Per Arne Karlsen

In his “first big public appearance” since being named Barack Obama’s chief antitrust enforcer, Assistant Attorney General William Baer addressed a gathering of antitrust lawyers at the American Bar Association. Baer stated that during the last five years, U.S. antitrust prosecutors collected 10 times as much money in criminal fines as they spent on criminal prosecutions.

“That’s a return on investment a lot of people in the private sector would envy,” he said.

There is so much wrong here that it’s hard to know where to start. First of all, was he joking? Perhaps—actually, I’d say he was half-joking. So let’s take the serious half seriously and ask what his little quip accomplishes.

In my mind, what stands out is how he blurs the line between economic power and political power. Economic power is productive ability—essentially, it’s Apple’s ability to offer an iPhone that millions of people want to buy. Political power is coercion—essentially, it’s the government’s ability to separate citizens from their property by threatening punishment, or by direct seizure.

The term “return on investment” offers a measure by which one can compare the profitability of placing money in various productive enterprises. If ROI is 2% in grocery retailing but 5% in petroleum refining, then that’s one factor in making an investment decision. But the government does not produce economic goods, nor does it generate profits. All it can do is seize the profits of productive enterprises.

Government officials who want to augment their power have every incentive to blur this distinction. Baer would like some of the aura of profitability to rub off on him. We shouldn’t let him get away with it.

If a common criminal “invests” $250 in a pistol and makes off with $10,000 in cash from a bank, has he achieved a 4,000% “return on investment”? Of course not. Clearly the robber produces nothing, he only takes. It would be a corruption to apply the term “return on investment” to his activities.

Taking money at the point of a gun—whether the gun belongs to a robber or a federal prosecutor—is not and can never be productive, and it’s a moral offense to equate the two. I’ve written elsewhere about why I question the propriety of the antitrust regime, as well as the penchant of federal antitrust enforcers to brag about their criminal prosecutions of businessmen. Baer’s little half-joke deserves to be completely condemned.

(This is cross-posted from LaissezFaire.)

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A few brief comments on recent developments in the Middle East:

• Yes, Iraq is unraveling: “Now we know—and to be honest, the answer is hardly a surprise. Iraq is a basket case these days, and none of its problems came out of the blue.”
• Hezbollah Aids Syrian Military in a Key Battle. Recall that this is the same Hezbollah that the Obama administration sought to “engage” diplomatically just a couple of years ago.
• An Atrocity in Syria, With No Victim Too Small. To describe the details of this story as “grisly” is a gross understatement. Incidentally,  just a few years ago the Obama administration sought to “engage” diplomatically with Assad’s regime.
• The reality on the ground in Syria is horrific. Naturally, we hear from the UN a shopworn banality: “U.N. Calls for Political Transition in Syria.” A transition from butchery to what kind of political outcome, when both sides are manifestly abhorrent?

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Just the other day, an NPR reporter interviewed Dr. Onkar Ghate, a senior fellow at ARI, in connection with a story (audio here) arising out of the Boston terrorist bombing and the chemical factory explosions in the town of West, Texas. According to the report, Democrats were busy reminding everyone that opponents of “big government” would leave police and regulators unable to remedy or prevent such catastrophes.

Here’s the published quote, selected from a much longer interview: “They [regulations] impose an enormous cost on companies and all individual Americans of the amount of paperwork and regulations that you have to go through when you’re not doing anything wrong.”

I think it’s worth amplifying on that true and insightful comment with two points of context:

1. Contra the setup of the story, “big vs. small government” is not the best way to frame the debate. The real issue is “the proper role of government,” a question on which ARI differs from both conservatives and liberals. We are in favor of proper government functions like the police force, a function which in a laissez-faire society would not be reduced. But we would entirely eliminate improper functions, like wealth redistribution programs and regulations that burden the innocent.

2. There’s a conservative line that “government costs too much”—as if a high price tag should discourage Americans from pursuing justice and saving lives. Dr. Ghate’s point differs from that. The tremendous costs are important, of course, but only in the larger context that regulations penalize the innocent, and that preventive law is an evil that infringes upon individual rights.

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I have a new piece on Forbes.com on General Motors, the United Auto Workers, and the nature of labor laws. It contains a blend of history and analysis.

