Coyote Blog

I wondered if folks would find my analogy from Bear Stearns to Enron I posted the other day stretched. 

Because Enron's demise came in exactly this sort of liquidity crisis,
and the situations are nearly entirely parallel, all the way up to and
including the CEO telling the world all is well just days before the
failure.  But no one understood Enron's business, so its failure seemed
"out of the blue" and therefore was attributed by many to fraud,
lacking any other ready explanation.   In the case of Bear Stearns, the
public was educated in advance as to the problems in their portfolio
(with mortgage loans) such that the liquidity crisis was less of a
surprise and, having ready source of blame (subprime loans) no one has
felt the need to apply the fraud tag.

Apparently, the Economist sees the same connection (via a reader):

For many people, the mere fact of Enron's collapse is evidence that
Mr Skilling and his old mentor and boss, Ken Lay, who died between his
conviction and sentencing, presided over a fraudulent house of cards.
Yet Mr Skilling has always argued that Enron's collapse largely
resulted from a loss of trust in the firm by its financial-market
counterparties, who engaged in the equivalent of a bank run. Certainly,
the amounts of money involved in the specific frauds identified at
Enron were small compared to the amount of shareholder value that was
ultimately destroyed when it plunged into bankruptcy.

Yet recent events in the financial markets add some weight to Mr
Skilling's story"”though nobody is (yet) alleging the sort of fraudulent
behaviour on Wall Street that apparently took place at Enron. The
hastily arranged purchase of Bear Stearns by JP Morgan Chase is the
result of exactly such a bank run on the bank, as Bear's counterparties
lost faith in it. This has seen the destruction of most of its roughly
$20-billion market capitalisation since January 2007. By comparison,
$65 billion was wiped out at Enron, and $190 billion at Citigroup since
May 2007, as the credit crunch turned into a crisis in capitalism.

Mr Skilling's defence team unearthed another apparent inconsistency
in Mr Fastow's testimony that resonates with today's events. As Enron
entered its death spiral, Mr Lay held a meeting to reassure employees
that the firm was still in good shape, and that its "liquidity was
strong". The composite suggested that Mr Fastow "felt [Mr Lay's
comment] was an overstatement" stemming from Mr Lay's need to "increase
public confidence" in the firm.

The original FBI notes say that Mr Fastow thought the comment
"fair". The jury found Mr Lay guilty of fraud at least partly because
it believed the government's allegations that Mr Lay knew such bullish
statements were false when he made them.

As recently as March 12th, Alan Schwartz, the chief executive of
Bear Stearns, issued a statement responding to rumours that it was in
trouble, saying that "we don't see any pressure on our liquidity, let
alone a liquidity crisis." Two days later, only an emergency credit
line arranged by the Federal Reserve was keeping the investment bank
alive. (Meanwhile, as its share price tumbled on rumours of trouble on
March 17th, Lehman Brothers issued a statement confirming that its
"liquidity is very strong.")

Although it can do nothing for Mr Lay, the fate of Bear Stearns
illustrates how fast quickly a firm's prospects can go from promising
to non-existent when counterparties lose confidence in it. The rapid
loss of market value so soon after a bullish comment from a chief
executive may, judging by one reading of Enron's experience, get
prosecutorial juices going, should the financial crisis get so bad that
the public demands locking up some prominent Wall Streeters.

The article also includes more details of exculpatory evidence that was withheld from the Skilling team and will very likely lead to a new trial.  The Enron prosecution team has not had a very good record in appeals court scrutiny of their actions at trial:

For what it is worth, prosecutors have had a tougher time in the
appeals court with Enron-related cases than in the initial jury trials.
Convictions have been overturned in a case relating to Nigerian barges
that Enron sold to Merrill Lynch. The conviction of the chief financial
officer of Enron Broadband has also been vacated, after two trials. So,
too, was the decision to convict Enron's auditor, Arthur Andersen
(albeit too late to save the venerable firm from liquidation).

With Eliot Spitzer going down for what shouldn't be a crime (paying for sex) rather than what should be (abuse of power), now is as good a time as ever to focus on prosecutorial abuse.  As in the case of Spitzer, the media seems to have little desire to investigate overly-aggressive prosecution tactics.  In fact, in most cities, the local media cheer-leads abusive law enforcement practices.  It makes heroes of these abusive officials, whether their abuses be against the wealthy (in the case of Spitzer) or the powerless (as is the case of our own Joe Arpaio here in Phoenix).

