Saturday, November 28, 2009

"Commonwealth Cup" a Misnomer This Year

Later today UVA will meet Virginia Tech in one of the South's oldest college football rivalries. Since 1996, the winner of this intrastate rivalry has won the "Commonwealth Cup." Virginia Tech won the cup last year, prevailing 17-14. Generally the winner of this game can properly consider itself Virginia's best college football team.

This year the "Commonwealth Cup" is a bit of a misnomer, however. At best, UVA, with only one win all year, is the state's fourth best college football team, behind William and Mary, which beat UVA in September, and Richmond, which defeated Duke early in the season and barely edged William and Mary last week.

Perhaps the "I-64/81 Cup" would be a more apt title.

Thursday, November 26, 2009

Should Presidents Use Thanksgiving Proclamations to Advocate Their Policies?


Do We Need More (or less) FDR?


Over at the Nation, John Nichols, is criticizing the tone and content of President Obama's Thanksgiving proclamation, calling for "another helping of FDR." According to Nichols, FDR departed from George Washington's example and used the proclamations as a platform to defend his policy initiatives. Nichols thinks this is a good thing and that Obama should do the same.

http://www.thenation.com/blogs/thebeat/500820/another_helping_of_fdr_please
Nichols quotes some of FDR's proclamations at length.

For instance, FDR's 1933 proclamation included the following:

"May we be grateful for the passing of dark days; for the new spirit of dependence one on another; for the closer unity of all parts of our wide land; for the greater friendship between employers and those who toil."

Moreover, his 1934 proclamation included the following:

"During the past year we have been given courage and fortitude to meet the problems which have confronted us in our national life. Our sense of social justice has deepened. We have been given vision to make new provisions for human welfare and happiness, and in a spirit of mutual helpfulness we have cooperated to translate vision into reality,"

Nichols criticizes Obama for being like Washington and George W. Bush and using the proclamation to emphasize themes that all Americans can endorse, regardless of party affiliation.

I respectfully disagree with Nichols.

1. Roosevelt was obviously referring to his economic recovery package, particularly the National Industrial Recovery Act (NIRA), passed in the summer of 1933. The plan fostered "unity," "dependence," and "social justice" by coercively requiring members of more than 500 different industries to fix prices and adopt other practices, including minimum wages, that disproportionately raised the costs of small businesses and thus fostered the exercise of market power by large entenched firms. The NIRA also required participating firms to bargain collectively with labor cartels known as unions, thereby further enhancing wages above the market level and further disadvantaging small business and racial minorities.

The Supreme Court unanimously declared the NIRA unconstitutional in 1935, and economists from both sides of the spectrum, including the Chair of President Obama's Council of Economic advisors, Christina Roemer, a William and Mary alumna, have argued that the NIRA significantly slowed economic recovery and thus exacerbated the misery caused by the great Depression. Empirical tests have confirmed this result.

The Supreme Court also struck down the Agricultural Adjustment Act and the Bituminous Coal Act, provisions that had similar price-raising, and recovery-stalling, effects.

In short, FDR's unconstitutional economic recovery plan was nothing to celebrate, and it's unfortunate to say the least that he enshrined arguments, albeit somewhat indirectly, for his plan in his Thanksgiving proclamation. Such proclamations should withstand the test of time and speak to timeless values. Roosevelt's arguments for his plan do not pass this test.

2. Some traditions and days should be above politics. Presidents should follow in George Washington's footsteps and use such proclamations to celebrate that which brings us together, not what divides us. Many small businessmen and racial minorities were anything but thankful for President Roosevelt's policies. Kudos to President Obama for taking the right approach here.

President Obama's Thanksgiving Proclamation

Here is President Obama's Thanksgiving Proclamation:

What began as a harvest celebration between European settlers and indigenous communities nearly four centuries ago has become our cherished tradition of Thanksgiving. This day's roots are intertwined with those of our nation, and its history traces the American narrative.
Today, we recall President George Washington, who proclaimed our first national day of public thanksgiving to be observed "by acknowledging with grateful hearts the many and signal favors of Almighty God," and President Abraham Lincoln, who established our annual Thanksgiving Day to help mend a fractured nation in the midst of civil war. We also recognize the contributions of Native Americans, who helped the early colonists survive their first harsh winter and continue to strengthen our nation. From our earliest days of independence, and in times of tragedy and triumph, Americans have come together to celebrate Thanksgiving.
As Americans, we hail from every part of the world. While we observe traditions from every culture, Thanksgiving Day is a unique national tradition we all share. Its spirit binds us together as one people, each of us thankful for our common blessings.

As we gather once again among loved ones, let us also reach out to our neighbors and fellow citizens in need of a helping hand. This is a time for us to renew our bonds with one another, and we can fulfill that commitment by serving our communities and our nation throughout the year. In doing so, we pay tribute to our country's men and women in uniform who set an example of service that inspires us all. Let us be guided by the legacy of those who have fought for the freedoms for which we give thanks, and be worthy heirs to the noble tradition of goodwill shown on this day.

Now, therefore, I, Barack Obama, president of the United States of America, by virtue of the authority vested in me by the Constitution and the laws of the United States, do hereby proclaim Thursday, Nov. 26, 2009, as a National Day of Thanksgiving. I encourage all the people of the United States to come together, whether in our homes, places of worship, community centers, or any place where family, friends and neighbors may gather, with gratitude for all we have received in the past year, to express appreciation to those whose lives enrich our own and to share our bounty with others.

In witness whereof, I have hereunto set my hand this 20th day of November, in the year of our Lord 2009, and of the independence of the United States of America the 234th (year).

Barack Obama

Wednesday, November 25, 2009

Happy Thanksgiving/Washington's 1789 Proclamation

HAPPY THANKSGIVING!




Thanksgiving approaches. During his first year as President, the father of our country issued the following proclamation.

By the President of the United States of America, a Proclamation.

Whereas it is the duty of all Nations to acknowledge the providence of Almighty God, to obey his will, to be grateful for his benefits, and humbly to implore his protection and favor-- and whereas both Houses of Congress have by their joint Committee requested me to recommend to the People of the United States a day of public thanksgiving and prayer to be observed by acknowledging with grateful hearts the many signal favors of Almighty God especially by affording them an opportunity peaceably to establish a form of government for their safety and happiness.

Now therefore I do recommend and assign Thursday the 26th day of November next to be devoted by the People of these States to the service of that great and glorious Being, who is the beneficent Author of all the good that was, that is, or that will be-- That we may then all unite in rendering unto him our sincere and humble thanks--for his kind care and protection of the People of this Country previous to their becoming a Nation--for the signal and manifold mercies, and the favorable interpositions of his Providence which we experienced in the course and conclusion of the late war--for the great degree of tranquility, union, and plenty, which we have since enjoyed--for the peaceable and rational manner, in which we have been enabled to establish constitutions of government for our safety and happiness, and particularly the national One now lately instituted--for the civil and religious liberty with which we are blessed; and the means we have of acquiring and diffusing useful knowledge; and in general for all the great and various favors which he hath been pleased to confer upon us.

And also that we may then unite in most humbly offering our prayers and supplications to the great Lord and Ruler of Nations and beseech him to pardon our national and other transgressions-- to enable us all, whether in public or private stations, to perform our several and relative duties properly and punctually--to render our national government a blessing to all the people, by constantly being a Government of wise, just, and constitutional laws, discreetly and faithfully executed and obeyed--to protect and guide all Sovereigns and Nations (especially such as have shewn kindness unto us) and to bless them with good government, peace, and concord--To promote the knowledge and practice of true religion and virtue, and the encrease of science among them and us--and generally to grant unto all Mankind such a degree of temporal prosperity as he alone knows to be best.

Given under my hand at the City of New York the third day of October in the year of our Lord 1789.
George Washington

Thursday, November 19, 2009

Seven Score and Six Years Ago . . .

Today is the 146th Anniversary of Abraham Lincoln's Gettysburg Address. Here is the entire text:

Fourscore and seven years ago our fathers brought forth on this continent a new nation, conceived in liberty and dedicated to the proposition that all men are created equal.

Now we are engaged in a great civil war, testing whether that nation or any nation so conceived and so dedicated can long endure. We are met on a great battlefield of that war. We have come to dedicate a portion of that field as a final resting-place for those who here gave their lives that that nation might live. It is altogether fitting and proper that we should do this.

