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Friday, August 01, 2003 :::

Rights and Reason: The Vatican Opts for Orphanages over Gay Parents

I start with what I presume is a point of agreement with the Cathoic Church. The ideal situation for a child is to live with a loving birth mother and a loving birth father in a stable marriage. However, the question of adoption exists because this is sometimes not feasible. Ideally, every child put up for adoption would be adopted by a loving, married heterosexual couple with the means to take care of the child. Since there is a shortage of such couples willing to adopt, that is not feasible, and very broadly any loving, responsible, permanent parent or couple is an improvement over the uncertain state of foster care and orphanages.

"As experience has shown, the absence of sexual complementarity in these unions creates obstacles in the normal development of children who would be placed in the care of such persons. They would be deprived of the experience of either fatherhood or motherhood."

So, by the decree of the Vatican, we should deny them both fathers and mothers. How compassionate.

"Allowing children to be adopted by persons living in such unions would actually mean doing violence to these children..."

It is staggering that the Vatican chooses to describe an orphan child being adopted by a gay couple as "doing violence to these children," given the American Church's decades-long record of leniency with pedophiles. Suffice to say that on the issue of the treatment of children, the Church lacks credibility.

"...doing violence to these children, in the sense that their condition of dependency would be used to place them in an environment that is not conducive to their full human development."

Whereas, apparently, orphanages and foster care are entirely conducive to their full human development.

By the way, "Experience has shown..."? There is a body of experience of children adopted by or raised by gay couples? If not, the entire passage is rendered to be, as the British say, bollocks. Reason might indicate, logic might dictate, but to the best of my knowledge there haven't been a whole lot of gay couples raising children in the past couple of millenia to provide a body of data to support a paragraph which begins "Experience has shown..."

What experience (thousands of years of recorded history) does indicate is that lifelong celibacy is an unnatural and deviant lifestyle. ("...a man shall leave his father and mother and be united with his wife, and they will become one flesh." Gen 2:24) Logically, the rejection of sexuality would tend to attract those whose sexuality for whatever reason is not healthy and who feel a need to escape from it. Great care should be taken when entrusting children to the care of such persons, as the code of celibacy collapses the distinction between healthy and deviant sexual behavior, both classified as regrettable human failings.

::: posted by John Bragg at 3:39 PM | link | donate |

Sports: Clarret's Claim

My colleague Eric McErlain believes Ohio State running back Mauric Clarett should abandon college and seek his riches in the NFL. Fine by me. The only problem is that Clarett can't enter the NFL draft for another year. Under current policy, a player doesn't become eligible for the draft�and thus entry into the NFL�until he's been out of high school for two years, and Clarett's only been out for one. McErlain states this shouldn't be a problem, however:

Were I in [Clarett's] shoes, knowing that my athletic talent might be lost forever on my next carry up the gut, I might seriously consider leaving Columbus early and challenging the NFL policy on drafting underclassmen (a situation where he would prevail in court, and quite easily, just like Spencer Haywood in the NBA).

I can find no authority to support McErlain's conclusion that Clarett would prevail in court. The Haywood case does not have the weight McErlain thinks it does. Indeed, Haywood's situation was not exactly like Clarret's.

Spencer Haywood graduated from high school in 1968, and following graduation he played for the U.S. Olympic team and enrolled at the University of Detroit. After his freshman year, Haywood signed a contract with the Denver Nuggets, then in the ABA, and quickly became a star, leading the league in scoring his rookie year and winning the Rookie of the Year and Most Valuable Player awards.

In 1970, Haywood tried to renegotiate his contract with Denver, and things turned ugly. For a variety of reasons I won't go into here, Haywood repudiated his new contract with Denver in August 1970, charging the team with fraud. In December of that year, Haywood signed a contract with the NBA's Seattle SuperSonics. Both Seattle and Haywood realized their contract would violate the NBA's bylaws, which require a player to be out of high school four years before becoming draft eligible. A U.S. district court in California issued an injunction permitting Haywood to play while he challenged the legality of the NBA's bylaw under the Sherman Act.

