Business & Markets

Business Hero Bill Gates Went Into Retirement Because of DOJ Lawsuit

From Bill Gates: People would use Windows Mobile if not for antitrust case:

Gates also said he would not have retired as soon had it not been for the U.S. government case, which began in 1998. Gates started the company with Paul Allen in 1975, then stepped aside as CEO in 2000, letting Steve Ballmer take the reins as the antitrust case was at its peak.

Recommended Reading:

Police Use Forfeiture: Fighting Crime or Raising Revenue?

A new Institute for Justice study (PDF), made possible through the support of the John Templeton Foundation, finds the nation’s largest forfeiture program does not help police fight crime. Instead, the study indicates police use forfeiture to boost revenue—in other words, to police for profit. The IJ study, “Fighting Crime or Raising Revenue? Testing Opposing Views of Forfeiture,” combines local crime, drug use and economic data from a variety of federal sources with more than a decade’s worth of data from the Department of Justice’s equitable sharing program. Equitable sharing lets state and local law enforcement cooperate with the Drug Enforcement Administration and other DOJ agencies on forfeiture cases and receive up to 80% of the proceeds.

The study—the most extensive and sophisticated of its kind—calls into question whether distributing billions of dollars in forfeiture proceeds improves police effectiveness. The new evidence undercuts claims by prominent forfeiture supporters, such as former Deputy Attorney General Rod Rosenstein, who called forfeiture an “important tool that can be used to combat crime, particularly drug abuse,” and Attorney General William Barr, who, while acknowledging “problems and potential abuses,” called forfeiture “a valuable tool in law enforcement.”

Specifically, the study finds:

  • More forfeiture proceeds do not translate into more crimes solved, despite claims forfeiture gives law enforcement more resources to fight crime.
  • More forfeiture proceeds also do not mean less drug use, even though forfeiture supposedly rids the streets of drugs by crippling drug dealers and cartels financially.
  • When local economies suffer, forfeiture activity increases, suggesting police make greater use of forfeiture when local budgets are tight. A 1 percentage point increase in local unemployment—a standard proxy for fiscal stress—is associated with a statistically significant 9 percentage point increase in seizures of property for forfeiture.

“These results add to a growing body of evidence suggesting that forfeiture’s value in crime fighting is exaggerated and that police do use forfeiture to raise revenue,” said Dr. Brian Kelly, associate professor of economics at Seattle University and the study’s author. “Given this evidence and the serious civil liberties concerns raised by forfeiture, forfeiture proponents should bear the burden of proof when opposing reforms that would keep police focused on fighting crime, not raising revenue.”

The scale of federal forfeiture is vast. Between 2001 and 2017, the federal government’s two main forfeiture funds took in close to $40 billion, and the funds’ net assets have surpassed $4 billion in every year since 2013. From 2000 to 2016, the DOJ’s equitable sharing program made more than 660,000 distributions totaling over $6.8 billion to state and local law enforcement. Distributions fell following modest reforms introduced by former Attorney General Eric Holder in 2015. However, former Attorney General Sessions reversed the Holder reforms in 2017. Detailed data following this reversal are not yet available.

“This study shows policymakers can undertake serious and much-needed forfeiture reforms without jeopardizing police effectiveness,” said Lee McGrath, IJ’s senior legislative counsel. “Congress should abolish equitable sharing, and in the meantime, states should opt out of the program. And lawmakers should eliminate the financial incentives in both state and federal forfeiture laws that encourage the pursuit of revenue over the pursuit of justice.”