Tom Kirkendall continues to be on the case of the Enron prosecution team for their abuses, which have been ignored in the media during the general victory dance of putting Jeff Skilling in jail and running Arthur Anderson out of business.  But, guilty or innocent, Skilling increasingly appears to have solid grounds for a new trial.  In particular, the Enron prosecution team seems to have bent over backwards to deny the Skilling team exculpatory evidence.  One such tactic was to file charges against every possible Skilling witness, putting pressure on them not to testify for Skilling.  Another tactic was more traditional - simply refuse to turn over critical documents and destroy those that were the most problematic:

The controversy regarding what Fastow told
prosecutors and FBI agents who were investigating Enron became a big
issue in the Lay-Skilling prosecution when the prosecution took the
unusual step of providing the Lay-Skilling defense team a "composite
summary" of the Form 302 ("302's") interview reports that federal
agents prepared in connection with their interviews of Fastow. Those
composites claimed that the Fastow interviews provided no exculpatory
information for the Lay-Skilling defense, even though Fastow's later
testimony at trial indicated all sorts of inconsistencies. 

However,
I have spoken with several former federal prosecutors about this issue
and all believe that the government has a big problem in the Skilling
case on the way in which the information from the Fastow interviews was
provided to the Lay-Skilling defense team. None of these former
prosecutors ever prepared a composite 302 in one of their cases or ever
used such a composite in one of their cases. The process of taking all
the Fastow interview notes or draft 302's and creating a composite is
offensive in that it allowed the prosecution to mask inconsistencies
and changing stories that Fastow told investigators as he negotiated a
better plea deal from the prosecutors. 

Similarly,
the Enron Task Force's apparent destruction of all drafts of the
individual 302s of the Fastow interviews in connection with preparing
the final composite is equally troubling. Traditionally, federal agents
maintain their rough notes and destroy draft 302s. However, in regard
to the Fastow interviews, my sense is that the draft 302s were not
drafts in the traditional sense. They were probably finished 302's that
were deemed "drafts" when the Enron Task Force decided to prepare a
composite summary of the 302's.

Note that showing how a person's story has changed over time is a key prosecution tactic, but one that is being illegally denied to Skilling.  Apparently Skilling's team has now seen the actual interview notes, and believe they have found "a sledgehammer that destroys Fastow's testimony" against Skilling.  Stay tuned, a new trial may be on the horizon.

Tom Kirkendall has stayed on the case of Enron Task Force prosecutorial abuse even while most of the world has turned away, apparently believing that "mission accomplished"  (ie putting Skilling in jail) justifies about any set of shady tactics.

But the evidence continues to grow that Skilling did not get a fair trial.  We know that the task force bent over backwards to pressure exculpatory witnesses from testifying for Skilling, but now we find that prosecutors may have hidden a lot of exculpatory evidence from the defense.

Meanwhile, continuing to fly under the mainstream media's radar
screen is the growing scandal relating to the Department of Justice's
failure to turnover potentially exculpatory evidence to the defense
teams in two major Enron-related criminal prosecutions (see previous
posts here and here). The DOJ has a long legacy of misconduct in the Enron-related criminal cases that is mirrored by the mainstream media's myopia in ignoring it (see here, here, here, here and here).

This motion
filed recently in the Enron-related Nigerian Barge criminal case
describes the DOJ's non-disclosure of hundreds of pages of notes of FBI
and DOJ interviews of Andrew Fastow, the former Enron CFO who was a key prosecution witness in the Lay-Skilling trial and a key figure in the Nigerian Barge trial.

Enron Task Force prosecutors withheld the notes of the Fastow
interviews from the defense teams prior to the trials in the
Lay-Skilling and Nigerian Barge cases. If the Fastow notes turn out to
reflect that prosecutors withheld exculpatory evidence or induced
Fastow to change his story over time, then that would be strong grounds
for reversal of Skilling's conviction and dismissal of the remaining
charges against the Merrill Lynch bankers in the Nigerian Barge case.

The post goes on to describe pretty substantial violations of FBI rules in handling interviews with Fastow, including destruction of some of the Form 302's summarizing early interviews.  The defense hypothesis is that Fastow changed his story over time, particularly vis a vis Skilling's involvement, under pressure from the task force and the 302's were destroyed and modified to hide this fact from the defense, and ultimately the jury.

From the beginning, national security letters had to end badly.  One only has to understand incentives to know that things were going to go off the rails.  Specifically, national security letters are an easy way to for investigators to short-circuit a lot of procedural steps, including review and approval of warrants by judges, steps that have been put in place for a real Constitutional purpose.  Anyone who is at all familiar with the operation of any government bureaucracy had to know that their use would steadily grow well outside the narrow bounds of urgent national security issues.  Anytime government employees can grow their power without supervision or accountability, they will tend to do so.  What absolutely guaranteed that this would happen, and sooner rather than later, was the legal non-disclosure requirements around these letters that prevents anyone from discussing, investigation, or discovering their abuse and misuse.

The Washington Post carries a great anonymous editorial from one person served with such a letter:

Three years ago, I received a national security letter (NSL) in my
capacity as the president of a small Internet access and consulting
business. The letter ordered me to provide sensitive information about
one of my clients. There was no indication that a judge had reviewed or
approved the letter, and it turned out that none had. The letter came
with a gag provision that prohibited me from telling anyone, including
my client, that the FBI was seeking this information. Based on the
context of the demand -- a context that the FBI still won't let me
discuss publicly -- I suspected that the FBI was abusing its power and
that the letter sought information to which the FBI was not entitled....