The Supreme Court's role in this matter was extremely limited. The Ninth Circuit had stayed the district court's injunction permitting Haywood to play, and Justice William O. Douglas, as the supervising justice for the Ninth Circuit, was asked to rule on a petition to reinstate the district court's order. Douglas did so, issuing a brief opinion which represented the Supreme Court's sole involvement in the matter. Douglas' opinion in substantive part held (1) the NBA, unlike Major League Baseball, was not generally exempt from the antitrust laws and (2) Haywood would suffer a far greater economic injury than the NBA if the district court's injunction was not granted pending the outcome of the underlying litigation.

The district court eventually invalidated the NBA bylaw prohibiting players like Haywood from entering the league. The judge considered the NBA's actions a "group boycott" plainly forbidden by the Sherman Act. How, then, is this different from Maurice Clarett's hyopthetical case? The main reason is that the Haywood case dealt with a rule adopted unilaterally by the league. The NFL's current policy, in contrast, reflects the current collective bargaining agreement (CBA) between the NFL and its players association. As a general principle, policies arising from labor agreements are immune from antitrust review, even if such policies would be plainly illegal under the antitrust laws outside the collective bargaining context.

Now, I've reviewed the NFL's CBA, and there is no express language defining draft eligibility, only several clauses that refer to it. But if the NFL Players Association felt the current "two years out of high school" policy violated the CBA, they have numerous channels to redress the situation. But under existing law, as best I can tell, it is the NFLPA's right alone to challenge the policies under the CBA. A third-party like Clarett cannot challenge valid provisions of the CBA under antitrust laws.

This is a principle well established in existing case law for sports leagues. In 1987, for example, the Second Circuit turned back an antitrust challenge to the NBA's CBA by Leon Wood. Wood was drafted in 1984 by the Philadelphia 76ers, who were then over the salary cap. As a result, the 76ers offered Wood a contract far below what he thought his value to be. Wood then sued to have the draft system and other parts of the CBA declared illegal under the Sherman Act. Both the district court and the Second Circuit rejected this claim. Circuit Judge Ralph Winter, writing for the Second Circuit, explained the defects in Wood's complaint:

Although the combination of the college draft and salary cap may seem unique in collective bargaining (as are the team salary floor and 53 percent revenue sharing agreement), the uniqueness is strictly a matter of appearance. The nature of professional sports as a business and professional sports teams as employers calls for contractual arrangements suited to the unusual commercial context. However, these arrangements result from the same federally mandated processes as do collective agreements in the more familiar industrial context. Moreover, examination of the particular arrangements arrived at by the NBA and NBPA discloses that they have functionally identical, and identically anticompetitive, counterparts that are routinely included in industrial collective agreements.

Among the fundamental principles of federal labor policy is the legal rule that employees may eliminate competition among themselves through a governmentally supervised majority vote selecting an exclusive bargaining representative. Section 9(a) of the National Labor Relations Act explicitly provides that "representatives . . . selected . . . by the majority of the employees in a unit . . . shall be the exclusive representatives of all the employees in such unit for the purposes of collective bargaining." 29 U.S.C. � 159(a). Federal labor policy thus allows employees to seek the best deal for the greatest number by the exercise of collective rather than individual bargaining power. Once an exclusive representative has been selected, the individual employee is forbidden by federal law from negotiating directly with the employer absent the representative's consent, NLRB v. Allis-Chalmers Mfg. Co., 388 U.S. 175, 180, 18 L. Ed. 2d 1123, 87 S. Ct. 2001 (1967), even though that employee may actually receive less compensation under the collective bargain than he or she would through individual negotiations. J.I. Case Co. v. NLRB, 321 U.S. 332, 338-39, 88 L. Ed. 762, 64 S. Ct. 576 (1944).

The gravamen of Wood's complaint, namely that the NBA-NBPA collective agreement is illegal because it prevents him from achieving his full free market value, is therefore at odds with, and destructive of, federal labor policy. It is true that the diversity of talent and specialization among professional athletes and the widespread exposure and discussions of their "work" in the media make the differences in value among them as "workers" more visible than the differences in efficiency and in value among industrial workers. High public visibility, however, is no reason to ignore federal legislation that explicitly prevents employees, whether in or out of a bargaining unit, from seeking a better deal where the deal is inconsistent with the terms of a collective agreement.

