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OpenMarket: July 2009

  • California's Biofuels Policy: Yes, No, or Both

    July 30, 2009
    The Los Angeles Times' Judith Lewis relates an amusing example of how government can undermine its own harebrained schemes.
    It was a fine June day in 2007 when a senator from Illinois, then a long-shot for the presidency, stood beside the pumps at Conserv Fuel in West Los Angeles and congratulated the heroes of the biofuel revolution. Conserv Fuel was one of the first fueling stations in the country to offer biofuel at the pump, and Barack Obama was looking to establish himself as an alternative-fuel-friendly candidate. He railed against the Bush administration's oil-centric energy policy. He commended Gov. Arnold Schwarzenegger for establishing a low-carbon fuel standard.
    That was then. But this is now:
    I'd been a regular at...
  • (Un)Free Press Sticks it to the Essentials

    July 30, 2009
    The latest missive from the folks at Free Press has crossed the line:
    When challenged, the wireless carriers actually compare their industry to another: soda. This is from the Times editorial on July 22:
    Phone companies point out that exclusivity agreements are commonplace in other industries. For example, they say, it is not often that one finds a restaurant serving Coke and Pepsi.
    Sorry, but cell phones aren't soda. Unlike carbonated sugar water, cell phone choice, network access and the mobile Web are increasingly essential components of a democratic society. We rely on them for access to the information we need to be engaged citizens in the 21st century.
    Free Press doesn't even bother to challenge the logic, because it's absolutely true....
  • The Obama's Administration's Strange Double Standards on Hate Crimes, Terrorism, and Health Care: Soft on the Guilty, Cruel to the Innocent, Unfair to Taxpayers

    July 30, 2009
    When black panthers were caught on videotape menacing white voters in Philadelphia, using nightsticks and racial epithets to drive them away from the polls, Obama political appointees, including Assistant Attorney General Tom Perelli, intervened to dismiss the lawsuit that had been won against them by career Justice Department lawyers -- dismissing the case after it had already been won! The Obama political appointees insisted that the Justice Department should throw out its victory by not permitting a default judgment against two of the defendants even after the court clerk had already entered a...
  • A Bailout for the First Amendment?

    July 30, 2009
    Dan Rather actually made the following two contradictory statements in the same speech:
    I personally encourage the president to establish a White House commission on public media.
    and then:
    A truly free and independent press is the red beating heart of democracy and freedom.
    He's right that the free press is a "watchdog on power." But that's not compatible with the idea that, as reported, "the government make an effort to ensure the survival of the free press." A press funded, promoted, propped up, subsidized by government is not a free press. Nor is it in any position to be a watchdog; it's more likely to become a megaphone for the states preferred ideas and expansion of government in other spheres, like health care, energy, finance, telecommunications,...
  • Prof. Gates' property rights likely violated in arrest -- but Obama was wrong to weigh in

    July 30, 2009
    Amid all the endless media psychobabble about "national conversations" and "teachable moments" - and we will no doubt here more of this in the reporting of the "beer summit" at the White House today -- I have been trying to weigh the established facts surrounding Henry Louis Gates' arrest from a libertarian, constitutional liberties perspective. I have come to a conclusion siding with Gates against the officers -- but only in a limited sense. Although I disagree that this was a case of racial profiling, I do think the charging of Gates with disorderly conduct for yelling at the officer in Gates' own home was an improper and likely unconstitutional infringement on both Gates' free speech and property rights. Generally, unless a something like a bullhorn is involved, a homeowner cannot "disturb the peace" on his own property, not matter how obnoxious the content of his speech might be....
  • Food Safety Bills Moving Through Congress

    July 30, 2009
    With all out attention diverted to the government's attempted takeover of the half of US health care that isn't already nationalized, the attempted destruction of our economy by crippling fossil fuel use, and the highly unstimulating stimulus plan, you could be forgiven for not noticing that Congress is also trying to re-formulate America's food safety regulations. The leading proposal is Rep. John Dingell's (D-Mich.) H.R. 2749, the Food Safety Enhancement Act of 2009. It's got plenty of support from both sides of the political aisle, and it likely will be passed into law before Thanksgiving, the most important food day of the years for Americans.
  • In Which Greed Is Good

    July 29, 2009
    The great economist Joseph Schumpeter wrote that "[F]ree trade is the cement that holds together the idea of peace." His logic is sound. Commerce gives people who may hate each other a powerful incentive to get along.
  • The Challenge of Network Industries

    July 29, 2009
    "Network" industries such as electricity, air transport, telecommunication, freight rail, and internet services face a challenge with their competing flow and grid components.  Flows are the power, messaging, trains, airplanes and travelers; grids are the lines, tracks, airports and highways are the grids. The operating and investment decisions of the flow and grid are best coordinated closely.  For example, the decision to expand railways depends on profitability and sufficient additional freight traffic.  The addition of new high-capacity DC electrical grid components or a new power plant might be good or bad, depending upon whether one also introduced pricing policies that would encourage greater energy use and/or consumers. A common problem affecting most network industries is that only rarely is the same entity in control of both the grid and the flow.  Thus,...
  • In Defense of Average Cost Pricing

    July 29, 2009
    Many industries in the modern economy are ridiculed for the financing strategies they employ.  Only marginal cost pricing is defended as a legitimate practice.  Yet it is infeasible for industries with high fixed costs and low production costs to rely on marginal cost pricing.   The diverse approaches of these industries include: bundling/unbundling as with service contracts and supporting software, market segmentation by Saturday night layovers, time release strategies for books and DVDs,  encryption, intellectual property rules, specialized marketing channels as allowed by retail price maintenance, product differentiation, diversity pricing and a host of others.  The political response to almost all these practices is: "Why don't your charges reflect more closely the costs of production?"  The challenge for industries is to use non-marginal cost financing strategies more creatively to...
  • Where's the Reality in Legislation?

    July 29, 2009
    In "Why Obamacare Is Sinking," Charles Krauthammer argues that President Obama's reliance on rhetoric is finally beginning to fail because "you can't fake it in legislation." Only if the true impacts were made clear would legislation somehow force reality.  That day vanished long ago when the courts authorized Congress to delegate open-ended regulatory powers to some executive branch agency.  Today, regulatory laws are long on rhetoric (living wage, anti-discrimination, clean air bills) and vague.  The realities of the complex and costly tradeoffs are realized only after the bill becomes law.  As America has come to rely more on regulation, the visibility of honest law-making has faded.  "Honest" intervention may have been wrong and/or stupid but it did pass the...

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