Commentary

The Department of Justice typically sets down certain terms of behavior for an individual seeking to settle a suit without going to trial. Usually, the requirements will include: Don’t step over that line again. And: Don’t associate with bad people. More severely, the government might say: Don’t engage in that profession again. But in a case settled this week, the DOJ required, as its price of settlement, that an individual drop a lawsuit seeking to vindicate free speech. Consider that again. The U.S. government said to someone: Of course, we can’t prosecute you for claiming you have a right to free speech—but unless you drop your legal claim to free speech, we are going to prosecute you for something else. And the civil libertarians said nothing. Because the individual was a company.

Sep 5, 2010

|

Jeffrey Skilling has been denied bail during the appeal he won from the Supreme Court. It was a one-sentence ruling, not much to go on, except to note the comparison with Conrad Black, who got bail.

Sep 4, 2010

|

September 2, 2010 -- Legal scholars distinguish between behavior that is malum in se (wrong in itself, such as murder, rape, and theft) and behavior that is malum prohibitum (wrong merely because it is against a society’s structural rules, such as driving on the left side of the street in America or the right in Britain). I sometimes wonder if we do not need a third category: malum insanum, behavior that is wrong merely because someone in authority has set down a completely arbitrary edict that declares it to be wrong. That, at least, is the reflection prompted by yesterday’s SEC settlement of insider-trading accusation against two friends, one of whom boasted about his work on a possible corporate acquisition and one of whom traded on the information—for his own benefit, not for their joint benefit.

Sep 2, 2010

|

Ted Frank, of the Manhattan Institute’s Point of Law blog, posts a letter about the Toyota affair that he sent to the New York Times but that (naturally) went unpublished. To the editor: Peter Goodman takes issue with Toyota's public relations but offers no alternative. According to Goodman, it would be a pr mistake for Toyota to blame driver error for the panic over "sudden acceleration." But more and more evidence exonerates Toyota and demonstrates that the allegations of an electronic defect were lies driven by self-interested trial lawyers trying to manufacture hysteria. How precisely should Toyota defend itself when faced with a financially-motivated attack on its reputation abetted by an unskeptical media if the truth is insufficient?

Sep 1, 2010

|

I suppose that you can’t judge a film by its previews. But on that superficial basis, I must admit that the Left’s pre-election movie, “Inside Job,” which I wrote about a few days ago , seems far more powerful than Ray Griggs ’s October movie, “ I Want Your Money .”

Sep 1, 2010

|

David Brooks coined the term “bourgeois bohemian” (BoBo) to refer to those children of the Sixties who exercise the bourgeois virtues of capitalism in their day jobs but affect the anti-capitalist (“bohemian”) attitudes and styles of the academic and cultural elite. Given this combination, the bourgeois bohemians of Wall Street were naturally among the largest contributors to the campaign of Barack Obama, the first presidential candidate with a completely post-Sixties outlook.

Aug 31, 2010

|

The Wall Street Journal editorial page today prints the following quotation from Camille Paglia : “We need a sweeping revalorization of the trades. The pressuring of middle-class young people into officebound, paper-pushing jobs is cruelly shortsighted. Concrete manual skills, once gained through the master-apprentice alliance in guilds, build a secure identity.”

Aug 31, 2010

|

Don't miss today's Wall Street Journal Europe profile of the leading Austrian economist Peter J. Boettke : "An Old Economic Theory Finds Converts in a New Age," by Kelly Evans. I had occasion to work with Boettke a couple years ago, in his capacity as editor of The Review of Austrian Economics, and found him to be extremely rigorous.

Aug 30, 2010

|

September/October 2002 -- Intuition: Its Powers and Perils . By David G. Myers. (New Haven, Conn.: Yale University Press, 2002. 322 pp. $24.95.) If you wanted to fathom the workings of a complex corporation, with many units, goals, and operations, you would not limit your investigation to its CEO. Although his decisions might be most visible, you would realize that thousands of other employees supported him and gave his decisions effect (and perhaps had their own agendas, as well). This is one of the metaphors that cognitive psychologist David G. Myers uses in describing the relationship between our conscious mind and our automatic mental processes, which he calls intuition. Intuition: Its Powers and Perils probably could not have been written even a decade ago. Its depth comes from relatively recent discoveries in brain science and hundreds of experiments over the last two decades in cognitive psychology--the study of how we think. Myers can refer to brain science to mount a cogent case that certain mental processes are genuinely automatic and nonconscious; and, when he talks about the astonishing capabilities and systematic errors of intuition, he can cite chapter and verse from cognitive experiments. There are fifty-six pages of endnotes in this non-academic book.

Aug 30, 2010

|

This list first appeared in the 2003 issue of Navigator magazine. Integrity A Man for All Seasons (1966) The Fountainhead (1949) Cyrano de Bergerac (1950) High Noon (1952) Chariots of Fire (1981) On the Waterfront (1954) Mr. Smith Goes to Washington (1939) The Spirit of America Boom Town (1940) Mrs. Parkington (1944) Cash McCall (1960) Field of Dreams (1989) Sergeant York (1941) A League of Their Own (1992) Singin' in the Rain (1952) The Music Man (1962) Moscow on the Hudson (1984) Meet Me in St. Louis (1944)

Aug 29, 2010

|

I might have guessed that the entertainment industry would not allow the leftist policies of its political friends to be exposed as the cause of the financial meltdown. On October 8, just in time for the elections, we are going to get the equivalent of a “Michael Moore” account of the collapse. Here is the plot summary: From Academy Award® nominated filmmaker, Charles Ferguson ("No End in Sight"), comes "Inside Job," the first film to expose the shocking truth behind the economic crisis of 2008. The global financial meltdown, at a cost of over $20 trillion, resulted in millions of people losing their homes and jobs. Through extensive research and interviews with major financial insiders, politicians and journalists, "Inside Job" traces the rise of a rogue industry and unveils the corrosive relationships which have corrupted politics, regulation and academia. Narrated by Academy Award® winner Matt Damon, "Inside Job" was made on location in the United States, Iceland, England, France, Singapore, and China.

