Morning Links

Monday, March 16th, 2009
  • AIG to pay out millions more in bonuses to the very executives who ran the company into the ground. This, immediately after accepting another $170 billion in federal bailout money. Question for my lefty friends: A few months ago on this site, we had a discussion about the morality of people who utilize offshore tax shelters. And Joe Biden said during the campaign that it was “unpatriotic” to avoid paying your taxes. At what point in this bailout madness does doing what you can to avoid federal taxes become acceptable? In other words, what percentage of the federal budget has to go toward bailout-out failed companies and their corrupt executives before taxpayers are justified in getting fed up, and refusing to fund the circus anymore?
  • And while I’m picking on the left, here’s yet another example of how increased federal regulation helps big business by screwing medium- and smaller-sized competitors. Be it the CPSIA, FDA regulation or tobacco, or now this livestock origin bill, there’s a reason why the affected industries’ biggest players supported the new regulation.
  • Tim Lee on why newspapers failed. Hint: It had nothing to do with copyright.
  • Feds submit 20,000 cell phone location requests per year, and don’t need a warrant to do it.
  • Woman arrested, jailed overnight, lectured by Florida judge for videotaping police officers as they arrested her son in the parking lot of a movie theater (he was arrested for trying to sneak in to a movie with a buddy after buying only one ticket).
  • Slug sex.
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  • 39 Responses to “Morning Links”

    1. #1 |  Dave Krueger | 

      I agree about the newspapers. What’s killing the newspapers isn’t a copyright issue. What’s killing the newspapers is obsolescence of the medium that they are so heavily vested in. It’s the same thing that will eventually kill libraries, the postal service, and the fax machine.

      Having said that, I now have the start-up page on my browser set to nytimes.com simply because I could no longer stand having to weed through tons of celebrity gossip, stunningly simpleminded opinion, and advertising (usually for their own imbecilic TV talk shows) to find a tidbit of objective news on cnn.com, my old start-up page.

    2. #2 |  TomMil | 

      Those Florida “anti-evesdropping” statutes are routinely abused in Clearwater by the Scientology thugs and the police on their payroll. It shouldn’t be necessary, but if the person doing the recording turns off the sound recording and just runs the video part the law can’t be used.

      Also, the cop in that picture resembles Sgt Carver from “The Wire”.

    3. #3 |  Nando | 

      I’m getting sick and tired of all of these people being arrested for taping the cops. Police have no reasonable expectation of privacy while on patrol.

      Is there any way to get a federal law passed that explicitly allows this? Should I write my Congressman and ask him to put a line in a finance bill somewhere so that this doesn’t happen?

      I figure that’s more likely than it ever going to the Supreme Court for precedent.

    4. #4 |  Bob | 

      Yeah, she learned her lesson, all right.

      That cops in Florida are total dirtwads.

    5. #5 |  David | 

      I doubt any such proposal would pass, Nando. The police unions would rail against such an effort as “pro-criminal” and”jeopardizing officer safety” and it would become poison for any legislator to support, despite the fact that the rest of us are on camera for large chunks of the day.

    6. #6 |  Sam | 

      By all accounts, the bonuses were contractually required under agreements written up in early 2008. Why this then gets laid at the feet of the Obama Administration is absolutely beyond me. If anybody is at fault for this, it is the people who insisted on writing such enormously stupid contracts to reward bad behavior by their executives, the same people who support free markets and deregulation.

    7. #7 |  Boyd Durkin | 

      On AIG, had they been forced to go thru bankruptcy this would not be an issue. AIG payouts are not a “previous contracts” problem, they are a problem with government bailouts of private ventures. “Before I give you this money, how will you spend it?” “I don’t need to tell you that.”

      Also note that Barney Frank took special care to clearly note that AIG first got the Fed (under Bush) to bail them out (and then Congress followed with more). Barney never misses an opportunity to skirt responsibility and note that he never makes a mistake. He’s such a clever rascal!

      “Slug sex” wasn’t what I thought it would be. :-(

    8. #8 |  Josh | 

      I for one am tired of hearing these politicians bitch and moan about these executive bonuses. Just what the hell did they expect? Those who argued against these bailouts because of “moral hazard” are seeing their arguments validated.

    9. #9 |  Mattocracy | 

      Sam,

      This has nothing to do with deregulation. In a true free market, these people never would have gotten their bonuses for running their companies into the ground because there would not have been any federal bailout money to pay them. The bonuses are the direct result of government intervention, not the free market.

