The Liberal Order

One Funny One About Newt

Santorum Nails It

I'm not a fan of Rick Santorum (I'm not a fan of any presidential candidate, I always write myself in), but he explains superbly the importance of the Constution and Declaration of Independence and how it explictly explains the relationship the relationship between the governed and their government.

 

Economics for Dummies . . . or Clowns

A pretty good comic illustration of what economists believe and what macroeconomics is all about. Again, it's a comic, don't expect deep philosophical insight.

HT: Carolyn S.

Should you short the stock of Costco and Target?

I was in Barnes and Noble two weeks ago and noticed that though there were quite a few people mulling around in the store, I didn't see anyone purchase anything other than coffee or some other refreshment from the café. In fact, about half the people in the store were in the café using the wi-fi. I ended up purchasing a remainder book for $6. 

These big-box retailers are struggling and the end of big box retailing is near. Internet retailing is reducing the revenue per square foot for bricks-and-mortar retailers. Stores like Barnes and Noble, much like Borders before them, also struggle with space dedicated to near-obsolete media - DVDs and music CDs.

Megan McArdle has more about how survival of big-box retailers will depend on niche products. Still a long shot.

Now, short BKS stock?

 

Strict Liability v. Negligence - An Example of the Latter

Watch the video below. (Caution: Language) It looks like a couple of joy riders or some suicidal person with a death wish. I'll say more after the video jump.

 

 

Apparently it's a woman who suffered problems with a diabetic attack. Now, had she ventured onto oncoming traffic and killed someone, would she suffer civil lebal liability? It depends.

Had she struggled with this problem in the past, it was then a foreseeable hazard for her to be driving. If, however, this was a first occurrence, and more importantly if she didn't even know she had diabetes, then the potential for accident was not foreseeable and she would likely not be held liable. That may be a tough burden to prove in either direction.

In the end, some enterprising lawyer would have devised some reason to sue the car company and the state for not removing snow from the median. Fortunately, she did not hit anyone.

HOAs and State Legislation

What differentiates a local, state, or national government from a homeowner's association (HOA)? Given the limited scope of the HOA, as well as the incentives of developers to provide an efficient mix of public goods (i.e., landscaping, garbage and lawn debris removal, pools, etc.), as Don Boudreaux and Randall Holcombe point out, HOAs tend to be less controversial. The HOA agreement is an ex-ante contract that you agree to prior to buying your home. 

So HOAs ought to be viewed more favorably than typical forms of government, thought they still are governments. Consequently, there has to be some means of residents petitioning and challenging their HOAs without having to run for office.

North Carolina's state legislature is considering limits on HOAs that intrude on homeowners' rights. 

Another hot-button issue was the ability of HOAs to foreclose on homeowners that don't pay their dues and assessments.

Tammy Neal, a real estate broker and former appraiser who lives in Union County, said she ran across an HOA board that foreclosed on a homeowner who owed $50. She called it "a travesty."

I agree, that sounds heavy-handed, but is it any less egregious than current asset seizure forfeiture laws? 

HOAs need to find more resident-friendly means of addressing delinquent residents and those who refuse to comply with guidelines. Yes, some residents are simply malcontents, who then need prodding by formal public institutions to hold them accountable. But such action should be a last resort. 

From my experience, I've seen too many people who sit on HOA boards who are control freaks that relish in exercising their authority and pushing people around. But it's also the case that HOAs cannot selectively enforce regulations, leaving them little room when it comes to enforcing what appear to be minor infractions.

For example, if the HOA agreement stipulates no commercial vehicles are permitted in a homeowner's driveway for more than ten consecutive days (this provides leeway for a homeowner having commercial work done on their home), then by allowing a resident to park a car in her driveway emblazoned with logos on the side of the college where she works, it makes the HOA susceptible to a lawsuit if it then denies the right of the homeowner who owns a moving business to park his moving truck in his driveway.  

Tim Thomas, A Man With Principle

Tim Thomas, goalie for the Boston Bruins, refused to attend a reception at the White House in honor of the Bruins winning the Stanley Cup. His reason?

A statement by the 37-year-old Thomas posted Monday on the team website said he opposed the "out of control" growth of the federal government that threatened "the rights, liberties, and property of the people."

"This is being done at the Executive, Legislative, and Judicial level. This is in direct opposition to the Constitution and the Founding Fathers vision for the federal government," the statement said. "Because I believe this, today I exercised my right as a Free Citizen, and did not visit the White House. This was not about politics or party, as in my opinion both parties are responsible for the situation we are in as a country. This was about a choice I had to make as an INDIVIDUAL."

I'm guessing neither Romney nor Gingrich are on his list of favorite candidates for president.

The truth about modern finance, perhaps?

Presentation Fail . . . What every academic should watch.

It's just so painful to watch.

 

Danny DeVito Explains the Morality of Companies Like Bain Capital

In a speech that offers one of the best (though of course rare) defenses of capitalism (sad that we have to constantly defend it), Danny DeVito explains the social benefits of what companies like Bain Capital do.

Setting the scene: Danny DeVito plays Lawrence Garfield, chairman and CEO of Garfield Industries. He's earned the name "Larry the Liquidator" because the objective of his investment firm is to purchase companies with asset values that exceed the stock capitalization of the firm and sell off the assets. So if a company's market cap is, say, $1 billion and the assets are worth, say, $1.2 billion, buy controlling interest in the firm and sell off the assets, reaping a 20% return on your investment.

Garfield Industries has targeted New England Wire and Cable, a cable manufacturer that is struggling in light of creative destruction - fiber optics. The speech is at the shareholder's meeting, where Larry the Liquidator is seeking to convince the other shareholders to vote for his slate of directors. On the opposing side is Andrew Jorgenson, CEO of New England Wire and Cable and the grandson of its founder, played by Gregory Peck. He pleads with the shareholders to protect labor and the existing mission of the firm.

If you haven't seen this, it's worth watching.