But, in a larger sense, we cannot dedicate, we cannot consecrate, we cannot hallow this ground. The brave men, living and dead who struggled here have consecrated it far above our poor power to add or detract. The world will little note nor long remember what we say here, but it can never forget what they did here. It is for us the living rather to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us -- that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion -- that we here highly resolve that these dead shall not have died in vain, that this nation under God shall have a new birth of freedom, and that government of the people, by the people, for the people shall not perish from the earth.

The speech, preceded by a two hour oration by Edward Everett, lasted just over two minutes.





Saturday, November 14, 2009

On the Regulation of Corporate Political Speech


The Blog of the William and Mary Chapter of the American Constitution Society recently posted an article reporting on and summarizing William Van Alstyne's November 11 lecture regarding Citizens United v. Federal Election Commission, currently pending before the Supreme Court. At the end of the last term, the Court ordered reargument in the case, asking the parties to address whether, for instance, the Federal Government may, consistent with the First Amendment, ban speech by Corporations in support of or in opposition to a particular political candidate. The Court first approved such a ban in Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990), in a 6-3 decision. Two justices presently on the Court dissented: Justice Kennedy and Justice Scalia. (Justice O'Connor, it should be noted, joined Justice Kennedy's dissent).

Here is a link to the story:

Among other things, the ACS article summarizes the case for stringent regulation of corporate speech as follows:

"Generally speaking, the campaign reform acts were put into place to prevent large commercial corporations from being able to contribute a large, disproportionate amount of money towards a particular campaign under the idea that such a contribution would make the democratic process less pure. Another reason why the campaign reform statutes were enacted was the fact that people purchase stocks from a corporation to further their own economic interest – not to make a political statement. The Supreme Court has upheld these campaign reform acts in the past, finding that a commercial corporation contributing money from its treasury to a candidate comes too close to bribery."

This is a fair summary of the rationales that proponents of such regulation have articulated. It should also be noted that such regulation includes outright bans on corporate political speech in connection with elections. Moreover, statutes banning such speech generally allow corporations to set up PACS that collect voluntary contributions from affiliated persons, such as shareholders and employees. Proponents of such bans on corporate speech argue that such PACS produce "enough" speech to vindicate the legitimate rights of corporations and their individual constituents to influence the political process.

Citizens United involves a slightly more complicated provision, Section 203 of the so-called Bipartisan Campaign Reform Act of 2002. Section 203 prohibits corporations from speaking 6o days before a general federal election and 30 days before a federal primary, whenever such speech requires expenditures from the corporation's general treasury, as opposed to the sort of "separate fund" described above. Moreover, Section 203's prohibitions arguably sweep more broadly than those at issue in Austin, described above, insofar as they apply even to speech that is primarily about issues, so long as a candidate is mentioned and the speech occurs during the requisite unsafe harbors before an election, i.e., when such speech is most likely to be effective.

I do not disagree with Professor Van Alstyne's description of how the Court might rule in Citizens United. Moreover, I agree that the decision could have major implications for the scope of state and federal authority over speech during political campaigns. Finally, I agree that, at least when it comes to regulation by individual states, the correct application of the Constitution could turn on whether corporations are, as the Supreme Court has repeatedly held or assumed for over a century, "persons" within the meaning of the 14th Amendment.

At the same time, I thought I would take this opportunity to offer some thoughts about the regulation/prohibition of Corporate political speech, from the perspective of someone who has taught Corporate Law and once even wrote about the regulation of corporate speech in a paper published by our own Bill of Rights Journal. See Alan J. Meese, Limitations on Corporate Speech: Protection for Shareholders or Abridgement of Expression, 2 W&M Bill of Rights Journal 305 (1993).

First, it is important to distinguish between speech, on the one hand. and contributions to candidates, on the another. Much commentary about the case, particularly by proponents of such regulation, muddies the distinction between these two means of influencing the political process.

Citizens United wants to speak, not make a contribution to a candidate or otherwise fund a campaign. Such speech costs money, but so does speech by individuals. (Even bumper stickers, yard signs and billboards cost money. Ditto for advertisements that an individual might take out in the newspaper or on television. Writing a letter to the editor or canvassing a precinct can cost money, particularly if the author or the canvasser must forgo other opportunities to write or canvass.) Ditto too for the exercise of certain other constitutional rights, e.g., building a church. If a state law provided that "no one shall spend more than $50,000 building a house of worship," we would (properly) call the law a burden on the exercise of religion, not a regulation of "religious spending." A proper application of the First Amendment in the Citizens United case requires the Court to distinguish between "speaking" and "contributing."

Second, the Supreme Court has properly (in my view) held that individuals are generally free to speak as much as they want, even if such speech is very expensive. Thus, the state could not prevent Ross Perot or Bill Gates from spending his entire personal fortune taking out newspaper advertisements in support of a candidate, so long as each really was acting independently. Nor could it prevent Mr. Perot from giving away his fortune to the Church of his choice. It would not matter in this connection if the resulting speech was "disproportionate" to the actual public support for the ideas expressed.

Third, there is no good reason for treating corporations, large or small, any differently from Ross Perot or Bill Gates, both of whom earned most of their wealth from . . . corporations! Corporations are legal fictions, just like "partnerships," "sole proprietorships," "limited liability companies," "labor unions," "non profit corporations," etc. Behind these fictions are actual human beings who contribute labor, capital, know how, etc. to a joint enterprise. Corporations, like other forms of business organization, are best understood as a "nexus of contracts" between various categories of individuals that supply inputs to a joint enterprise. Where corporations are concerned, such suppliers include shareholders, debt holders, managers, employees, directors and others. Hopefully such enterprises earn enough to pay off lenders, pay handsome wages and salaries, and earn a profit. In the case of a corporation, some of the profits are paid out as dividends, some are reinvested in new projects, and some remain in the corporate treasury, for future use at the discretion of management.

Fourth, if a corporation speaks, by, for instance, paying for an advertisement in a newspaper, it is because the directors, elected by the shareholders, have hired managers who think such speech is in the best interest of the corporation, i.e., the shareholders. Shareholders are persons. The funds expended are presumably retained earnings that managers are "investing" in speech they believe will benefit the shareholders. Corporate law traditionally grants managers very wide leeway to make investment decisions, e.g., whether to focus on building large or small cars, cars or tractors, tractors or boats, inboard or outboard motors, etc. Economists and economically sophisticated legal scholars explain this leeway by pointing out that various non-legal market mechanisms align the interests of directors and managers on the one hand, and shareholders on the other. These mechanisms are not perfect; no such mechanism is, but they deter directors and managers to some extent from employing retained earnings for projects that do not advance the interests of shareholders.

There is no reason to believe that directors/managers are any less likely to act in shareholder interests when making investments in speech than when making investments in factories, charitable giving, or research and development. If shareholders think Ford is making poor investment decisions, whether the investments are speech or factories, they can sell their shares. In other words, what we sometimes call "corporate speech" is really speech on behalf of persons who have authorized such speech, utilizing resources that the corporation could otherwise pay out to shareholders in dividends or use to invest in new projects.

As a result, bans on "corporate speech" are really bans on individual speech, and they must stand or fall under the same standards applied to analyze bans on individual speech.

Fifth, there are two counterarguments to the pro-speech approach that I have just sketched. First, that corporations receive "special privileges" from the state that justify additional state regulation, privileges such as perpetual life, entity status, and limited liability. Each such privilege, it is said, facilitates the creation of wealth in the economic marketplace that corporations might improperly transfer into the political arena, by spending resources on speech that exceeds the "actual public support" for the ideas expressed. Second, that shareholders need protection from managers who will use "their" (shareholders') money to speak about candidates the managers support, whether or not shareholders support them.

The Supreme Court bought the first argument in Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1991). Justice Brennan, in a concurrence, bought the second argument, analogizing corporate speech to a "theft" of shareholder assets to support viewpoints with which shareholders might disagree. Neither argument withstands scrutiny, in my view.

Many corporations, even large ones, are quite young. (Microsoft is ten years younger than I am.) Still, bans on corporate political speech apply "across the board," regardless of the age of the firm. Hence, the "perpetual life" attribute does not justify the current scope of speech regulation. Moreover, limited liability limits the liability of shareholders, not corporations (who are fully liable for their own torts or contract breaches despite limited liability), and it's a bit odd to invoke a benefit granted to individuals to justify disadvantaging corporations. (Also, corporations often "pay" for limited liability because they must pay higher interest rates to compensate voluntary creditors for the latter's inability to access shareholder assets if the corporation is judgment proof.)

