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Coyote Blog, Year Two Archives, Volume Two / 1

Coyote Blog: The Second Year

Volume 2: April, 2006 to September, 2006

By Warren Meyer

2 / Warren Meyer

Copyright © Warren Meyer, 2005

Coyote Blog, Year Two Archives, Volume Two / 3

Table of Contents

Forward..............................................................................................................................................................5

April, 2006.........................................................................................................................................................6

Supreme Court Asleep..................................................................................................................................8

Immigration and the "Legality" Issue...........................................................................................................9

Massachusetts Insurance Fiasco..................................................................................................................11

Damages and Double Jeopardy...................................................................................................................13

More on Massachusetts Health Insurance...................................................................................................14

My Worst Vendor -- Guess Who?..............................................................................................................16

Limiting Free Speech Unifies Congress.....................................................................................................18

The Peak Whale Theory..............................................................................................................................20

I'll Try Again -- Why The Trade Deficit is Not a Debt...............................................................................22

Disturbing Trade News From China...........................................................................................................29

May, 2006........................................................................................................................................................33

My Immigration Reform Plan.....................................................................................................................34

Real Price Collusion Requires the Government..........................................................................................43

If it Passes, I'm Turning Off the Pumps......................................................................................................47

So Why Not Cuba?......................................................................................................................................54

Reconciling the Skilling Verdicts...............................................................................................................63

Price Controls at Work................................................................................................................................65

Are People Rational About Gas Prices?......................................................................................................66

The Connection Between Paul Ehrlich and Immigration Opponents.........................................................68

An Absurd Demand.....................................................................................................................................71

June, 2006........................................................................................................................................................75

The Obesity Obsession................................................................................................................................77

Eminent Domain, But Without the Compensation.....................................................................................78

Statism Bites its Creators............................................................................................................................79

July, 2006.........................................................................................................................................................85

Thoughts on Detentions..............................................................................................................................85

State of Arizona Channeling Enron............................................................................................................96

In Case You Thought Anti-Trust Was About Consumers..........................................................................97

Estate Tax Confusion..................................................................................................................................98

Guilt or Innocence is Irrelevant, I Guess..................................................................................................103

A Skeptics Primer for "An Inconvenient Truth".......................................................................................105

World's Largest Banana Republic.............................................................................................................118

Answer: Wealth.........................................................................................................................................119

August, 2006..................................................................................................................................................120

Virtues of a Carbon Tax............................................................................................................................120

Thoughts on Net Neutrality.......................................................................................................................121

I Have Government Derangement Syndrome...........................................................................................122

Thanks, China!..........................................................................................................................................124

Katrina was Government Revealed...........................................................................................................130

In Case You Thought Anti-Trust Was About Consumers, Part 2.............................................................132

Pre-Season College Football Rankings are the Most Important...............................................................140

Leaving Poverty in China..........................................................................................................................140

4 / Warren Meyer

More Zero Sum Economics (Sigh)...........................................................................................................142

Progressives in Their Own Words............................................................................................................150

Immigration Opponents Depend on Bad Public Schools..........................................................................152

Free Market Does Not Mean Pro-Business...............................................................................................160

Ignoring a Positive Cancer Test................................................................................................................161

The Skeptical Middle Ground on Warming..............................................................................................162

September, 2006............................................................................................................................................164

Free Speech, But Only If Its Bilateral.......................................................................................................164

Urban Heat Islands....................................................................................................................................165

Wanted: Honesty of Purpose.....................................................................................................................167

You Can't Make Decisions for Yourself...................................................................................................168

Circumscribing the "War on Terror".........................................................................................................170

What are People Afraid Of?......................................................................................................................173

Coyote's Law and 9/11..............................................................................................................................177

Get Wal-Mart Out of the Public Trough...................................................................................................179

Arizona Minimum Wage Ballot Initiative................................................................................................180

Broken Window Fallacy, On Steroids......................................................................................................183

More Anti-Immigration Scare Stats..........................................................................................................184

Sanction of the Victim..............................................................................................................................190

You've Never Had It So Bad.....................................................................................................................192

Anti-Trust is Anti-Consumer....................................................................................................................196

Index to Articles.............................................................................................................................................202

Coyote Blog, Year Two Archives, Volume Two / 5

Forward

This book is an archive of my blogging efforts at www.CoyoteBlog.com for the second year of the blog's

existence, a time period stretching from April, 2006 to September 2006.

