Corporate & Securities Law

Should schools teach Hayek?

Posted on March 16, 2010
The Texas Board of Education recently decided to add F.A. Hayek to the high school economics curriculum. The New York Times reports: In economics, the revisions add Milton Friedman and Friedrich von Hayek, two champions of free-market economic theory, among the usual list of economists to be studied, like Adam Smith, Karl Marx and John Maynard Keynes...

Barack Obama, financial journalist?

Posted on March 14, 2010
When I was a student at the University of Chicago Law School, our president lectured there. I didn’t take any classes from him — he taught stuff I wasn’t interested in — but I had friends who did; all raved. The other day, I opened up my copy of the Law School directory for reasons of nostalgia...

My Testimony Re: Citizens United & Corporate Governance

Posted on March 12, 2010
Earlier this year the Supreme Court affirmed the free speech rights of corporations by way of the Citizens United case.  President Obama then chided the Court in a rare face-to-face attack during his state of the Union, the blogosphere rightly noted the poor form and ungentlemanly conduct of that move, and former Chief Justice Marshall incidentally shuddered in his grave in response...

A More “Competitive” Agriculture? [#agworkshop]

Posted on March 12, 2010
The morning’s panel of farmers represented a variety of perspectives, ranging from more reasoned to more reactionary.  Among the ideas suggested: More reasoned: Find a balance between food and fuel in the policy debate (though no clear directions how) Increase trade in global markets (always easy to talk about forcing other countries to buy more of our stuff without addressing the domestic industry issues) Invest in new research and technology (and in land-grant universities…now, how can I argue with that?) More reactionary: Take that research and technology and give it away (thereby eliminating any private incentive for investment) Limit subsidies going to large farms so only small farms benefit Big companies should be busted up (no matter the efficiency implications for consumers or ag producers) Prohibit contracting between packers and livestock producers because it creates “captive supply” and thins out the cash market (thereby eliminating packers’ ability to provide consistent quality meat products to consumers and many producers’ abilities to access financial capital) In short: Farmers want to make more money and want to change the rules to get more of the money in the system...

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Why Citizens United was right

Posted on March 12, 2010
Let me say at the outset, some of my prior beliefs. First, I believe in the marketplace of ideas and think that more speech is generally better than less speech. I believe the Founders shared this belief and enshrined it in the ?no law? component of the First Amendment...

Economics versus politics in antitrust [#agworkshop]

Posted on March 12, 2010
Bill Northey, IA Ag Sec’y, sounds a bit like an economist (ah, turns out he has a degree in ag business and an MBA . . . ).  Yes, price of seeds has gone up, but so has yield, and so has overall value.  The issue, he says, is how to divide the surplus, and he suggests that it’s dividing the pie that drives farmer concerns...

Some political theater [#agworkshop]

Posted on March 12, 2010
As readers may know, Eric Holder was added to the workshop at the last minute (see the latest agenda here).  So the day starts out with Holder and Vilsack, and they are joined by Varney and Tom Miller (the Iowa AG) and a host of other politicos including Senator Grassley and Congressman Boswell...

The Aggregation Problem [#agworkshop]

Posted on March 12, 2010
As Geoff noted, we’re stationed at the DOJ/USDA workshop to witness the goings on and provide some comments. US Secretary of Agriculture Tom Vilsack opened this session with a laundry list of statistics concerning rural America and the agriculture sector...

A global warming hypothetical

Posted on March 12, 2010
Global warming critics have taken two primary approaches. First, deny the facts based on the incentives for scientists to fudge the data to get prestige and research dollars (see, for example, the East Anglia emails), based on the inherent limitations of humans to build global weather models to predict the temperature 100 years from now, and based on humans’ Chicken-Little tendencies...

Sykuta and Manne: Covering the Agricultural Antitrust Workshop in Iowa [#agworkshop]

Posted on March 12, 2010
UPDATE:  Trying to find the right hash tag for the event, I’ve changed the title of this post and we’ll follow the convention for our live blogging today–posts from the Workshop will all have “#agworkshop” in the title. Later this week Mike Sykuta and I will be winging our way to Iowa on behalf of the ICLE to attend the first of the year-long series of DOJ/USDA Workshops on Agriculture and Antitrust Enforcement Issues...