To be sure, limited liability, perpetual life, entity status, etc. all facilitate the separation of ownership from control in large public corporations and thereby facilitate the creation and retention of wealth. (An investor is far more likely to purchase shares in a corporation if he or she knows that he or she can only lose the amount invested, without putting personal assets at risk.) Still, lots of background rules, whether contract law, tort law, partnership law, agency law, property law, trademark law, the law of secured transactions, etc., facilitate the creation and retention of wealth by individuals --- where would a franchise be without the state action necessary to enforce a trademark --- but we don't therefore conclude that individuals have received "special benefits from the state" that justify additional limits on their speech. Nor would we, for instance, allow the state to squelch speech by individuals to whom it had guaranteed a minimum income, even if the state argued that it was merely preventing the recipients of state largesse from using that largesse, or the leisure made possible by subsidies from others, to distort the political marketplace. Here again, there is no reason to distinguish individuals from corporations.

Moreover, most industries are characterized by free entry, so there is no reason to believe that the special nature of the corporate form generally allows firms to earn above-average returns, because such returns would just attract additional competition from other corporations. Finally, unless I am mistaken, bans on corporate speech are not reserved for large corporations, but apply even to corporations that are much smaller than many partnerships, for instance. Thus, even taken on their own (unpersuasive) terms, such bans are not narrowly tailored to further their purported interest.

What, though, about the "shareholder protection rationale?" Proponents of this approach argue that, if shareholders want to support a candidate, they can contribute to special funds that then spend the money on speech as directed by the corporation. Under this approach, Justice Brennan said, speech reflects "actual support" for the views expressed. This is mere wordplay. Such speech reflects some actual support, yes, but not the full actual support. As Roberto Romano argued before Austin, reliance upon separate funds is beset by collective action problems. One shareholder's contribution benefits all shareholders, even those who don't contribute. The result will be free riding by some shareholders on the contributions made by others and thus suboptimal expenditures on speech. Such a burden is not justified by any effort to protect shareholders, who have voluntarily agreed to participate in an enterprise that uses retained earnings to speak. Perhaps states could adopt heightened scrutiny of speech to make sure such speech furthers a firm's interest, but an outright ban, relegating shareholders to suboptimal separate funds, sweeps too far and offends the First Amendment, in my view. For an elaboration of this rebuttal of the shareholder protection argument, see Alan J. Meese, Limitations on Corporate Speech: Protection for Shareholders or Abridgement of Expression, 2 W&M Bill of Rights Journal 305 (1993).

Let's hope the Supreme Court keeps these various principles in mind when reconsidering Austin!

Wednesday, October 14, 2009

Timothy Noah on Possible McCarran-Ferguson Repeal

Over at Slate, Timothy Noah has penned an excellent piece on the threat by some Senate Democrats to include repeal or partial repeal of the McCarran-Ferguson Act in any health insurance reform package. Noah's piece does a great job explaining the history that led to McCarran-Ferguson Act in 1945. He also elaborates on the policy arguments for repealing McCarran-Ferguson, pointing out that the insurance industry claims that they operate in a "highly competitive industry." Finally, he notes that opposition to McCarran-Ferguson has been bipartisan: President Reagan's Federal Trade Commission advocated repeal, for instance.

Here's a link to Noah's piece.

Perhaps the most interesting tidbit in Noah's piece was his claim that Senator McCarran of Nevada shows up as Senator Pat Geary of Nevada in Godfather II.

Readers of this blog will recall that, in early August, I called for repeal of McCarran-Ferguson as a way of injecting competition into the health insurance market. Here is a link to that post:

Let me also add the following. Much of the discussion of McCarran-Ferguson has focused on the statute's grant to insurance companies of an exemption from the antitrust laws. Less attention has been focused on the section of the statute that empowers states to block out-of-state insurers from entering their markets. This sort of state-by-state protectionism prevents the formation of a true national market in health insurance. If there were such a highly competitive, national market, then arguments for the so-called "public option" would become weaker than they already are.

Monday, September 14, 2009

Tribe Rolls On/Richmond Edges Delaware/CAA Still Strong

The Tribe notched its second straight win on Saturday, easily defeating Central Connecticut State, 33-14. Nearly all scoring occurred in the first half, which ended with a score of 30-14. R.J. Archer threw two touchdown passes, including a 21 yard pass into the back of the end zone to a leaping D.J. McAulay. (McAulay also hauled in a 48 yard strike to set up an earlier 17 yard touchdown pass to fullback Jimmy Hobson.) Jonathan Grimes led Tribe rushers with 80 yards on 19 carries. Jake Trantin (2 solo tackles, 8 assists), Evan Franks (4 solo tackles and 5 assists), Adrian Tracy (3 solo tackles and 5 assists) and Sean Lissemore (3 solo tackles and 3 assists) led a solid Tribe defense.

In other CAA action, number 1 Richmond edged Delaware, unranked in the Sports Network and Coaches poll last week, 16-15, before more than 20,000 fans in Newark. Look for the Blue Hens to jump into the top 20 based on this showing. I suspect Richmond will remain at number 1 but perhaps receive fewer first place votes.

No 9 New Hampshire, also of the CAA, defeated FBS opponent Ball State, 23-16, giving theCAA its fourth victory this year against and FBS team.

Here's a story about that game from a New Hampshire paper:

http://www.seacoastonline.com/articles/20090914-SPORTS-909140301

Number 6 JMU took Maryland to overtime but lost 38-35. Look for JMU to retain its number 6 spot. JMU's performance confirms that the best teams in the CAA can play "toe-to-toe" with several teams in the ACC, despite the latter's advantage in athletic scholarships given per year and other expenditures. Even before theNew Hampshire/Ball State and JMU/Maryland games, the CAA's performance against ACC and other FBS opponents last week led some, particularly the Richmond Times Dispatch, to wonder whether ACC teams would continue to schedule CAA teams in opening games, instead of choosing less powerful opponents. Currently, Richmond is scheduled to play Virginia, Duke, N.C. State and Virginia, in that order through 2014. William and Mary is slated to play North Carolina in 2010 and Virginia again in 2011. Here's the link to the Times Dispatch Story.

http://www2.timesdispatch.com/rtd/sports/college/college_football/article/CAAF12_20090911-212805/292212/

Monday, September 7, 2009

Tribe Climbs in Polls/More Post-Game Round Up

1) Here is a link to a video montage from the UVA game, produced by the Athletic Department here, including some interviews.

http://www.tribeathletics.com/files/fb/2009/video/uva2.html

My favorite quote from the interview comes from W&M President Taylor Reveley:

"Mr. Jefferson's first university just beat Mr. Jefferson's second university."

2) The Tribe has jumped to 7th among FCS schools in two national polls: the Sports Network poll and the FCS coaches poll.

http://www.tribeathletics.com/story.php/9156/


3) The CAA has named B.W. Webb its defensive player of the week. Go here for the other honorees and some video.

http://www.caasports.com/ViewArticle.dbml?SPSID=48484&SPID=4660&DB_OEM_ID=8500&ATCLID=204788804

4) For a detailed account of the W&M/UVA game with some post-game interviews, see this article in the Cavalier Daily:

http://www.cavalierdaily.com/news/2009/sep/07/cavs-devastated-by-tribe-as-spread-offense-sputter/

Saturday, September 5, 2009

William and Mary Stuns UVA in College Football, 26-14



Earlier this evening the William and Mary Tribe stunned the University of Virginia Cavaliers, 26-14 in Charlottesville before a near-capacity crowd. What follows is an eyewitness account, bolstered by some statistics from an AP report posted on ESPN. For the ESPN report, and the box score posted on the William and Mary website, go here and here, respectively.


UVA led 14-13 at halftime, but the Tribe's rock-solid defense held Virginia to zero points in the second half. The Tribe took the lead in the third quarter, 16-14, with a field goal that capitalized after UVA muffed a punt that William and Mary recovered at the Virginia 9. The Tribe did not look back, adding another field goal in the fourth quarter before redshirt freshman B.W. Webb returned his third interception of the evening down the sideline 50 yards for a touchdown, putting the Tribe ahead 25-14 before the extra point and igniting pandemonium among William and Mary fans at the stadium. The Tribe sideline was penalized for entering the field, and UVA fans began streaming out of the stadium. A subsequent UVA drive fizzled on downs, and William and Mary ran out the clock.

