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Capitalism & Law: Banning Ephedra... But for How Long?
At first glance, you might think consumers would stay away from a product the government considers dangerous enough to ban. Yet that’s not happening with ephedra:
Online retailers are reporting a run on ephedra products as consumers make last-minute purchases of the dietary supplement that the federal government plans to ban.
The Food and Drug Administration announced Tuesday that it will ban ephedra in March. The agency urged consumers to stop taking the herbal ingredient, which has been linked to 155 deaths in the United States.
* * *
A sales representative at Dps Nutrition Inc., a Taylor, Pa., online supplement store, said ephedra products such as Extreme Ripped Force, ECA Stack and Diet Fuel have been dominating sales this week.
"We're seeing a record number of sales for ephedra products," the sales representative said, refusing to disclose her name.
Bodybuilding.com, a Boise, Idaho, online supplement retailer, posted about 2,000 orders for ephedra products on Tuesday, the Los Angeles Times reported. That one-day sale doubled the company's previous record.
Metabolife's original 356 formula, a weight-loss supplement with ephedra, was selling on EBay yesterday for $60 to $100 per 104-capsule bottle. Its ephedra-free counterpart was selling for $5 to $16 per 90-capsule bottle.
The FDA is treading on shaky legal ground in banning ephedra. Herbal supplements are not subject to prior authorization by the FDA, meaning the agency must affirmatively demonstrate ephedra is dangerous in order to ban its sale. Ephedra producers will almost certainly challenge the FDA ban in court. But the fight is worth the FDA’s time, since a victory will strengthen the agency’s ability to control and regulate other supplements. Like all bureaucracies, the FDA sees itself as a guardian of the “public interest,” and the best way to fulfill that mission is by acquiring as much power as possible.
The market, however, can still undermine the FDA’s authority. Even after the ban takes effect, ephedra will still be bought and sold in unofficial markets, many of them made possible by the internet. Unlike Prohibition of the 1920s, it’s no longer necessary to organize a massive crime syndicate to undermine the government’s authority. We’ve already seen what online Canadian pharmacies have done to undercut the FDA’s ban on importing prescription drugs. The more the FDA pushes for regulation, the more the market will push back. If I were a betting man, I’d put my money on the market ultimately prevailing.
::: posted by Skip Oliva
at 2:10 PM | link
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The commercial speech doctrine reared its ugly ahead again in today’s Ninth Circuit opinion in American Academy of Pain Management v. Joseph. The AAPM is a 15-year old group that maintains voluntary standards for various professionals that administer pain medication, such as dentists, athletic trainers, and chiropractors. AAPM sued Ronald Joseph, the executive director of California’s Medical Board, because the state of California restricts the ability of AAPM members to advertise without the Board’s permission. The issue is whether California can exclusively define the term “board certified”.
“Board certified” generally refers to a physician certified by a specialty board. The problem here is who decides what boards can certify. California law prohibits a physician from using the phrase “board certified” in any advertising unless the board referred to is itself accredited by a group called the American Board of Medical Specialties. ABMS, like AAPM, is a voluntary nonprofit organization that maintains professional standards. Unlike AAPM, however, ABMS has been granted coercive power by most state governments to restrictively decide which specialty boards may “certify” physicians, and which may not. In California’s case, a physician may not claim to be “board certified” by any specialty group that doesn’t meet ABMS’s approval.
AAPM did not meet ABMS’s standards. For example, the Ninth Circuit’s opinion refers to a dispute between the two groups over the length of the certification exam administered by AAPM; it lasted about two hours. ABMS and the California Medical Board require an exam of at least sixteen hours. Reasonable minds can certainly differ on this question, but California allows for no competition or discussion: ABMS sets the rules for everyone, even though it’s a private organization, not a government agency.