Long before General Motors neared collapse, it was a proud and flourishing symbol of American manufacturing. In the 1950s, GM was the first company to ever make $1 billion in a single year, and it had 50% of the domestic automobile market. GM executives used to proudly quip, “we’re still losing 5 out of every 10 sales!” What happened to this great company?

Many factors are acknowledged as contributing to GM’s decline: it juggled too many brands, over-extended its dealer network, failed to respond rapidly to market cues, and struggled to work with its union, the United Auto Workers.

But the extent of its problems with the UAW is astonishing—and the problems themselves warrant explanation. Consider some of the onerous arrangements that GM’s management agreed to. …

Read the whole thing.

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Here is a roundup of some recent health care items making headlines, with my comments:.

• Obamacare “scares the daylights out of” small businesses, who, through a crippling new tax, will be forced to pay the medical bills of others.
• Last fall one compounding pharmacy made headlines when steroid injections it sold caused a meningitis outbreak. Now the FDA wants to control all compounding pharmacies. Whatever happened to being treated as innocent until proven guilty?
• Grocery stores will have to spend $1 billion in the first year alone to meet Obamacare’s requirement of displaying calorie labels on all their foods. Says one executive at Kroger, “We might have thousands of SKUs for birthday cakes and thousands of types of prepared pizza. The problem is [Obamacare] forces us to label all of that, down to the olive bars and salad bars.” Much of the cost will go towards not signage but just figuring out how many calories are in each food item they sell.
• Last week Obama addressed concerns over the “train wreck” that is expected from implementing Obamacare, saying, “We still have a lot of work to do in the coming months to make sure more Americans can buy affordable health coverage.” One crucial task is convincing young people to sign up for insurance (in order to fleece them to pay for the medical bills of others). Look out this summer for a mass marketing effort in this vein.

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Over at TheAtlantic.com, David A. Shaywitz has a thoughtful essay called “Getting to the Right Relationship Between Doctors and Drug Companies.” Shaywitz, a medical doctor with a Ph.D. to boot, works for a biopharmaceutical company and has a healthy appreciation for the value of collaboration between doctors and drug companies.

Shaywitz opposes the growing movement to demonize, and eventually end, the consulting relationships through which doctors help pharmaceutical companies develop and market new drugs. After noting how hard it is to find commercially feasible ideas, Shaywitz writes:

To advance even a solid idea requires, ideally, close communication between industry and outside experts: university researchers, who often developed the science and understand it the best; practicing clinicians, who can describe where the medical needs are the greatest, and what properties an ideal therapeutic would have; and patients, of course, who understand better than anyone else what they need, and where existing approaches may fall short.

We should strive to cultivate, not demonize, these sorts of interactions.

This is just a taste of Shaywitz’s solid, fact-rich argument in favor of preserving such collaboration against a rising tide of attacks. Unfortunately, Shaywitz’s argument falters when he attempts a moral defense of drug companies’ profit-seeking.

Shaywitz, an adjunct scholar at the conservative American Enterprise Institute, takes an approach similar to that favored by AEI’s president, Arthur Brooks. (My colleague Don Watkins has analyzed Brooks’ weaknesses here, here, here and here.) In essence, Shaywitz asserts that drug company profits should be tolerated because they allow companies to serve other people’s needs. In support he quotes Whole Foods CEO John Mackey: “Making high profits is the means to the end of fulfilling Whole Foods’ core business mission. We want to improve the health and well-being of everyone on the planet though higher quality food and better nutrition, and we can’t fulfill this mission unless we are highly profitable.”

This kind of argument amounts to: “Please excuse our profits—we’re really out to benefit others, not ourselves.” No matter how often conservatives resort to this strategy, it will always ring false because it concedes the impropriety of profit-seeking while simultaneously attempting to excuse it. Such arguments are worse than useless in the current controversy, because the anti-collaboration movement succeeds by decrying the profit motive as a source of corruption and conflicts of interest.

In reason, however, the progenitors of progress in medicine—especially the scientists, physicians, engineers, and executives who work in and for pharmaceutical companies—have no need to apologize or justify themselves altruistically. What’s urgently needed here is a defense based on rights—the moral right of doctors and drug companies to work together to advance their own productive interests, and their legal right to do so without interference from government regulators.