A text record of a blog is by its nature very imperfect. The real advantage of blogging, beyond its

immediacy and low-cost reach, is the ability to link other online sources to extend or provide backup for a

particular article, called a “post”. Throughout this print record, you will see phrases that are underlined

like this. In the original electronic version, these were links where readers could click through to view

related material on other web sites. I have chosen to leave this underlining in this text version, as an aid to

understanding where richer content was available to the original online readership. Another important

point of style is that blog posts typically quote heavily from other sources as part of the commentary:

Rather than using quotation marks, most quotes are indented and printed in italics, like this.

In compiling this archive, I have chosen to remove many of the original posts. Most of these removed

posts were short posts whose main purpose was to point readers to other interesting content on the web,

and as such are nearly meaningless in a printed version.

I have done some cleanup of spelling and grammar, but readers of this printed version should recognize

that blogging is a real-time activity and readers generally do not expect publication quality prose. Along

these same lines, you will encounter a number of Internet abbreviations, including LOL (laughing out

Loud), OMG (Oh My God), and Fisk (to tear apart someone else's argument line by line). Readers online

would have been very familiar with these shortcuts. You may also note that a number of the articles have

sections at the end marked as “Update”. This is additional information added to the text after it was

originally posted, consistent with the dynamic and real-time nature of blogging.

Finally, given the sheer volume of material here and the near certainty that few people will be interested

enough to plow through it all, I have highlighted some of my favorite posts in the Table of Contents on the

previous page. The index at the back contains a full listing of all the articles included in this volume.

Warren Meyer

“Coyote”

January, 2008

6 / Warren Meyer

April, 2006

Force over Choice

Progressives often wrap themselves up in a lot of libertarian-sounding jargon. But when push comes to

shove, progressives are more comfortable with coercion than free association. James Taranto links this

piece in his Friday Best of the Web:

A longtime singer and guitarist with the Zucchini Brothers and a substitute teaching assistant

for Washington-Saratoga-Warren-Hamilton-Essex BOCES [school board], Powell has lived

frugally for years. He works about three days a week as a sub, earning about $70 a day, with no

benefits. From March to October, he rides his bike 20 miles to work when work is available....

Part of that survival--or so he thought--included shopping at Wal-Mart to take advantage of

cheaper prices for himself, his partner and her two children. Then his discussions about Wal￾Mart with Sandra Carner-Shafran, a teaching assistant at BOCES and a member of the Board of

Directors of New York State United Teachers, started churning inside him. . . .

"I don't like what Wal-Mart stands for," Powell said, noting the mega-chain's scanty health

insurance for staffers. "Because of all those things they can lower the prices."

He and his partner agreed to go on food stamps for their family rather than shop at Wal-Mart

any longer.

Please observe the moral choice he made that is being applauded by those on the left: Rather than get low

cost food from Wal-mart, which generally* transacts with its suppliers, employers, and customers through

mutual self-interest and the consent of all parties in each transaction, he has decided it is MORE MORAL to

get his food expropriated from the American taxpayer without their consent. Lovely. By the way, it is

ironic that he is mad that Wal-mart employees accepts jobs with no health benefits when he in fact has

made the same choice himself.

More on what makes progressives tick here.

*The exception being that Wal-Mart does use the force of government via imminent domain to obtain land

where the free will of landowners would not cooperate and to get special tax credits from local

governments to get area citizenry to subsidize its business. If Mr. Powell were to protest these practices, I

would be all for it, but my guess is that he is not protesting government handouts to Walmart by signing

up for... government handouts for himself.

Posted on April 1, 2006 at 09:16 AM

Politics Negates Belief

One of the advantages of not being a partisan of either the Democrats or Republicans is that I have more

flexibility to actually say what I believe, without worrying that something I am saying might actually give

Coyote Blog, Year Two Archives, Volume Two / 7

aid and comfort to my political enemies. I have always felt that it is really, really difficult and rare to

become actively political without sacrificing consistency in your deeply held beliefs, particularly since both

parties represent such an inconsistent hodge-podge of positions. The irony of this has been, at least until

the advent of blogging, that I could be smug about maintaining my philosophic virginity but I left myself

no avenue to make any impact with my strongly held beliefs.

