Anthony Martin’s Weblog

Application of antitrust law is capricious and the exemptions are established to improve the shaky credibility as to the effectiveness of these laws.  Then, when the exemptions ultimately fail to bring objective improvements, they are used as "proof" that deregulation was a bad idea.

I have often brought up the idea that deregulation is good.  This applies to specific topics like private health insurance as well as the agricultural industry and banking.  So if I sent you to this article because you and I were chatting/talking about deregulation, welcome, and thank you for following the link!

I'll try to keep this short and to the point (well, to the point anyway).  I assert that deregulation always helps an industry overall.  A quick example of this can be find in any industry that has never been regulated or has minimal regulation to begin with.  So for example, I'll cite mobile phones and computers as two areas where the lack of regulation has helped those industries.

Are there examples where regulations were removed, causing an overall improvement?  My progressive friends who argue for regulation will cite antitrust exceptions as a counterexample to the benefits of deregulation.  They maintain that the exemptions (or exceptions) to antitrust law prove that deregulation is bad.

I keep hearing this argument, so let me address it from my point of view.

What is antitrust law?

First of all, what is antitrust law?  Primarily, the way regular people like you and I tend to encounter them is in the form of government price controls.  A corporation is only able to charge an amount that the government deems is fair and equitable.  Any time there is a cap on prices, the "evil greedy" corporation try to find a creative way to get around these caps.  Because evil greedy corporations are ... uh greedy!

According to the Department of Justice ...

Many consumers have never heard of antitrust laws, but when these laws are effectively and responsibly enforced, they can save consumers millions and even billions of dollars a year in illegal overcharges. Most states have antitrust laws, and so does the federal government. Essentially, these laws prohibit business practices that unreasonably deprive consumers of the benefits of competition, resulting in higher prices for products and services.

One way the evil greedy corporations could get around the price caps is to bring the price far below the fair and equitable amount.  This would supposedly put the competition out of business.  So antitrust law has also been created to keep prices from going too low.

Got that?  The same body of laws keep the price from going too high and too low.  Sort-of like Goldilocks (not too hot ... not too cold ... just right).  How is that possible?  Well, the summary above says it best, "... when these laws are effectively and responsibly enforced."  It is subject to the whim of the government.

And that's the main purpose of antitrust law.  There's a lot more to it than that, but the main goal is to protect consumers and keep prices where they should be.  And "where they should be" is determined by government.  And how does government know where prices should be?  They have really smart people, never mind the so-called "market signals," so stop asking those kinds of questions!

But I will question.  I always question.  I'll question if these antitrust exemptions even qualify as deregulation.  I assert they do not.  It is regulation on top of regulation that is then labeled "deregulation."  It is more accurate to call them "faux-deregulation."

What are antitrust law exemptions?

In a nutshell, antitrust law exemptions are where government gives a pass to certain corporations to do things that would normally be illegal under antitrust law.  Basically, if your industry is organized enough to have a lobby, you can probably get an exemption, if you have enough time and money.

One example of antitrust law exemptions is when the government allows corporations to join up and share resources.  So, for example, the Newspaper Preservation Act of 1970 allows for joint operating arrangements between newspapers to share production facilities and combine their commercial operations.

Before this act, it would have been illegal for two competing newspapers to join forces like this because government thinks it reduces competition.  But government realized (with the help of the lobbyists) their own regulations were getting in the way.  So they had a choice of either killing the newspapers with regulations or creating an exemption for them.

Why doesn't it work?

The primary reason antitrust exemptions are faux-deregulation is because antitrust law itself is ambiguous.  You can't make clear exemptions if the overall law isn't clear.  The application of antitrust law is unpredictable and at the whim of whoever is in charge.  Some actions cause the law to come down like a ton of bricks.  But then those same actions performed by another corporation are allowed, even before the exemptions are drafted.

Being long winded when it comes to all forms of writing, I also have a strange habit of actually writing letters.  I'm not talking about e-mail letters.  I'm talking about old fashioned "typed" letters on paper, mailed with a fricking stamp.  Ok, I don't use a typewriter and I do send e-mail too, but when I want to be really annoying, I print them, stuff them in an envelop, and hope at least one eyebrow will raise from my antics.

When I write them for mailing, I try to stick to some semblance of the formal rules of letter writing if I can.  I tend to just use Einstein's format for FDR (see below).