Now, not everything in a CBA would be exempt from outside legal review. For instance, if the NFL's CBA contained a provision preventing white people from becoming draft eligible, the courts would strike down such a provision as inconsistent with federal civil rights law. There is, however, no such public policy protecting against minimum age discrimination. There are laws preventing maximum age discrimination�you can't generally hire or fire an employee because of age if he's over 40�but that's inapplicable here.

None of this should be read to preclude the possibility Clarett could sustain an antitrust claim against the current NFL rule. But McErlain erred in asserting that it was a foregone conclusion that such a claim would succeed. All of the current evidence weighs decisively against challenging the NFL policy so long as it remains within the CBA's zone of influence.

::: posted by Skip Oliva at 2:15 PM | link | donate |

Antitrust News: Orbitz Cleared

A second federal antitrust investigation into Orbitz, the online travel company co-owned by five U.S. airlines, found no evidence of "anticompetitive conduct":

R. Hewitt Pate, Assistant Attorney General in charge of the Department's Antitrust Division, issued the following statement today after the Department announced the closing of the Orbitz joint venture investigation:

"After an extensive investigation of the available facts, the Antitrust Division concluded that the Orbitz joint venture has not reduced competition or harmed airline consumers. This thorough review involved interviewing numerous interested parties, reviewing many documents that were produced by Orbitz as well as by third parties, engaging in extensive empirical analyses of airline booking data, and examining the analyses suggested by third parties.

"The Division considered several theories of harm none of which was ultimately borne out by the information collected by the Antitrust Division. These concerns included whether certain Orbitz contract terms would facilitate coordination among the participating airlines or reduce their incentives to discount resulting in higher fares and whether those contract terms would make the Orbitz joint venture dominant in online air travel distribution. The Division found that those terms did not result in higher fares or make Orbitz dominant in online air travel distribution."

Orbitz was previously investigated by the Transportation Department's inspector general, who also found no "consumer harm" resulted from the formation and operation of the joint venture. And the pesants rejoice!

::: posted by Skip Oliva at 1:10 PM | link | donate |

Antitrust News: FTC Ups the Ante

Yesterday the Federal Trade Commission issued a "policy statement" on the possible future use of "monetary remedies" in antitrust cases. In most antitrust cases, you see, the FTC generally seeks injunctive remedies, i.e. orders not to engage in a particular business practice. Monetary remedies, in contrast, seek to directly seize property from offending businesses, either in the form of "restitution" to alleged victims or by "disgorgement," where the government takes all profits allegedly earned from anticompetitive activities.

Viewed alone, the Commission's policy statement amounts to nothing more than a restatement of existing theories on potential uses for monetary remedies. Placed in context, however, it seems to me that the FTC is sending a message to certain businesses�like Brown & Toland Medical Group�that there will be a price to pay for challenging the FTC's authority and not settling right away. Monetary remedies, after all, are of little benefit in settlement cases, the majority of the FTC's docket, because most businesses would fight rather than see all of their profits "disgorged." Thus in conparison, settling for injunctive relief meets the FTC's need to regulate while leaving the majority of businesses intact.

Every business that asserts its rights however acts in defiance of the FTC's mission to regulate the economy without question. In these cases, restitution and disgorgement are powerful weapons to hold over businesses�a nuclear option, if you will.

::: posted by Skip Oliva at 1:05 PM | link | donate |

Rights and Reason: Vatican Condemns Gay Marriage Proposals, Not Gays--Why?

From the Vatican via New York Times:

In its recent Vatican statement, the Roman Catholic Church says that gays "must be accepted with respect, compassion and sensitivity." "They are called, like other Christians, to live the virtue of chastity." This is not, as some have suggested, an expression of hostility towards gays. This is the Church's ideal for all of us, not a special punishment for gays. The church calls upon all people to come to Christ, and upon all Christians to live the virtue of chastity, in other words to live as sexless a life as possible.

Once again, the Catholic Church makes clear that it sees sex not as a celebration of love between two people, a celebration of humanity, but as a human failing to be regretted and to be avoided and censured where possible. The Catholic Church sees sex as a sin, justified only by its effects in propagating the human species. The Church, accordingly, condemns contraception, masturbation, and heterosexual sodomy as well as homosexual sodomy, while denying marriage and therefore any sexual satisfaction to its most devoted followers, the men and women of the clergy.