AAPM argued that California’s prohibition on using “board certified” in advertising without ABMS accreditation violated AAPM’s First Amendment rights. The Ninth Circuit panel disagreed. Their basic argument is superficially compelling: California law defines “board certified” to mean certification by an ABMS-approved specialty board, thus AAPM’s attempt to use the term amounts to misleading advertising.
This is a compelling argument only if you believe California has the right to define commercial terms of art. We’re not talking about a trademark or intellectual property. ABMS does not have proprietary use of “board certified”. Furthermore, the certification standards are themselves completely arbitrary; they can be changed at the whim of ABMS or California without any rational context. This means the issue is not whether AAPM’s proposed advertising is truthful or beneficial to consumers, but rather whether AAPM is willing to subject its professional judgment to the dictates of ABMS and California regulators. This defeats the whole point of voluntary professional societies.
Unfortunately, under the commercial speech doctrine, California’s position is consistent with existing Supreme Court precedent. The Ninth Circuit held the state has an interest in preventing consumers from being misled into thinking the state is endorsing AAPM’s standards, which apparently the term “board certified” conveys. This exposes the very flaw discussed above: The entire point of voluntary societies is to develop standards and practices based outside of the state’s arbitrary exercise of force.
Put another way, consumers should be free to receive and judge information for themselves outside of state-approved entities. Given the easy accessibility of information today, a consumer can easily review the accreditation standards of different societies and decide for themselves which standards make the most sense. The commercial speech doctrine, however, was created by the Supreme Court long before the Internet, and the justices paternalistically assumed the public was subject to easy manipulation outside of state protection from “false and misleading” advertising. The Court has also failed to recognize state-run licensing regimes as monopolistic cartels. Together, these two judicial errors have produced a litany of useless, “anticompetitive” regulation that violates the spirit and the letter of the Constitution.
(Editor's Note: This post was board certified by the American Academy of Webloggers, Fiskers, and Krugman Stalkers. This certification may not be valid in California, Tennessee, and any state with a "d" in its name.)
::: posted by Skip Oliva
at 11:47 PM | link
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Antitrust News: Pleading in the New Year
If you think the Bush administration cares first and foremost about preventing terrorist attacks, consider how the Justice Department’s been spending its time lately:
Micron Technology, as part of an agreement to win amnesty from prosecution by the Justice Department, may admit it conspired with competitors to manipulate computer-chip prices, people familiar with the probe said.
Boise, Idaho-based Micron, the world's No. 2 maker of memory chips, is in talks to provide information to bolster a possible U.S. case against three other companies in the $16 billion market for dynamic random access memory, or DRAM, chips, the people said.
The U.S. is probing whether Micron conspired with Infineon Technologies, Samsung Electronics and Hynix Semiconductor.
Cooperating with the agency could allow Micron executives to avoid prosecution.
The DRAM antitrust investigation centers around an alleged short-term price increase that happened two years ago. There is no fraud, coercion, or other criminal act at the center of this investigation, only the DOJ’s insistence that businesses not take any action to affect prices in their markets.
If the DOJ was capable of putting things in context—and they are not—they would see memory chips have never been cheaper or more plentiful. Even if there were some private agreements among competitors, the market as a whole has not suffered. But the Justice Department employs hundreds of lawyers and has empanelled more than 70 grand juries just to investigate antitrust matters. They will find something even where nothing exists.
To be sure, Micron didn’t help itself when one its executives pled guilty to obstruction of justice related to the antitrust investigation. The executive apparently altered notes about chip prices after they were subpoenaed by the grand jury investigating Micron. While I don’t condone this, the truth is Micron would be in trouble either way. The truth does not matter to the DOJ, only altering facts to meet their pre-determined subjective reality.
And I’m not sure I can condemn Micron for seeking a deal. Really, what choice do they have? If they don’t settle, they’ll almost certainly be indicted on criminal antitrust charges. Executives will be sent to jail. I have no trust in a jury’s ability to see the inherent irrationality of antitrust. Most people will simply assume Micron is just another corrupt corporation like Enron or WorldCom, and Micron will be punished for those firms’ sins.