Given this, I was therefore struck by this, from Cathy Young at Reason, writing about Yale's future Taliban

student:

One striking aspect of this controversy is the reaction from Yale's liberal community. Della

Sentilles, a Yale senior, recently wrote a piece for the Yale Herald denouncing such

manifestations of rampant misogyny at Yale as the shortage of tenured female professors and

poor childcare options. On her blog, a reader asked Sentilles about the presence at Yale of a

former spokesman for one of the world's most misogynistic regimes. Her reply: "As a white

American feminist, I do not feel comfortable making statements or judgments about other

cultures, especially statements that suggest one culture is more sexist and repressive than

another. American feminism is often linked to and manipulated by the state in order to further

its own imperialist ends."

It appears Ms. Sentilles, beyond having a lot of multi-cultural baggage, is terrified that if she actually

criticizes Afghanistan in any way, she is somehow giving aid and comfort to the Bush administration,

which feminists have declared enemy #1. The politics of US presidential elections, in this case, trump

criticizing a regime that treated women worse (by far) than the US has at any time in its history. Which of

course is one of the reasons* that women's groups in this country are sliding into irrelevance, putting their

support of a broad range of leftish causes above speaking out on what is essentially apartheid-for-women

in the Middle East (I say essentially, because women are actually far worse off in much of the Middle East

than blacks ever were in South Africa). Whereas a decade ago the left was marching in the street to better

the lot of blacks in South Africa, they are strangely mum on women in the Middle East.

As a result, I can lament the condition of women in the Middle East, acknowledge that Saddam was a

blight on humanity, but still oppose the war in Iraq as not worth the cost (when "cost" is defined broadly

enough to include not must money and men but also opportunity cost). I can adopt this position because I

am not required to put on the Republican happy face or Democratic America-always-sucks face.

* Another reason is that it may be time for women to declare victory.

Posted on April 1, 2006 at 10:44 PM

More Trouble Than I Thought at GM

Today's announcement that GM will sell 51% of their GMAC financing arm really brought home to me

how bad things are at GM. I haven't really followed the situation, but I had assumed that GM was facing

the same type demographic bomb as the airlines, fat and underfunded pensions and retiree health care

benefits promised when times were good and US auto makers didn't face much troubling competition.

Here is what I found interesting: GMAC is reported to make about $2.5 - 3 billion a year in profits. This

might tend to imply a value of at least $25 to $30 billion, which is confirmed by the fact that GM just sold

half for $14 billion. But GM as a whole has a market cap of just under twelve billion. This means that their

entire manufacturing business is valued in the market at roughtly -$16 Billion. Yes, negative sixteen

8 / Warren Meyer

billion. Another way to look at this is that if instead of selling GMAC yesterday, GM had instead sold all

of their automotive manufacturing, brands, designs, etc. to someone for $1, and became a pure financing

business, GM shareholders would be richer by $16 billion, the equivilent of raising the current stock price

from about $21 to about $49.

Posted on April 3, 2006 at 09:05 AM

Supreme Court Asleep

The Supreme Court refused to review the Padilla case:

The Supreme Court on Monday refused to hear the appeal of Jose Padilla, a U.S. citizen held in

a military jail for more than three years as an "enemy combatant." The Court, however,

declined to dismiss the case as moot, as the Bush Administration had urged. Only three Justices

voted to hear the case, according to the order and accompanying opinions. The case was Padilla

v. Hanft (05-533).

The decision was a victory for the Bush Administration in one significant sense: by not finding

the case to be moot, the Court leaves intact a sweeping Fourth Circuit Court decision

upholding the president's wartime power to seize an American inside the U.S. and detain him

or her as a terrorist enemy, without charges and -- for an extended period -- without a lawyer.

The Court, of course, took no position on whether that was the right result, since it denied

review. The Second Circuit Court, at an earlier stage of Padilla's own case, had ruled just the

opposite of the Fourth Circuit, denying the president's power to seize him in the U.S. and hold

him. That ruling, though, no longer stands as a precedent, since the Supreme Court earlier

shifted Padilla's case from the Second to the Fourth Circuit.