Throughout the game the Tribe flawlessly executed a ball-control offense, mixing running and passing to remain on the field over 35 minutes, keep the Cavaliers off-balance and consume precious time, thereby keeping the Cavalier offense off the field and giving the Tribe defense time to rest and adjust to Virginia's evolving attack, which employed three different quarterbacks. The Tribe racked up 309 total yards, 184 passing and 125 rushing. R.J. Archer was 25-43 and threw for one tocuhdown and one interception, the latter of which was the functional equivalent of the punt on third and long, when Archer threw deep down the sideline. Jonathan Grimes led the Tribe running backs, with 46 yards on 19 carries, while quarterback R.J. Archer added 50 yards, including a 23 yard run that helped set up the Tribe's 4th field goal in the fourth quarter. Brian Pate kicked four field goals. Another attempt was blocked, a second from over forty yards hit the left upright, and a third missed wide.

All in all, UVA turned the ball over seven times and fumbled the ball out of bounds once as well. The Tribe defensive line and linebackers repeatedly harried UVA's quarterbacks, while Tribe quarterback R.J. Archer was sacked only once, for a four yard loss.

The Tribe entered the game ranked 14 in the Football Championship Series conference by the Sporting News, and 15th by USA today. No doubt the Tribe will move up in the rankings. This is the Tribe's first victory over an FBS opponent since it defeated Temple 45-38 in 1998. The Tribe defeated UVA in 1986, 41-37, in Charlottesville.

Update, 1:14 AM, Sunday, September 6. Here is a round up of stories about today's upset:

From the Daily Press of Hampton Roads;

http://www.dailypress.com/sports/dp-spt_UVA-wm_0906sep06,0,6002823.story

From the William and Mary Flat Hat:

www.Flathatnews.com/content/71295

Some additional thoughts:

Both Tribe lines turned in outstanding performances.

[More to Come].

Tuesday, September 1, 2009

Fear The Llamas

Here's a photo of a Llama farm, off U.S. Route 191, Northwest of Pinedale.

Sunday, August 30, 2009

Tribe Football in 6 days !

Just 6 days from now the William and Mary Tribe will take on the University of Virginia in Charlottesville. The action starts Saturday, Septmber 5, at 6:00 PM at Scott Stadium in Charlottesville. According to Weatherunderground.com, it will be mostly sunny in Charlottesville that day, with the high in the mid-80s. Tickets are still available for the game.
Those with long memories will recall that the Tribe beat the Cavaliers 41-37 at Scott Stadium in 1986.

The summer has seen some good news for the Tribe, raising expectations for a 2009 great season!

First, Adrian Tracy has been selected as a Sports Network preseason all-American and is on the preseason "Watch List" for the Buck Buchanan award, given to the top defensive player in the FCS league (formerly 1AA) each year. Tracy registered 7 tackles against N.C. State last year and led the CAA conference with .91 sacks per game, a figure that made him 6th nationally. He also had 15.5 tackles for a loss.

Moreover, five Tribe players have been selected to the College Sports Network pre-season All-American team. The honorees are: Adrian Tracy, Jonathan Grimes (running back), David Caldwell (safety), David Miller (punter) and Brian Pate (placekicker). Tracy earned first team honors, Caldwell second team, and Miller third team, while Grimes and Pate earned honorable mention. Some will remember Caldwell for his 66 yard return of a blocked field goal for a touchdown last year against Norfolk State. Here's a video of that play:

http://www.tribeathletics.com/files/fb/2008/video/nsu/caldtd.html

Brian Pate (placekicker), Sean Lissemore (defensive tackle), C.J. Herbert (defensive tackle), Rob Varno (tight end), and Dave Miller (punter).

Finally, the Tribe has done well in some of the pre-season rankings.

According to a press release from the William and Mary Athletic Department:

"Athlon Sports gave the Tribe its highest ranking at 11th, while the Sporting News and Phil Steele’s magazine both list W&M as the 12th-best team in the nation entering the ’09 season. Any Given Saturday and USA Today College Football Sports Weekly rank the College 13th and 14th, respectively, while Lindy’s magazine has the Tribe slotted 16th."

Here is the USA Today top 25. Note that six of the top 25 are members of the Colonial Athletic Association, further confirming what a tough conference this is.

1) James Madison
2) Appalachian State
3) Cal Poly
4) Northern Iowa
5) Montana
6) Villanova
7) Richmond
8) Weber State
9) Wofford
10) Southern Illinois
11) New Hampshire
12) Elon
13) Central Arkansas
14) McNeese State
15) South Carolina State
16) William and Mary
17) Maine
18) Tennessee Martin
19) Harvard
20) Furman
21) Colgate
22) Liberty
23) Western Illinois
24) Jacksonville State
25) Tennessee State

Others receiving votes included: Holy Cross, Prairie View, Eastern Kentucky, North Dakota State, and Grambling, among others.

For more information visit the following links:

http://www.tribeathletics.com/story.php/9004/

And, for photographs of last season's action, go here:

http://www.tribeathletics.com/story.php/7123

For video highlights from last year's season, go here:

http://www.tribeathletics.com/story.php/6901/

With 8 returning starters on defense, including a very strong defensive line and a very strong backfield the Tribe should be tough to beat !

If you can't make the UVA game, don't forget to listen on 107.9 FM or 92.3 FM in Williamsburg, 1050 Am in Lynchburg, or 1450 AM in Richmond. Or, go here to listen to the game via streaming audio. http://www.tribeathletics.com/story.php/1336/. Finally, the game is apparently available on Espn360.com.

Wednesday, August 19, 2009

How To Calculate the Payoff From Investments in Prevention

Charles Krauthaumer has taken issue with the claim that health care reform can actually save the government (and private insurance companies) money by encouraging more tests and procedures that will detect diseases and other conditions early, thereby eliminating the need for more expensive treatments later on. As Krauthaumer points out, many Democratic proponents of health care reform have in fact claimed that mandating or subsidizing additional expenditures on prevention (not always well-defined) can actually save money for the government and private insurance companies. President Obama, for instance, has claimed that such reform can save lives and money. Krauthaumer argues that these claims are incorrect, and offers some logic and evidence to back up his assertion.

Here is a link to the Op-Ed, which originally appeared in the Washington Post.


As Krauthaumer points out, a particular procedure may, ex post, turn out to be cost-beneficial for an individual patient. For instance, a procedure that costs the patient $1,000 might save the patient (or his insurance company) the costs of a much more expensive (say, $100,000) operation a few years later. The test might also save his life. This does not mean, however, that increasing expenditures on prevention across the board will thereby save money overall. If, for instance, there are one million 40 year olds, and each undergoes the $1,000 procedure, we have spent $1 Billion on that procedure. Let's say that the procedure detects 1,000 conditions that can be treated (at some expense) , thereby avoiding the $100,000 operation just mentioned. The result is a $900 million loss or so, at least if one is simply looking at the out of pocket expenses in question. While each of the 1,000 individuals who avoid the expensive operation are made better off by the invesment, the other 999,000 individuals in question receive no benefit, except perhaps the peace of mind that they do not have the particular condition in question.

And, in fact, Krauthaumer quotes a letter from the Congressional Budget Office concluding that:

"Researchers who have examined the effects of preventive care generally find that the added costs of widespread use of preventive services tend to exceed the savings from averted illness."

Thus, Krauthaumer concludes, mandating and encouraging additional prevention may well increase the costs of health care borne by the government and the private sector.

At the same time, this is not the only way to frame the inquiry. That is, an investment in prevention can do more than just reduce future medical expenses. Such investments can also save lives and/or reduce the time an individual is away from work. The $100,000 operation mentioned above might require the patient to be away from work and/or family for 6 or 8 weeks, convalescing at home or in a hospital. Even after the operation, the individual in question might be less productive than he would have been had the condition been detected earlier. He might retire sooner and/or die earlier. Thus, any true assessment of the benefits of expenditures on prevention must take into account more than just any resulting reduction in public and private health expenditures down the line. Such an assessment must also take into account the increased productivity of individuals who, because of investments in prevention, avoid illnesses that would otherwise reduce their productivity. And, of course, such an assessment must include, as President Obama has suggested, the value of human lives saved.