::: posted by Skip Oliva
at 10:57 AM | link
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Thursday, January 01, 2004 :::
Foreign Affairs: Can the Irish Save Civilization?
Today Ireland assumes the rotating presidency of the European Union for six months. This is one of the few encouraging developments at the EU in recent memory. Unlike its continental counterparts, Ireland's government, under Prime Minister Bertie Ahern, has promoted lower taxation and deregulation as the foundation of its economic policy. The result has been faster growth for Ireland when compared to most of the EU. This enrages the EU bureaucracy in Brussels, which wants reduced "tax competition"--meaning higher taxes--throughout Europe. Ahern says he'll use the Irish presidency to promote deregulation in a number of areas. Here's hoping Ahern finds even some success.
::: posted by Skip Oliva
at 10:58 AM | link
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Rights & Reason: Civil Rights vs. Common Sense
Glenn Reynolds posted this selection from a story in the Washington Times:
The 17-year-old junior says that stance inspired threats from which teachers have refused to protect him. Some faculty members even started a public campaign against his group. . . In a telephone interview, Tim said he's been threatened at least three times . . . . One boy said he was going to "find someone" to beat up Tim. In two of those instances, Tim said two faculty members stood by and did nothing to help him.
Reynolds suggests the Justice department should look into this matter for potential violations of the student’s civil rights, because of “the apparent complicity of state employees in the suppression of speech they find disagreeable.” Based on my reading of the same story, Reynolds is wrong.
First, let’s provide some context. The student, Tim Bueler, founded a Conservative Club at his public high school. The club’s stated mission is to promote “the pillars of the Bible, patriotism and conservative beliefs as balance to the mostly liberal viewpoints of teachers.” The club’s newsletter published an article by Bueler criticizing illegal immigration. The Times cites one passage from the article: “Liberals welcome every Muhammad, Jamul and Jose who wishes to leave his Third World state and come to America.” Bueler says he was threatened by other students, that one teacher refused to help him deal with the threats, and that several teachers have called him a “Nazi” and a “bigot”. The Times quotes a biology teacher, Mark Alton, as calling on students to “take a stand against the neo-conservative wing-nuts who call themselves Americans.” This was in response to the Conservative Club’s maintenance of a “liberal assault hotline” designed to report incidents of teachers that “verbally assault” conservative students.
Alton said he doesn’t oppose the Conservative Club’s presence, but adds, “[w]hat bothers me is the extreme views that border on racism or homophobia, the negative tone, and the hotline that calls teachers ‘traitors’.”
Neither side here—Bueler or the opposing teachers and students—seem to exhibit much in the way of rational or mature behavior. But based on the information provided in the Times, it doesn’t add up to a federal civil rights violation. First, Bueler appears to have gone out of his way to upset the entire school. This is not a case where a student is being singled out merely because he expressed an unpopular opinion. Second, there is no evidence in the article that speech was suppressed. Far from it: Bueler’s club remains operational and no threats have been acted upon. Furthermore, the teachers have responded by defending themselves from Bueler’s verbal attacks. I don’t think civil rights law requires teachers to stand there and not respond what they believe are false accusations, be it from a student or anyone else. Yes, the “Nazi” and “bigot” remarks are out of line, but I’m not sure what can be done about that in the setting of a government school. A private school principal could discipline or fire a teacher who treated a student that way; public school administrators generally lack that ability because of state tenure laws and union contracts. As for the threats against Bueler, assuming they’re genuine, the state and local authorities already have laws in place to deal with this behavior. I presume the entire state of California isn’t part of the conspiracy to silence Bueler’s important message.