I don't even pretend to understand all the procedural stuff, but I find it amazing that the effective

suspension of habeas corpus, particularly when the "war" and "enemy" that is used as its justification is so

amorphous and open-ended, isn't something the Supreme Court would like to sink its teeth into.

Apparently, the Justices were reluctant to address the case since it has now been made "hypothetical" by

the transfer of status of Padilla from enemy combatant held incommunicado indefinitely to a more

mainstream justice track. However, this transfer occurred, as the appeals court pointed out angrily, in a

transparent effort by the Bush administration to avoid judicial review of indefinite detentions. Which

raises the possibility that the administration could hold hundreds of people in such detention,

systematically changing the status of any individual whose case comes for review, thereby avoiding review

of the program in total. As Ruth Bader Ginsburg wrote, "Nothing prevents the Executive from returning to

the road it earlier constructed and defended."

One wonders by this logic if the segregationist south could have indefinitely postponed Supreme Court

review via Brown vs. Board of Education just by letting individuals like Linda Brown individually into

white schools whenever their cases got to the Supreme Court.

And still I ask, as I did here, where the hell is Congress? I am sorry the Supreme Court failed to review this

but the Constitution created this group called the legislative branch that is supposed to have the power to

change the law. If law is unclear here, they could make it clear.

Posted on April 4, 2006 at 08:44 AM

Coyote Blog, Year Two Archives, Volume Two / 9

Immigration and the "Legality" Issue

I know some may be bored with my immigration posts, so if you are, that's cool, you can ignore the rest. I

have done something of late I normally don't do: I have tuned into conservative talk radio for bits and

pieces of time over the last several days to get the gist of their arguments to limit immigration. The main

arguments I have heard are:

1. Illegal immigrants are breaking the law

2. We should not reward law-breaking with amnesty. We need to round these folks up that are

breaking the law and teach them a lesson. Or put them in concentration camps if that were

logistically feasible

3. We don't like first generation Mexican immigrants carrying the Mexican flag in parades. (though

we love it when 4th generation Irish carry Irish flags in parades)

A recent commenter on my post defending open immigration, which is superseded by this pro￾immigration post I like better, had this related insight:

1. YOUARE ILLEGAL

2. YOU ARE ILLEGAL

3. YOU ARE ILLEGAL

4. YOU ARE ILLEGAL

5. YOU ARE ILLEGAL

6-10000000 YOU ARE ILLEGAL

DO I NEED TO WRITE THIS IN SPANISH SO THAT THE ILLEGALS CAN UNDERSTAND.

IF YOU CAN READ THIS THEN YOU DID PASS THE BASIC ENGLISH TEST THAT IS

RREQUIRED OF ALL LEAGAL MIGRANTS !!!

OH, BTW, I HAVE THE RIGHT TO SAY THIS, BECAUSE I AM LEGAL!!

It sure is comforting that us "leagal migrants" have to pass a basic English test, or we might come off as

idiots when we post comments online. But you get the gist. My first thought is that this is certainly a

circular argument. To answer my premise that "immigration should be legal for everyone" with the

statement that "it is illegal" certainly seems to miss the point (it kind of reminds me of the king of swamp

castle giving instructions to his guards in Monty Python and the Holy Grail) The marginally more

sophisticated statement that "it is illegal and making it legal would only reward lawbreakers" would seem

to preclude any future relaxation of any government regulation.

Many people writing on this topic today lapse into pragmatic arguments ala "well, how would we pick the

lettuce without them?" Frequent readers of this site will notice I seldom if ever resort to this type argument

(except perhaps when I argued that immigration might be a solution to the demographic bomb in medicare

and social security). My argument is simpler but I hear it discussed much less frequently: By what right

are these folks "illegal"?