None of this is to say that Krauthaumer or the Congressional Budget Office is incorrect. And, I'll also note that society already spends billions of dollars on prevention of one sort or another. My only point is that, when determining whether such prevention is cost-beneficial, one must look at more than just the out-of-pocket costs borne by government and/or health insurance companies.

Monday, August 17, 2009

Tuition at Some Public Law Schools Rising Rapidly/Will The Public Law School Disappear ?

Law.com reports that tuition at some public law schools has risen dramatically this year, as schools attempt to offset reductions in state appropriations and endowment income.

The article, by Karen Sloan and entitled: can be found here:

http://www.law.com/jsp/law/LawArticleFriendly.jsp?id=1202432727154

Sloan reports the following tuition increases taking effect this fall:

1) Indiana Bloomington, 25 percent;

2) UC Davis, 19 percent;

3) Iowa, "nearly 20 percent;"

4) Texas, 16 percent;

5) U. Colorado, 16 percent.

The article also notes that some public law schools have held down their tuition increases, citing UVA and the University of Michigan as examples. Both schools, however, already charge in-state tuition much higher than the schools listed above. In state tuition at Michigan is now $43,200 per year, while in-state tuition at UVA is $38,800. Compare that to Indiana, which is just under $25,000, Iowa, which is at $21,400, and Colorado, at $25,400. Virginia receives no state support whatsoever and thus presumably is pricing at what the market will bear. Michigan, according to the article, receives only 3 percent of its budget from the state. (No doubt the proportion of state support is falling at other "public" schools as well.)

Sloan also notes that some schools are concerned that higher tution will reduce access to the schools in question, therefore compromising what many see as their mission of providing such access to the legal profession. At the same time, and in may view, one might conclude that legislators, the ultimate representatives of the public, have decided that such access is not worth the cost of providing it. Schools that nonetheless keep their tuition artifically low will thereby be furthering a mission of their own making, and not one that can be characterized as necessarily flowing from their public status.

In any event, it's hard to imagine state legislatures reversing the recent trend of declining to provide increased or even level financial support to public law schools. When it comes to support for education, K-12 education always goes to the head of the line. This is not surprising because: (1) K-12 teachers are often unionized and thus well-organized politically and (2) save for those who attend private schools, all children in a state attend such schools at one time or another, thereby enhancing the magnitude of public support for such expenditures. By contrast, many children, upon graduation from high school (if they do graduate) do not attend college at all or, if they do, attend a school in another state. Hence, support for investments in higher education are is predictably weaker than support for investments in K-12 education. And, of course, college faculties are often not unionized and thus lack the political muscle found among K-12 teachers.

Perhaps, 50 years from now, we will look back and view the state-funded law school as a sort of anomalous relic.

Sunday, August 16, 2009

More On Health Care Reform/How Really to Lower Health Care Costs

Over at Conglomerate, Gordon Smith has posted a thoughtful analysis of the politics and policy of President Obama's health care reform efforts.



Among other things, Smith notes that most Americans are generally happy with the health care they receive. Moreover, despite some initial promises, there is no indication that the plans promoted by President Obama and his allies will improve the amount or quality of care that most Americans receive. Instead, Smith suggests, providing health insurance for 45 million additional Americans will only increase the cost that everyone else pays for health care, and perhaps reduce its quality. (I'll add here that it will increase cost in two ways: first, it will increase the demand for health care services (according to some sources the uninsured currently receive 50-60 percent of the care received by others), without any increase in the supply of health care, thus driving up the price of such services. ("Where are the additional doctors ?" Smith asks.) Second, it will increase expenditures, by the government and the private sector, on health care, hence the $1 trillion (minimum) price tag of the proposals in the Congress., and that is just the price tag for the national government.) Smith concludes that, unless the Democrats can convince Americans that that their plans will actually improve their health care and/or lower the price they pay for it, no ambitious plan will actually pass Congress.

I certainly agree with Smith's cogent analysis of both the policy issues and the politics of health care reform. I will also add that President Obama is missing a real opportunity here. There may in fact be a way to BOTH increase access to health care (certainly an important policy objective) AND reduce costs, but no one is talking about it. That is, the government could take various steps to reduce the costs of producing and financing health care, shifting the supply curve of such services so that, despite increased demand for care, prices might actually fall. Or, at least such steps could mitigate any price increase that would otherwise result from increasing health care expenditures on the 45 million or so individuals who are not insured.

Here are the sort of steps that I have in mind:

1) Increase the number of doctors educated here in the USA. The government could require states, as a condition of receiving Medicaid funds for instance, to increase the size of their medical schools, thus increasing the supply of physicians.

2) Relax immigration restrictions. Such restrictions prevent foreign-educated doctors from becoming U.S. citizens or prevent American-educated citizens of foreign countries from remaining in the USA. A growing number of Americans are travelling abroad, e.g., to India, for surgery. Why not bring the Indian doctors here, instead, thereby increasing the supply of physicians, as Smith seems to suggest?

3) Eliminate so-called "certificate of need" laws that prevent entry by hopsitals into underserved markets. Most states have such laws, which require individuals to obtain a state's approval before building a new hospital. According to one report, New York was the first state to adopt such laws, in 1964, and numerous other states followed suit at the behest of the American Hospital Association. Here's the report, from the National Conference of State Legislatures.  The Department of Justice and the Federal Trade Commission have criticized such laws, pointing out that they increase concentration in health care markets, reduce competition and drive up prices. The national legislature has the authority to preempt such laws, so long as they burden interstate commerce, which many of them do.  Moreover, Congress could also decline to provide, say, Medicaid subsidies to states that maintain such laws.

4) Reform the McCarran-Ferguson Act.  As explained in a previous post, the McCarran-Ferguson Act exempts health insurance companies from the sort of antitrust regulation that other companies live under, whenever states regulate or purport to regulate such companies themselves. McCarran-Ferguson also allows states to block out of state insurance companies from entering their markets. Both provisions, of course, naturally raise economic concentration in local health insurance markets and thus likely raise the price of health insurance.

So far as I can tell, none of the bills currently in play in the House or Senate includes any of the measures listed above. If the President and members of Congress really want to take on "special interests," why not take on the American Hospital Association and the AMA by attempting to preempt certificate of need laws and significantly increase the number of doctors? The failure to do so is perplexing.

Thursday, August 13, 2009

President Obama Awards Jack Kemp Medal of Freedom


Yesterday President Obama awarded Jack Kemp the Medal of Freedom.

The White House website contains the following statement about Kemp, explaining the award:

"A statesman and a sports icon, Jack French Kemp advocated for his beliefs with an unwavering integrity and intellectual honesty. On the football field, he earned the respect and admiration of his teammates for his judgment and leadership. As a public servant, he placed country before party, and ideas before ideology. Jack Kemp saw bridges where others saw divisions, and his legacy serves as a shining example for all who strive to challenge conventional wisdom, stay true to themselves, and better our Nation."

Moreover, at the ceremony itself, the President had this to say:

"Told he was too small to play college football, Jack Kemp became a pro quarterback. Cut by four teams, he led the Buffalo Bills to two championships. Football, he once said, gave him a good sense of perspective about politics: He'd "already been booed, cheered, cut, sold, [and traded]." (Laughter.) Makes me feel better. (Laughter.) A conservative thinker, a Republican leader, and a defender of civil rights, he was that rare patriot who put country over party, never forgetting what he learned on the gridiron -- that it takes each of us doing our part, and all of us working together, to achieve a common goal. It's a life from which we can all draw lessons, Democrat and Republican alike."

Unfortunately, Kemp was not alive to receive the award. One has to wonder why, in eight years, George W. Bush did not get around to awarding Kemp, the pro-life, hawkish supply-side tax cutter the medal.
Bravo to President Obama for making the award.

Sunday, August 9, 2009

Damn It Jim, I'm A Doctor, Not A Quizmaster . . . .

The New York Post (of all places !) features a Star Trek "Video Quiz" on the front page of its website, interlaced with clips from the original episode. Careful, some of the questions deal with subsequent movies, and not the original series.

http://www.nypost.com/entertainment/comicsgames/popjax_game.htm?gameId=1593&campaign=NYP_PCW_20090805

And, if you want to watch some full-length episodes, including at least one in HD, go to the CBS website here. Thanks CBS !

http://www.cbs.com/classics/star_trek/

Saturday, August 8, 2009

More (Health Care) Privatization in . . . . .Sweden !!!!!!!