Aug 28, 2010

|

On Monday, a district judge in Los Angeles will be asked to dismiss the S.E.C.’s case against Angelo Mozilo, the former CEO of Countrywide Financial and the eponymous hero of the “Friends of Angelo” program, which provided favorable loans to people in high places . So reports Peter J.

Aug 27, 2010

|

The Deepwater Horizon oil spill is not central to the concerns of the Business Rights Center. But it is worth following because of the legal, legislative, and regulatory consequences that are bound to follow. Alarming assessments of the spill are easy to come by. For the other side of the story, here are two more measured assessments: “ Our Real Gulf Disaster ,” by Lou Dolinar (published in National Review, August 30, 2010), and “ The Catastrophe That Wasn’t ,” by Paul Schwennesen (published at MasterResource.org). Full disclosure: I occasionally do some copyediting for MasterResource.

Aug 25, 2010

|

Yesterday, I noted Chrystia Freeland’s criticism of business journalists for explaining systemic economic events with tales about “malfactors of great wealth.” Freeland seemed to think that such journalists were motivated simply by the desire to attract an audience. But a broader focus shows that such muckraking journalism is but one small part of a much broader attack on businessmen, which I call the Great Media/Legal Rich-Hunt.

Aug 25, 2010

|

The Financial Accounting Standards Board is proposing that, in the interests of “full disclosure,” companies should have to announce “the existence of studies in reputable scientific journals . . . that indicate potential significant hazards related to the entity’s products or operations.” So, in addition to being sued by the plaintiffs bar, a company and its executives will be sued by the SEC--or maybe prosecuted by a U.S. Attorney--for not having discovered and publicized the existence of a borderline amount of metal or carcinogen in their goods. There is a phenomenon at work here and elsewhere that deserves a name: It is a step-by-step process that purports to aim at the market’s perfection but in fact aims at its destruction, and of course it is possible only because people accept mistaken ideas about what tends to perfection, for example, full disclosure. My own belief is that the market would be a far safer place if companies disclosed much, much less public information--but permitted insider trading.

Aug 25, 2010

|

For three generations now, the rights of businessmen have been trimmed back--by regulation and prosecution--in order to make markets conform to the false ideal of "perfect competition." The great Galleon insider-trading case is but the latest example. Today, in the WSJ, Dennis Berman suggests that the 1000-point Flash Crash of last May 6 may have been a result of this process. He writes : "The May 6 'flash crash' was the culmination of 35 years of relentless stock-market reform."

Aug 24, 2010

|

As I no longer subscribe to the New York Times (I'll let Joseph Epstein explain ), I am late in discovering this astonishing essay by Chrystia Freeland, global editor at large for Reuters. According to Freeland's evidence, the allegation is going around that business journalists are too favorable to their subjects. In fact, it seems that this thesis is exemplified by three best-selling novels (called the Millenium trilogy ) written by a Swedish socialist who was himself a business journalist. (I confess that I had not heard of them, having given up on pop culture circa 1965.)

Aug 24, 2010

|

On August 16, Judge Ellen S. Huvelle of the U.S. District Court for the District of Columbia rejected the SEC’s proposal to settle charges that Citigroup misled investors about certain investments in its portfolio. Gary L. Crittenden, Citigroup’s former CFO, and Arthur Tildesley Jr., former head of investor relations, were also charged. The firm agreed to pay $75 million, without admitting or denying charges. But Judge Huvelle asked why only the two named executives were included and, more generally, why current shareholders should have to bear the cost of the fine.

Aug 22, 2010

|

The first big win from SCOTUS’s “honest services” ruling. According to an AP story: “Former Westar chief executive David Wittig and his top strategy officer, Douglas Lake, were charged with conspiring to inflate their compensation from the Topeka-based company and taking steps to hide their actions. A third trial date for the men, who were forced out of Westar in late 2002, was pending.

Aug 22, 2010

|

December 2004 -- Ayn Rand 's ideas inspired many people; one of them was me. When I began reading Atlas Shrugged in the summer of 1964, I had no idea that doing so would change not only my understanding of the world but also my choice of career. Rand's powerful vision of rationality and liberty hit me at an opportune time. Previously inspired by Barry Goldwater's libertarian-oriented The Conscience of a Conservative, I was in the thick of the student "Goldwater for President" movement. And thanks to MIT's required courses in modern Western ideas and values, I'd been introduced to Aristotle, Locke, Hume, Smith, and Mill (along with many others), and on my own had discovered Friedman, Hayek, and Mises. I was ready for an integrated worldview that explained why I'd never been comfortable being labeled a conservative.

Aug 20, 2010

|

Robert Poole