Legislators, fundraisers and special interests

Politicians have a number of ways of raising money. There is, of course, the cold call, in which a politician or their representatives contact supporters or potential supporters and essentially beg for money. Direct mail is also popular, though it seems to irritate as many folks as it attracts.

There’s also fundraisers, particularly those predicated on reaching out to specific segments, such as individuals with an interest in a certain industry, cause or piece of legislation.

With the latter we get such events as that put on last week by the South Carolina Association for Justice for state Sen. Gerald Malloy. Here’s how SCAJ President Kirk Morgan’s invitation read: 

Dear SCAJ Member:

In the South Carolina General Assembly, the trial bar could not have a more stalwart friend than Senator Gerald Malloy. A true trial lawyer, Senator Malloy was the first President of our Association to be a sitting legislator and remains a defender of the rights of citizens and of those dedicated lawyers who fight for the public good in courtrooms across this state.

While he has always been his own man, he has proven over the years to be a friend to the trial lawyers through his work. Tomorrow he has a fundraiser. In my private capacity as a trial lawyer, I would like to take the opportunity to encourage you to attend this reception for Senator Malloy and express your appreciation.

WHERE: The Inn at USC
WHEN: May 18, 2010
TIME: 6:00 – 8:00 p.m.

Please do not let this opportunity pass by to thank Senator Malloy for his years of service.

Sincerely,

Kirk Morgan

For those who don’t know, Sen. Malloy represents District 29, which includes parts of Chesterfield, Darlington, Lee and Marlboro counties. He was first elected to the state Senate in 2003.

Morgan’s letter, while typical of many fundraising missives, contains interesting nuggets that are better understood when one reads between the lines:

“In the South Carolina General Assembly, the trial bar could not have a more stalwart friend than Senator Gerald Malloy.”

Translation: When trial attorneys need someone to do their bidding, Sen. Malloy is always there.

“A true trial lawyer, Senator Malloy was the first President of our Association to be a sitting legislator and remains a defender of the rights of citizens and of those dedicated lawyers who fight for the public good in courtrooms across this state.”

Translation: Sen. Malloy has not only made a pretty penny from being a trial lawyer ($371,798.56 in workers’ comp fees alone over the past two years), he was able to curry a great deal of influence for our lobby by being elected to the legislature. He’ll defend most anyone who’s got money to line his pockets.

“While he has always been his own man, he has proven over the years to be a friend to the trial lawyers through his work. Tomorrow he has a fundraiser.”

Translation: Malloy puts his own interests first, but he’s also been happy to place the needs of our organization before those of the citizens of South Carolina as a whole. Now, it’s time to pay him back.

“In my private capacity as a trial lawyer, I would like to take the opportunity to encourage you to attend this reception for Senator Malloy and express your appreciation.”

Translation: As president of this organization, I’m telling you it’s time to pony up with some cold hard cash for Sen. Malloy.

“Please do not let this opportunity pass by to thank Senator Malloy for his years of service.”

Translation: Having a former association president in the General Assembly is a gold mine for our organization. We don’t want to lose one our biggest advocates in the General Assembly, so bring your checkbooks.

More bad news for CommunitySouth

CommunitySouth Financial Corp. continues to struggle. The Easley-based parent of CommunitySouth Bank & Trust reported a loss of $2.1 million for the three months ended March 31, compared to a $36,000 deficit during the same period in 2009.

That comes on the heels of an $18.3 million loss in 2009 and stock in the company is trading for 40 cents a share. That’s down from more than $17 a share in 2007.

In its most recent filing with the US Securities and Exchange Commission, CommunitySouth highlighted a number of issues with regulators.

Last June, the bank entered into the memorandum of understanding with the SC Board of Financial Institutions and the Federal Deposit Insurance Corp.

Then, this past February, the bank received a supervisory letter from the FDIC which put additional restrictions on the bank and called for mandatory actions to be taken, including:

  • Achieve and maintain total risk-based capital at least equal to 10 percent of risk-weighted assets and Tier 1 capital at least equal to 8 percent of total assets;
  • Develop a written analysis and assessment of the Bank’s management and staffing needs;
  • Establish a comprehensive policy for determining the adequacy of the bank’s allowance for loan and lease losses, which must provide for a review of the bank’s allowance for loan and lease losses at least once each calendar quarter; 
  • Enhance the bank’s written plan for the reduction of classified assets, which shall include, among other things, a reduction of the bank’s risk position in each asset in excess of $250,000 that is classified as “substandard” or “doubtful.” 

On March 1, 2010, the company entered into an informal agreement with the Federal Reserve Bank of Richmond.

In addition, the company’s auditor has said there is substantial doubt about the company’s ability to continue as a going concern.