This fundamental mistake informs every statement and every action by the Church concerning sexuality. The ill effects of the "virtue of chastity" doctrine are seen more clearly the higher one goes in the Church heirarchy. The parish priest who interacts regularly with married couples at least has years of firsthand observations of how healthy sexual and romantic relationships between loving, married couples operate. The bishops, however, interact mainly with other priests, and the cardinals interact largely with other bishops. The sobering fact is that no one in the entire College of Cardinals has any personal understanding of what it is like to love and be loved in a healthy relationship with another person.

Looked at from this perspective, is it more understandable why the Catholic Church in America regarded pedophile priests as good men who strayed from the path, and tried to silence their accusers, rather than as predators who would molest and rape again? Since the Church sees sexuality itself as suspect, is it any wonder they could not distinguish between sex in a loving relationship and molesting an altar boy, treating both as regrettable but forgivable human failings?

::: posted by John Bragg at 12:42 PM | link | donate |

Thursday, July 31, 2003 :::

Rights and Reason: Bush Wants Only Man-And-Woman Marriages

This from the AP:

President Bush says Americans should respect homosexuals, but he wants to make sure marriage is defined strictly as a union between a man and a woman.

Government lawyers are exploring measures to enshrine that definition in the law, the president said Wednesday.

"I believe in the sanctity of marriage. I believe a marriage is between a man and a woman, and I think we ought to codify that one way or the other," he said.

Still, he urged Americans not to ostracize gays.

"I am mindful that we're all sinners, and I caution those who may try to take the speck out of the neighbor's eye when they got a log in their own," the president said, invoking a biblical passage from the Gospel of St. Matthew.

"I think it is very important for our society to respect each individual, to welcome those with good hearts, to be a welcoming country," Bush said.

Sinners? That's like asking someone when did they stop beating their wife.

And what does the President's religious view of gays have to do with anything? The question is whether gays have the individual right to enter into a marriage contract. The president's faith may tell him no, but there is not a shred of reason in this universe that says two consenting adults ought not to be able to define their relationship on their own terms and have that relationship protected under the rule of law.

::: posted by Nicholas Provenzo at 9:55 AM | link | donate |

Wednesday, July 30, 2003 :::

Rights and Reason: Alabama governor says voters have Christian duty to approve big tax increase

This from the AP:

Alabama�s new governor is trying to persuade voters to approve the biggest tax increase in state history by telling them it is their Christian duty. And for a state in the Bible Belt, that might seem like a winning strategy.

Instead, Republican Gov. Bob Riley�s $1.2 billion tax package is alienating even the Christian Coalition and other supporters, who see Riley as a Judas. Riley had consistently opposed new taxes while in Congress.

Riley says the tax increase is needed to erase Alabama�s biggest deficit since the Depression and improve education. The plan also seeks to help the poor by raising the income level at which people have to begin paying state taxes.

Alabama�s threshold for paying state taxes is the lowest in the nation at just $4,600 for a family of four and has been unchanged since 1982.

Riley, a Southern Baptist, says Alabama has taxed its poorest too harshly for too long.

"According to our Christian ethics, we�re supposed to love God, love each other and help take care of the poor," he said. "It is immoral to charge somebody making $5,000 an income tax."

Well, we now at least know that God favors the progressive income tax.

::: posted by Nicholas Provenzo at 3:06 PM | link | donate |

Rights and Reason: Hormel Fights to Defend Spam Name

The AP reports that Hormel Foods is suing a Seattle-based software firm for infringing upon its "Spam" trademark.

SpamArrest, which specializes in blocking junk e-mail or "spam," filed papers to trademark its corporate name early this year. Hormel then sent the company a warning to drop the word "Spam." SpamArrest refused.

"If you ask most people on the street, they're going to say junk e-mail as opposed to the luncheon meat as their first description of what spam is. I think they're overstepping their bounds," said Brian Cartmell, SpamArrest's chief executive.

Cartmell says his company's use of the word has nothing to do with Hormel's product, first produced in 1937. Hormel officials disagree, arguing that the company has carefully protected and invested in the brand name, and that the public could confuse the meat product with the technology company. It filed its challenges in late June.

