Archive for the 'Trade' Category

Help Us Celebrate Obama’s Venture Capitalist Co-Chair

Posted by on Sep 05 2012 | Economics, obama, PPC, Trade

We believe in capitalism.

That means there are winners and losers in the marketplace. But competition makes all players more efficient, which is great for customers. Failing businesses need to radically change how they do things to become competitive again, or they go out of business.

Those business leaders who have the courage to make the tough—and often very painful—decisions, to re-organize in order to save a company from bankruptcy are often rewarded financially. But there are other winners when a business is turned around, including those who are still employed, the investors, the customers of that business, and lest we forget, the government. The taxes collected from employees, stockholders, customers through sales tax, and the business through property and income taxes help keep revenue for governmental services flowing.

While it has become trendy to lampoon venture capitalists who have successfully turned around failing businesses, I believe it is worth recognizing these people who have helped so many by risking their wealth to save a business. In fact, I wish to recognize and celebrate one such man.

Through his venture capital company, Vestar Venture Capital, this man was part of a team that closed a Del Monte Foods plant in California, sadly displacing hundreds of employees…but today Del Monte is still alive and thriving.

His venture capital firm laid-off hundreds of workers at Birdseye Foods…but hundreds are still employed because Birdseye did not fail.

His venture capital firm closed three domestic factories with the Solo Cup Company costing hundreds of jobs…But Solo Cup is still in business, supplying real jobs.

Who is this courageous and successful business man? It’s the national co-chair of the Obama re-election campaign, our former Denver Mayor Federico Peña.

I believe this is a story worth telling. But the media in Denver, including the paper of record, the Denver Post, won’t touch it. I am asking for your help in celebrating the venture capital success of Pena by helping raise the funds needed for a full-page announcement in the Denver Post. If we can raise $23,000 we will run a full-page “thank you” to the national co-chair of the Obama reelection campaign and help educate the hundreds of thousands of Post readers to the importance of capitalism.

If you believe this is a success story that should be shared, a story that should be in the Denver Post, please donate today. Help us celebrate capitalism. You can make this happen – donate here. You may see a mock-up of our ad here.

Please share this with anyone you think might be interested.

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The Compact Clause vs. the Multistate Tobacco Cartel

Posted by on Feb 15 2011 | Constitutional Law, federalism, Trade

(David Kopel)

Over at Balkinization, guest blogger Michael Greve offers an excellent post explaining the Competitive Enterprise Institute’s pending cert. petition in a case challenging the tobacco cartel. In short, the 1998 Master Settlement Agreement for the lawsuits initiated by some state Attorneys General against the largest tobacco companies is a violation of the Compacts Clause. Article I, sect. 10, of the Constitution list some things that states may never do, and other things that states may only do with the consent of Congress.  The Compact Clause mandates: “No State shall, without the Consent of Congress…enter into any Agreement or Compact with another State…”

As Greve explains, the Supreme Court has not done much to enforce the Compact Clause for the last quarter century; but Greve points out that in 2009, the Roberts Court enforced another provision in section 10 (the Tonnage Clause) which had last been heard from in 1935. Even the Court’s most lax interpretations of the Compact Clause have not left the clause without meaning, and Greve persuasively argues that if the Compact Clause has any legal meaning, it must prohibit the MSA.

The CEI website has a page with links to various documents in the case, including an amicus brief in support of the cert. petition, signed by the impressively diverse and brilliant team of Kathleen Sullivan, Richard Epstein, and Alan Morrison.

As a practical matter, the MSA is a scheme by which a few tobacco giants, all of which were accused of decades of substantial misdeeds, including fraud, were allowed to create a system to cartelize the tobacco market, and to insulate their market shares against competition from smaller companies which had committed no wrong-doing. The VC’s Todd Zywicki participated in an antitrust professor amicus brief in favor of the cert. petition. That brief points out that the tobacco cartel is a classic violation of the Sherman Antitrust Act. As the Sherman Act has been interpreted, price-fixing is per se illegal, and price-fixing is the only antitrust violation which frequently results in criminal prosecution. While some precedents allow Sherman Act violations if they are part of a regulatory system supervised by a state, the antitrust professors argue that the tobacco cartel doe not fit within the scope of exceptions which have been authorized by Supreme Court precedent.

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