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I noticed an amusing headline headline in the Washington Post.
::: posted by Nicholas Provenzo
at 12:36 AM | link
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Monday, January 12, 2004 :::
The Arts: Sparrowhawk: Jack Frake
I just finished reading book one of novelist Edward Cline's Sparrowhawk series. Jack Frake is a triumph and I can not reccomend it enough.
The challenge in writing historical fiction lies in capturing both the details of a period and the spirit that inhabits it; to be believed, historical drama demands faithfulness in both set and actors. In Sparrowhawk: Jack Frake, Cline succeeds where countless others have failed. He tells the story of a boy, Jake Frake, who grows up under the weight of a brutal and hopeless society in early 18th century England, and yet aligns himself with unbowed heroes and emerges a young man of valiant and courageous character. In Jack Frake and his compatriots, one sees the genesis of the ideas that will one day compel colonists in America to declare, as inscribed in the marble of the Jefferson Memorial, “eternal hostility against every form of tyranny over the mind of man.” Cline does not deal treat these ideas as disconnected parlor games; he shows them embodied in men of action and passion. The result is compelling.
Edward Cline has crafted a testament to the unbreakable sprit that makes men great. I eagerly look forward to reading the upcoming installments of the Sparrowhawk series.
::: posted by Nicholas Provenzo
at 5:12 PM | link
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Antitrust News: Smoking Out the Cartels
The FTC likes to compare price-fixing cartels to "smoke-filled room conspiracies". If ever there was an appropriate use of that phrase, it would be the cartel formed by state governments to extort cigarette companies. Last week the Second Circuit considered the latest case to arise from the perpetual "War on Smoking", Freedom Holdings Inc. v. Spitzer. This appeal reinstated a suit brought by tobacco importers against the State of New York. Specifically, the importers challenged the state’s enforcement of the 1998 Master Settlement Agreement (MSA) between 46 states and the nation’s four largest cigarette manufacturers. The MSA purports to compensate states for the healthcare costs incurred from smoking-related illnesses, and restricts the industry’s general marketing and sales practices. The MSA requires manufacturers to make an annual payment to the states based on each firm’s individual market share.
The MSA payments function as an additional tax on cigarettes, since the additional costs are passed on to the consumer. This price increase creates a problem, however, since various small cigarette companies were not parties to the MSA. These companies could conceivably undercut the MSA companies on price, gain market share, and thus decrease the annual payments to the states. To combat this, the states passed laws that require these smaller companies to either join the MSA and abide by its terms, or pay money into an “escrow fund” that effectively taxes the non-MSA companies at a higher rate. The express purpose of these laws is to discourage price competition that would otherwise undermine the states’ ability to realize the maximum revenue possible from the MSA.
New York went one step further. Many non-MSA sellers were not paying into the escrow fund and selling “contraband” cigarettes. Accordingly, New York required all cigarettes sold in the state to bear a tax stamp indicating the manufacturer or importer was complying with the escrow rules. Yes, this is indeed a “stamp tax,” the kind that caused so much trouble when New York was ruled by the British crown. The irony is obviously lost on New York officials.
A group of importers challenged the contraband rule, alleging it violated the Constitution’s Commerce Clause and, of all things, the Sherman Act. The trial court dismissed the complaint on summary judgment. The Second Circuit reversed on the Sherman Act claim, holding that New York’s enforcement of the MSA could very well be an illegal cartel arrangement. Gee, you think?
The truly amazing—and appalling—thing about this case is how New York articulates two completely contradictory objectives. On the one hand, the state claims its protecting public health by enforcing the MSA, which raises the price of cigarettes to discourage consumption; on the other, the contraband laws exist to maximize the state’s revenues from the sale of cigarettes. And keep in mind, the states are under no obligation to use its MSA payments to subsidize public health costs. Most states in fact use the MSA funds for general budget items.
Then there are the lawyers. Most states retained private counsel to represent them in the cases leading to the MSA. When the ink dried on the settlement, these lawyers cashed-in big time. The New York lawyers alone took home more than $600 million. Peter Angelos, the Baltimore Orioles owner and a prominent tort lawyer, tried to claim $1 billion in fees from Maryland. The Kansas attorney general paid millions to her own former law firm. And Texas paid over $3 billion in fees to five lawyers who also happened to be among the top ten political donors in the state.
So what we have here is a giant cigarette cartel that’s being forced to fund the operations of a large alliance of state governments and trial lawyers. How this benefits “public health” is beyond my ability to conceptualize. But I do know this: If ever there was a proper use for the antitrust laws, this is it. Of course, you shouldn’t need antitrust to undo this situation. The state attorneys general and private attorneys who cooked up this scheme should be sitting in prison for committing what is possibly the largest extortion scheme in world history. Since that’s never going to happen, we should focus our efforts on deposing the political leaders who committed these atrocities.
::: posted by Skip Oliva
at 4:43 PM | link
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Antitrust News: 'Innovation' no more at Lindows.com
A San Francisco judge has ruled that Lindows.com may not file voucher requests on behalf of consumers as part of the settlement of a California antitrust suit against Microsoft.
Last October I blogged about San Diego-based Lindows.com, which had set up a special website to facilitate an "instant settlement" of a 1999 lawsuit bought on behalf of California consumers against Microsoft. The lawsuit claimed Microsoft violated the California's antitrust and unfair competition laws, and under terms of its settlement, Microsoft agreed to provide vouchers ranging in value from $5 to $29 to consumers who submitted written claim forms.
Yet rather then have consumers submit their own claims against Microsoft, Lindows.com sought to file consumer's claims for them with so-called "digital signatures," in reality, nothing more then the claimant's name in a web form. In addition, it offered a free PC to the first 10,000 claims applicants and ever so conveniently, allowed consumers to purchase Lindows software with an advance on their settlement proceeds.
Unfortunately for Lindows.com's planned scheme to loot its Redmond rival, the terms of the settlement explicitly required claimants print out, sign and mail their claim forms and certify the accuracy of their claims. Superior Court of California Judge Paul Alvarado agreed, ruling that Lindows.com's attempt to file voucher requests for consumers was invalid and any claim it submitted on behalf of consumers was to be rejected.
This is good news. Lindows.com's attempt to cash in on the California antitrust suit was obnoxious. The California lawsuit was not about consumers injured by Microsoft. (The paltry number of consumers taking advantage of the settlement confirms that most consumers have no quibble with Microsoft.) This and all the other suits against Microsoft are about the software giant's rivals attempting to use antitrust to hobble an industry leader rather then compete with it head to head.
::: posted by Nicholas Provenzo
at 12:35 PM | link
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The Culture: Just what should conform to what?
One of the Volokh's is impressed with a recent interview of University of Tennessee law professor and Instapundit Glenn Reynolds. They liked this part:
What philosophical thesis do you think it most important to disseminate? > That there are more things in heaven and earth than are dreamt of in philosophy.
What philosophical thesis do you think it most important to combat? > That life should conform to a philosophy."
I enjoy Instapundit, but in this instance I'm less impressed with how its creator expressed his philosophic views. I read Reynolds' one liners as swipes against philosophy. If Reynolds has a problem with how most philosophy is practiced today, I couldn't agree more. Still, one should never imply that that philosophy that has little to do with anything real and true. Philosophy should conform to existence--and it's the tool by which one would ever come to know anything it. I don't need to tell Objectivists that there is a lot wrong with philosophy today, but an attack against philosophy as such is nothing less then an attack on man.
I received a fortune cookie with dinner last night that said, "Today's philosophy is tomorrow's common sense." Heh. If it were that easy.
::: posted by Nicholas Provenzo
at 9:40 AM | link
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