This leaves only the issue of the principal telling Bueler to stay home for a few days. I don’t necessarily agree with this move, but again, it doesn’t suggest to me a federal civil rights violation. I’d certainly like more information before even considering Glenn’s call for John Ashcroft to get involved. Once again, context is essential. If you have a student who is deliberately making himself a target by, in essence, calling on students to rebel against “liberal” teachers, you have an order and discipline issue. I’m going to assume the school would act if someone actually hurt Bueler. But given that he’s just inspired hatred, what exactly should the principal do? Should he give special protection to Bueler? If so, you’ve just invited every malcontent student to make even more inflammatory remarks. Would Glenn call for a civil rights inquiry if the school asked a student who went around insulting Jews to stay home until things calmed down?
The larger problem I see in stories like this is the intellectual decay of the conservative movement. From what the Times reports, Bueler strikes me as a pretty pathetic activist. He’s probably read too much Ann Coulter and listened to too much Bill O’Reilly. Rather than advocate his ideas in a responsible manner, Bueler seems more comfortable with cheap stunts designed to annoy his enemies.
You see a lot of this inflammatory confrontation in the young conservative movement. It’s become a modern form of feminism, emphasizing the victim status of conservatives at the hands of the liberal establishment. Conservatives lash out because they believe no thinking person will listen to them otherwise. The standard of success for these conservatives is not winning converts to their side, but making the other side as angry as possible. This explains, in part, the popularity of “affirmative action bake sales” on many college campuses.
None of this suggests Bueler and his ilk aren’t entitled to full First Amendment protection. But let’s keep that in context as well. The First Amendment prohibits only prior restraints of speech by the government. It does not insulate speakers from all criticism and consequences of their speech. The Times report provides no evidence of any prior restraint, merely a lot of upset people. And before Glenn reiterates his call for a civil rights investigation here, he should stop and consider what a liberal Justice Department would do with such an interpretation of the civil rights law in their hands.
::: posted by Skip Oliva
at 10:51 AM | link
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Wednesday, December 31, 2003 :::
The War: What's wrong with this picture?
Here's a New Year's Resolution: Rather then witness the image of the Statue of Liberty under the barrel of a machine gun, we ought to endeavor to give the capitals of Iran, Syria, North Korea, and Saudi Arabia the benefit of such a sight.
This picture concretizes the failure of the Bush Administration's policy of "homeland defense" in no uncertain terms. Rather than pacify the governments that make terrorism against the US possible, rather then pacify their skies, the Bush Administration is pacifying our skies.
Yet can such a strategy hope to work? For example, could a policy of securing American borders and searching every container ship as it enters American harbors stop an attempt to smuggle a nuclear bomb into America better then destroying the facilities capable of producing such a bomb? I doubt it.
If there are enemies who aim to attack us, every effort ought to be placed on destroying them before they can even think about approaching our borders. I wonder though, even after the horror of 9/11, if the US has the stomach to truly fight all its enemies.
::: posted by Nicholas Provenzo
at 2:03 PM | link
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Tuesday, December 30, 2003 :::
Antitrust News: The Atlantic Divide
Earlier this month the European Court of First Instance—the rough equivalent of the U.S. Court of Appeals for the D.C. Circuit—upheld a $8.4 million fine imposed in 1999 against British Airways. The European Commission found the airline guilty of antitrust violations, specifically that the company “abused its dominant position” by offering rebates to travel agents that sold the most British Airways tickets. Under European antitrust theory, such rebates are illegal because it’s just too darn hard for other airlines to compete against the dominant firm.
This case exposes a key difference between European and American antitrust theory. In the U.S., regulators focus on short-term consumer prices. If a particular action doesn’t substantially raise prices, the FTC and DOJ will usually let a company be. Europe, in contrast, considers any dominant firm to be inherently suspect, and thus any action they take to assert their economic dominance—regardless of impact on prices—is an antitrust violation. Put another way, U.S. regulators consider their mission to protect the competitive process, while European officials want to protect specific competitors from dominant firms. That’s precisely what happened to British Airways, as the case against them was brought by rival Virgin Atlantic.