Without the gag orders issued on recipients of the letters, it is
doubtful that the FBI would have been able to abuse the NSL power the
way that it did. Some recipients would have spoken out about perceived
abuses, and the FBI's actions would have been subject to some degree of
public scrutiny. To be sure, not all recipients would have spoken out;
the inspector general's report suggests that large telecom companies
have been all too willing to share sensitive data with the agency -- in
at least one case, a telecom company gave the FBI even more information
than it asked for. But some recipients would have called attention to
abuses, and some abuse would have been deterred.

I found it
particularly difficult to be silent about my concerns while Congress
was debating the reauthorization of the Patriot Act in 2005 and early
2006. If I hadn't been under a gag order, I would have contacted
members of Congress to discuss my experiences and to advocate changes
in the law.

Tim Lynch makes a point about the national security letters I found intriguing and that has not been discussed very often, that the letters represent effect conscription of ordinary citizens into an intelligence or even big brother role.  The author of the WaPo editorial makes the same point:

I resent being conscripted as a secret informer for the government and
being made to mislead those who are close to me, especially because I
have doubts about the legitimacy of the underlying investigation.

Via Hit and Run:

A blistering Justice Department report accuses the FBI of
underreporting its use of the Patriot Act to force businesses to turn
over customer information in terrorism cases....The report, to be
released Friday, also says the FBI failed to send follow-up subpoenas
to telecommunications firms that were told to expect them.....

Overall,
the FBI underreported the number of national security letters it issued
by about 20 percent between 2003 and 2005..... In 2005 alone, the FBI
delivered a total of 9,254 letters relating to 3,501 U.S. citizens and
legal residents.

The Patriot Act....allows the FBI to issue national
security letters without a judge's approval in terrorism and espionage
cases.

Here is my bet:  Even more interesting will be a review of these letters, if that is ever allowed, to see how many really had any burning relation to national security.  My guess is that many of these are being used in drug cases and financial cases that only the most creative FBI agent could twist into a national security situation.

I have liquor licenses in about six different states, and like sales taxes, the process varies a lot by state.  But one universal impression I have is that the whole liquor licensing process has long ago ceased to serve its original purpose and has instead become either become captive to rent-seekers or has become a bureaucratic jobs program or both.  Al Capone died more than half a century ago.  And while one might argue there is some government interest in making sure minors don't buy the product and similar rules are followed, the liquor licensing process is orders of magnitude more complex and onerous than, say, getting a license to sell cigarettes or to prepare foods on site, both of which have similar features.

The liquor licensing process in most states was crafted in the 1930s, with the end of prohibition.  At that time, the primary concern was to keep out organized crime interests who had run the liquor business during prohibition.  So the process includes FBI background checks, as well as minute disclosure of every single person who has ever loaned you money, so they can be checked out to make sure you are in no way beholden to anyone who is a bad guy in the FBI computers.  The licenses take months to obtain (including a fingerprinting process) and cost thousands of dollars a year, presumably to offset the bureaucracy required to review all the applications.  Here in Arizona, minuscule errors, such as abbreviating "Boulevard" in an address to "Blvd" can cause the application to be rejected and have to be resubmitted.  Believe me, I know.

Worse than the ridiculous jobs-program-and-mindless-bureaucracy-fighting-a-threat-that-no-longer-exists problem is the way liquor licenses are now used in many locales for rent-seeking.  The worst offenders are states that purposefully artificially limit the number of liquor licenses.  This is quite obviously an incumbent protection program, protecting current liquor businesses from new competition.  California is one such state.  Even after I had purchased an existing license for a ridiculous amount of money ($5000 I think), I still had to make my case to the local county planning board who had final approval as to whether they would allow me a license into the county.  I asked them why this was necessary, and they were very up front about it (the following is paraphrased but accurate):

If we issue too many licenses, then it would be hard for you to make money.  We are really just helping you.

Sorry, but I don't need help.  I am willing to take the risk.  And does anyone really think that Shasta County California is looking after me, an out-of-state business just entering the area?  Of course not.  What they are really saying is "let us decide if all our buddies here in the county who we play golf with and who donate to our campaigns are OK with you competing with them."

In fact, this is exactly what happens in Lake Havasu City, AZ.  Though Arizona is not a state that limits liquor licenses, Lake Havasu required some kind of local board meeting to approve our license in that city.  The stated reason was that they wanted to make sure the new liquor business would not bring down the image of the city.  Which is hilarious, for anyone who has been to Lake Havasu City, particularly in spring break.  In fact, I am pretty sure it was an excuse for all the local interests to decide if they could tolerate another competitor or not.