Earlier this blog reported that Sweden had rejected GM's plea for a government Bush/Obama-style bailout of GM subsidiary SAAB. We also noted the irony that a country known for its Socialism had reject the sort of policy adopted by a country known for its Capitalism.

See here.

Now comes word that Sweden has taken another step toward a free society, just as America seems poised to lurch toward more central control of our health care sector. That is, Sweden has announced plans to privatize its pharmacies, previously owned by a state monopoly Apoteket. That's right, until now, a private Swedish citizen, no matter how qualified, could not open a Pharmacy. (Sorry Sweden's equivalent of Linus Pauling !) Instead, someone who wanted to pursue the pharmacy vocation would have to apply for a civil service position with Apoteket.

Here's the story about the end of Apoteket's monopoly, July 1.

At the same time, it does not appear that Sweden's decision was entirely voluntary. Apparently Swedish citizens challenged the state monopoly as a violation of Article 31 of the European Community Treaty. One Swedish retailer simply wanted to sell some non-prescription Nicorret Gum but was with threatened with criminal prosecution for selling a product over which Apotekek had a state-conferred monopoly. In 2005, the European Court of Justice held Sweden's state monopoly violated Article 31 of the EC Treaty because there was no mechanism in place for assuring that Apoteket's purchasing decisions were free of bias against non-Swedish manufacturers. Bascially, the opinion, located here, requires such monopolies to adopt a transparent system of competitive bidding, so that manufacturers whose goods are not purchased will know why, say, Sweden has excluded their products from the market.

Apparently Sweden decided to privatize its pharmacy system instead of keeping its monopoly and implementing the sort of reform necessary to comply with the Court's ruling. Of course, a truly free market will do a better job of ensuring that manufacturers have access to Sweden's markets, anyway.

Tuesday, August 4, 2009

Happy Birthday Mr. President/From Russia with Love !

Russian Birthday Present ?
CBS News reports that the President of Russia called President Obama today to wish him a happy birthday.
Isn't that special ! Apparently he also sent two Akula class nuclear powered submarines to set up station off the Atlantic coast. The submarines are capable of carrying twelve nuclear armed anti-ship cruise missiles as well as torpedos and antitship missiles. The New York Times has the story on the subs' deployment --- the first such deployment in 15 years --- here.


Monday, August 3, 2009

More on Health Care/How to Lower Costs

Over at Conglomerate, Gordon Smith has posted a thoughtful analysis of the politics and policy of President Obama's health care reform efforts.

http://www.theconglomerate.org/2009/08/the-problem-with-health-care-reform.html

Among other things, Smith notes that most Americans are generally happy with the health care they receive. Moreover, despite some initial promises, there is no indication that the plans promoted by President Obama and his allies will improve the amount or quality of care that most Americans receive. Instead, Smith suggests, providing health insurance for 45 million additional Americans will only increase the cost that everyone else pays for health care, and perhaps reduce its quality. (I'll add here that it will increase cost in two ways: first, it will increase the demand for health care services (according to some sources the uninsured currently receive 50-60 percent of the care received by others), without any increase in the supply of health care, thus driving up the price of such services. ("Where are the additional doctors ?" Smith asks.) Second, it will increase expenditures, by the government and the private sector, on health care, hence the $1 trillion (minimum) price tag of the proposals in the Congress., and that is just the price tag for the national government.)

Smith concludes that, unless the Democrats can convince Americans that that their plans will actually improve their health care and/or lower the price they pay for it, no ambitious plan will actually pass Congress.


I certainly agree with Smith's cogent analysis of both the policy issues and the politics of health care reform. I will also add that President Obama is missing a real opportunity here. There may in fact be a way to BOTH increase access to health care (certainly an important policy objective) AND reduce costs, but no one is talking about it. That is, the government could take various steps to reduce the costs of producing and financing health care, shifting the supply curve of such services so that, despite increased demand for care, prices might actually fall. Or, at least such steps could mitigate any price increase that would otherwise result from increasing health care expenditures on the 45 million or so individuals who are not insured.

Here are the sort of steps that I have in mind:

1) Increase the number of doctors educated here in the USA. The government could require states, as a condition of receiving Medicaid funds for instance, to increase the size of their medical schools, thus increasing the supply of physicians.

2) Relax immigration restrictions. Such restrictions prevent foreign-educated doctors from becoming U.S. citizens or prevent American-educated citizens of foreign countries from remaining in the USA. A growing number of Americans are travelling abroad, e.g., to India, for surgery. Why not bring the Indian doctors here, instead, thereby increasing the supply of physicians, as Smith seems to suggest?

3) Eliminate so-called "certificate of need" laws that prevent entry by hopsitals into underserved markets. Most states have such laws, which require individuals to obtain a state's approval before building a new hospital. According to one report, New York was the first state to adopt such laws, in 1964, and numerous other states followed suit at the behest of the American Hospital Association. Here's the report, from the National Conference of State Legislatures.
http://www.ncsl.org/default.aspx?tabid=14373 The Department of Justice and the Federal Trade Commission have criticized such laws, pointing out that they increase concentration in health care markets, reduce competition and drive up prices. The national has the authority to preempt such laws, so long as the burden interstate commerce, which many of them do. Moreover, Congress could also decline to provide, say, Medicaid subsidies to states that maintain such laws.

4) Reform the McCarran-Ferguson Act. As explained in a previous post, the McCarran-Ferugson Act exempts health insurance companies from the sort of antitrust regulation that other companies live under, whenever states regulate or purport to regulate such companies themselves. McCarran-Ferguson also allows states to block out of state insurance companies from entering their markets. Both provisions, of course, naturally raise economic concentration in local health insurance markets and thus likely raise the price of health insurance. Here's that previous post, by the way.

http://bishopmadison.blogspot.com/2009/08/r-ohio-liked-competition-d-illinois.html

So far as I can tell, none of the bills currently in play in the House or Senate includes any of the measures listed above. If the President and members of Congress really want to take on "special interests," why not take on the American Hospital Association and the AMA by attempting to preempt certificate of need laws and significantly increase the number of doctors? The failure to do so is perplexing.

How To Inject Real Competition Into the Health Insurance Market

(R-Ohio)
Liked Competition


(D-Illinois)
Pretends to Like Competition

The Richmond Times Dispatch editorial board has identified (yet) another contradiction in President Obama's plans for health care reform. On the one hand, the President and his supporters claim that they want to inject more "competition" into the nation's health insurance markets, by creating a so-called "public option." At the same time, none of the bills proposed by President Obama's allies in Congress would amend laws that both exempt insurance companies from federal antitrust laws --- which are supposed to encourage competition --- and empower states to block competition that might take place across state lines. The brief editorial, which is worth reading in full, can be found here.

http://www2.timesdispatch.com/rtd/news/opinion/editorials/article/ED-COST30_20090729-190409/282857/

The chief culprit here is the McCarran-Ferguson Act, which Congress passed in 1945 in response to the Supreme Court's decision in United States v. South-Eastern Underwriters, 322 U.S. 533 (1944). Southeastern Underwriters held that the Sherman Antitrust Act (named for its sponsor, Senator John Sherman, R-Ohio, pictured above) applied to the business of insurance and banned a horizontal price fixing agreement between insurance companies selling insurance across state lines. The decision was correct and made perfect sense. However, in its infinite wisdom, Congress responded to the decision by passing the McCarran-Ferguson Act, which, among other things, granted antitrust immunity to insurance companies who are regulated by state insurance authorities. The only exceptions to such immunity are for instances in which the company engages in "boycott, coercion or intimidation." McCarran-Ferguson was one of several New Deal-era federal statutes that undermined competition by encouraging price fixing and creating barriers to entry. Another classic example is the Motor Carrier Act of 1935, which required anyone wishing to transport goods across state lines in a truck to obtain a federal license to do so. The Act also empowered the Interstate Commerce Commission to sets prices for such transportation and pass on truckers' applications to serve particular routes. Put another way, the Act empowered the ICC to engage in Central Planning of the trucking industry.