    10. #10 |  Chance | 

      RFID costs pennies per tag. Even a full system costs relatively little compared to overall operations. Notification requirements don’t sound burdensome either (wouldn’t an email suffice?). Regardless of the merit or injustice of this regulation, I think any operation this shuts down wasn’t long for this world anyway.

    11. #11 |  Dave Krueger | 

      I used to worry about the government watching over my every move. When I had some money stolen out of my desk, I set up a webcam in my office. Soon after my daughter went to work at an NGO in Afghanistan, my camera caught a city cop looking around in my office at 2AM. I have no doubt he was there with the permission of my employer (although they never mentioned it) and I never asked what he was looking for, but since then I just take it for granted that the U.S. has adopted the position that everyone is a suspect.

      Fear mongering has become such an effective tool at nullifying Constitutional restrictions on government snooping (among other activities), that even the pretense of privacy is nothing more than a idealistic historical fantasy. The new philosophy is “if you haven’t done anything wrong, you should have nothing to hide”.

    12. #12 |  Mattocracy | 

      I bet that we will follow suit with the United Kingdom where we will not be allowed to record law enforcement in anyway. Oh, hurray for the power of unions.

    13. #13 |  Dave Krueger | 

      With regard to the AIG bonuses, you have to wonder how big the bonuses would be if, instead of totally destroying the companies and bludgeoning the stockholders, the executives actually managed to turn a profit (or at least leave them solvent).

      I’m assuming, of course, that the bonuses would be larger in that case. I’m no longer sure. I now see most corporate senior executives as part of an elite club, not of entrepreneurs, but parasites in partnership with the government whose only function in life is to suck the financial life out of everything they touch, leaving a trail of rotting carcasses behind them as they move on to the next juicy target, ultimately absorbing not just our current wealth, but any chance we might have for future prosperity as well.

    14. #14 |  Marty | 

      #3 | Nando

      creating more statutes will just muddy the water more. these cops and judges are abusing the laws on the books. hopefully, this woman has a civil case to fight this.

      about the 20,000 cell phone requests- any chance the fuckers can help me find my phone?

    15. #15 |  Dave Krueger | 

      If tax dollars had to be used, here is what they should have done as part of the bailout:

      1. Identify the banks, manufacturers, and insurance companies that acted responsibly in the period leading up to the crisis.

      2. Force the failing institutions into bankruptcy, to get control over them.

      3. Buy up all the toxic assets from the failing institutions.

      4. Dismantle the failing companies and throw their execs out on the street.

      5. Distribute the assets and accounts of the failing institutions to solvent corporations identified in step 1.

      6. Let the execs sue to get their bonuses from the bankruptcy courts. The new owners would be given statutory immunity from those suits.

      Next week, I will outline my 6-step plan for world peace and an end to poverty.

    16. #16 |  Nando | 

      Maybe the NAACP can take up the case in Florida and get a court to agree that videotaping a cop, while performing his official duties, is protected under the 1st Amendment.

    17. #17 |  Dave | 

      “This has nothing to do with deregulation…The bonuses are the direct result of government intervention, not the free market.”

      Right, because the deregulation–or rather lack of regulation from the very beginning–of CDS and similar derivative financial instruments has nothing to do with AIG’s demise.

      All this talk about bonus pay (and why this is specific to “lefties” is truly beyond me) still ignores the fact that AIG wouldn’t have to be bailed out in the first place if more transparency and regulation had been implemented from the get-go.

    18. #18 |  Buck | 

      Free markets ain’t free.

    19. #19 |  Jim Collins | 

      Chance,
      Price an RFID chip reader and programmer sometime.

    20. #20 |  Comrade Dread | 

      I think I’m just as shocked that sneaking into a movie theater is an arrestable offense and not merely an act that would get you banned by the management or, at worst, getting a ticket from the officer.

      Regardless, police unions fight any sort of oversight from any ‘civilian’ non-government source. I fully expect that they will push to make videotaping police a felony under some bullshit pretext that it endangers officers if the serfs can photograph them in uniform.

    21. #21 |  Moorlock | 

      “At what point in this bailout madness does doing what you can to avoid federal taxes become acceptable? …before taxpayers are justified in getting fed up, and refusing to fund the circus anymore?”

      For me, the point came six years ago, before the bailout madness, when the Iraq Invasion madness happened (that, too, was funded by tax dollars… or at least it will be when the government gets around to paying off its debts).

