of "experts" are far better suited toward regulatory matters in the first place. This philosophy is rampant within the federal judiciary, most of which (with some notable exceptions) defers to agency judgments as infallible despite evidence to the contrary. For all the talk of judicial activism on the bench, Americans should really be debating the issue of judicial laziness—judges who put the interests of regulators over the constitutional principle of individual rights.
::: posted by Skip Oliva
at 9:10 AM | link
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