Here is a letter I wrote (albeit slightly edited and reformatted for the internets) originally addressed to the Los Angeles County Metropolitan Transportation Authority (a.k.a. "Metro," formerly RTD, formerly MTA, etc.).  The letter was written and sent in June of 2008:

Los Angeles County Metropolitan Transportation Authority
One Gateway Plaza
Los Angeles, CA 90012-2952

Sir or Madam:

    My daily round-trip cost is $2.45 in total.  I commute four days out of the week and spend the fifth day working from home.  As you can see, I have no need for a $5 daily pass, nor $62 a monthly pass, since I only spend about $42 each month.

    Needless to say, I have nothing to complain about with regard to bus fare.  My commute seems longer than it was when I drove the seven miles over a year ago, but the price is much easier to deal with.

    I notice that many of the Metro buses have been outfitted with flat panel displays called "Transit TV" which inform and attempt to entertain riders en-route.  One of the features I have noticed of this system is that as the bus driver presses down on the bus accelerator, the audio from Transit TV system intentionally gets louder to compensate for the extra noise from the bus engine.

    I find it odd that radios are prohibited by law (California Penal Code § 640.3 "Playing sound equipment on or in a system facility or vehicle.") yet sound equipment from the Transit TV systems are lawful.  In fact, I find Transit TV downright obnoxious.  Why should I be jarred away from my book to hear commercials for people with bad credit?  On the Torrance Transit line, if some-one's earphones are too loud, the bus driver asks them to turn them down.  I am seriously considering what it would take to remove Metro from my daily commute.  In all likelihood, the only thing I need to do is purchase a bicycle.

    I would like to know if Transit TV has been granted an exception from the law, and if so, I require to know where this exception is documented so that I may start a petition to remove the exception, if I find any such interest from other riders to do so.

   No doubt, Metro receives revenue from Transit TV for playing those obnoxious commercials.  It would be one thing if the monitors merely displayed messages in silence.  No doubt revenue could still be gathered by silent ads.  I can only guess this is all in an effort to avoid raising the bus fare.

    As it is, the bus fare really doesn't bother me, but I pay $1.55 to get to work and $0.90 to get home four days a week because I incorporate Torrance Transit into my route.  It might make more sense to just remove Metro from the equation and pay only $0.50 each direction.

     When I come home, I get a transfer from Torrance Transit.  When I transfer to Metro, many times the Metro driver won't take my transfer, but let me on anyway.  Occasionally, Metro drivers offer resistance for even showing them the transfer.  It's like they think they are day passes, they don't recognize them anymore, or they think I'm trying to pull a fast one.  I'm not sure why the driver wouldn't want to take my transfer.

     I know the code requirement for fare disputes is to pay the fare (§640.B), but I have been polite with the drivers and thus far this has not been necessary.

     All this to say, I am not that impressed with your bus line and I have a sneaking suspicion you are getting rid of inter-agency transfers and force me to buy a day pass that the Torrance Transit line doesn't plan on accepting.  Is this true?  If so, all this will serve to do is confirm my desire to remove Metro from my daily commute.

Sincerely,
Anthony Martin

I do not write my letters really expecting any change or even a response.  Only about half of the letters like this ever get a reply.  And about half of those replies do not seem to pertain at all to what I originally wrote about.  This does not come as a surprise to me.  But years ago, I would get coupons and other perks for writing nutty letters to corporations.  Lately, nothing.  And I certainly didn't expect anything from monopolistic-pseudo-corporations like these guys.

And I was right.  There was no reply.  My address was part of the letter I sent (which was redacted here for posting online), so there's no reason they couldn't reply.  But because I brought up legal terminology, my letter was probably shredded ASAP.

But an interesting thing has happened since that time.  My primary complaint about the noise level generated by "Transit TV" seems to have been addressed.  I'm not sure if it's because of my letter or something unrelated like the fact that maintenance has gone completely out the window (maybe it's a combination thereof).

And my secondary complaint about the odd treatment of transfers has also been addressed.  I have gotten zero resistance to my transfers for a long time.  There have been many new operators since that time too, so it's not because they got used to me.

So I can't say letter writing was effective here since I have no direct evidence to support it.  But I do enjoy it nonetheless.  And on occasion, it might even help.  Who knows?

Lieutenant Stephen D’anjou says that the suspicionless checkpoint (covered previously) was announced to the Daily Breeze on September 2nd.  Again, I find no mention on the Daily Breeze website, so we still have an effective Internet blackout of this information.