      There have been a number of conscientious objectors to the U.S. tax system — mostly anti-war types who trend leftish, along with some people from the traditional peace churches — but lately I’m seeing signs (http://sniggle.net/Experiment/index.php?entry=15Mar09) that small-government conservatives and libertarians are also finally deciding it’s time to put their money where their mouths are.

    22. #22 |  Dave Krueger | 

      I would hate to see AIG renege on paying those bonuses and risk having all those top executives quit, taking all their exceptional financial talents with them.

    23. #23 |  Chance | 

      @ Jim – I have, for inventory control in my office. Prices ranged from a few thousand (2-4K) to the tens (15-30K). A lot of it depended on tag type, reader type, and program. I would assume the cheaper versions are not robust enough for use in animals, but since the article didn’t specify the exact requirements, I can’t assume that the most expensive systems would be required.

    24. #24 |  J sub D | 

      RFID costs pennies per tag. Even a full system costs relatively little compared to overall operations. Notification requirements don’t sound burdensome either (wouldn’t an email suffice?). Regardless of the merit or injustice of this regulation, I think any operation this shuts down wasn’t long for this world anyway.

      Are extra layers of record keeping and reporting free in your world?

    25. #25 |  chsw | 

      Shouldn’t the existence of a film on “Slug Sex” really be linked under a “markets in everything” header?

    26. #26 |  Cynical in CA | 

      “… what percentage of the federal budget has to go toward bailout-out failed companies and their corrupt executives before taxpayers are justified in getting fed up, and refusing to fund the circus anymore?”

      Taxpayers are a priori justified in not “paying” their taxes.

      Taxation is larceny.

      The bailout is a magician’s sleight-of-hand. Look at the bailouts, but pay no attention to the root cause.

    27. #27 |  Boyd Durkin | 

      @ #17 Dave,
      “…still ignores the fact that AIG wouldn’t have to be bailed out in the first place if more transparency and regulation had been implemented from the get-go.”

      Bailouts are a problem with socialism, not the free market. Failure is part of the competition of ideas in capitalism, but it is dealt with quickly rather than spread out as a burden for all in a slow, lingering cancer (I’m looking at you TARP).

    28. #28 |  Boyd Durkin | 

      Sorry, forgot to yell…AIG DOESN’T HAVE TO BE BAILED OUT!

      “…AIG wouldn’t have to be bailed out in the first place if…”

    29. #29 |  Coises | 

      Question for my lefty friends:

      I identify myself as a “left-side libertarian” — somewhere in the vicinity of libertarian socialist. So, for example, my attitude towards the bailouts is that what is “too big to fail” is too big to be treated as private enterprise. AIG and its ilk are government under another name — a decidedly undemocratic branch of government which seeks to privatize profit and socialize loss, and at present is succeeding in that endeavor.

      A few months ago on this site, we had a discussion about the morality of people who utilize offshore tax shelters. And Joe Biden said during the campaign that it was “unpatriotic” to avoid paying your taxes. At what point in this bailout madness does doing what you can to avoid federal taxes become acceptable? In other words, what percentage of the federal budget has to go toward bailout-out failed companies and their corrupt executives before taxpayers are justified in getting fed up, and refusing to fund the circus anymore?

      Law has nothing to do with morality — this is a fiction from which it is very, very difficult to escape. It is not immoral to evade taxation — it’s dangerous. Whether it’s worth the risk is a personal calculation, but government expenditures (which are independent of taxation anyway, aside from the net effect on the debt) surely can’t have much bearing on that.While I’m pontificating, I’ll put in a plug for the Fair Tax. As a libertarian of any stripe, the important thing about this to me is that it doesn’t require collecting data on individuals. I don’t care whether the government taxes sales, income or whatever; only that taxes on any given transaction are independent of other transactions, so they can be collected immediately, consistently and without any need to accumulate personal information. The current tax regime is like posting “Please, Do Not Enter” above an open doorway; much better simply to lock the door and dispense with the appeal to an (allegedly) ethical denial of self-interest that just confounds the issue for everyone. Take what you’re going to take, but do it simply, directly and with certainty. The system as it stands creates “criminals” and then feigns shock at how unpatriotic people can be.

      And while I’m picking on the left, here’s yet another example of how increased federal regulation helps big business by screwing medium- and smaller-sized competitors. Be it the CPSIA, FDA regulation or tobacco, or now this livestock origin bill, there’s a reason why the affected industries’ biggest players supported the new regulation.