All this comes to mind after I read this article by Radley Balko.  It is a good example of what can happen to you if your business depends on a government license and the local rent-seekers decide that your business needs to go.  A very brief excerpt:

I'll get into the
harassment, entrapment, and defamation Mr. Ruttenberg has endured in a
bit. For the moment, I'd like to focus on possible reasons for the
harassment. Why has this been going on for several years? I think there
are a few minor motivating factors. For one, I think there is,
unfortunately, some antisemitism at play. There's also a strange
rivalry Mr. Ruttenberg had with a Manassas Park police officer over a
girl. And I think part of this may be driven by city officials who for
whatever reason simply began to harbor a grudge against Ruttenberg.
Remember Milton Friedman's old axiom: Hell hath no fury like a bureaucrat scorned.

But I think something else is going on, here. And Black Velvet Bruce
Li has hit it. I believe there is some very strong circumstantial
evidence suggesting that Mr. Ruttenberg's bar was targeted by the city
of Manassas Park because the city had its eye on the property as a
possible site for an off-track betting facility for the Colonial Downs
horse racing track in New Kent County, Virgina.

Update:  I guess this is the day to blog about outdated 1930's liquor legislation.

When the Legislature wrote the first alcohol laws after
Prohibition was repealed in 1933, California defined what a beer is and
what wine is. The definition was simple"”anything added to beer or wine
renders it something else. Sometime thereafter beer and wine producers
started adding things such as preservatives, flavor enhancers and other
things. So narrowly reading the law there is NO such product as either
beer or wine sold in California today. Now common sense and alcohol
regulators know that is not true and so for years have ignored this
narrow interpretation.

Last week [on December 13] a bare
majority of the Board of Equalization voted for the narrow
interpretation of the law, and have begun the process to tax all
alcohols with any additives as distilled spirits. This will increase
the taxes charged on beers, wines, flavored malt beverages, and
flavored beers to the level on hard liquor.

The dated California
law defines beer as having no additives whatsoever. No beer that I know
of"” except perhaps some home brews"”meets this definition.

This has been an incredible week in the ongoing culture clash between the western democracies and radical Islam.  In a series of events right out of the Onion or Monty Python, radical Muslims around the world protested the Pope calling them violent with ... waves of violence.  Once his remarks were proven right in such an obvious and public way the Pope reacted by ... apologizing for his remarks.**   

I am tired of apologizing to radical Islam (for some silly, bland cartoons, for god sakes!)  I am tired of bending over backwards into pretzels to give them the benefit of the doubt.  I am extremely tired of being told these folks are just aggrieved and in reality they share my values, because it is very very clear that they don't share my values.  I am tired of being told most Muslims are peaceful --  when these peaceful folks give their sanction and support to the violent ones and accept the most radical as their leaders. 

Radical Islam is, with the downfall of soviet communism and the painfully gradual opening up of China, the most illiberal force in the modern world. By a long shot.  It treats individual life with contempt, has no concept of rights, and in particular treats women far worse than apartheid South Africa ever treated blacks.  The theocracy we fear from certain Republican 700 Club folks is like 3.2 beer compared to full 200 proof Islamic theocratic fascism. 

I don't know why the left in this country has been hesitant to call out illiberal practices in the Middle East as vociferously as they have in other circumstances.  A part of this hesitation is probably opposition to the Iraq war, and fear that denouncing radical Islam for its faults might somehow give the administration a stronger mandate for more military adventures.  A less charitable explanation is that the hesitation is an extension of political correctness and cultural relativism run wild).

Well, I opposed the Iraq war:  The Augean stables are just too dirty to clean up by sending the military from dictator to dictator. I will go further and say I actually think the terrorist threat is exaggerated (and yes I do remember 9/11) in order to keep giving the FBI more powers and help politicians get elected.  Get tough on terrorism is sort of the new get tough on crime election speak.

But I don't think the threat to liberal values posed by Islamic fundamentalism is exaggerated.  And the first step in fighting it is to not give it, as Ayn Rand would say, the sanction of the victim.  People sometimes email me and say "who are we to talk -- America is not clean."  I will agree we have our warts - and much of this blog is taken up with pointing some of them out.  But what I always tell people, and still believe, is the following:

The US does harm when we fail to live up to our values.  Radical Islam does harm when they successfully pursue what they value.

**Postscript:   I don't pretend to understand all the 13th century quotations in the Pope's speech.  I don't think it matters.  If he had simply said "radical Islam preaches too much violence and it has to stop" he would have gotten the same reaction.  By the way, every person in the world seems to say bad things about the US, many of these comments are untrue or apply only to a minority of our leaders and not to myself. I can't remember anyone ever apologizing to me.   This story  that Muslims will do more violence unless the Pope apologizes some more reminds me of Sir Robin in the Monty Python and the Holy Grail.  "Perhaps if we run away more..."

And here is my message to the right -- I acknowledge that radical Islamic leaders treat apologies, backing-down, etc. as weakness to be exploited rather than preludes to reasonable compromise.   For this reason, I thought the invasion of Afghanistan was a necessity.  However, this general fact does NOT automatically justify the Iraq war.  If it did, it would also justify invading any Islamic country we want.  I still don't understand the strategic sense of Iraq and now we are stuck there, because I agree that once in, backing off will only embolden the radicals in the area to further hi-jinx.

