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The Rule of Reason

Thursday, December 25, 2003 :::

Merry Christmas . . .

. . . and to men of goodwill, Peace!

::: posted by Nicholas Provenzo at 7:00 AM | link | donate |

Wednesday, December 24, 2003 :::

Season's Greetings: Gone Fishin'

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

::: posted by Skip Oliva at 10:55 PM | link | donate |

Capitalism & Law: A Tale of Two Professions

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

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

::: posted by Skip Oliva at 5:40 PM | link | donate |

Rights & Reason: Campaign Finance in Practice

A point that is often overlooked when discussing campaign finance “reform” is the ultimate objective of the alleged reformers: government financing of all political campaigns. John Lott of the American Enterprise Institute points out some of the many problems with this concept:

Campaign finance reform will undoubtedly also survive recent scandals — even the revelation of a New York City Council candidate who was apparently the first to realize that you could use donations to get matching funds and then hire those same donors as political consultants with the government money. With New York City offering four dollars of matching funds for every dollar raised, few legal investments provide that kind of return.

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

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

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

::: posted by Skip Oliva at 10:21 AM | link | donate |

Rights & Reason: Driving Without Probable Cause

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

Eric McErlain, commenting on Austin’s situation, points out that in Virginia, the cops aren’t just out for drunk drivers, but for social drinkers as well:

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

::: posted by Skip Oliva at 9:52 AM | link | donate |

Tuesday, December 23, 2003 :::

Corporate Cowards: Dow AgroSciences

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

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

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

Garry L. Hamlin
[Address omitted]

Merry Christmas.

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

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

::: posted by Nicholas Provenzo at 5:54 PM | link | donate |

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

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

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

::: posted by Nicholas Provenzo at 4:28 PM | link | donate |

Capitalism and the Law: China to Consider Changing Property Law

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

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

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

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

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

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

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

::: posted by Nicholas Provenzo at 2:27 PM | link | donate |

Monday, December 22, 2003 :::

Capitalism & Law: Mountain Brief Filed

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

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

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

::: posted by Skip Oliva at 10:34 PM | link | donate |

News: Uniting Commerce and Education

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

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

::: posted by Skip Oliva at 10:20 PM | link | donate |

Rights & Reason: Googling Leftism

The Adam Smith Institute, a British free market group, warns that Google will be the next major target of anti-corporate leftists. ASI’s Alex Singleton cites an interview with a reporter for the state-subsidized BBC, who bemoans the selfish motives of Google’s leadership:

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

::: posted by Skip Oliva at 10:04 PM | link | donate |

The Culture: New Tower Design for WTC Site Unveiled

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

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

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

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

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

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

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

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

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

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

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

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

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

::: posted by Nicholas Provenzo at 4:55 PM | link | donate |

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