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One nice thing about living in Orange County, California, is that food trucks are seemingly everywhere that is convenient. A waffle food truck pulls into my apartment complex, offering a late Saturday breakfast. Different trucks rotate in on Thursday evening, offering a quick dinner. Food trucks visit the corporate park where I work, offering lunch. Food trucks also have a strong presence at local parks and events. And the variety is wide: I have seen food trucks serving lobster, sushi, pizza, Thai, vegetarian, Mexican, monster burgers, etc. If you can think of the food, it is probably served out of a truck in Orange County.

Orange County, California, is surely no free market when it comes to the mobile food industry. But contrast the industry’s presence in O.C. to the dearth of food trucks in New York City, as described in this recent New York Times column:

As I was walking through Prospect Park recently, I wanted to find a healthful snack for my son and something for me. The only options, though, were the same sort of carts that my dad took me to in the ’70s: Good Humor ice cream, overpriced cans of soda and overboiled hot dogs sitting in cloudy water. This seemed ridiculous. In the past few decades, food in New York City has gone through a complete transformation, but the street-vendor market, which should be more nimble, barely budges. Shouldn’t there be four Wafels & Dinges trucks for every hot-dog cart?

Why are food trucks not easy to find in New York City? He blames regulations:

There are numerous (and sometimes conflicting) regulations required by the departments of Health, Sanitation, Transportation and Consumer Affairs. These rules are enforced, with varying consistency, by the New York Police Department. As a result, according to City Councilman Dan Garodnick, it’s nearly impossible (even if you fill out the right paperwork) to operate a truck without breaking some law. Trucks can’t sell food if they’re parked in a metered space . . . or if they’re within 200 feet of a school . . . or within 500 feet of a public market . . . and so on.

Things can get so bad that one food-truck employee spent eight hours in jail for vending falafels without the proper license!

The author concludes by comparing New York City regulations with the Third World:

In Ecuador, for example, it takes about 56 days and 13 separate procedures to get all the legal paperwork done to start a new business. In the United States, it’s an average of six days and six procedures. But if you want to open a mobile-food business in New York, it’s essentially like starting a business in Ecuador — and that’s if you can somehow arrange a permit.

I do not agree with everything the author says, but this whole article is worth reading because it illustrates how regulations can mire and discourage business activity.

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Over at TheAtlantic.com, Justin Fox offers thoughts on how antitrust policy will impact social media companies going forward. The article is worthwhile reading, in part for what it reveals about the smug sense of entitlement policymakers exhibit when it comes to America’s most successful companies.

“The Web’s New Monopolists” floats a number of trial balloons, including:

• The desirability of regulating companies like Twitter and Facebook as “utilities”
• Whether Internet giants such as these, not to mention Apple, Amazon, and Google, should be seen as “scary monopolies that somebody needs to do something about”
• Whether a company like Facebook should be nationalized
• Whether “it’s possible to spin a credible tale of antitrust lawyers enabling disruption and innovation” through enforcement measures such as those against Microsoft in the 1990s.

What’s on display here is the idea that the more success a company earns, the more it must put up with coercive control over its business practices. Fox’s conclusion says it all:

So all praise to today’s would-be utilities and monopolies, as they try to build enterprises that own their markets and that we can’t do without. But when they actually succeed, don’t think we shouldn’t be sniffing around in their business. At a certain point, it becomes our business, too.

Unfortunately, the businessmen subjected to antitrust enforcement typically accept it as a cost of doing business. “There’s a joke in Silicon Valley,” says UC Berkeley economist Carl Shaprio. “‘You know you’ve really made it when you’ve got antitrust problems.’ That’s the sign of success.”

Notably, Fox’s article contains not a single quote or mention of anyone—businessman, academic, or policy analyst—who opposes antitrust regulation of Internet companies on principle.

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Over at FoxNews.com, Anne Bayefsky captures the latest absurdity emanating from the United Nations:

In case you didn’t think the UN could get even more bizarre (and dangerous), try this one. Iran will soon become the President of the Conference on Disarmament. The Iranians rotate into the job for four weeks near the end of May. Their qualification for the position? Iran is the member state that comes next in the English alphabet after Indonesia.

Iran will have the task of managing the 2013 Conference agenda, which includes “the cessation of the nuclear arms race and nuclear disarmament.” On the one hand, since the mullahs running the country are engaged in a mad race to acquire nuclear arms, chairing a meeting on disarmament may be a bit of a struggle. On the other hand, the Conference just talks, and talking for its own sake is an Iranian art form.