      Us left-libs (what the hell, I’ll speak for all 29 of us) don’t oppose regulation — we oppose stupid regulation. Who is in favor of or opposed to the regulation is immaterial. The answer would lie in a cost-benefit analysis, if anyone has bothered to do that. That probably no one has — as everyone is too busy arguing ideology to be bothered with pesky facts — I would identify as the big “What’s wrong?” in contemporary politics.

    30. #30 |  Aresen | 

      @ Coises # 29

      I suggest you read Friedman on concentrated vs. diffuse interest.

      The problem with regulation is only partly the regulatory burden. A huge part of it is that, for the regulated parties, the form of regulation can make a difference of hundreds of millions of dollars spread over a hundred million transactions.

      For you, the nominal “beneficiary” of the regulatory regime, the difference in cost is a few cents to at most a couple of hundred bucks per transaction. However, added up to the regulated companies, it makes billions of dollars in difference. Which is why the regulated companies concentrate on getting control over the regulatory regime – by lobbying legislators to shape the regulations, by paying big bucks to high-powered legal teams to argue their side before the regulatory boards, or by getting “their men” appointed to the regulatory boards themselves.

      An individual consumer, looking at the cost of such a fight, simply does not have the time or resources to compete with the vested interests, nor would it be cost-effective for them to do so.

      Even if you have a consumer organization, they find it very hard to raise the money to fight all the causes before all the regulatory boards. (Even assuming they are only fighting the “right” causes.)

    31. #31 |  Coises | 

      @ Aresen #30If this is a fair summary of the Friedman views to which you refer, then I’d say he and I differ in only one aspect. He appears to hold that it is necessary to institute formal restraints on the scope of government to avoid the counter-productive effects of special interests. My contention is that a more useful paradigm would be to separate the goals of public policy — which are appropriately decided by representation of the people — from the means of reaching those goals, which are best worked out by independent, objective analysis. We don’t presently have a political system capable of doing this; but in my opinion, building such a system is the single most important problem which confronts modern democracy.I think that I don’t follow the paragraphs following the first in your comment. If you are saying that regulations may adversely affect competition in the markets of interest, then this effect is properly a part of an objective cost-benefit analysis. If you are saying that the result may be “unfair” to small competitors, then I hold that this is irrelevant (so long as competition is not reduced to the point that it becomes ineffective as a market force, as per my previous sentence). If you are saying something else, it’s gone over my head.

    32. #32 |  Dannyp19 | 

      Regarding AIG . . .

      Why are the politician’s bitching! They are just voting for a raise just like congesss does!

      When in Rome . . .

      Isnt nationalization grand!!!!???

    33. #33 |  Coises | 

      Radley:
      Would you consider adding a preview function for comments? The comments I’ve posted have shown odd, and to me unpredictable, formatting anomalies. It would be nice to be able to proof the results and tweak HTML tags until the results look as intended.

    34. #34 |  Aresen | 

      My contention is that a more useful paradigm would be to separate the goals of public policy — which are appropriately decided by representation of the people — from the means of reaching those goals, which are best worked out by independent, objective analysis.

      First, who are the “representatives of the people” who decide the goals of public policy? Are they some god-like beings who know better than us? Or are they just politicos who give in to the pressure group who screams loudest?
      Second, how are you going to separate the goals and the means, since one inevitably affects the other?
      Third, how are you going to prevent bureaucratic inertia?

      Take the FCC as an example of a regulatory agency. The “goals” of the FCC have varied over the years from ensuring competition (which was somehow done by limiting entry into the broadcast market) to ensuring ‘decency’ (remember the freakout over a one-second boob-flash?). Goals change.
      The separation of the goal and the means was impossible -for the people who had the most knowledge of how broadcasting worked were the broadcasters themselves – and the regulators were either drawn from their ranks or functionaries so ignorant of broadcasting (both technically and economically) that they were incapable of dealing with the masses of evidence that the broadcasters would present to bolster their own case. Even when they did oppose the broadcasters, the FCC regulators generally did so in ways that did not serve the best interests of the consumers.
      “Technical and objective analysis” in a bureaucratic context almost always means “postpone a decision and make another study”. The FCC dithered for 20 years on upgrading the TV signal from the 256 line standard originally implemented. The problem was eventually solved not by the FCC, but by clever computer programmers. Analog broadcasting should have died no later than 1980. It is still with us today (given yet another life extension just this year by Congress.)
      If the FCC could have regulated the home video market, we’d still be waiting for them to decide between VHS and Betamax. I just bought a Blu-Ray player. I love it. It gives me a great picture. But it wasn’t a result of an FCC decision. I know damn well that the thing will be obsolete in another 10 years, but I don’t care and I definitely don’t want some regulator to tell the electronics companies to hold off on the next format until it can be made compatible with my by-then-ancient Blu-Ray.