The European antitrust view will become more problematic for the U.S., as American firms are targeted with greater frequency by Brussels. Microsoft is one such target. Another is Coca-Cola, which runs a rebate program similar to the one that got British Airways in trouble. The Bush administration has made a priority of increasing international antitrust cooperation. But will this cooperation force U.S. officials to adopt the more rigid, anti-capitalist stance of European antitrust regulators? Recent history suggests it will. The White House has allowed its own antitrust regulators to expand their scope and authority without oversight, and there is little indication the administration will stand up against European aggression in this area.
::: posted by Skip Oliva
at 10:33 AM | link
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The Culture: All Children Left Behind
Yesterday’s Wall Street Journal reported that the “No Child Left Behind” law has had an interesting (and for my money, predictable) consequence: States are cutting back on funds for gifted and talented programs to focus on making all students “proficient” in basic skills. NCLB doesn’t reward students for excelling, only for minimum competence. And because it’s a federal mandate, NCLB leaves little room for local variation or experimentation.
Now, the cuts to gifted and talented programs should not alarm or upset anyone. Such programs are inherently incompatible with public education, which must emphasize collective mediocrity over individual achievement in order to survive. Now if that concept upsets you, then you shouldn’t support government-run schools. But you can’t have it both ways: Demanding excellent achievement for some children while allowing others to languish. Government schools are about egalitarianism. Or, put another way, they’re about “socialization”.
The fundamental error in education policy is the confusion between socialization and education. The two are not coterminous. When men interact in a society, it is for two primary reasons: knowledge and trade. There are of course other purposes, such as friendship and love, but knowledge and trade form the foundation of social relationships. Young children, however, have not yet developed intellectually to the point where they can fully grasp those concepts.
The educators will tell you “socialization” helps children learn in a group setting. But this is a false identification. Nobody learns “in” a group. They can learn from a group, particularly those individual members with existing knowledge. But there is no group consciousness that can substitute for the work of an individual mind.
In a group, children do not form a society based on the exchange of knowledge and trade; they form a society based on peer pressure and force, such as bullying. William Alford, a student at George Mason University, recently offered these insights into this subject:
Children, Dr. Graham tells us, if left to devise their own society, would most likely come up with something resembling William Golding’s The Lord of the Flies. In other words, an 11-year-old’s social milieu is “crude… stupid… [and] savage.” Given the similar authority figure-to-inmate ratio and the detachment, it also resembles prison. G. Gordon Liddy, having spent five years in federal ‘correctional institutions,’ often says on his radio program that the prisons are actually run by the prisoners.
Children are not intrinsically this way, Dr. [Paul] Graham argues. Mongol teenagers or Renaissance apprentices probably did not engage in such bullying behavior because they were busy. Suburban teens are, he continues, instead warehoused in schools mostly for baby-sitting and being drilled information that is perceivably less and less relevant to anything applicable in the real world. Now that children are not working alongside adults as they learn their crafts, they have little identification with [or respect for] the adult world and thus devise their own:
“Since the group has no real purpose, there is no natural measure of performance for status to depend on. Instead of depending on some real test, one's rank ends up depending mostly on one’s ability to increase one's rank. It’s like the court of Louis XIV. There is no external opponent, so the kids become one another's opponents in an inexorable zero-sum competition.”
It is important to point out that the child specialists [in the cited and other researched materials] do not consider bullying to be ‘normal’ -- and certainly not acceptable. They almost universally characterize it as destructive unnecessary behavior that must be actively curbed – some even naming it as a disorder. Although the professional literature certainly demonstrates a clear grasp of what causes bullying, solutions are not as definitive. There are vague recommendations to mobilize parents and teachers to combat the problem. There is little evidence offered of any effective answers.