Thus, so long as insurance companies are subject to state oversight, they may engage in the sort of horizontal price fixing that would be a felony if practiced by, say, automobile manufacturers. They may also engage in exclusionary tactics that do not rise to the level of "boycott, coercion or intimidation." Moreover, such companies can merge with one another with impunity, thereby producing concentrated markets without regard to whether such concentration is necessary to produce efficiencies. As the Times-Dispatch editorial notes, 94 percent of state insurance markets are "concentrated" if one applies Department of Justice Merger Guidelines. The problem is compounded in this context, where, because of McCarran-Ferguson, insurance companies can agree on the prices they will charge consumers without any threat of liability under Federal law.

Ordinarily, concentration itself it not necessarily a problem, since the threat of new entry can sometimes prevent firms in concentrated markets from raising prices above the competitive level. If, say, Dominos and Pizza Hut agree on the price of delivered pizza, Papa Johns and others can enter the market and defeat the cartel. However, McCarran-Ferguson empowers a state to prevent entry by out-of-state insurance companies into the state's own market, thereby preventing consumers in, say, Virginia from seeking health insurance from firms based in New York. In the end, then, McCarran-Ferguson is a sort of one-two punch: insurance companies may agree on prices they will charge consumers in a particular state, and consumer may not seek to avoid such price fixing by seeking insurance elsewhere.

There are various ironies here. The Obama administration and its allies generally support, or claim to support, aggressive enforcement of the antitrust laws. At the same time, they have made no effort to undo the pernicious anti-competition effects of McCarran-Ferguson. Moreover, some arguments for the so-called "public option" rest on the assumption that the Federal Plan will become so large that it will have bargaining leverage over providers of health care, an assumption in tension with a professed desire to enhance competition.

There is final irony. President Obama and his allies claim that failed markets justify additional government involvement in the health care industry. In this case, however, the problem seems to be failed government. To quote the Times-Dispatch:

"The market gets blamed for a lot these days, but it is absurd to pin high health insurance premiums on markets when excessive regulations are much more culpable. Any health care overhaul should repeal the ban on interstate health insurance shopping."

Enough said !

Friday, July 31, 2009

IRL Pulls Out of Richmond/IRL to Announce 2010 Schedule Today

Bad news for those Virginians, like me, who are fans of the Indianapolis Racing League. Today the Richmond Times Dispatch reported that, after nine straight seasons, there will be no IRL race in Richmond next year. Falling attendance, and Suntrust's decision not to sponsor the race were apparently significant factors preventing the IRL and the International Speedway Corporation, which owns the Richmond track, from reaching an agreement to hold the race in Richmond. Here is the story.

http://www2.timesdispatch.com/rtd/sports/motor_sports/article/INDY31_20090730-220205/283257/

Why the falling attendance ? Two reasons, perhaps. First, the economy is quite weak, with Virginia' unemployment rate reaching its highest in years last month. Second, and as your humble blogger can confirm, the most recent IRL races at Richmond have not been particularly exciting. The oval track is relatively small --- about three quarters of a mile, compared to 2.5 miles at Indianapolis, and 1.5 miles at the Kentucky Speedway, for instance. The short straightaways at the track make it very difficult for one car to pass another or, for that matter, for the cars to run two wide. As the Times-Dispatch article puts it: "During the race, there were long stretches of uninterrupted racing with few lead changes."

For the sake of posterity, here, courtesy of the Times-Dispatch story, are the winners of the nine IRL races held in Richmond over the years.

• 2001: Buddy Lazier • 2002: Sam Hornish Jr. • 2003: Scott Dixon • 2004: Dan Wheldon • 2005: Helio Castroneves • 2006: Sam Hornish Jr. • 2007: Dario Franchitti • 2008: Tony Kanaan • 2009: Scott Dixon.

The Indy Racing League will unveil its 2010 schedule live, at 4:00 PM. Go to http://www.indycar.com/ to watch the broadcast.

Portland Headlight "In Action," July 2009 and July 2011



Your blogger took these pictures of the Portland Head Light, in Casco Bay, from the Casco Bay Lines ferry in July, 2009. Wikipedia has a nice entry on the history and significance of the lighthouse (see here), constructed in the late 18th Century at the behest of George Washington.  Moreover, the lighthouse itself maintains a webcam, to be found here.  Click on the webcam photo to enlarge it.

Here is another photo of the same lighthouse, taken in July, 2011.

 

More On China's Undue CO2 Emissions

The UK Guardian reports that three electricity companies in China emit more carbon dioxide than the entire United Kingdom, the latter of which is the sixth or seventh largest economy in the world.

http://www.guardian.co.uk/environment/2009/jul/28/china-greenhouse-gas-emissions-greenpeace

The report also notes that China emits less carbon per capita than various industrial nations, but omits the fact that, as a reported in a prior post, China utilizes and emits far more carbon per unit of output than the United States, for instance.

Here is the prior post:

http://bishopmadison.blogspot.com/2009/07/china-surpasses-us-auto-salescould.html

Wednesday, July 29, 2009

Fire at Sal's/Employee Fund Created

Many have already heard that Sal's by Victor here in Williamsburg burned down last night. Here is the most complete newspaper story on the subject to date, from the William and Mary Flat Hat:

http://flathatnews.com/content/71100/local-pizzeria-destroyed-fire

The Flat Hat Story was updated Tuesday afternoon, to report that a fund has been created to assist the employees of the restaurant. Here is the information about the fund:

A fire fund account at Chesapeake Bank has been set up for the 48 employees of Sal’s by Victor. Those wishing to make a donation may do so in person at any Chesapeake Bank branch, or by mailing the donation to the bank, attention Sal’s by Victor Fire Fund, 1229 Lafayette St., Suite 202, Williamsburg, VA 23185. Checks should be made payable to the Sal’s by Victor Fire Fund.

WAVY News 10 also has a detailed story on its site, along with some video.

http://www.wavy.com/dpp/home/local_wavy_williamsburg_fire_20090728

Thank God that no one was seriously hurt in the fire or in the efforts to extinguish it. Let's hope that Victor can get Sal's back up and running as soon as possible despite the devastation. Ditto for the other businesses that we affected.

Tuesday, July 28, 2009

Flawed Arguments For Unionization From Maine

In a recent editorial, the Portland Press Herald has endorsed pending legislation in Congress that would purportedly make it easier for employees to form unions, against the wishes of their employers. Here is a link to the Op-Ed.


Here is the core of the paper's argument for this legislation:

"For decades, middle-class wages have been stagnant and union membership has been in decline. The trends are connected. America has been losing the industrial manufacturing jobs which were once the stronghold of organized labor. The result can be felt throughout the economy. Union members are better paid and are more likely to have employer-supplied health insurance and pension plans than non-union employees. Non-union workers in communities with strong unions are better paid than similar workers in other areas. The importance of unions has been recognized in federal law since the 1930s. But organizing today's workers in service sectors, like high-tech and medical industries, will take some changes to the rules that were put in place to govern organizing factory workers many decades ago."

In other words, unionized workers earn more than non-unionized workers, so "reform" that encourages unionization over the objection of employers is a good thing. This is a very common argument for unionization and legislation that facilitates it.

There are, however, several flaws in this all-too-common argument. Here are three.

First, the observation that unionized workers earn more than their non-union counterparts may simply reflect the fact that unions are more likely to organize workers in high wage industries. Campaigns to unionize a workforce can be expensive, and unions can only recoup their expenses by charging workers who choose to organize union dues, dues that are presumably higher in high wage industries, where workers can afford such levies. As a result, unions may choose not to unionize low wage industries in the first place, thereby explaining the gap between wages for union and non-union workers.

Second, the data invoked do not, contrary to the editorial's assertion, indicate that unions make workers in unionized industries better off than they otherwise would be. While unionization may raise the wages (and benefits) of some workers, such wage increases will cause employers to substitute capital for labor, thereby employing fewer workers now and in the future and reducing overall employment. Such adjustments will be more pronounced in the longer run, as capital wears out and firms thus have more flexibility to adopt capital-intensive production processes. In some cases, industries may shut down altogether because of competition from foreign firms with lower labor costs. (Indeed, the editorial does not seem to recognize that America has been losing manufacturing jobs precisely because unionization of such industries artifically raises the cost of labor. Instead, the editorial seems to treat the failure of these industries and resulting reduction in manufacturing employment as an argument for encouraging unionization elsewhere !) Thus, while the wages of some workers may rise as a result of unionization, the wages of others may fall to zero, at least until these laid off workers obtain less remunerative employment elsewhere. Studies purporting to show that unionized workers, who are by definition employed, earn more than others, do not account for the negative impact of unionization on those who, because of unionization, are now former employees.