The Enforcers [#agworkshop] [#dojusda]

Posted on March 12, 2010
To expand on Geoff’s post about concentration in the seed industry, there has been a consistent line of discussion throughout the day raising the specter of monopoly and anti-competitive behavior, not only in seed but also in livestock.  There are continual references to adverse price effects and limitations in choice for consumers and producers alike, followed by such tagged-on qualifiers as “if there are any”...

On seed industry concentration and its claimed effects [#dojusda #agworkshop]

Posted on March 12, 2010
A common theme throughout the day has been the declining number of seed companies–increasing concentration–and its effect. Except no one has talked about the effect.  Other than pointing to the structural change itself, no one seems to have any evidence relating to the effect of the change...

Credit derivatives don?t kill countries, politicians do

Posted on March 11, 2010
Looking for something to blame for the Greek debt crisis, some observers are pointing their fingers at credit derivatives. An article in yesterday?s New York Times makes the case that credit default swaps (CDS), and specifically their sale by Goldman Sachs, are somewhat to blame in part for Greece?s problems...

“Each use of salt in violation of this section shall constitute a separate violation”

Posted on March 11, 2010
I wonder if that is on a per pinch basis?  I refused to believe this is real language, from a real bill.  But Professor Bainbridge says it is — and doesn’t pull any punches in describing its drafter (or at least leading proponent) Assemblyman Ortiz in NY as an “officious pig and an ass...

Heritage Of A Taco

Posted on March 10, 2010
Thanks to Peter Klein over at O&M for bringing attention to this image created by a group of California design students showing the network of suppliers necessary to produce the taco enjoyed at their favorite local taco truck. While the purpose of their picture is to illustrate the ecological footprint (”tacoshed”) of their favorite tacos, the image illustrates just how complex is the nature of the food supply system...

TradeComet complaint against Google dismissed

Posted on March 09, 2010
TradeComet’s antitrust suit against Google has been dismissed by the S.D.N.Y. Court in which the case was being heard.  The opinion is available here. The holding: Google has now moved to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(1) and 12(b)(3) for improper venue based on a forum selection clause in the parties? advertising contracts...

Has the Obama Administration Retreated From Behavioral Economics?

Posted on March 09, 2010
The WSJ implies that the answer is yes in an interesting article describing the Obama administration’s changing views on behavioral economics and regulation.  The theme of the article is that the Obama administration has eschewed the “soft paternalism” based “nudge” approach endorsed by the behavioral economics crowd and that received so much attention in the blogs — especially as it related to Cass Sunstein’s appointment to OIRA, the Consumer Financial Protection Agency and a few other issues — in favor of harder paternalism and “shoves” including recent proposals for “regulating health-insurance rate increases, separating commercial banking from investing on behalf of their own bottom lines, and prohibiting commercial banks from owning or investing in private-equity firms or hedge funds...

Sykuta and Manne: Covering the Agricultural Antitrust Workshop in Iowa [DOJ/USDA Workshop]

Posted on March 09, 2010
Later this week Mike Sykuta and I will be winging our way to Iowa on behalf of the ICLE to attend the first of the year-long series of DOJ/USDA Workshops on Agriculture and Antitrust Enforcement Issues.  You can find the agenda for the first workshop, to be held Friday, March 12 in Ankeny, Iowa, here...

ROTC on campus

Posted on March 05, 2010
I’m delighted to see the news that Stanford is considering reinstating ROTC on campus. I served for four years in ROTC at Princeton, and it was one of the highlights of my college years. (President Clinton’s budget cuts — the so-called peace dividend — and an untimely shoulder surgery kept me from serving...

The efficient level of torture

Posted on March 05, 2010
Every morning on my 1-mile drive to work, I pass two signs expressing outrage about torture ? one is a hand-made yard sign, the other an ominous black banner hanging from a church window: ?torture is wrong.? (Yes, punctuation by e.e. cummings it seems...