Bayefsky hits the nail on the head: “Now the proverbial foxes guard the chicken coop. It would be funny, except that the Iranian fox really intends to devour the chickens.” Read the whole thing.

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Former vice president Al Gore recently spoke before a Toronto audience where he railed against, among other things, the Keystone pipeline.

Disappointed that lawmakers in the United States haven’t been doing more to stop projects that would bring oil to America, Gore reflected that the lack of gumption to stop the pipeline was most likely because people were failing to take the issue personally. He said that when people view these issues as a matter of personal values, they are more likely to take action:

“When these kind of issues settle into a choice between right and wrong, then the moral clarity that eventually develops makes it possible to move quickly.”

I absolutely agree.

We are surrounded by technology that oil has made possible, and sometimes it can be easy to forget exactly how valuable those things are to us. I’m taking a moment today to reflect on some of those values.

Oil makes fuel which has allowed us to make trips that would never have been possible just one hundred years ago. Kerosene-based rocket fuel put men on the moon and satellites into space that allow us to find our location anywhere on Earth, listen to music or watch television, track storms and communicate worldwide.

The gasoline which powers our automobiles makes journeying to stay in touch with family easy. In the mid-1800s my great-great-grandfather moved away from the family farm in Wisconsin to make his own way in the neighboring state of Minnesota. He never saw his brothers and sisters again, and his children never met their grandparents. There was never any bad blood between them; it was simply that the distance between the two farms was too great to make visiting possible. He packed up, made the journey and never looked back. There were just 400 miles between the two farms.

Oil-based technologies now make that journey easy—simply jump into your car and go. Mechanized combines and diesel tractors unburden a farmer from a great deal of physical labor and make a weekend trip possible—even in the dead of a Minnesota winter.

Oil makes jet fuel. Living in California, I am able to see my family in Minnesota by simply boarding a commercial airplane. These vehicles can weigh over 800,000 pounds and sail through the sky, making a journey that would have taken my great-great-grandfather well over a hundred days had he chosen to travel the Oregon Trail out to California. A direct flight makes the trip in about five hours.

But a single barrel of oil makes more than just fuels–about 16% of each barrel goes toward making products such as: sunglasses, telephones, asphalt, dishwashers, microwaves, surf boards, refrigerators, umbrellas, roofing, shampoo, nylon rope, clothes, insect repellent, skis, footballs, water pipes, yarn, hair dye, movie film, soft contact lenses, artificial limbs, motorcycle helmets, syringes, CDs and DVDs, aspirin, deodorant, shoes, stuffed animals, pacifiers, extension cords and shower curtains.

The list goes on for pages. But even on this short list above, how many things are there that have made your life better, easier, safer, longer and happier?

Keep these precious things in mind the next time Al Gore or anyone else tells you that you should choose to give up these “unethical” values and force everybody else in the country to do the same.

Standing in front of this group in Canada, Gore’s message was clear. He rejected the idea that there was any circumstance, any use, any origin of oil that makes it justified, redeemable or proper to use.

“There’s no such thing as ethical oil,” he said. “There’s only dirty oil and dirtier oil.” This remark apparently triggered a round of audience applause.

Without any viable alternatives to oil, it is unclear how strangling the pipeline at the border will be a cause for celebration. Consider the view of morality implied in Gore’s outlook. On his view, human innovation, human health, human happiness and human flourishing—all these are dispensable, and should be sacrificed. In my view, moral clarity implies just the opposite and a well-due round of applause for oil.

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It seems indisputable by now that Obamacare will wreak havoc on the American health care system. Even Sen. Max Baucus, an architect of the law, recently predicted that implementing Obamacare will be a “huge train wreck.”

Curiously, this news has evoked not much more than a shrug from some people. For example, New York Times columnist David Brooks dryly summarizes the disasters expected to occur (“chaos” that will unfold in “cascades”) and then chalks it up to: “When you build [a] complex [regulatory regime], it takes a while to work through the consequences.” (Brooks is more interested in the political ramifications of Obamacare’s failure than its effects on people.)

But the damage that Obamacare will inflict on American health care—and as a result, on all of us—is not something to dismiss so nonchalantly. Brooks suggests that the pain may be temporary and eventually things will “settle down to a new normal.” Even if this were true (it isn’t—the “new normal” will be a health care system permanently crippled by greater government control—read one example here), Obamacare’s consequences should not be minimized.

