Philavore

Wondering whether this whole Greek debt crisis will make people think twice about all the economic benefits that flow from hosting the Olympics.

More on finding information on the origin of corporations in the most unlikely places.

In addition to a frustrating overuse of the idiom "in order," Kate Hopkins' "99 Drams of Whiskey" provides an interesting history of the legal organization of the whiskey industry in England as well as a good excuse to read a book and drink bourbon.

Because that's what you do when you're an inveterate gambler, you ask the guys who run the casino to ban you from the casino.

“This is taxpayer money and it’s compromised... You’re playing roulette or you’re gambling with this money and it might work out for some areas, but for a heck of a lot of others it did not.”

The quote appears in today's edition of Bond Buyer and are the words of State Sen. Lisa Boscola. She uttered them as explanation for why she plans to introduce legislation that would ban school districts and localities from using financial swaps and derivatives (fancy words that dress up a transaction that is nothing more than a bet).

Hopefully Sen. Boscola gets the law passed. Folks should never enter into a financial transaction without understanding what exactly is going on. Because when you don't have a clue what you're buying, more often than not you're being taken. And that's precisely happened to PA's school districts when they entered into these types of transactions.

Bond Buyer notes that on one deal the Bethlehem school district ended up costing $10.2 million more than what the same transaction would have cost had the school district just gone with standard fixed-rate loan.

I'm reading Edward Chancellor's "The Devil Take The Hindmost." It's a "History of Financial Speculation." Maybe it's just confirmation bias, but it seems that just about everything I read these days has some interesting tidbit on the origin of corporations.

In the chapter discussing the events that led to the passage of the Bubble Act, it mentions all sorts of patents that were issued to establish commercial enterprises to carry out a specific form of commerce - from patents to raise shipwrecks to patents to produce imitation Russian leather. Some of the patents discussed clearly relate to what amounts to the commercialization of an invention while others definitely amount to business methods.

It is as if 17th century entrepreneurs faced a choice between organizing their business enterprise via patent or incorporation that is very similar to the choice between organizing as an C Corp, LLC or S Corp faced by 21st century entrepreneurs.

I got to thinking about whether a renewed commitment to the enforcement of Antitrust laws would be an appropriate remedy to problems caused by Citizens United. After all, if a corporation is so huge that its participation will warp the democratic process, it suggests that the corporation ought to be an appropriate target for an antitrust investigation.

Similarly, I always thought the use of the term "too big to fail" necessarily implicated antitrust laws. Unlike Amtrak or even AT&T, I never could understand either (1) the market failure that required government intervention; or (2) the public good that would otherwise go unfulfilled if in fact these too-big-to-fail firms failed. It was not that these firms created some product that was necessary to sustain our way of life. With neither predicate satisfied, I always thought that rather than being "too big to fail," the banks were too big to exist.

While occasionally discussed on the fringe, policy makers never gave consideration to imposing as a condition of the bailout a break up of the banks. Rather, the whole debate was framed as some sort of new-fangled ecological disaster.

OMG!!! Lehman and Bear Stearns have run aground!!! Their captains were drunk. Millions of barrels of crude CDOs have been spilled. [Images of dying otters; their fur matted with toxic CDOs.] The horror!!! OMFG!!! Goldman Sachs and its drunken sailors are going to crash too!!!

It was if the bailout addressed a new form of pollution. In my peculiar logic, I thought it made more sense to see the subprime crisis as the financial industry's Bhopal disaster. The bailout just being the cost of scrubbing clean all the CDO-smothered cormorants.

But my plan is not to revisit my whole limited liability thing.

My plan is to address a thought I've been chewing on this evening - antitrust law as a method of managing systemic economic risk.

First, I've been mulling over Keynes' "In the long run we are dead." Problem is, as long as "we" now includes corporations, this statement is no longer true.

Second, I've been mulling over the Great Laws of the Iroquois. Specifically, the duty to "consider the impact of our decisions on the next seven generations."

What if corporations had to consider this duty? What if being a "fiduciary" encompassed this concept?

Wouldn't that would be a neat solution to this whole Citizens United nonsense?

Keith Olbermann devoted his special comment to today's decision by the Supreme Court in Citizens United v. FEC. I agreed with Howard Fineman in that for once I felt that his normal hyperbolic schtick didn't do justice to the issue. And considering Olbermann's comment was based upon his comparison of today's decision to the Dred Scott decision that upheld the institution of slavery, Olbermann could have made a much finer point had he noted the irony of corporations achieving their ascendance by appropriating for themselves the very means created to free the slaves - the 14th Amendment.

Led by Justice Roberts and the so-called originalists, the the Supreme Court wrested control of our democracy from the people who created it and vested it in the tools we have created.

It's a plot straight out of Terminator.

From Metropolis (no not this Metropolis):

The contaminated water that returns to the surface is called "flowback"-and the debate over the gas drilling centers on how to treat it. If it is not properly treated, the used water can harm fresh water ecosystems. Flowback is a cocktail of carcinogenic solvents, hydrochloric acid, lubricants, anti-corrosion agents and microbe killers.

So depressing.

But for the fact that limited liability allows corporations to offload the cost of the externalities to taxpayers, this whole fracking thing would never be profitable.

Pennsylvania has been on the front lines of a recent controversy over fracking, a new technique to extract natural gas. Not to be confused with "fraking," fracking involves pumping a bunch of water mixed with all sorts of untoward stuff into underground rock formations. The idea being that the hydraulic pressure will "frack" the rock causing it to release all sorts of trapped natural gas and thus solving the energy crisis all the while earning millions of dollars for the corporations who came up with this fraking plan.

By now you're probably wondering what the frak this has to do with the limited liability problem.