Since the Institute for Justice began its End Forfeiture initiative in 2010, 32 states and the District of Columbia have enacted forfeiture reforms. Seven states and the district have largely opted out of equitable sharing, limiting law enforcement’s ability to receive funding through the program and making it harder for law enforcement to circumvent state civil forfeiture laws. And in 2015, New Mexico abolished civil forfeiture, replacing it with criminal forfeiture and requiring that all forfeiture proceeds be deposited in the state’s general fund. In February, IJ secured a landmark victory in Timbs v. Indiana, where the U.S. Supreme Court unanimously ruled that state civil forfeiture cases are bound by the Eighth Amendment’s ban on “excessive fines.” – Made available through ij.org

 

Free Livestream: Business, Free-Speech, Immigration and the Welfare State in Europe

Ayn Rand Student Conference Europe (AynRandCon) is officially underway in Prague, the Czech Republic! This is ARI’s first ever conference in Europe and the theme is “Individualism in an Age of Tribalism.”

Some particular new talks and panels of note:

  • An Individualist Doing Business in Collectivist Europe – Mr. Christensen, co-founder of Denmark’s Saxo Bank and founder of the private equity firm Seier Capital, has had a long, successful career as an innovator in banking and finance. In this talk, he discusses some of the challenges he’s faced as a staunch individualist (indeed, an Objectivist!) doing business in collectivist Europe.
  • Panel + Q&A: Immigration and Islam
    The issue of Muslim immigration is one of the major sources of political and cultural tension in Europe today. This panel will explore the controversies over immigration and Islam and the future of Europe.
  • Panel + Q&A: Capitalism, Individualism and the Welfare State – This panel will discuss the ways in which tribalism leads to the “mixed economy” welfare state—and how that political-economic system reinforces the anti-individual mindset. The result is a vicious circle of increasingly collectivist policies and an increasingly collectivist electorate that both supports and is victimized by the system.

Even if you are not at AynRandCon, you have the opportunity to join attendees and speakers and watch all or some of the program live on the Ayn Rand Institute’s YouTube channel, beginning this Saturday, February 16 at 8:40 AM CET. (Note that Prague is on Central European Standard Time or six hours ahead of Eastern Standard Time.)

Link: Ayn Rand Institute’s YouTube channel

Objectivist Economist Richard Salsman Tackles The Egalitarian Envy Brigade

The leading Objectivist economist, “Saysean” Richard Salsman has an excellent article in Capitalism Magazine on why “Justice Demands That We Should Celebrate Diversity in Wealth Too“.

Writes Dr. Salsman:

In most realms of life today, diversity and variety are justifiably celebrated and respected. Differences in athletic and artistic talent, for example, entail not only robust, entertaining competitions, but fanatics (“fans”) who respect, applaud, award, and handsomely compensate the winners (“stars” and “champions”) while also depriving (at least relatively) the losers.

Yet the realm of economics — of markets and commerce, business and finance, income and wealth — elicits a near-opposite response, even though it’s not, like sporting matches, a zero-sum game. In the economic realm, we observe differential talents and outcomes unequally compensated (as we should expect), but for many people, diversity and variety in this realm are disdained and envied, with predictable results: a perpetual redistribution of income and wealth by punitive taxation, stiff regulation, and periodic trust-busting. Here winners are more suspected than respected, while losers receive sympathies and subsidies.

What accounts for this rather odd anomaly?

Read the rest of Justice Demands That We Should Celebrate Diversity in Wealth Too.

Brian Philips “The Principles of Property Rights” Online Course Now Free

Brian Philips‘ online course on The Principles of Property Rights is now free online at Udemy.

Here is the course description:

Property rights have long been a part of America’s political heritage. Indeed, the Founding Fathers wrote extensively on the importance of protecting property rights. But property rights are under attack in America today. Part of the reason for the success of these attacks is imprecise or fuzzy thinking. Even many advocates of property rights are unable to clearly define the concept, and thus, they are unable to provide a consistent and principled defense. In this course, we will examine the principles that underlie property rights, as well as the principles underlying attacks on property rights. Only by understanding these principles can we clearly defend property rights and refute the claims of their enemies. Who is the target audience? Business owners harmed by regulations Property owners restricted by land-use regulations Organizations involved in defending property rights.

Link: The Principles of Property Rights

Brian Philips Online Course: The Principles of Property Rights

Brian Philips‘ online course on The Principles of Property Rights is now free online at Udemy.