      You say you don’t follow the comments in my later paragraphs in post # 30. To boil it down to the simplest terms:
      The companies being regulated can afford to spend millions to influence regulations and regulators in their favor. I, as a consumer, do not have the resources to match their spending and would not do so in any case because the cost to me of the regulations is at most a couple of hundred bucks.

      In summary: The regulators and regulations will be controlled by the regulated. Do not imagine that you can find some pure, omniscient regulator who can see through and overcome the interests of those he regulates. Even if he could, who do you think appoints him? If the companies don’t like him, they will put pressure on the politicians to remove him. And you can’t take that away from the politicians; nor would you want to as you would then be faced with an individual whose power was unchecked.

    35. #35 |  Boyd Durkin | 

      @coises
      My cost analysis shows a free market deregulated approach to be the most beneficial. Lefties do not agree. The problem cannot be reduced to just being against stupid regulations.

    36. #36 |  Chance | 

      “Are extra layers of record keeping and reporting free in your world?”

      Nearly so, yes. A fairly simple system can export the inventory data into a spreadsheet, and the reporting can be done via email.

      Look, you may have a water-tight philosophical argument against regulations, but this rule is not particularly burdemsome, and the cost is only going to break the cows back on farmers that already were tottering near failure. I also wonder how many of these “family farms” are being propped up by subsidies and friendly regulations in the first place – anyone have any numbers on that? A number of commentators here have argued passionately that small businesses should not be protected simply because they are smaller (the Wal Mart argument). If that’s true, and many of these small farmers/ranchers have been subsidized just like the big boys (or even more favorably?), then the only difference this regulation makes is to end their zombie like business.

    37. #37 |  Coises | 

      @ Boyd Durkin (#35)

      By your terms, then, I’m probably not a real lefty. I don’t believe that the results in any given instance of regulation (or government intervention of any kind) must, on principle, be less desirable than the results of not involving government at all. However, I do hold that in practice unfettered, distributed decision-making in the presence of reasonably apt incentives proves so consistently superior to centralized control that the burden of proof should always be on those who suggest that government involvement can make anything better.

    38. #38 |  supercat | 

      Nearly so, yes. A fairly simple system can export the inventory data into a spreadsheet, and the reporting can be done via email.

      Keeping pretty good records is generally not difficult. Keeping absolutely impeccable records which are not only correct, but can be proven to be correct despite the existence of other records that contradict them, is another story altogether.

      If the government behaves in its usual fashion, it will ignore most of the errors that will occur in the records associated with livestock, but if a particular farmer becomes a nuisance it will pore over that farmers’ records with a fine-tooth comb, ready to pounce on any little discrepancy it finds.

      Actually, that’s a fairly charitable interpretation of the government’s real motives. I wouldn’t be surprised if there are other motives that are far worse.

    39. #39 |  Coises | 

      Aresen (#34):

      The regulators and regulations will be controlled by the regulated. Do not imagine that you can find some pure, omniscient regulator who can see through and overcome the interests of those he regulates.

      I don’t imagine that. I imagine — and I grant that at this point in time it requires imagination — a well-functioning democracy, in which the people hold their representatives accountable for representing their interests, and fire them if they fail to do so; directly and via their representatives, demand competence and effectiveness in their executives, and fire them if they fail to demonstrate those qualities; and at the critical juncture where “the will of the people” is translated into policy, require honesty and fidelity in choosing apt courses of action to achieve common goals.

      First, who are the “representatives of the people” who decide the goals of public policy? Are they some god-like beings who know better than us? Or are they just politicos who give in to the pressure group who screams loudest?
      Second, how are you going to separate the goals and the means, since one inevitably affects the other?

      I’ve written a more complete exposition of my thoughts regarding this, but it’s too long and wanders too far from Radley’s topic to include in a comment, so I’m linking to it: Democracy, Ends and Means.

      Third, how are you going to prevent bureaucratic inertia?

      A degree of inertia is crucial; without it, a democracy truly responsive to the will of the people would change its policies too easily and too often. However, I think excess inertia, like disproportionate responsiveness to special interests, can be largely explained by the defective “feedback loop of democracy” I describe in the essay linked above.

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