The law will severely alter people’s lives—and not for the better. Here are just a few recent news headlines:

• “Doctor Shortage Likely to Worsen With Health Law”
• “Indiana [medical device] company scraps plans for expansion over ObamaCare device tax”
• “Health-care law uncertainty grips Old Town Alexandria cafe — and other small businesses”
• “Health Law Pinches College Teachers”
• “Healthcare law could raise premiums 30% for some Californians”

These consequences, far from being shrugged off, should call into question the goal and rationale of the law itself.

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For those passionate about Ayn Rand’s ideas and their application to today’s events, and who hope to turn that passion into a career, the Ayn Rand Institute offers this new video presentation. “3 Essential Tips for Aspiring Intellectuals” features Dr. Onkar Ghate, vice president of Intellectual Leadership and senior fellow at the Ayn Rand Institute, and Elan Journo, fellow and director of Policy Research at ARI. They discuss ARI’s new Junior Fellows Program—a unique opportunity to work full time on ARI’s staff for up to one year, and to gain real-world experience and vital skills alongside ARI’s senior intellectuals.

Note: For the 2013-2014 fellowship year, the deadline for applications is May 15.

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Obamacare requires young people to pay higher health insurance premiums in order to subsidize older people’s coverage. But don’t worry, say Obamacare’s defenders: Many young people will qualify for federal subsidies to offset the higher premiums. For example, health policy analyst Austin Frakt says, “[M]ost of the cross subsidization is not flowing from younger to older individuals. It’s flowing from the treasury to everyone with low enough incomes.”

This defense doesn’t hold water.

First, only those earning below 400% of the federal poverty level are eligible for subsidies, which means if you are a young single worker who makes more than $45,960 a year, you must pay the higher premiums imposed by Obamacare entirely out of your own pocket. In my view, even one young person fleeced to pay for the older generation’s health care expenses is too many.

Second, the government obtains money for the promised subsidies by confiscating funds from its citizens—in the form of taxes, borrowing, or printing money (this last effectively depletes savings). So when Frakt says the federal government will effectively be subsidizing the coverage of those older, what he means is that everyone (including young people) whose earnings are drained by the government will pay for the coverage of those older. But it’s wrong for the government to force any group of people—be they young, of higher-income, or classified by any other category—to pay the medical bills of others.

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In a recent op-ed Judith Stein of the Center for Medicare Advocacy explains why she thinks government should lower drug prices for Medicare recipients. The article is worth reading because it is an example of a pernicious assumption that permeates most health policy discussions.

Stein argues at length that lower drug prices would benefit Medicare recipients, the federal government and taxpayers. Considered out of context, who could oppose the possibility of cheaper life-saving drugs for the elderly?

But consider the means Stein supports to bring about this result—a congressional initiative to impose price controls on drug companies (a process dressed up by calling it a “rebate”).

By what right does the government dictate to drug companies—those who have spent billions of dollars and worked countless years to figure out how to alleviate the complex ills that can plague the human body—what they can charge for their efforts? Stein doesn’t bother to consider this issue in her article—the assumption is that since some people need cheaper drugs, it’s okay to pay the producers, not what they’re charging, but what the consumers decide is enough.

Imagine doing this in any other context—for example, walking into an Apple store, picking up an iPad that costs $499, deciding it’s not worth that much, slapping a hundred dollar bill on the counter and walking out. It would be inconceivable (not to mention a crime).

Yet this attitude is ever-present in health policy circles, where there is much discussion about how to distribute the efforts of others without any consideration of the rights of the producers. In this case, there is no consideration for the fact that these drugs belong to the companies that have invested the time and resources to produce them—and that nobody else has the right to decide the price at which they are sold.

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On this episode of Eye to Eye, I had the opportunity to interview Richard Tren, a leading proponent for the use of DDT in the fight against the deadly disease malaria. Spread by the bite of a mosquito, malaria currently claims the lives of over half a million people a year—most of them children living in Africa.

Tren, who hails from South Africa, experienced first-hand a devastating malaria epidemic in the 1990s and saw how the re-introduction of DDT quickly brought the disease under control. At the same time, he saw anti-DDT advocates at the U.N. Stockholm Convention pushing hard for a world-wide DDT ban. This led him to become a founder of the organization Africa Fighting Malaria, where he is a director to this day.