The Lieutenant  believes it was also posted on Torrance Police Department website, but he said the website program never published it.  An honest mistake.  I've seen first hand that this can be a common mistake in any web publishing environment.

But there's something else I'd like to point out.  See if you can tell the difference between the two announcements.  One announcement was for the 11th, the other was for June 19th.

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The information published about June 19th, 2009 listed the intersection as well as the time.  But the information published about September 11th, 2009 does not list the intersection.

It's already beyond recognition of what it was originally.  They're just going to keep tweaking and modifying this.

If you still don't understand why this is bad, please review my previous article on the subject.  Also consider an article called "Bloodsuckers in Blue" on Lew Rockewell's web site.

 

Last night, I observed a suspicionless checkpoint on Artesia going eastbound toward Van Ness.  All eastbound traffic was being stopped.  A lot of cars were being towed.

I contacted Torrance Police Department to inquire as to why these activities were not announced ahead of time.  The initial response from Lieutenant Stephen D’anjou (via Blackberry) was that the press release was sent out last week.

I believe Lieutenant D’anjou is mistaken.  I checked the Torrance PD web site and no such press release was listed on their press release page.  Maybe a press release was sent out but just not posted on the web page.  The local paper would have gotten a copy if that's the case.

Let's imagine I have extremely troublesome neighbors living next door to me.  And they're not just troublesome, they are downright rotten and they violate my private property with nuisances like noise, smells, occasional vandalism, and verbal threats.

If there was no government solution to everything, there would pretty much always be a voluntary market solution.  Government gives you one-size-fits-all, so that's why they can only think of dumb ideas.  They also have no incentive to avoid waste since they take their resources by force.

The above simple answer is usually not enough for people, so a more detailed solution is as follows:

Protection (Insurance) Agency Example

In my scenario, since there is no government solution, I would hire a private insurance agency to deal with the problem neighbor matter.  I would agree to pay a monthly premium to the agency that they decide on after observing my situation.  They would have an interest in setting the premium to the right level depending on how the neighbors act when they do their inspection(s) before we sign the contract.

I may have a high premium because my neighbors are unusually difficult.  If I have a high premium, I might tolerate my neighbors until I feel I have evidence that they have sufficiently transgressed against my property.   When my neighbor transgresses against my property, I will make a claim and let my agency will decide how to handle it in the most effective manner.

So I don't have to personally think of ways of dealing with the problem because I have paid experts who have a financial incentive to get it done for my particular situation.

If my agency cannot deal with the problem, my contract stipulates that my agency will pay to move me to a new location, lock, stock, and barrel.  So they have a huge incentive to figure out a creative solution.  Either way, problem solved.

Arbitration Agency

I outlined that the contract was between me and my insurance agency. Let's assume this would be a reputable, well know insurance agency. If I have any disputes with them, we both agree to take our dispute to an arbitrator.  If either of us are unhappy with the decision, we can appeal the first arbitrator to a second.  If the first arbitrator is overturned, the first arbitrator pays, so they have an incentive to do it right the first time.  In fact, it would always be "loser pays" for any dispute.

If the loser cannot appeal and does not make the winner whole, they are financially ostracized, which can ruin a business and an individuals who want to make future contracts.  So civilized people would want to avoid it at all costs; they will abide by the arbitrators decision.

This is called a "voluntary society."  As opposed to a society that operates on coercive violence.

You may wonder if police still exist in this scenario, and I think they certainly could, as long as they keep to themselves when there is no calls out for them and when people have other arrangements.

The less we look to government solutions, the better off we'll be.

In this scenario I describe, it would be highly unusual to look to any kind of government judges after already agreeing to a private solution.  Someone who appeals to government after a getting a private arbitrator would also be ostracized.  They don't mix well unless all parties agree to mix them.  It's like using baseball rules in a game of cricket.

Take the SMS ban while driving.  That should most certainly be an insurance arrangement.  Your insurance company should ask if you intend to SMS while driving.  If you say yes, you should pay more.

The Altruistic Body

It might be hard to believe that it is never necessary to look to government for any reason.  Maybe you are looking for a wise, altruistic, disinterested body with unlimited resources that knows the likely outcomes of the great many schemes of man?

This person knows if you've been bad or good, right?  I think I have heard of him.  He wears a red coat and has a white beard, right? Rides a slay, I think.

Yeah, I stopped believing in Father Christmas a long time ago.