Hormel acknowledges that its brand name has taken on new meaning, and it outlines on its Web site what it considers acceptable uses of the word.

I think Hormel is well within its rights. To be honest, I'm at a loss as to why "Spam" became synonymous with unsolicited e-mail in the first place. The news editors who first covered Internet jargon should have been sensitive to the fact that "Spam" is a commercial trademark--any good journalism style manual tells you as much for obvious reasons. But, by an attempt to be cute, Hormel�s mark has more or less been dragged through the mud and will likely never come clean.

As far as SpamArrest goes, they can not escape the simple fact that the name "Spam" is property that Hormel has a right to protect. SpamArrest does not have a right to the commercial use of the word �Spam� despite the word�s wide-spread non-commercial use.

It will be interesting to see how the courts rule in light of the recent Victor's Secret case, where it was held that "Victor's Secret" was sufficiently different from "Victoria's Secret" to squelch a trademark infringement suit. Ideas are ethereal things, and yet protecting their value is crucial. This is a case we will be monitoring closely.

::: posted by Nicholas Provenzo at 10:47 AM | link | donate |

Tuesday, July 29, 2003 :::

Humor: Federal Elections

I love the press releases I get:

"According to the Dixie Chicks, only 36 percent of Americans between the ages of 18 through 24 voted in the last presidential election."

I am both heartened and relieved that the Dixie Chicks, in addition to being country music performers, are closely monitoring federal election trends.

::: posted by Nicholas Provenzo at 4:30 PM | link | donate |

Website down

We're working on it. Thanks to those who dropped us a line.

::: posted by Nicholas Provenzo at 8:19 AM | link | donate |

Monday, July 28, 2003 :::

Antitrust News: NCAA Dunked

In what I hope is not a harbinger of future antitrust troubles, the NCAA fell prey this evening to a federal judge in Ohio who struck down a college basketball rule limiting participation in in-season mini-tournaments. ESPN's Andy Katz reports as follows:

College basketball got a rare dose of offseason good news Monday night when an Ohio federal judge rescinded the NCAA's 2-in-4 rule.

That means tournaments such as the Maui Invitational, Great Alaska Shootout, Preseason NIT, Coaches vs. Cancer Classic and any other in-season exempted events are more likely to include at least one to two major-name teams.

In a 38-page ruling, Judge Edmund A. Sargus ruled in favor of the plaintiffs (Gazelle Group, Inc., Worldwide Basketball and Sport Tours, Inc., Sports Tours International, and Sports Promotions, LLC). The lawsuit by the plaintiffs started on Dec. 21, 2000, against the NCAA's 2-in-4 rule that restricted teams to two exempted events in a four-year cycle.

Some schools were grandfathered into the rule and were allowed to play three such events in a four-year cycle. An exempted event is a tournament that counts as only one game on the maximum 28-game schedule for Division I teams.

Sargus said the 2-in-4 rule was in violation of Sections One and Two of the Sherman Act. Sargus said in his ruling that, "The NCAA is hereby permanently enjoined from enforcing the 'two-in-four' rule.'' This means that teams are eligible to play in a certified event on an annual basis, like they were prior to the 2-in-4 rule in 2000. But the NCAA rule limiting teams to one of these events a season is still in place. Teams cannot play in an exempted event in the same season that they go on a foreign trip.

Sargus put off a ruling on this case in July, 2002 to see how the rule would affect the tournaments in Year Three of the legislation.

"Last season was the turning point,'' said Bill Markovits, attorney for the plaintiffs. "The judge was looking to see what would happen and he saw what we predicted, and that was a decrease in output and quality of events.''

Markovits said the NCAA certified 28 events but only 17 were able to go forward because the other 11 couldn't fill their fields with eligible teams. There were 25 events the previous season. The number of exempt games decreased from 251 to 144.

I'll review the judge's full opinion when I can obtain a copy, but for now I would note that there is nothing in the Sherman Act that prevents a private membership association from passing rules for its internal governance. Whether the rule is a good idea--and it's not in my opinion--is not a subject for a federal judge to decide when there's no independent contractual dispute. The tournament organizers were clearly unhappy with the NCAA's rule, but that does not give them the right to use the courts of law to impose their wishes upon another organization.