Here is the course description:

Property rights have long been a part of America’s political heritage. Indeed, the Founding Fathers wrote extensively on the importance of protecting property rights. But property rights are under attack in America today. Part of the reason for the success of these attacks is imprecise or fuzzy thinking. Even many advocates of property rights are unable to clearly define the concept, and thus, they are unable to provide a consistent and principled defense. In this course, we will examine the principles that underlie property rights, as well as the principles underlying attacks on property rights. Only by understanding these principles can we clearly defend property rights and refute the claims of their enemies. Who is the target audience? Business owners harmed by regulations Property owners restricted by land-use regulations Organizations involved in defending property rights.

Link: The Principles of Property Rights

John Allison: The 2008 Financial Crisis Was Caused By Regulatory Policy

From A Conversation With John Allison, the CEO Who Led BB&T Through the Financial Crisis:

The Fool: In your opinion, what caused the crisis?

Allison: I view the crisis differently than a lot of people. I was a long-serving CEO when the crisis struck and I think the whole thing was caused by regulatory policy.

Yes, some big banks made mistakes. But it was a combination of government housing policy, Fannie Mae and Freddie Mac in particular, which had $5 trillion in liabilities and $2 trillion in subprime mortgages when they failed, and the Federal Reserve, which held interest rates below inflation, that contributed to the bubble in the housing market, along with bubbles in other markets.

I don’t believe the whole industry was failing. I think that’s ridiculous. It was a relatively small number of large institutions that were in trouble. Banks like Citigroup. I think they should have been allowed to fail and the world would be a better place today.

The whole idea that everybody would have gone broke if one of the big banks failed was absurd. We had been doing business with investment banks like Bear Stearns andGoldman Sachs, but we controlled our risk with those companies just like we did with any borrower. If they had gone broke, we would have lost money, but not nearly as much as we lost to residential builders in the marketplace.

It was a relatively small number of large banks and a handful of small banks that were in trouble. It was not an industrywide crisis, except to the degree that the regulators created a crisis by choosing to fail Wachovia, save Citigroup, fail Lehman Brothers, save Bear Stearns. The uncertainty caused by that response took what was going to be a normal correction and transformed it into a crisis, making everything worse than it had to be.

 

The Fool: How did regulators’ response to the financial crisis differ from their responses in past crises that you witnessed?

Allison: I went through the financial correction in the early 1980s, which should have been more severe because we were in bad trouble economically after the inflation of the 1970s. I also went through the correction in the early 1990s. In neither case did we have a panic. And the reason we didn’t have a panic was because at least you knew what to expect.

Thousands of banks and thrifts failed in the 1980s and 1990s. The unwillingness to let banks fail in the latest crisis — they were effectively bailing out everybody — prevented the natural correction process from happening.

We had rule of law in the past. In this crisis, we had no rule of law. When Washington Mutual failed, instead of taking the losses out of the FDIC fund, they took it from bondholders. That crashed the capital markets, which then caused Wachovia to fail. That was a regulatory decision.

The entire interview is definitely worth a read.

Link: A Conversation With John Allison, the CEO Who Led BB&T Through the Financial Crisis.

Simpson: “Big Gap” Between Objectivism and Conservatism

From Is Ayn Rand Affecting Trump’s America? An Interview with Steve Simpson | Merion West.

[Alex:] To what degree do you think Ayn Rand’s philosophy is influencing the modern Republican Party?

Steve: I would say very little honestly. It’s really hard to say that she’s influencing the Republican party. She’s definitely influenced the right, generally speaking, in a huge way, but that does not mean necessarily that conservatives are interpreting her ideas correctly.

I would put it this way: the right is just as afraid of Rand’s ideas as the left is; the right disagrees with her important ideas just as much as the left does. But what Atlas Shrugged has done is give people who are in favor of business, in favor of the free market, in favor of capitalism an ideal to aspire to. Atlas Shrugged is the only novel I’ve ever heard of that portrays businessmen as heroes. I think if you’re on the right and you think there is something good about capitalism, Rand gave the most ringing endorsement to that view that anybody could have given. So it makes really good sense that people on the right, who are sympathetic to capitalism, would like her novel, but that’s a very different thing from them saying they agree with her.