The Girl Scouts and Section 5

Posted on March 05, 2010
It turns out that the Girl Scouts price discriminate, i.e. they charge different prices for the same product in different parts of the country (HT: Knowledge Problem).   Rumor has it that demand for Thin Mints varies by region.  While the Girl Scouts concede that the introduction of the price discrimination scheme results, when coupled with  Girl Scout marketing efforts,  is tantamount to the evading pricing constraints imposed by current demand conditions...

Past Use of Reconciliation in Congress: Correcting the Record

Posted on March 04, 2010
As predicted, President Obama has called upon Congress to enact his health insurance reform plan using the reconciliation process, which allows the Senate to avoid a filibuster attempt and would permit enactment of the legislation without any Republican support...

The Commission Wins an Exclusive Dealing Case

Posted on March 04, 2010
Today, the Commission announced a consent decree with Transitions Optical in an exclusionary conduct case.  Here’s the FTC description: Transitions Optical, Inc., the nation?s leading manufacturer of photochromic treatments that darken corrective lenses used in eyeglasses, has agreed to stop using allegedly anticompetitive practices to maintain its monopoly and increase prices, under a settlement with the Federal Trade Commission announced today...

The first thing we do, let’s kill the quants!

Posted on March 02, 2010
Professor Bainbridge has a provocative post up taking on empirical legal scholarship generally.  The While the Professor throws a little bit of a nod toward quantitative work, suggesting it might at least provide some “relevant gist for the analytical mill,” he concludes that “it’s always going to be suspect — and incomplete — in my book...

Chicago Ministers Play Hardball on Wal-Mart (and for the Right Team!)

Posted on March 02, 2010
I’ve previously posted on the moral bankruptcy of the campaign against Wal-Mart in Chicago. Those fighting to prevent the company from opening outlets in Chicago’s inner-city neighborhood — including Alderman Ed Burke, the busybody who once tried to ban trans fats in the City of Broad Shoulders — continue to flex their illiberal muscles to deny inner-city residents access to the “everday low prices” wealthier suburbanites regularly enjoy...

NYT on Hazlett’s TV Broadband Auction Proposal

Posted on March 01, 2010
Richard Thaler’s NYT Economic View column features Tom Hazlett (my colleague, and former chief economist as the FCC) proposal for auctioning off TV spectrum.   Thaler points out: These frequencies are very attractive on technological grounds. People in the industry refer to them as ?beachfront property? because these low-frequency radio waves have desirable properties: they travel long distances and permeate walls...

Health Care Reform, Reconciliation, and the Role of the Senate: Some Wise Counsel from Key Democrats

Posted on February 28, 2010
Well, it looks like Congress is going to attempt to enact the Senate’s health care bill using the reconciliation process. President Obama certainly suggested as much in Thursday’s Health Care Summit, downplaying the significance of such a move and suggesting it may be necessary in order to “move forward...

Disclosure of ethics waivers under SOX: Recent scholarship from Rodrigues and Stegemoller

Posted on February 28, 2010
Usha Rodrigues and Mike Stegemoller have penned an interesting article, “Placebo Ethics,” assessing the effect of one of SOX’s disclosure provisions: The required immediate disclosure of waivers from a company’s code of ethics, found in Section 406 of the law...

Why Don’t Federal Judges “Hire” Economists More Often?

Posted on February 24, 2010
Dick Langlois’ post on Carl Kaysen’s role in the United Machinery antitrust case reminded me of a question I’ve been meaning to blog about.  Langlois writes: Obituaries praise Kaysen for his role as a policy intellectual of great scope, especially in the area of nuclear non-proliferation...

Big Yet Not-So-Surprising Antitrust News Of the Day: EU Opens Google Investigation

Posted on February 24, 2010
The EU has launched its preliminary investigation of Google’s search engine and search advertising businesses.  From the Financial Times: According to Google, one of the three complaints was from rival Microsoft. That protest, from an online service called Ciao that was recently bought by the software company, echoes a complaint that had already been lodged with regulators in Germany...

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