I joke.  But I don't.  I'm sorry if that seemed glib or condescending, but that's what I think of the "all seeing eye" of government.  It's fiction.  It's Santa Claus.

Yet I do believe there is a set of overarching laws that all market actors must follow without exception.  They can be boiled down to:

1. All parties do what they agree to do.
2. Non-aggression Principle is in play (which means do not initiate force).
3. Failure to follow 1 or 2 will result in ostracization.

You may wonder if the above rules I set out require a governing authority.  I do not believe they do.  That's the point.  Enforcement turns completely on the idea of ostracization.

P.J. O'Rourke said, “When the legislature controls what is bought and sold the first thing that is bought and sold is legislators.”

Therefore it follows that if ostracization controls what is bought and sold the first thing that is bought and sold is ostracization.  Meaning you will do everything to protect against, and buy protection from, whatever limits you in the market place.  It becomes a commodity.

At Least Repeal Regulation

In America, Vice Presidente Dan Quayle once talked about how something like 100 or 100,000 regulations being eliminated in a particular government agency.  I can't remember the details.  But it resulted in a net savings of $20 or $25 billion for the businesses being deregulated.  How much do you think would have been saved if they just got rid of the whole ball of wax?

Regulations cost money to implement and enforce.  Obviously someone has to benefit or else why would regulations come about?  Government is one body that benefits.  But market competitors also benefit.  So they lobby to regulate their own industry.

Regulation is really just government backed "cartelization" (as in "to make a cartel").  A private cartel that has no government privileged to back it cannot last very long.  Someone in the cartel will lower their prices to take advantage of the other cartel members who made a pact to keep their prices high.  Once one member lowers his prices, the whole thing falls apart.

Government regulations have the same effect, but they are harder to bust than cartels because government regulation carry the "color of law."

For example, in Virgina, there's a town that requires professional photographers need get a special license.  Illegal photographers cannot advertise their business in the paper or the phone book. Regulation was supposed to improve the industry but all it did was increase the capital required to start.

Another example, in 1934, the last taxi license was issued in New York City for $10.  A fixed number of licenses traded back and forth from then on.  Now, those licenses trade for around $100,000.  So taxi drivers cannot start their own business without very heavy capital.The little guy has been excluded and the big guy likes this arrangement.

That's all regulation does.  It makes people feel good (a false sense of security) and gives the big guy a huge advantage.

I think private (for profit) certification is a better option instead.  We have the Better Business Bureaus and Consumer Reports, but their role is undermined by government regulations that overlap with them.  Ever hear of the UL?  That's the private body that tests and certifies electrical equipment.  The UL is successful *because* the government never really got into that field.  Many people think the UL *is* a government agency, but it's nothing of the sort.

The certification companies position their business so that they profit by their expert opinions.  They spend limited funds judiciously to test and certify.  If it turns out they fudged something, they are putting their name and business on the line.  Without regulation, someone is always ready to compete with them, just waiting for the smallest slip-up.

Child Molesters

You might ask, "Do I really think a voluntary society can deal with things like child molesters?"

I think the incentive to fix problems is there if you look and are free to innovate.  Remember, if I knew exactly how the free market would handle each opportunity, I could be dictator.  There are innovative solutions we could never dream of.  The way it might work is thusly:

Imagine there exists a child with only one parent and that parent is pretty much the only one who knows the child exists.  So for the most part, nobody cares if the child exists or not.  Then assume the child is abused by his or her parent.

Let's suppose a private protection agency is formed to seek out evidence to suggest children like this could exist.  Let's further suppose that this protection agency could put together evidence by using investigative technique like interviewing neighbors and going through people's garbage, etc.  These techniques are not aggressive techniques and therefore do not violate the non-initiation of force principle.  And *if* they are perceived by anyone as a violation, they can go to arbitration.

The protection agency has to take risks, but they have to also weigh the risk against losing settlements in arbitration.

The protection agency weighs the evidence and the risk against the incentive to put their reputation and livelihood on the line to break into the suspected house of a child abuser to rescue the child.  They then go to arbitration with hard evidence and an actual perpetrator in their custody.

For the initial incentive, we need to assume there is a standing bounty for child abusers in this voluntary society.  Voluntary charities can put up money and resources to give incentive to protection agencies.

The child will grow up and might eventually need protection agencies for him or herself.

This protection agency could be thinking of the long term goals of saving children in order to build a well known and successful brand, thereby offering service back to the children it saves.