I sense I am in the minority on this (what's new) but I just don't understand the outrage directed at the decision to let Muhammad Khatemi into the US for some speaking engagements.  I guess I am enjoying the spectacle, though, of conservatives attacking McCain-Feingold for limiting free speech and then attacking the state department for letting a former head of state (albeit a fairly crazy one) into the country to, uh, speak.

The letter says that allowing
Mr. Khatemi to visit America "undermines U.S. national security
interests with respect to Iran and the broader Middle East." It also
says permitting Mr. Khatemi's "unrestricted travel through the United
States runs contrary to U.S. priorities regarding homeland security."

Taking the first part of this objection, I suppose they are arguing that granting this person a visa is somehow a reward, and we don't want to reward Iran.  Now, I will confess that Iran sucks, but I don't get how this rewards them or sets back our cause.  Yes, if he was received in the White House or by a prominent government official, I can understand it, and I would oppose doing so.  Besides, when our former head of state Jimmy Carter goes to other countries, the trips always seem to have the opposite effect that people fear here, as he tends to hurt rather than somehow advance his home country's interests every time.

As to the second part, I could understand it if someone had a legitimate concern that this was a terrorist leader and he would be spending his time visiting and organizing terrorist cells, but I have not seen anyone make that claim.  Besides, if I was in the FBI, I would love it if he was here to do that, and would follow him all over the place.  The CIA and FBI often leave known agents in place, because it is much easier to stay on top of the person you know about than the person you don't.  A high profile visit by Khatemi should be the least of our security concerns.

This just strikes me as one of those silly political loyalty tests that Democrats seem to like to conduct on domestic policy and Republicans conduct on foreign policy.  If you let this guy in, you are branded as a supporter of terrorism and fascism and whatever else. 

As I said just two days ago:

I am constantly irritated by efforts to ban a certain speaker from
speaking or to drown out their message with taunts and chanting.  If
you think someone is advocating something so terrible - let him talk.
If you are right in your judgment, their speech will likely rally
people to your side in opposition.  As I like to tell students who want
to ban speakers from campus -- Hitler told everyone exactly what he was
going to do if people had bothered to pay attention.

By the way, in explanation of the title of this post, I was reacting to something quoted from Rick Santorum.  Now, I often hesitate to react to comments by Santorum, because, like Howard Dean and a few others, he is sort of a human walking straw man.  But here goes:

On it, Mr. Santorum, who
has cut his deficit against his Senate challenger in Pennsylvania to
single digits, wrote that he should be granted a visa only if Iran
allows their people to hear "free American voices."

Mr. Santorum wrote: "We should insist, at a minimum, that the
Iranian people can hear free American voices. Iran is frightened of
freedom. They are jamming our radio and television broadcasts and
tearing down television satellite dishes in all the major cities of the
country. It seems only fair that we be able to speak to the Iranians
suffering under a regime of which Muhammad Khatemi is an integral part."

So now are we going to allow people free speech only if their country does so in a bilateral manner?  All you Americans of North Korean, Chinese, Iranian, Saudi Arabian, Venezuelan, etc. decent, Beware!   This logic betrays a theory of government that rights don't extend from the fact of our existence, but are concessions granted by the government.  By this logic, people have free speech only as long as the government allows it, and the government has the right to trade away an individual's free speech as a part of a negotiation.    

A while back, I lamented that all three branches of government seemed to be conspiring to weaken Constitutional limits and separation of powers.

The good news is that Congress has finally gotten worked up about protecting separation of powers.  The bad news is that the issue at hand is the justice department's investigation of Congressional bribery.  Unbelievable.  These guys are totally lost.  More on the Jefferson bribery charges.  Glenn Reynolds comments and has a roundup.

Ed Morrissey provides a bit of Constitutional analysis, as well as this excellent point:

This can't be the same Congress that issues subpoenas for all sorts
of probes into the executive branch and the agencies it runs. Does
Congress really want to establish a precedent that neither branch has
to answer subpoenas if issued by the other, even if approved by a judge
-- which this particular subpoena was?

The FBI had a valid subpoena for the information in Jefferson's
office. He refused to provide it. The FBI had little choice but to go
in and take it, and from the description given in the Washington Post,
they took extraordinary care not to confiscate legitimate data relating
to his legislative responsibilities.