What does it mean to be living in this country? Well, immigrants have to live somewhere, which

presupposes they rent or buy living space from me or one of my neighbors. Does the government have the

right to tell me who I can and can't transact with? Most conservatives would (rightly) say "no," except

what they really seem to mean is "no, as long as that person you are leasing a room to was born within

10 / Warren Meyer

some arbitrary lines on the map. The same argument goes for immigrants contracting their labor (ie

getting a job). Normally, most conservatives would (rightly again) say that the government can't tell you

who you can and can't hire. And by the way, note exactly what is being criminalized here - the illegal

activity these folks are guilty of is making a life for their family and looking for work. Do you really want

to go down the path of making these activities illegal? Or check out the comment again above. She/he

implies that immigrants without the proper government papers don't even have speech rights, rights that

even convicted felons have in this country.

By the way, I understand that voting and welfare type handouts complicate this and can't be given day 1 to

everyone who crosses the border -- I dealt in particular with the issue of New Deal social services killing

immigration here.

Our rights to association and commerce and free movement and speech flow from our humanity, not from

the government. As I wrote before:

Like the founders of this country, I believe that our individual rights exist by the very fact of

our existance as thinking human beings, and that these rights are not the gift of kings or

congressmen. Rights do not flow to us from government, but in fact governments are formed

by men as an artificial construct to help us protect those rights, and well-constructed

governments, like ours, are carefully limited in their powers to avoid stifling the rights we have

inherently as human beings.

Do you see where this is going? The individual rights we hold dear are our rights as human

beings, NOT as citizens. They flow from our very existence, not from our government. As

human beings, we have the right to assemble with whomever we want and to speak our

minds. We have the right to live free of force or physical coercion from other men. We have

the right to make mutually beneficial arrangements with other men, arrangements that might

involve exchanging goods, purchasing shelter, or paying another man an agreed upon rate for

his work. We have these rights and more in nature, and have therefore chosen to form

governments not to be the source of these rights (for they already existed in advance of

governments) but to provide protection of these rights against other men who might try to

violate these rights through force or fraud.

These rights of speech and assembly and commerce and property shouldn't, therefore, be

contingent on "citizenship". I should be able, equally, to contract for service from David in

New Jersey or Lars in Sweden. David or Lars, who are equally human beings, have the equal

right to buy my property, if we can agree to terms. If he wants to get away from cold winters

in Sweden, Lars can contract with a private airline to fly here, contract with another person to

rent an apartment or buy housing, contract with a third person to provide his services in

exchange for wages. But Lars can't do all these things today, and is excluded from these

transactions just because he was born over some geographic line? To say that Lars or any other

"foreign" resident has less of a right to engage in these decisions, behaviors, and transactions

than a person born in the US is to imply that the US government is somehow the source of the

right to pursue these activities, WHICH IT IS NOT.

Disclosure: A number of my great-grandparents were immigrants from Germany. When they came over,

most were poor, uneducated, unskilled and could not speak English. Several never learned to speak

English. Many came over and initially took agricultural jobs and other low-skilled work. Because the new

Coyote Blog, Year Two Archives, Volume Two / 11

country was intimidating to them, they tended to gather together in heavily German neighborhoods and

small towns. Now, of course, this description makes them totally different from most immigrants today

that we want to shut the door on because...um, because, uh... Help me out, because why?

PS - And please don't give me the "government's job is defend the borders" argument. Government's job is

to defend its people, which only occasionally in cases of direct attack involves defending the borders. I am

sick of the rhetorical trick of taking people like the "minutemen" and describing them as patriots defending

the border, when this nomenclature just serves to hide the fact that these folks are bravely stopping

unarmed human beings from seeking employment or reuniting with their families. And I will absolutely

guarantee that the borders will be easier to patrol against real criminals and terrorists sneaking in when the

background noise of millions of peaceful and non-threatening people are removed from the picture and

routed through legal border crossings.

Posted on April 5, 2006 at 12:12 AM

Massachusetts Insurance Fiasco

Insurance legislation passed in Massachusetts:

The bill requires that, as of July 1, 2007, all residents of the Commonwealth must obtain flood

insurance coverage, even if they don't live in a flood plain.... The purpose of this “Individual

Mandate” is to strengthen and stabilize the functioning of flood insurance risk pools by making

sure they include people outside of flood plains with no flood risk as well as people who know

they live in a flood plain.

What? We have to get insurance, even if we think there is no risk and the insurance is just wasted money?