Third, even if additional unionization will increase the overall welfare of some employees, one still needs additional argumentation to support such legislation. Higher wages and benefits are not free. Firms and/or their customers must pay for such additional labor costs. Thus, legislation that encourages unionization may simply transfer income from one set of middle class workers and business owners to others. To be sure, unionization may in some instances increase the productivity of employees by, for instance, facilitating the negotiation and enforcement of efficient and complex contracts between labor and management. However, if the efficiency benefits of unionization entirely offset the increased wages resulting from unionization, then employers would embrace unionization, thereby obviating the need for such legislation. Absent some convincing argument that unionized workers deserve increased wealth more than employers and their customers, the editorial's argument fails on its own terms.

Monday, July 27, 2009

Top 100 Movie Lines/Some Suggested Amendments


GET YOUR HANDS OFF ME . . . .



Some of you may have seen the video on YouTube collecting what purport to be the 100 best movie lines, including the line quoted above from Planet of the Apes. The video is quite impressive, managing as it does to collect all 100 lines in under four minutes. Here is a link to the video.

http://www.youtube.com/watch?v=9QUT0tweX1M

At the same time, there are, in my mind ayway, some obvious omissions from the list of top 100 lines, including the following, in no particular order. Where possible, I have located and posted a clip from Youtube or another source.

1) "I'm Spartacus" from Spartacus

http://www.youtube.com/watch?v=hFbCS4a14J4

2) "Dodge This" from The Matrix

http://www.youtube.com/watch?v=PwbtQWub7Zs

3) "You used up all the glue . . . on purpose." From "A Christmas Story"

http://www.youtube.com/watch?v=JJMePGBYNqA

4) "I'll make it." From Hoosiers.

http://video.google.com/videosearch?hl=en&q=Hoosiers%20Memorable%20quotes%20I


(50 seconds into this clip).

5) "Michael, we're bigger than U.S. Steel." From The Godfather II

6) "Leave the gun. Take the canolis." From The Godfather

7) "I've got nowhere else to go." From Officer and a Gentleman

8) "There is no fighting in the war room." From Dr. Strangelove

9) "I get paid to be suspicious when I've got nothing to be suspicious about." From The Firm

10) "30 years from now when you are sitting around your fireside with your grandson on your knee, and he asks you 'what did you do in the great World War II' you won't have to say, 'well, I shoveled shit in Louisiana." From Patton.

Thursday, July 9, 2009

China Surpasses US Auto Sales/Could Double Carbon Emissions By 2030

Today came news that China's auto sales rose 36.5 percent in the first half of 2009, surpassing sales in the USA.

This news reminded me of a recent article in Der Spiegel entitled: "China's Greenhouse Gasses Threaten to Double." The article summarizes recent studies showing that China's greenhouse gas emissions will, under optimistic assumptions, rise by 80 percent by 2030, a date by which numerous other industrialized nations hope to have reduced their emissions significantly.

According to the article, China, is the world's 4th largest economy (behind the U.S., Japan, and Germany). (Note that other estimates place China 3rd, ahead of Germany.) At the same time, China's economy is growing faster than those it currently trails, and rapid urbanization and economic progress will increase the demand for electricity (and automobiles!) by the average Chinese citizen. Currently coal-fired power plants produce 83 percent of China's electricity, compared to 48-50 percent in the USA. While China hopes to move to alternative fuels between now and 2030, the study estimates that, despite China's best efforts, coal will still provide 70 percent of China's much larger output of power by 2030. Even under this "rosy scenario," in which China successfully moves to switch from coal-based generation to alternative fuels, China's emissions will rise 80 percent. If China is less successful at steering its energy generation toward alternative fuel sources, it's Carbon Output could double.

The article should also serve as a reminder that China, and not the USA, is already the largest emitter of greenhouse gases. According to this report by the Congressional Research Service, China had already passed the USA in such emissions by 2005. See table 1 in the report.
http://www.fas.org/sgp/crs/row/RL34659.pdf

The report also estimates that China's GDP is less than half that of the USA. Other estimates place it at about one third of the USA's GDP. Thus, China's output is much more carbon-intensive than that of the USA. Indeed, according to this story from NPR, China's emissions grew 14 percent in 2004, a gross amount equal to the entire emissions of Germany or the UK.

Some commentators like to blame the United States and other countries for China's increase in emissions, because we and others purchase Chinese products, thereby driving the Chinese economy. I doubt, however, that these same commentators blame countries that purchase US exports for American emissions. This is ironic, because, as just explained, U.S. firms employ far less carbon per unit of output than their Chinese counterparts.

So long as China continues on its present path, efforts by G-8 countries to reduce greenhouse gas emissions will have limited, if any, net impact on the overall level of greenhouse gases in the atmosphere.

N.b. The Photo of a Chinese Power Plant comes from Wikipedia and is subject to the GNU free documentation license published here:






































Tuesday, July 7, 2009

Why Is California Collapsing ???




I.O.U.
Over the past couple of days I have come across two articles with very different diagnoses of California's fiscal crisis. One article, by Kevin O'Leary in Time Magazine, lays the blame for the crisis on Proposition 13, a Constitutional Amendment approved by California voters in 1979 that limits the property taxes that localities may levy. Because of Prop. 13, the argument goes, the state legislature must appropriate more and more money for projects and activities, such as public education, normally funded at the local level. As a result, the state has no little money left over for projects at the state level ordinarily funded by the state legislature.

A second article, by Kevin Hasset of the American Enterprise Institute, argues that California's troubles are the result "an orgy of spending" leading to its $26 Billion deficit. Having stated this conclusion, he then argues that California's experience is a cautionary tale for President Obama and his various expensive proposals.

O'Leary's hypothesis is shared by many, but it is only that, a hypothesis. Moreover, it is subject to a simple empirical test. The theory implies that states like California would derive less tax revenue overall, because of the Proposition 13 constraint, than states without such a restraint, thereby explaining the "gap" between spending and revenues in California. (After all, if California obtains more tax revenue from its citizens that other states, then the distribution of those receipt between state and local government should not logically impact the state's ability to provide services equal to the value of such revenues.) The theory also implies a subsidiary thesis, namely, that in California, local spending would constitute a smaller portion of overall state and local spending combined than in other states.

The data are inconsistent with both predictions and thus seem to falsify the O'Leary hypothesis.

According to the U.S. Census Bureau, California raised $236,646,725,000 in state and local revenue in during the 2005-2006 fiscal year, when its population was 36.1 million. That's $6,555 per person. (2005-2006 is the most recent year for which data are available at the census website.)  By contrast, during the same fiscal year, Utah raised $13,275,165,000, on a population of 2.5 million, for a total of $5,310 per person.

That is, California raised 23 percent more revenue per person than Utah in 2005-2006.

Utah, it should be noted, is not idiosyncratic. During the same period, Virginia, with a population of 7.5 million in 2005, raised $44,144,819,000, or $5867 per person, a figure closer to Utah than California. Indiana's tax revenue was also less than $6,000 per person. Here is the Census website, with the data on revenues and spending. 2005 population figures come from other reliable sources, e.g., Census press releases and a report from a think tank at UVA.

Note that a different source puts California per capita taxes in 2005 at $7,253.00, compared to $5,889.10 for Virginia, $5,811.8 for Utah and $5,710.10 for Indiana. Again, California's per capita spending is between 23 and 27 percent higher than that in Virginia, Utah and Indiana respectively.

What about the subsidiary thesis, i.e., that California localities will collect a smaller share of overall state taxes than localities in other states ? Here again, the data apparently contradict the O'Leary thesis. According to data on the same website listed above, California localities derive a LARGER share of overall state tax revenue than the localities in the other three states mentioned. Here are the figures, i.e., the percentage of overall state tax revenue taken at the local level, in the 2005-2006 fiscal year.

California 43 percent.

Virginia 41 percent
Indiana 41.8
Utah 36 percent.

Absent some equivalent to Proposition 13 in these three states, one must respectfully disagree with Mr. O'Leary' hypothesis. Spending, not some inability to tax, is the problem in California.
Note also that, from 1992-2004, a period with relatively low inflation, total state spending in California nearly doubled, according to from $123.9 billion, to $240.2 billion. It's hard to characterize California as a low tax state.