As I mentioned in an earlier post, we recently won the concession for Elk Creek Marina on Blue Mesa Lake, Colorado.  For the last week, I have been scrambling to take the steps necessary to take over this business without disrupting service to customers. There are a lot of things to do from a customer service standpoint to get the business up and running, but there is a staggering list of permissions and licenses we need from the state of Colorado and other government bodies to be able to conduct this business, particularly since this is our first entry into Colorado.  Here is what we know we need so far, though I caution that this list continues to grow at the rate of 2-3 more items a day as we learn more:

• Our corporation must register with the Colorado Secretary of State as a "foreign" corporation, foreign in this case meaning that we are registered in another state.
• To register as a foreign corporation, we need to hire a person to be a "registered agent" to be a contact with the state.  The only real purpose of this person I have ever found is to provide an avenue for mail to get lost
• We have to register to pay Colorado unemployment insurance tax
• We have to register to withhold Colorado income taxes from our employees
• We have to register to pay state corporate income taxes and franchise taxes
• We have to register to collect sales taxes
• I think we have to get a special license for collecting electricity taxes, since we sell power to boats at some of the docks
• We need to go through an extensive application process to transfer three current liquor licenses into our name.  I wrote about liquor license hassles here.
• The person on the phone today told me a corporation in Colorado cannot own more than two liquor licenses.  If this is true, we will have to form a second company in Colorado, repeating all the tasks above plus the initial work just to form the company
• I need to fly to Colorado to get fingerprinted for my FBI background check that is needed for the license.  This despite the fact that I have been fingerprinted and background-checked for liquor licenses in several other states.
• Since the company will hire out fishing guides from the marina, the company has to have a Colorado outfitter license, which includes a 13 page application and very detailed regulations and required contract terms I must use to provide the life-and-death service of helping people find fish.
• The outfitter license requires that I post a bond, which in turn requires I submit detailed financial and background information to get the bond approved
• Our managers need to attend food handlers training in Colorado.  Of course, they have attended the exact same course in California, but Colorado wants them to sit through it again within their state's borders
• We need to fill out a pretty elaborate application to sell Colorado fishing licenses, and may need to post another bond to do so. (Update: Confirmed, we need a $4000 bond).
• We will likely need an occupancy license from the county
• We will need a health department inspection and license for the two retail stores, since they sell packaged foods, and a more detailed inspection for the restaurant
• We will need a fire inspection of the restaurant
• We will need Coast Guard inspection and certificate for the docks
• We will need to change the registration of all 45 boats that are kept at the marina for boat rentals  (imagine standing at the DMV to register 45 cars).
• We will need Coast Guard inspection of all the boats

75 days until we open.  Eeek.

Self-described "progressives" on the left have gone nuts over the past several years over creeping legislative and regulatory inroads made by religious conservatives.  Fascism! They are quick to reply.  The government can't tell us what to do with our own bodies, or in the privacy of our own homes!  Abortion, homosexuality?  Hey, that's our choice, its our bodies.  NSA eavesdropping, warrant-less searches?  Hey, those are our private phonecalls made from our private phones.  Searches of private cars without probable cause to enforce seat belt use?  Hey, what a great idea!

Boston Globe columnist Scot LeHigh editorializes against Massachusetts Democrats attempt to micro-regulate personal behavior:

THIS WEEK, the Massachusetts House of Representatives will face a telling test:
Can it resist a progressive Legislature's ever-present impulse toward pesky
paternalism?

The issue is seat belts, and whether the police will be allowed to stop
motorists upon suspicion that someone in their vehicle is not wearing a seat
belt or only ticket them for that grievous offense if they have first been
pulled over for something else.

This is exactly why I am suspicious of progressives and resist making common cause with them, even on issues where we tend to agree.  For while they talk the libertarian talk pretty well when they want to (abortion with its "I should control decisions over my own body" defense being the most obvious example), progressives also have a very strong streak of "we are smarter than you are and sometimes will tell you what to do because it is for your own good".   As a result, for example, progressives support abortion because a woman should make decisions for her body without government intrusion, but oppose the legality of breast implants and vioxx because a woman should, uh, not be able to make decisions for her body without government intrusion (more on this here).

And what decision could be more about my own body than what level of protection I want to afford myself in a vehicle?  If I choose, for whatever reason, not to wear a motorcycle helmet or a seatbelt, who cares?  It may be a really, really stupid choice on my part, but its my decision for my own body, right?  (By the way, I know that some people will make the 'taxpayers pay for your medical care argument', which I dealt with earlier in my post about government health care funding as a Trojan horse for fascism).

But even beyond the issue of individual decision-making, what about the 4th amendment issues?  It is amazing but true that progressives and the Massachusetts legislature, who would never in a million years give the police, the FBI, or anyone under George Bush's chain of command the right to stop a motorist without probable cause to check for evidence of terrorist intent, are actually endorsing that the police have this power to stop motorists without probable cause for freaking seat belt use.  Is this really the alternative we are being offered today - you can choose fascism to stanch the threat of terrorism or you can choose fascism to increase seat belt use? 

I predict that the left may come to regret setting this precedent, as they have come to regret other expansions of government power that their political enemies have used as stepping stones for their own agenda.  A good example is Title IX, which is beloved by the left for using the fact of federal funding to browbeat even private universities into changing their admissions policies, but has been used as a precedent by the right to browbeat private universities into accepting military recruiters.  Government micro-managing of individual decision-making is only fun as long as you and your gang are the ones doing the micro-managing.