::: posted by Skip Oliva at 11:55 PM | link | donate |

Antitrust News: Good Riddance

The FTC announced today that Commissioner Sheila Anthony resigned today, effective August 1. That's odd considering Anthony's term expired last September, and she only remained in office because her successor�Pamela Jones Harbour�was not confirmed by the Senate until last week. Technically, Anthony is already out of office, but I guess Harbour needed a few days to transition herself.

In other FTC news, the Commission announced the hiring of two new intellectual property attorneys in a press release titled "FTC Expands Intellectual Property Expertise." Is this an admission the Commission is presently ignorant about intellectual property matters?

::: posted by Skip Oliva at 2:36 PM | link | donate |

Antitrust News: Operatic Overkill

In a rare formal opinion, the Federal Trade Commission upheld antitrust charges against two record companies the Commission's lawyers say engaged in nefarious price-fixing:

Federal regulators upheld charges Monday that two companies illegally fixed prices when they joined forces to sell recordings of the opera stars known as The Three Tenors.

The Federal Trade Commission rejected an appeal by subsidiaries of French corporation Vivendi Universal and supported a June 2002 ruling by an administrative law judge who ordered the companies to stop anticompetitive practices.

The case involves 1998 recordings of the tenors Luciano Pavarotti, Jose Carreras and Placido Domingo performing at the World Cup soccer finals in Paris.

In 1997, Warner Communications Inc. formed a joint venture with PolyGram Music Group, which was later acquired by Vivendi. Warner was to distribute the recordings in the United States, while PloyGram would handle overseas distribution.

The FTC said the two companies feared videos and albums of the 1998 concert wouldn't sell as well as those from the trio's first two World Cup appearances in 1990 and 1994. So the companies agreed to restrict discounts and advertising for the older performances before and after the release of the 1998 recordings, the FTC said.

"Restraints on price discounting and advertising are inherently suspect," FTC Chairman Timothy Muris said in the ruling. He said the agreement between companies sought to deprive consumers of the "vigorous competitive offering of certain products to induce them to choose others."

The FTC voted 5-0 to uphold the ruling against Vivendi's subsidiaries. That ruling found that the agreement with Warner violated federal antitrust law, because the two earlier recordings were not jointly produced by the two companies.

Chairman Muris' 61 page order is itself a virtuoso performance in which he barely hides his prejudicial contempt for the perfectly justified conduct of the two record companies:

Nessun Dorma! � None must sleep!

This Puccini aria, sung by tenor Luciano Pavarotti in the recording at the heart of our case, announces the edict of the Chinese princess Turandot that no one in Peking may sleep until she solves her problem. The princess has made a bad
judgment � agreeing to marry the first suitor who, at peril of death, can answer three riddles. Although this plan once had served her purposes, someone has now answered the riddles, and Turandot is encumbered with a product she neither wants nor can market. She grasps at one last chance to stop the wedding, by guessing the name of the suitor, and will stop at nothing to obtain the information.

Our story takes place not on the opera stage, but in the business world of operatic recordings. The drama is not so stirring, and no one loses his head, at least not literally. The story is troubling, nonetheless. Two recording companies agree to form a joint venture to market a new recording, by three of the world�s foremost singers, and to split the costs and profits. By itself, such an agreement, even by competitors, is often beneficial, because it helps bring a new product to market. Here, however, the story turns dark when it becomes apparent that the new recording will repeat much of the repertoire of existing recordings, diminishing its marketing potential and worrying the recording companies. While other businesses might have worked harder to develop an improved or more distinctive product to attract greater consumer interest, our protagonists chose another route. They agreed to restrict their marketing of competing products that they respectively controlled � products that were clearly outside the joint venture they had formed. They imposed a moratorium on discounting and promotion of those recordings that might otherwise siphon off sales of the new product. We now consider whether such an agreement unreasonably restrains trade in violation of the antitrust laws. We conclude that it does.

Dramatics aside, Muris is saying that a company violates the antitrust laws simply by making a business decision the FTC's lawyers disagree with. In this case, Muris said the companies should have produced a better album with more original material; because they didn't, that constitutes a legal injury to consumers who, depending on how you look at it, have a right to either lower prices or a new Three Tenors album every four years.