This is just one isolated line of reasoning.  I think this line of reasoning can be adapted to a lot of different scenarios or even ignored and approached in a completely different, voluntary way.

No Utopia

I make no claim that any voluntary society would be utopia.  But wild-cards like serial killers would have to deal with an armed society.  And an armed society is a polite society, which would certainly be an improvement.  Neighbors would know each-other and look out for one another because they know they only have each-other and any mutual protection pacts they've developed.

I don't see how charity is Utopian.  Charity is something conservatives point to whenever they make arguments against high taxes.

I don't see how voluntaryism is Utopian.  Voluntary interaction is a very fundamental form of free association.  The notion of "unlimited contract" is just another way of talking about voluntary interaction.

There may in fact be situations where it's not lucrative to participate in a particular market.  That is called a wasteful enterprise.  Unfortunately, our current system keeps us in the dark about exactly which situations are lucrative and which ones aren't.  It's not a conspiracy, it's just how socialism works.

So if there's no money in belly-button-lint-removal, nobody should be trying to make a living doing it.  But if there's a government paying people to do it, they'll do it, even if it's wasteful, to the detriment of other tasks.  That's basically socialism.

Socialism distorts market signals.  Like right now, the cash-for-clunkers program is distorting market signals.  Car companies think there's demand for certain models, so they will move capital* to produce those models in order to meet the "demand."  But the demand is artificial.  If the distortion stops, the demand will fall.  It has nothing to do with real resources being traded.  It's all artificial.

* (Moving capital is a HUGE SERIOUS BIG deal.  Over time, it is where financial bubbles come from.  Moving capital, by definition, makes it hard to "go back" to another capital position.)

In a free society, it might not be lucrative to start a daisy-picking agency.  So if it's not lucrative, or if it's not mildly rewarding, it won't be pursued as a profession.  To suggest it should be perused by force for *any* reason, and force funds to be allocated to that pursue, is the very definition socialism.

So if catching a really smart serial killer is a wasteful enterprise, it shouldn't be anyone's profession.  Maybe it can be someone's hobby.

By the way, may I ask how police in our society, who are paid by force, can catch really smart serial killers who can not be caught in a voluntary society?

This illegal transfer was issued to me today:

It was double punched by the person who gave it to me.  That person was the bus operator of the Metro line I take each morning.

He didn't have the transfer ready, so he punched it while we were rolling, something I find to be rather dangerous.

If I am restricted from operating a mobile phone while driving, surly a bus operator is restricted from punching transfers while driving.

I have seen riders stopped for passing old transfers.  The Torrance bus operator did a double take at the transfer but didn't say anything.  I guess he's used to double punched transfers.

They also use an official "jagged hole" punch to make it difficult for people to punch them on their own.  But that is to prevent books of transfers from being stolen and punched by thieves.

The bus lines are quasi government operation.  They have the force of government backing their actions and guidelines as well as huge financial backing (subsidy).  The fare is kept artificially low by this backing.

They have no incentive to provide good service.  They don't care if they expose "customers" to problems by their mishandling their fare media.

This is not the first time I've seen double punched transfers.  One time, I almost didn't get a transfer at all because the operator couldn't find a single transfer to give me.  Lucky for me, she found a book of current transfers in her personal bag.

I recorded this while walking to the office from my final bus stop, so you can hear a bit of background noise.

My points: pro-life condemns / I am anti-abortion / I agree with condemnation of Tiller's murder but would go further / Tiller was a monster / I speculate that his murder was a step backwards for the pro-life movement / Tiller started because of RvW / Tiller was an activist / Tiller's murder "activated" more activists / Perspective: Bush authorized $2 billion in abortion spending while Tiller contributed $200,000 to Democrats and their PAC

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In the latest episode of The Sitter Downers, I thought it was interesting that Tom had to come up with a legitimate reason to invade the US before he could postulate his actual question.  I'm not entirely sure what Tom's question was, so I'll come up with my own after using the following scenario to help suspend Adam's disbelief.

I guess I shouldn't be so surprised. To me, half the problem is that people trust this government of theirs to magically fix things that defy logic. Don't they know this fiction is no different from Santa and the Tooth Fairy?
 
The real answer is that government already has the tools and authority needed to address the problem, but they have ignored their mandate. All they should be doing is upholding the rule of law and prosecuting fraud. That's it. Everything else will only delay the recovery.

Sent from my iPhone