I would love to see someone in Washington making a consistent case for freedom of decision-making for individuals when the decision affects only themselves or others with whom they are interacting in a consensual manner.  But I am not holding my breath.

If you didn't see it on Instapundit, LSU professor Jeffrey Sadow has a great post on the huge corrupt porkfest that is being proposed in Louisiana:

The $250 billion [in proposed federal aid] is not far behind the $350 billion
estimated spent on the military aspects and their aftermath of the war
of terror since Sep. 11, 2001 "“ which means in reconstruction terms
(leaving out the actual war-making expenses), Louisiana actually is
asking for more than countries with 10 times its population which face
far more damage.

The $40 billion [in proposed Corps of Engineering spending for Louisiana] is ten times the annual
Corps budget, and 100 times the annual amount typically received by
Louisiana which gets more such funding than any other state.

Also, it is nearly three times the size of the entire request for coastal restoration efforts in the state.

He concludes:

So, let's get this straight. Louisiana, from some of her federal officials through some state officials all they way down to city and other local governments,
countenanced negligence from benign to irresponsible in ensuring proper
flood protection and in dealing with hurricanes. And now these same
people have formulated a plan wanting the country to pay an incredible
sum of money to the state controlled by people from the state to deal
with the aftereffects and, apparently, Louisiana's past inability to
utilize our resources efficiently in other areas?

The rest of the country is going to look at this and think we're still stuck on stupid.

Glenn Reynolds also has a long post with other good links on the topic here.  I particularly liked this bit he quotes from John Fund:

Put bluntly, the local political cultures don't engender confidence
that aid won't be diverted from the people who truly need and deserve
it. While the feds can try to ride herd on the money, here's hoping
folks in the region take the opportunity to finally demand their own
political housecleaning. Change is past due. Last year, Lou Riegel, the
agent in charge of the FBI's New Orleans office, described Louisiana's
public corruption as "epidemic, endemic, and entrenched. No branch of
government is exempt."

Louisiana ranks third in the nation in the number of elected
officials per capita convicted of crimes (Mississippi takes top prize).
In just the past generation, the Pelican State has had a governor, an
attorney general, three successive insurance commissioners, a
congressman, a federal judge, a state Senate president and a swarm of
local officials convicted. Last year, three top officials at
Louisiana's Office of Emergency Preparedness were indicted on charges
they obstructed a probe into how federal money bought out flood-prone
homes. Last March the Federal Emergency Management Agency ordered
Louisiana to repay $30 million in flood-control grants it had awarded
to 23 parishes

Update: Lots more at Porkopolis. 

Louisiana population is 4,468,976, not all of which was
affected by the hurricane. A reasonable assumption is to say that half the
population was in the path of the hurricane. That would be about 2,234,488,
but to keep calculations simple we'll round up the affected population to 2,
500,000. That 2.5 million of affected Louisiana residents will make for an easy
calculation

$250 billion divided by 2.5 million affected residents
results in a disaster relief request of.....(drum rooooooooooll)...$100,000 per person!

And these juicy details:

• $100 million for "psychological trauma response early intervention,
  prevention, and disorder treatment by culturally competent counselors and mental
  health professionals for children who are 0 to 5 years of age; see page 38, line
  1.
• $100 million for mosquito abatement; see page 39, line 12.
• $1 billion "shall be used for a program to aid the travel and tourism
  industry"; see page 45, line 17
• $5 million for Project Serv under the Safe and Drug-Free Schools and
  Communities Act; see page 49, line 13
• NOAA weather radio for every eligible person; see Sec. 526 .

Occasioning this statement:

"It's all vital," said Landrieu. "There's not
anything in here that we would consider a wish list or pie in the sky. This is
what we really believe is essential."

This is just the macro-scale version of this, business as usual in Louisiana:

Police found cases of food, clothes and tools intended for hurricane
victims in the backyard, shed and rooms throughout the home of a chief
administrative officer of a New Orleans suburb, officials said
Wednesday.

Police in Kenner searched Cedric Floyd's home Tuesday because of
complaints that city workers were helping themselves to donations for
hurricane victims. Floyd, who runs the day-to-day operations in Kenner,
was in charge of distributing the donations.

The donations, including lanterns, vacuums and clothes with price
tags attached, had to be removed in four loads in a big pickup truck,
Kenner police Capt. Steve Caraway said.

"It was an awful lot of stuff," he said.