Yes indeed, that is correct. Well, almost correct. I changed a few words. The actual wording of the bill,

sent to me by reader L Cole, mandates unwanted health insurance rather than unwanted flood insurance:

The bill requires that, as of July 1, 2007, all residents of the Commonwealth must obtain health

insurance coverage.... The purpose of this “Individual Mandate” is to strengthen and stabilize

the functioning of health insurance risk pools by making sure they include healthy people

(who, if not offered employer-sponsored and -paid insurance, are more likely to take the risk of

not having insurance) as well as people who know they need regular health care services.

More from Bloomberg.

For years I have criticized the argument which says that the problem with the health care system is that

there are too many uninsured people. My argument was always that there were many people who choose

to self-insure, and that the real "problem," if there is one, is how many people there are who need care but

can't get it (a much much smaller number that is never discussed). Just look at the attached bill - the

justification is that there are people uninsured, not that there are people unserved. Now we can see the

end result: Instead of fixing the actual problem, which is people who need care not getting it, they fix the

problem as it was discussed: they literally forced people to get health insurance, even if they don't want or

need it. Now some elected weenie can say "in Massachusetts, we have licked the problem of people

without health insurance." Reminds me of this Rush song.

Like many parallel bills proposed in other states, this one requires businesses to provide health insurance

or to pay into a state fund if they don't. But the bill also has this scary provision:

12 / Warren Meyer

The Free Rider surcharge will be imposed on employers who do not provide health insurance

and whose employees use free care. Imposition of the surcharge will be triggered when an

employee receives free care more than three times, or a company has five or more instances of

employees receiving free care in a year.

First, as an employer, why am I a free rider? It is not me that received any free services or care. My

employees medical problem is not my fault (or else it would be workers comp). If I hire someone that

takes advantage of government loans to send their kids to college, am I a free rider? If my employees

choose subsidized mass transportation over driving their own cars, am I a free rider?

Second, I sure hope all you poorer folks with health problems understand that it is now going to be really

hard to find a job in Massachusetts. No employer in their right mind is going to hire someone who may

trigger this liability. This provision would be a disaster for our company, since we tend to hire older

retired people (with lots of health problems) for seasonal work (for which it is impossible to structure a

health insurance plan). Fortunately, I guess, Massachusetts is one of the states our company red-lined

years ago as a place we will never do business, so this does not change our strategy much.

I have no idea what this will cost taxpayers and businesses in Mass., but I am positive it is substantially

more than the bill's sponsors have let on. And there is a lot of hand-waving going on by supporters who

insist that this bill will drive premium costs way down that strikes me as bullshit as well.

Update: This article in Business Week provides some insight into the 500,000 uninsured in Mass.

Supporters of the bill claim that 100,000 of these are poor people who qualify for Medicare but haven't

bothered to sign up. 200,000 are higher income folks who could afford insurance but choose not to buy it.

The other 200,000 are people they claim can't afford it, but surely even if they could, some portion would

choose not to buy it. So by the admission of the bill's supporters, at least 60% and probably more of the

uninsured are that way because they choose to be. Lets come up with a costly socialization of the medical

industry in order to force on people something they don't necessarily want or need.

Posted on April 5, 2006 at 12:54 PM

What 6th Amendment?

I have written several times on prosecutorial abuse, most recently in this post on the Justice Department's

current practice of forcing companies to waive attorney-client privilege and punishing companies that help

their employees seek legal council.

The WSJ($) editorializes about a recent division by Judge Lewis Kaplan in the KPMG trial.

Those steps were extraordinary in their attempt to pressure corporate executives: They include

waiving attorney-client privilege to give investigators access to internal documents and cutting

off accused employees from legal and other forms of support. In short, the Thompson memo

said that companies under investigation are expected to surrender any right against self￾incrimination and cut their accused employees adrift.

In one sense, the memo's guidelines are just that -- internal guidelines for prosecutors. But as a

practical matter, only a rare CEO will risk the death sentence that a corporate indictment

represents. So "cooperation" as defined by Justice is hardly optional. It was on this point that

Judge Kaplan took Assistant U.S. Attorney Justin Weddle to task last week. When Judge

Kaplan questioned the fairness of pressuring companies to throw their employees overboard,

Coyote Blog, Year Two Archives, Volume Two / 13

Mr. Weddle replied that companies are "free to say, 'We're not going to cooperate.'"