Bullying, like much of the drug abuse problem among teenagers, can be traced directly to the existence of government schools. This is an admission no government official will ever make. Even a Republican president like George Bush has no political interest in challenging the system’s fundamental premises. Instead he focuses on isolated concretes like raising test scores, themselves a somewhat arbitrary measure.
The biggest threat to the government education establishment is not any politician, but the people who’ve rejected the system—the home educators (I personally dislike the word “homeschooler,” since education and schooling are distinct concepts). Students taught at home by committed parents aren’t “left behind”; quite the contrary, they’re far ahead of their government-institutionalized peers. This is why in many states the establishment is trying to pass new laws to stunt the growth and success of home education. Again, we’re told these laws are necessary to ensure “socialization”. But as William Alford notes, both socialization and education prosper outside of the government’s watchful eye:
In this writer’s not-so-humble opinion, child socialization and education are in many ways incompatible, especially for juveniles. These should therefore be separate experiences, wherein the child is individually educated according to his/her abilities. Socialization should be carefully supervised, with the parents and other concerned adults deciding which children will be interacting with each other and under what circumstances -- not a government-run institution staffed by the likes of NEA members.
(Thanks to Daryl Cobranchi, a proud home educator, for pointing me to the Alford article.)
::: posted by Skip Oliva
at 10:17 AM | link
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Monday, December 29, 2003 :::
Capitalism & Law: The Highest Court in the Land
The Supreme Court’s workload has been decreasing for years under Chief Justice William Rehnquist. Steve Chapman, writing in Saturday’s Washington Times, notes that lawyers have started to complain about the Court’s lack of production:
Philip Allen Lacovara, [h]as argued numerous cases before the court. Writing in the December issue of the American Lawyer, he notes that in 1976-77, a typical year for that era, the court issued decisions after hearing oral arguments in 176 cases. In its 2002-03 term, by contrast, the number was 73, which is about the norm these days.
It's not that the court is strapped for the resources it needs to handle its caseload. Each justice now has four law clerks to provide assistance, up from one or two a few decades ago. Petitions to the court that used to be read by actual justices now are often left to clerks. It takes about $86 million a year to produce those 73 decisions.
Chapman and Lacovara both argue the Court ignores too many important cases worthy of attention. Most notably, the Court “has come to disdain cases that involve economic regulation.” That’s completely true. One example that comes to my mind is the Three O Realty case, which the Court declined to review. In that case, New York State blatantly abused its eminent domain power by falsely claiming “blight” as an excuse to take private property and give it to another private owner—the New York Times, as it turns out. This case screamed for review, yet like almost all eminent domain abuse cases, the justices couldn’t be bothered.
Chapman also echoes my longheld belief that the Court suffers from opinion glut:
The court's shrunken caseload only proves idle hands are the devil's workshop. As the justices have fewer cases to resolve, they spend far more time on gratuitous hairsplitting. Many of them often act like pop divas in concert — less intent on harmonizing than on outdoing each other in showy solos.
One fairly simple Fifth Amendment case last term somehow split the court more ways than a shattered windshield, yielding six different opinions, with few of the justices able to agree on much of anything. The recent decision on the Bipartisan Campaign Reform Act of 2002 was a law student's worst nightmare, running nearly 300 pages and requiring 26 lines of small type just to score the votes. If these nine go out to dinner together, you can bet they insist on separate checks.
Deciding fewer cases doesn't seem to produce happier justices. Nasty sniping is far more common than in previous decades. Justice Antonin Scalia is particularly prone to spice his disagreements with insults. Last term, he said a verdict striking down sodomy laws "is the product of a court, which is the product of a law-profession culture, that has largely signed on to the so-called homosexual agenda."
It’s almost like the Court has become a overpriced, underperforming NBA team—lots of star players who can’t come together as a team and win. The fact that the Court is now largely controlled by its star pragmatist, Sandra Day O’Connor, only makes things worse.
::: posted by Skip Oliva
at 10:50 AM | link
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