::: posted by Skip Oliva at 2:12 PM | link | donate |

Sunday, July 27, 2003 :::

Antitrust News: Safe Harbour Granted

Last Wednesday, the Senate confirmed Pamela Jones Harbour to the Federal Trade Commission by voice vote without debate. That alone tells you how seriously the Senate takes the FTC and its work. Commissioner Harbour will serve a seven-year term retroactive to September 2002, meaning she'll remain in office until well past a potential second Bush presidential term. It also means, given Harbour's Democratic connections, that the new commissioner may be in line to become FTC chairman should the left succeed in toppling Bush next year.

::: posted by Skip Oliva at 11:40 PM | link | donate |

The Constitution: Foreign Presidents

On Wednesday the Senate Judiciary Commitee will hold a hearing on a quirky constitutional amendment proposed by the committee's chairman, Utah Republican Orrin Hatch. The proposed amendment reads as follows:

A person who is a citizen of the United States, who has been for 20 years a citizen of the United States, and who is otherwise eligible to the Office of President, is not ineligible to that Office by reason of not being a native born citizen of the United States.

Under the 1789 Constitution, a foreign-born citizen is ineligible to assume the presidency without exception. This provision was written largely because of concerns that some factions in the new American government would seek to "import" a chief of state from England and install him as a de facto King. That's obviously not a major concern of most Americans today, and with the number of respected foreign-born citizens in political life, it would seem appropriate to reconsider the original Constitution's total ban.

I only wonder why Hatch specified a 20-year period of citizenship. It seems high. The Constitution specifies House members must be citizens for seven years, and Senate members for nine. Following that progression, a president should be qualified after just 11 or 12 years. But this is obviously a detail that can be hashed out in debate.

::: posted by Skip Oliva at 11:34 PM | link | donate |

Antitrust News: A Sticky Injunction

The Justice Department obtained an injunction this week preventing UPM-Kymmene Oyj from acquiring a competitor in the �label stock� industry, that is the adhesive used on peel-and-stick labels. The DOJ claimed the merger of UPM and rival Morgan Adhesive would illegally concentrate 70% of the market with UPM and its remaining major competitor, Avery. The Court�s injunction stops the merger pending an adjudication of the government�s antitrust claims.

This is an all-too-typical antitrust decision, where the Court falsely emphasizes the government�s specious claims over the property rights of the merging companies. The Court admits as much in the final paragraph of its 26-page ruling granting the injunction:

The balance of harms, which is a question I am not required to consider given my view of the merits, is nonetheless a factor which favors the government. A wrongful denial of injunction would, for a year or more, inflict irreparable damage on consumers and, in all probability, leave us with a Raflatac 2nd that could not be divided back into the entities from which it was formed. A wrongful grant of injunction leaves Raflatac no worse off than it is now. Instead of buying market share, they can earn it in the customary way. MACtac�s declining condition will either be reversed or its slack will be taken up by other producers�the existing price competition will be diminished little or not at all. I find the public interest in having competitive markets is served by preventing the merger.

Although �[i]t is regrettable that antitrust cases are decided on the basis of theoretical guesses as to what particular market-structure characteristics portend for competition, . . . to place on the government an insuperable burden of proof is not the answer.� Rockford, 898 F.2d at 1286. �The principles of civil procedure do not require that the plaintiff make an airtight case, only that his case satisfy some minimum threshold of persuasiveness and be better than the defendant�s case.� Id. I find that the government has met this �minimum threshold.�

As with most antitrust cases, due process and reason are turned on its head to satisfy the government�s pathological need to regulate the economy. The most blatant false premise asserted by the Court here is the notion that UPM is �buying market share� rather than earning it �in the customary way�. Even with a larger firm, UPM still has to prove its value to its customers on a daily basis, or risk facing new competitors down the road. The government, however, cannot account for these new competitors, so instead the Justice Department goes after UPM merely on the fear that no such competition will arise.

And even if UPM is doing nothing more than buying market share, so what? In a free market, property owners may buy more property to satisfy their needs. In a regulated antitrust market, however, property itself is a privilege held at the government�s discretion. Thus, UPM is guilty not of harming consumers, but of failing to show proper tribute to government regulators before purchasing a rival firm.

::: posted by Skip Oliva at 4:51 PM | link | donate |

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