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Constellation Energy dropped 10% in the span of seconds as bids disappeared following this headline on December 21st at 11:58 AM

US sues to block Excelon acquisition of Constellation Energy

Trading is halted in CEG five minutes later and reopened at 12:08. CEG rockets up 10%, and at 12:10 a headline crosses saying,

US settles with Excelon

Themis Trading, a stalwart critic of HFT, attributes the activity to the shady business of machine readable news.

There can be no effective control of corporations while their political activity remains….Corporate expenditures for political purposes, and especially such expenditures by public-service corporations, have supplied one of the principal sources of corruption in our political affairs.

Teddy Roosevelt, The New Nationalism speech, 1910 – Osawatomie Kansas

the health insurance mandate does not require Americans to subject themselves to health care. It requires them only to buy insurance to cover the costs of any health care they get.

Einer Elhauge, professor of law at Harvard, founding director of the Petrie-Flom Center in Health Law Policy: via NYT

Professor Elhauge enters the healthcare debate with a precise refutation of the but they’ll make me eat broccoli contingent. So say the many critics of the healthcare legislation passed by congress. If the government can make me buy health insurance, what’s to stop them from making me buy broccoli or worse. Elhauge finds these critics and their adherents baseless for three reasons, all of which point to a perversion of the debate based on a faulty understanding of the Constitution.

It happens that we are already legally bound to purchase healthcare. It’s called medicare, and everyone must contribute to medicare as a condition of employment. Elhauge points out that some might say one can always forgo employment and, therefore, it’s not a mandate. But, asks Elhauge, is that a difference of substance?

If we were to entertain a difference of substance, Elhauge has a constitutional lesson for these opponents. The discussion of the commerce clause, argues Elhauge, is a red herring. Yes, one can invoke it to support the present healthcare reform, and precedents, such as Wickard v. Filburn, provide legal cover. He does make a technical point that the healthcare reform law would need to be phrased differently and offers the following: anyone who has engaged in any activity that affects commerce must buy health insurance. Nonetheless, the broccoli contingent will still have their will it only stop when they make me eat broccoli editorials. Perhaps yes, Congress could make you eat broccoli, but Elhauge reminds us that there is nothing in the constitution against making stupid laws, and not all laws requiring purchases are stupid – example, airbags.

Elhauge swiftly moves from the commerce clause, however, to the necessary and proper clause. If the discussion around the commerce clause is a red herring, the necessary and proper clause is unambiguous.

The mandate is clearly authorized by the “necessary and proper clause,” which the Supreme Court has held gives Congress the power to pass any law that is “rationally related” to the execution of some constitutional power.

Because the law requires insurers to cover everyone while also restricting premiums, it is necessary and proper to the execution of the law to compel everyone to seek coverage. If not, premiums would skyrocket, coverage would be untenable, and the law would fail.

The commerce clause is important, but it’s not the only mechanism at play. The necessary and proper clause provides a critical underpinning to healthcare reform. By narrowing the debate to the commerce clause, healthcare reform’s critics have introduced a red herring and avoided a proper analysis of the law.

Andreas Englund and his everyday superhero

Blind resentment of things as they were was thereby given principle, reason, and eschatological force, and directed to definite political goals

Daniel Bell, The End of Ideology (1962)

Imagine a time before writing, when you would learn things from your hands and your elders. Spoken words were helpful, but the root and branch of education was one’s experience with things, not abstractions. Timothy Ferris fashioned exactly this idyllic world in Wired Magazine this week and enlisted the vanguard of scientists and engineers to invoke the old path of learning and bring us back to interrogating nature directly.

What, then, drove society off course? Read the rest of this entry »

So corporate profits do not drive economic growth — they’re just restless sums of surplus capital, ready to flood speculative markets at home and abroad. In the 1920s, they inflated the stock market bubble, and then caused the Great Crash. Since the Reagan revolution, these superfluous profits have fed corporate mergers and takeovers, driven the dot-com craze, financed the “shadow banking” system of hedge funds and securitized investment vehicles, fueled monetary meltdowns in every hemisphere and inflated the housing bubble.

Professor James Livingston, Rutgers: via NYT

He got it right. Des Lachman put a stake down and predicted that Greece would default in May 2010. Today, it did.

Though some had talked about it, few were willing to stake their reputation on the probability of a Greek default. Lachman said, in testimony to a Joint Economic Committee of the Congress, “There is every prospect that within the next twelve to eighteen months Greece will default on its US$420 billion in sovereign debt.” Fifteen months later, the ECB arrived at a debt accord that would give holders of sovereign Greek debt a 50% haircut – more or less, a technical default. Read the rest of this entry »

The Speculations of Mr. Spectator

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