"That's lame," the judge retorted. He then asked Mr. Weddle "what legitimate purpose" was

served by insisting that companies cut their former employees off from legal support.

Companies under investigation, Judge Kaplan noted, ought to be free to decide whether to

support their employees or former employees without Justice's "thumb on the scale."

Mr. Weddle replied that paying the legal fees of former employees charged with crimes

amounted to protecting "wrongdoers." This prompted the judge to remind the young

prosecutor that the accused are still innocent until proven guilty. He also reminded Mr.

Weddle that the Constitution's Sixth Amendment guarantees the right to counsel. And for good

measure, if the government is confident in its case, it shouldn't be afraid to allow "wrongdoers"

access to an adequate defense.

Its good to see these practices starting to get some judicial scrutiny. There is unfortunately no real political

constituency in this country to get worked up about this kind of stuff. Left-leaning groups tend to be the

first to challenge police and prosecutorial abuses of power, but have little interest in doing so when the

target (ie corporations) is someone they have no ideological sympathy for. And right-leaning groups tend

to be strong law-and-order types that feel the need to go out of their way to be tough on recent corporate

transgressors to avoid the accusation that they are in bed politically with white collar criminals.

Posted on April 6, 2006 at 08:50 AM

Damages and Double Jeopardy

I saw the other day that Merck lost another Vioxx trial, with the jury awarding $4.5 million to a man who

had a heart attack after taking Vioxx. I won't get into my problems with this type of litigation today, but I

did in many other posts like this one (and this and this).

My question today revolves around the fact that this trial is now going into the punitive damages phase,

where the jury will decide if Merck owes more money as a punishment not narrowly for this man's heart

attack (for which they are paying $4.5 million) but more generally for Merck's actions in bringing the drug

to market at all.

Here's the problem: A jury in Texas already hit Merck with $259 million in punitive damages*. This

number was based on a lot of testimony about Merck's sales and profits from Vioxx, so it was presumably

aimed at punishing Merck for "errors" in their whole Vioxx program. So if that is the case, how can Merck

end up facing a jury again coming up with a separate punitive damage award for the same "crime"? Sure,

it makes sense that Merck can owe actual damages to individual claimants in trial after trial. But how can

they owe punitive damages for the whole Vioxx program over and over again? Aren't they being

punished over and over for the same misdeed, violating their Constitutional protection against double

jeopardy?

I'm not sure what the solution is. One approach, of course, would be to say that punitive damages can

only be awarded once, which would effectively mean they would go to the first plaintiff to win his case. I

am not sure this makes a lot of sense from a public policy point of view, but it would be highly entertaining

to watch tort lawyers knocking themselves over and maneuvering to be the first verdict, knowing that if

14 / Warren Meyer

they are first,they would get 30% of hundreds of millions of dollars but if they are second they get 30% of

much much less, since punitive damages are always far larger than actual damages.

*Under Texas law, this amount will likely be reduced, but it doesn't change the fact of double jeopardy

Posted on April 6, 2006 at 09:21 AM

More on Massachusetts Health Insurance

I loved this email received at Maggie's Farm:

What are you guys smoking over there? Here I am in Massachusetts, without health insurance,

and with a family of four, and all that has happened is on top of having to pay full freight for

my family's doctor bills, I get fined $1000.00 for the privelege.

I don't want your stinking welfare greenstamp department of motor vehicle government cheese

copay paperwork foodstamp prepaid doctor tax charity ward let a million flowers bloom

supervision of my family's medical situation, thank you very much.

Catastrophic medical insurance is currently illegal in Massachusetts. All they had to do is allow

me to purchase what I could get if I lived 50 miles west, which is REAL LIVE INSURANCE,

that is, they would pay if something unexpected, substantial, and expensive happened. And it

would cost me a couple hundred bucks a month. But no, I have to pay full freight for every

lamebrain thing that every knucklehead who has a job with benefits wants tax free, like gym

memberships and aromatherapy and acupuncture and reiki massage and "mental health," ie,

I'm a miserable failure as a human being and I want to talk to another miserable failure that

went to community college for psychology about it, at great expense. Oh, yes, let's not forget all

middle age men that need free blue pills because what a mean spirited thing it would be [if]

middle age men didn't wander the earth with extra free hardons.

