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Benjamin Zycher Archives

Some Shameless Self-Promotion

I am supposed to be on NPR ("All Things Considered") today to give a sermon on gasoline prices, profiteering, and Beltway blather. Check your local listings.

May the spirit of Adam Smith be with me.

I am perpetually behind the news cycle, but I see that the California Supreme Court ruled recently that sexual banter in the workplace at times is not verboten, but acceptable and even necessary. That is the essence of the recent ruling in the hostile environment lawsuit against the producers of the TV sitcom Friends, in which a former writers' assistant claimed that the crude bantering among the writers exchanging ideas for the show---the culture, so to speak---created an environment deeply offensive to her, or something. Throwing the lawsuit out, Justice Marvin Baxter ruled that "Most of the sexually coarse and vulgar language at issue did not involve and was not aimed at plaintiff or other women in the workplace."

Really? Sorry, but I am confused; I am, after all, a lowly economist. Is that now the standard for infringement of free speech in the workplace? If I have in my office a large poster photo of a gorgeous starlet giving a speech on Iraq, in the nude, does that "involve" or is it "aimed at" other women in the office? What if I decide to test the color and sharpness of my new flat-screen monitor by downloading some of the finest porn that the world wide web has to offer? What if my door is closed?

I think I know the likely response of the plaintiff attorneys. And so my conservative/libertarian legal friends---whom I really do respect greatly---have it wrong, I think, in their applause for this decision. Some workplaces now are more equal than others. What would a reasonable person say, and then whom does the offensive speech involve or at whom is it aimed? This looks to me like a decision designed to increase the full-employment prospects of attorneys.

I suspect as well that the judges did not want to bear the criticism that would have proven attendant upon a decision that a jury might well decide that writers on a sexually-themed sitcom may not exchange sexual jokes. And that is the problem: We cannot get rid of bad law until we enforce it in all its absurd glory. This decision may be fine in a narrow sense, given the broader context of hostile environment law, but that is the point: It is that broader context that must be attacked.

Head I Win Tails You Lose

Out here in the Land of the Free Lunch---I refer to California, the Golden State---the Spirit of Brezhnev breathes free. Surely you remember the great philosophic truth that the Great Leonid Ilyich bequeathed mankind for all the ages: What's Mine Is Mine and What's Yours Is Up For Grabs. (I translate loosely from historical editions of Pravda.) Well, in the wake of rising gasoline prices in california, we now hear loud calls for "windfall profit" taxes to be imposed upon oil producers and refiners.

Perhaps old age has affected my memory, but I simply do not recall arguments for windfall loss subsidies for those same producers when market conditions were weak. Moreover, to the extent that high prices for refined products stem from increases in the world market price of crude oil, refiners (as opposed to oil producers) are losers. And let us not ignore the past efforts of the very same interests now calling for such taxation at thwarting investment in new refining capacity. Moreover, the ethanol mandate---by the way, little evidence supports the notion that oxygenation with either ethanol or MTBE improves air quality---has reduced gasoline supplies because too little ethanol production capacity exists to satisfy total regulatory needs now that Congress has refused to exempt MTBE producers from lawsuits over groundwater leakage, even though those producers have little or nothing to do with leaking gasoline storage tanks.

So: Tax 'em when prices are high, let 'em lose money when prices are low. That means automatically that over time the production/refining sector cannot earn competitive returns, because upside potential is limited while downside risk is not. That Governor Arnold Schwarzenegger has signed on to this mendacity even as he sings the praises of Milton Friedman---"We must not rule out the possibility of market manipulation, price gouging or unfair business practices employed by oil companies."---is appalling.

Reductio Ad Absurdum

Out here in the land of Intellectual Rigor---California---various pieces of legislation enacted over time have required that K-12 education cover the "roles and contributions" that the respective interest groups, oops, ethnic and cultural defenders, have demanded, as public education in the Golden State sinks ever deeper into the feel-good/self-esteem/multicultural cesspool of identity politics. These laws also proscribe teaching and textbooks that cast any of the groups in a negative light. The latest effort in this context is a bill introduced by the ineffable state Senator Shiela Kuehl (D-Santa Monica), which would add as a protected class "people who are lesbian, gay, bisexual or transgendered."

And so I have a question for my legal-beagle colleagues: Are whites not entitled to equivalent treatment under the 14th Amendment? If so, does that mean that education about the history of slavery would become illegal, as it would depict whites negatively? Would it be illegal to point out that most modern-day terrorist acts are perpetrated by Muslims? Anything about black crime, illegal immigration by Hispanics, ad infinitum? Can air brushing of photos be far behind?

The Saga of Cipro
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It truly is an honor for me to have this opportunity to guest-blog on PoL this week, at the invitation of Wally Olson, a gentleman and a mensch, whom I have known for many years. It appears that Wally invited me to do this and then promptly left town; plausible deniability remains high on the agenda of any sound legal thinker. I on the other hand am a lowly economist---a senior fellow at the Manhattan Institute---with many theories and mounds of data, always anxious to publish yet another paper showing that water flows downhill. So: Where to begin? The landscape of legal and regulatory abuse, after all, is a target-rich environment.

Well, it seems that pharmaceuticals have dropped off the immediate news cycle radar screen, but do not be fooled: Eternal vigilance, as Pravda used to put it, remains necessary. After all, with the new Medicare drug benefit, future spending is likely to exceed current projections, and in any event bureaucrats and politicians have powerful incentives to constrain spending by limiting formularies, and if the medicine that you need is not covered, well, feel free to write a strongly worded letter to your Congressman. But the problem of legalized theft is worse than that, because public officials with short time horizons---the next election is never more than a few years away---constantly are confronted with opportunities to transfer wealth to their constituencies at the expense of someone else.

And emergency conditions are not salutary in terms of resistance to such temptations. So let us begin with Saga of Cipro. (Actually, let us begin with a full disclosure: The Pharmaceutical Research and Manufacturers Association supports a substantial part of my work in defense of capitalism.) Cipro is an antibiotic effective against airborne anthrax. When the potential terrorist use of anthrax became a serious concern in 2001, the Centers for Disease Control and Prevention asked Bayer Pharmaceutical (the producer of Cipro) to obtain Food and Drug Adminstration approval to label the drug for the treatment of anthrax. Bayer did so at its expense, and then donated 4 million doses to the federal government.

The feds then demanded another 1 million doses at a discounted price. When Bayer resisted, the government threatened to suspend the patent on Cipro, thus forcing Bayer to sell the additional doses at one-quarter of the then-market price. Other major purchasers of Cipro then demanded that same price; and Bayer enjoyed no liability protection against potential lawsuits stemming from any side effects attendant upon use of the drug. Inside the Beltway, it is no mere cliche that no good deed goes unpunished.

This government theft, by the way, was orchestrated by those pro-business, pro-free enterprise, pro-capitalism Republicans, in the person of then-HHS Secretary Tommy Thompson. Would anyone like to venture a guess as to the ensuing effects upon research and development incentives in the context of bioterrorism threats? Government compassion yet again rears its ugly head.



Rafael Mangual
Project Manager,
Legal Policy

Katherine Lazarski
Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.