I think she’s influenced the right in general, but the caveat is that it does not mean those on the right necessarily agree with her. When you get to things like “Trump is the Ayn Rand presidency,” that’s nonsense. She’s influenced the right, but there’s still a big gap between Objectivism and what many conservatives believe.

Read the rest: Is Ayn Rand Affecting Trump’s America? An Interview with Steve Simpson | Merion West.

Black Lives Matter Group Advocates Racism Because They Hate Capitalism

Another example of why anti-capitalism and racism go hand-in-hand is evidenced in a Newsweek article, Black Lives Matter Wants to Bring Down White Capitalism With ‘Black Christmas’:

Activist group Black Lives Matter of Los Angeles (BLM) is calling for holiday shoppers to spend their money at black-owned businesses in a push for a “black Christmas” that aims to resist white supremacy through capitalism.

Group leaders say it’s time for people to “resist white capitalism” and divest from businesses that contribute to racial inequality. Melina Abdullah, a BLM leader who is a professor at California State University, Los Angeles (CSU-LA), is encouraging shoppers to use their money to support economic empowerment for minorities. “We say ‘white capitalism’ because it’s important that we understand that the economic system and the racial structures are connected,” said Abdullah during her weekly radio show, Beautiful Struggle.

[…]

“Anthony Ratcliff, another BLM leader and CSU-LA professor, was also on the radio show to explain the purpose of “black Christmas.” “Black Lives Matter and other organizations build a strong critique and understanding of racism and white supremacy and sexism and homophobia, transphobia, but we have to have as much hatred or vitriol against capitalism,” said Ratcliff. “Until we start to see capitalism [is] just as nefarious as white supremacy, we will always be struggling.” The advocacy group organized “black Christmas” last year too and called on consumers to shop at black-owned businesses….”

[…]

Previous black Christmas demonstrations have drawn attention, such as when protesters temporarily blocked roads to airports in San Francisco and Minneapolis in 2015. In Los Angeles that year, nine were arrested for blocking traffic on a major highway.

This, of course, is racism.

To refuse to buy a good from someone because their skin is white is racist. 

Racism is the species of collectivism that advocates judging individuals by their ancestry and skin-color as opposed to the content of their character. Contrast this to the capitalist policy of purchasing the best product at the best price, i.e., the one you find most profitable.

The solution to the plight of alienated black Americans is to be productive and color-blind. The only social (political-economic) system that leaves them free to do both is laissez-faire capitalism

Sadly, Black Lives Matter (BLM) leaders advocate the opposite policies of racism and political activism, with their advocacy of “Black Christmas” and physically blocking Airport roads.

Inequality Debate Ignores Fundamental Distinction Between Politics and Production

From: Richest 1% own over half the world’s wealth – Business Insider

The world’s richest 1% of families and individuals hold over half of global wealth, according to a new report from Credit Suisse. The report suggests inequality is still worsening some eight years after the worst global recession in decades.[…]

“The bottom half of adults collectively own less than 1% of total wealth, the richest decile (top 10% of adults) owns 88% of global assets, and the top percentile alone accounts for half of total household wealth,” the Credit Suisse report said.[…]

In most countries, including the US, a large wealth gap translates into those at the top accruing political power, which in turn can lead to policies that reinforce benefits for the wealthy.

The real question is: how many used political power to acquire wealth as opposed to honestly producing it economically? If someone created the wealth — like a Bill Gates, Warren Buffet and Jeff Bezos — then they rightfully own the assets they created.

Billionaire politicians and dictators (Castro, Putin, etc.) who earned their money through political means — theft and cronyism — do not.

Sadly Business Insider, like much of the anti-capitalist press, does not make that distinction.