And so "insurance" becomes paying in advance for others to get what they don't need or

deserve, to the point where "Insurance" costs 1200 a month and if something catastrophic did

happen, would bankrupt me anyway, because instead of paying $50 for an office visit for an

imaginary ailment, but having a real catastrophe paid for, the powers that be would prefer

paying $5 dollars copay for an office visit to their yogurt enema wellness healer, but have to

chip in 20% for cancer therapy, which would bankrupt anybody that has to worry about the

cost of health insurance in the first place.

ROFL. I too am a big believer in catastrophic health insurance. My home insurance does not cover broken

light bulbs and leaky plumbing. My car insurance does not cover air filters. Why does my health

insurance have to cover routine stuff? I pay for my own health care and this is exactly how my family

handles both dental and medical: We pay regular visits but have catastrophic coverage for major health

breakdowns.

Jeez, I wish I had written that email and could take credit for it. The blog does not reveal the emailer's

identity, but whoever you are you're welcome to guest blog here any time.

Update: About a year ago, my family of four was quoted about $650 a month for the type of full (not

Coyote Blog, Year Two Archives, Volume Two / 15

catastrophic) medical insurance that the state of Mass. is requiring. This is about $8000 a year. This strikes

me as by far the most expensive item that any US government has required its citizens to purchase, and

given the average GDP of most nations, may be the most expensive item any government in history has required

all of its citizens to purchase. Up to this point, many municipalities have shied away from requiring purchase

of $40 smoke detectors. The only thing that is even within an order of magnitude of this is perhaps car

insurance, but even car insurance is not required of every citizen, just the ones with cars (don't laugh, if car

insurance laws followed the same logic as this health insurance bill, not having a car would not be a legal

excuse for not having auto insurance.)

Update 2: I am sure I will get the response, "but the supporters promise that the bill will halve the cost of

private health insurance. Right. Here is a clue: Except for the reform plan in California pushed by Gov.

Arnold, every single state attempt to "reform" workers comp. has resulted in my premiums going up. I am

sure we are all holding our breath for the price drop in passenger rail service and first class mail.

This plan removes the last people from the market who are price sensitive shoppers of individual medical

services (i.e. those who pay expenses out of pocket rather than having them covered by medical

insurance). If you drive down the marginal cost to all consumers to the level of the copay from the much

higher true-cost of the procedure, then you are going to get a lot more use of all medical procedures.

Higher use = higher cost. Higher cost = higher premiums, even when spread over more people.

I am constantly stunned that this concept has to be explained to people. Let's consider a test that costs

$1000 to administer that can detect a very rare type of cancer that only occurs in 1 in 100,000 people. Well,

if they charged you anywhere near the $1000 cost, few people would choose to pay for a test to identify

something so low-risk. But if you could take the test for a $20 copay? Sure doc, let's do it! So the

insurance pool has to fork over $1000 for a procedure that you might only value at $20. Also see this post

for more along the same lines. And here too.

Posted on April 7, 2006 at 04:42 PM

Don't Fix Immigration, Fix the Welfare State

Brian Doherty of Reason observes:

The solution to the legal crisis immigration represents won't come through immigration law

itself, which again and again has proven itself useless at fully stemming the irresistible tides of

human desire for a better life. No matter how much money is spent or how the law is jiggered,

it is not immigration policy that has created unnecessary tears and strains in America's social

order. Rather, the welfare state is at the root of any legitimate claim that immigration (legal or

illegal) is an assault on the American nation. (There are plenty of illegitimate complaints, based

merely on distaste for the often-imaginary hell of running into Spanish-speaking people in day￾to-day life or seeing some flag not of your nation, but such complaints are not worthy of

consideration.)...

The free market, as it usually does, has created a system of mutually satisfactory

interdependence, all of us serving each other and helping each other get what we want. The

welfare state, in all its manifestations from medical care to schooling to pure giveaways, creates

a negative sum game in which resources are forcibly redistributed making some a problem, or

a perceived potential problem, to others, and allowing demagogues to obsess over precious