One point he made that I found particularly interesting was that although people are coming at the disease from many angles (some search for an ever-elusive vaccine, others work on drugs to assuage symptoms, and still others concentrate their efforts on controlling the mosquitoes that carry the disease), in the end, it is the amount of wealth that a nation has that is its best protection against diseases like malaria. Free economies, in his view, are key for nations to rise out of poverty. In his view, there is a certain danger with foreign aid in that it stops countries from using their own resources to create sustainable programs. Although Tren calls Americans “generous” in their willingness to help, he also makes the point that if the people and governments in affected countries choose not to combat the problem themselves, eradication may be hopeless. I would add that the only proper outlet for this generosity is private charity, and not taxpayer funded foreign aid.

Some of the other topics Mr. Tren discusses in the podcast include:

• The problem of disappearing honey bees
• The use of pesticides in agriculture
• How DDT works
• Rachel Carson and the book Silent Spring
• The role of DDT in the eradication of malaria in the United States
• What led to the ban on DDT in the United States, and the consequences for the rest of the world
• The safety of DDT
• The problem of insecticide resistance
• The unfounded view of DDT as a dangerous chemical

Richard Tren is co-author of the book The Excellent Powder: DDT’s Political and Scientific History and contributor to the book Silent Spring at 50: The False Crises of Rachel Carson.

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I never cease to be shocked by how people who I meet on a regular basis are held back by regulations. For instance, I was having a nice conversation with a cab driver who was transporting me to my home after a business trip. He recently came to the country from Africa and he was ecstatic to be living here, especially in beautiful Southern California.

Naturally, I was curious to learn about the different kinds of regulations that taxi drivers must comply with. In California, my driver explained, cab drivers who have a local-government-issued permit to pick up passengers in one city are not necessarily permitted to make pickups in a neighboring city.

“How does this impact you?” I asked him.

He indicated that he often picks up passengers from John Wayne Airport in the city of Santa Ana, where he is licensed, and takes them to Disneyland. But since Disneyland is in the neighboring city of Anaheim, he is legally forbidden to pick up passengers there and take them back to the airport. Instead, he is forced to drive back to the airport without a passenger, wasting his time and costing him a potential fare.

Of course, he could try to jump through the regulatory hoops to get a permit from the city of Anaheim as well. But this requires money, time, and a lot of paperwork. And even if he tries, the city of Anaheim might not give him a permit anyway, because they may want to cap the number of cab drivers who are allowed to operate in their city, just as some other cities do.

This is yet another example of the often unseen aspect of the regulatory state: an imbroglio of rules that make it more cumbersome for decent, hardworking people to earn a living.

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What’s fascinating about the late Edward Said, a literature professor at Columbia, is how much (deleterious) impact he managed to have not only within academia, but far beyond. His career stands as a rebuke to the facile notion that “academic” necessarily means divorced from life, irrelevant. More than a decade after his death, Said’s influence on the field of Middle East studies—and on how many people in the West think about the region—remains indelible. By this point you might be asking: How does an English professor re-shape the study of the Middle East? That’s one of the questions touched on in Joshua Muravchik’s insightful piece at World Affairs:

Columbia University’s English Department may seem a surprising place from which to move the world, but this is what Professor Edward Said accomplished. He not only transformed the West’s perception of the Israel-Arab conflict, he also led the way toward a new, post-socialist life for leftism in which the proletariat was replaced by “people of color” as the redeemers of humankind.  [...]

The book that made Edward Said famous was Orientalism, published in 1978 when he was forty-three. Said’s objective was to expose the worm at the core of Western civilization, namely, its inability to define itself except over and against an imagined “other.” That “other” was the Oriental, a figure “to be feared . . . or to be controlled.” Ergo, Said claimed that “every European, in what he could say about the Orient, was . . . a racist, an imperialist, and almost totally ethnocentric.” Elsewhere in the text he made clear that what was true for Europeans held equally for Americans.

Muravchik’s lengthy article goes on to expose the dubious character of Said’s scholarship. Even some who sympathized with his outlook blushed at his methodology and dodgy inferences. And yet—tellingly—his views became a kind of orthodoxy.

(You might also consider reading Martin Kramer’s excellent monograph, Ivory Towers on Sand: The Failure of Middle Eastern Studies in America, which is now available in PDF online. In a review  years ago I praised it, noting how Kramer skillfully explains the unlikely triumph of false ideas.)