Technorati Tags:  Katrina, Porkbusters

A while back, I lamented all the work it takes in some states to get a liquor license.  Most liquor license laws stem back to the emergence from prohibition, when states wanted to purge organized crime from the liquor business.  What the heck, then, are they trying to do today, other than limit competition for incumbents, which is the typical role of licensing?  Before I go on, I can't help quoting Milton Friedman again about liscencing of all sorts:

The justification offered is always the same: to protect the consumer. However, the reason
is demonstrated by observing who lobbies at the state legislature for
the imposition or strengthening of licensure. The lobbyists are
invariably representatives of the occupation in question rather than of
the customers. True enough, plumbers presumably know better than anyone
else what their customers need to be protected against. However, it is
hard to regard altruistic concern for their customers as the primary
motive behind their determined efforts to get legal power to decide who
may be a plumber.

Anyway, here in Arizona, it takes a load of paperwork even to change the manager of a licensed facility (even regulation-happy California does not require this).  For each manager, a multi-page application, personal history, proof of training, and fingerprint cards (yes, really) have to be submitted, and an FBI background check has to be completed (to make sure they never worked for Al Capone, I guess).

Today, I got my new managers application back from the license bureaucracy a second time for corrections.  This time, here are the two errors they found:

• For the year when the manager was full time RVing (that means living the nomadic life with no permanent home, roaming the country in his RV) he didn't show a permanent address.  Yes, we explained his lifestyle then, but the form requires a permanent address for the last five years and can't be processed without it
• For a period of time when the manager was unemployed, he did not fill in his own home address where it asked for his employer's address

That's it - after sitting in their hands for weeks. After already returning the application to me before with another flaw, and never mentioning these flaws.  No phone call to get the information, just rejected out of hand, requiring the whole process start over again. 

After dealing with these folks for years, it is absolutely clear to me that they have totally lost sight of what the original mission of their organization might have been, and have substituted the mission "uncompromisingly ensure the rigorous compliance with all forms and processes adopted by this organization in the past".

I thought this demographic and psychological study by the Foreign Policy Research Institute (caution:  I have not idea who these guys are) and linked via Little Green Footballs is pretty interesting.

Most people think that terrorism comes from poverty, broken families, ignorance, immaturity, lack of family or occupational responsibilities, weak minds susceptible to brainwashing - the sociopath, the criminals, the religious fanatic, or, in this country, some believe they're just plain evil.

Taking these perceived root causes in turn, three quarters of my sample came from the upper or middle class. The vast majority"”90 percent"”came from caring, intact families. Sixty-three percent had gone to college, as compared with the 5-6 percent that's usual for the third world. These are the best and brightest of their societies in many ways.

Al Qaeda's members are not the Palestinian fourteen-year- olds we see on the news, but join the jihad at the average age of 26. Three-quarters were professionals or semi- professionals. They are engineers, architects, and civil engineers, mostly scientists. Very few humanities are represented, and quite surprisingly very few had any background in religion. The natural sciences predominate. Bin Laden himself is a civil engineer, Zawahiri is a physician, Mohammed Atta was, of course, an architect; and a few members are military, such as Mohammed Ibrahim Makawi, who is supposedly the head of the military committee.

This is not particularly surprising to me.  The "terrorism comes from poverty" mantra has more to do with trying to make a political point (generally to excuse terrorism and totalitarianism and often to blame the US) rather than any particular facts on the subject.  In fact, the description above matches surprisingly well with US domestic terrorists and mass murderers.  Though there is a lot of argument nowadays about this stereotype, Phillip Simpson describes the FBI's serial killer profile (emphasis mine):

He is usually a white male between twenty-five and thirty-five years old, though of course there are teen-aged and elderly serial killers as well. Generally, the male serial killer is at the height of his physical powers, a fact which not only serves him in the practical matter of overpowering victims but also empowers him in the public arena: his strength and apparent potency (and of course, choice of innocent victims) render him an effective media monster. He is also likely to be an eldest son or an only child and of average or above-average intelligence. His childhood may have been marked by incidents of sexual or physical abuse, and his parents may be divorced or flagrantly unfaithful to one another. He usually possesses a strong belief that he is more intelligent and privileged than ordinary people (a belief that only grows stronger when confronted by evidence to the contrary) and thus exempted from the social restrictions that govern the masses. No safe predictions can be made about his economic origins, but as Leyton notes, serial murder in our era is more a crime of the middle classes than of the lower or upper ranges of the socioeconomic hierarchy.

The sexual material may or may not be parallel, though it is interesting to think about in terms of the anti-women male dominance of radical Islam.

America experienced no major terrorist attack on its soil in the run-up to the election.  This can't be for lack of trying.  If the terrorists bombed Spain, at best a peripheral country in the war on terror, to influence its election, you know that they would have loved to have bombed the Great Satan.  But they didn't.  All we got was a VHS valentine from Osama.

Thank you to the US Military, to the administration, to the department of homeland security, to the FAA, to the Phoenix Police, to the FBI, to the CIA, and to everyone else who made this non-event possible.  And, thank you to all the citizens of the US, who, whatever issues they might have with those in power, would never harbor a terrorist.  This sounds like an obvious statement, but its not.  It is in fact our best defense against terrorism.  Europe is much more vulnerable, because it has communities and groups and various cities who ARE willing to aid and abet terrorists.