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If you want to imagine the potential hazards of the United Auto Workers unionizing foreign automakers’ factories in the American south, consider the following episode from the history of General Motors. It provides a glimpse of how bad things can get in a Wagner Act world where businesses are forced to deal with unions. (I am drawing my information from Paul Ingrassia’s Crash Course: The American Automobile Industry’s Road From Glory to Disaster.)

In early June 1998, then-current UAW-GM working arrangements allowed GM employees to go home once they met their daily production quotas. But employees at GM’s two Flint, Michigan, body plants were regularly meeting these quotas after four to five hours worth of work, and then heading home with a full eight hours’ worth of pay. If GM wanted employees to work in the afternoon, it needed to pay overtime. If GM wanted to stay competitive with its non-unionized Japanese rivals, then this kind of institutionalized inefficiency needed to go.

GM executives anticipated that directly fighting UAW representatives to end this long-standing practice would be too costly. So they instead relocated some of the Flint stamping equipment to other facilities where it could be used for eight hours worth of daily production. Equipment reallocation is commonly done at GM and at other large manufacturers. But, in this case, the UAW leadership perceived this move as a direct threat to their cushy working arrangement and more broadly feared what such a move could mean for job security down the line.

So they launched a strike.

Within one week, 9,200 GM employees walked out of two metal-processing plants in Flint. By abandoning their paid posts, these striking employees stopped production of vital car body parts. This sent shockwaves throughout GM’s entire supply chain, halting production at many assembly plants that depended on body parts produced at Flint. As a result, the strike idled 175,000 GM workers and tens of thousands more at plants owned by other companies that supplied parts for GM.

The strike was devastating. It lasted fifty-four days and cost GM roughly $2.2 billion. By one reckoning, because of the strike, the entire industrial production of the United States dropped by 1 percent for the month of June, the sharpest monthly decrease in five years. For GM, this was the costliest strike that they suffered in twenty-eight years. Once the strike ended, GM reluctantly returned the equipment to the Flint metal-stamping plant. While this happened in broad daylight, UAW members stood by cheering for what was basically a celebration of willful inefficiency.

Events like the 1998 GM strike remind us about the dangers of laws that force businesses to deal with unions.

The post What can go wrong if the UAW unionizes foreign automakers? Let history speak appeared first on VOICES for REASON.

Two years ago, Navy SEALs dispatched Osama Bin Laden in a spectacular raid on his compound in Abbottabad, Pakistan. The notion at the time was that the jihadists were done for, with Al Qaeda decapitated and its operations soon to be decimated.

But as I argued in my book (released in 2009), bringing Bin Laden to justice was essential but would be far from sufficient to thwart what we call the Islamic totalitarian movement, the cause of those seeking Islamic domination worldwide. The basic reason is that Al Qaeda is just one part of the movement, and Bin Laden was just one leader. If we conceptualize the forces we oppose as just Al Qaeda, or just the Taliban, or just random losers, etc., we fail to recognize that our enemy is moved by ideas and a common goal.

It remains to be seen whether the Boston bombers had contacts with jihadist enablers or groups; perhaps yes, perhaps no. But the fact remains that even without Bin Laden, the pernicious ideas fueling the jihad remain potent and continue to empower attacks against us.

The post The Jihad, two years after Bin Laden appeared first on VOICES for REASON.

For those passionate about Ayn Rand’s ideas and their application to today’s events, and who hope to turn that passion into a career, a free Livestream is coming next week. “3 Essential Tips for Aspiring Intellectuals” is the topic of a webcast featuring Dr. Onkar Ghate, vice president of Intellectual Leadership and senior fellow at the Ayn Rand Institute, and Elan Journo, fellow and director of Policy Research at ARI.

The hosts will be discussing ARI’s new Junior Fellows Program—a unique opportunity to work full time on ARI’s staff for up to one year, and to gain real-world experience and vital skills alongside ARI’s senior intellectuals.

For instructions on joining the webcast, RSVP here and instructions will come later. Also, those who submit a question that the hosts answer live during the webcast will receive a copy of Free Market Revolution in the mail.

Date: Tuesday, May 7, 2013
Time: 2:15 p.m. Pacific/5:15 p.m. Eastern

Those who don’t wish to participate can listen in live on ARI’s Facebook or Livestream pages.

The post Live webcast: “3 Essential Tips for Aspiring Intellectuals” appeared first on VOICES for REASON.