What ‘freedom’ looks like in Cuba

How would you like to prohibited from migrating within your own country? That’s apparently the situation in Cuba, according to this CNN story.

Thanks to a mid-1990s law, rural migration to Havana is restricted, making it possible for Cubans to be illegal residents in their own capital city:

The government deported tens of thousands of people or forcibly removed them from Havana to other parts of the island,” said Daniel Wilkinson, America’s deputy director at Human Rights Watch. “It’s just one in a series of laws that place severe restrictions on Cubans [and] how they live, where they live, and where they work.”

“I was caught because I was an illegal,” explained a bicycle taxi driver as he gripped the rusted blue handle-bars of his vehicle in Havana’s Central Park. “And because I’d been here several times before, I was deported back.”

But the driver working his trade in the capital city did not arrive in Cuba from another country. Instead he is among the thousands who have come from rural provinces in search of work and a place to live – but who have been deported back because of “Decree 217.”

The 1997 law restricts rural migration to Havana, making this taxi driver an illegal resident in his own capital city.

“If you’re illegal you can’t be here in Havana,” said the driver, originally from Cuba’s eastern Holguin province. “You don’t have an address here in Havana.”…

Economic conditions were generally worse at the eastern end of the island, according to Cuba analyst Edward Gonzalez, a professor emeritus at the University of California Los Angeles.

“[The eastern region] has always been the less affluent, impoverished part of the island,” he said, “heavily dependent upon agriculture, less on tourism, and also happens to be more black and mulatto.”

The effort to keep migrants out and prevent overcrowding in Havana may have resulted in police discrimination against darker-skinned Cubans presumed more likely to be illegal, Gonzalez said.

But have no fear, there’s universal health care for everyone, even if those in the poorest part of the country are restricted from migrating and even if the average Cuban suffers long waits at government hospitals and many services and technologies are available only to the party elite and foreign “health tourists” who pay with hard currency. 

(Hat tip: Coyote Blog)

Slavery, Government and Capitalism

In a letter to the New York Times, Don Boudreaux of Cafe Hayek disputes the paper’s criticism of libertarianism and its assertion that “It was only government power that ended slavery.”

Slavery was common throughout history until the age of industrial capitalism and only then did it disappear, Boudreaux writes.

“Slavery was killed by capitalism because that institution puts a premium on creativity, initiative, and good judgment (which even the mightiest slave-master’s whip cannot extract from its victims), and because the ethos that gives life to capitalism – free-market liberalism – is hostile to the ownership of man by man,” he adds. 

“That the first-to-industrialize English were the first abolitionists is no coincidence.”

Boudreaux adds that in North America, pressure brought by capitalism to end slavery was countered by the very agency many today praise as slaves’ liberator: government. 

“From 17th and 18th century slave codes to the Fugitive Slave Acts of 1793 and of 1850, government in America actively deployed force on behalf of slaveholders,” he writes. “Without this force, slavery would never have taken root as deeply as it did in the U.S. and would have died away sooner and with less bloodshed.”

An interesting theory, and one that would appear to be supported by the fact that the places which eradicated slavery last were the least industrialized.

That slavery still exists today – particularly in unindustrialized parts of Africa, the Middle East and South Asia – would also seem to back up Boudreaux’s premise.

Copernicus reburied as hero in Poland

Nicolaus Copernicus, the 16th-century astronomer regarded as the first individual to hold that the Earth revolves around the Sun, was reburied by Polish priests as a hero on Saturday, nearly 470 years after he was laid to rest in an unmarked grave.

The ceremonial reburial of Copernicus in a tomb in the medieval cathedral at Frombork on Poland’s Baltic coast is seen as a final sign of the Church’s repentance for its treatment of the scientist over his theory that the Earth revolves around the Sun, declared heretical by the Vatican in 1616, according to the Times of London.

Copernicus (1473-1543) died as a little-known astronomer working in a remote part of northern Poland, far from Europe’s centers of learning. He had spent years laboring in his free time developing his theory, which was later condemned as heretical by the Catholic Church because it removed Earth and humanity from their central position in the universe.

Copernicus had postulated that the Earth rotated on its axis once a day and travelled around the sun once a year, opposing the Church-backed Ptolemaic theory that the Earth was fixed at the centre of the universe, with the sun and stars revolving around it, wrote Agence-France Presse.

His revolutionary model was based on complex mathematical calculations and his naked-eye observations of the heavens because the telescope had not yet been invented, according to The Associated Press.

After his death, his remains rested in an unmarked grave beneath the floor of the cathedral in Frombork, the exact location unknown.

“On Saturday, his remains were blessed with holy water by some of Poland’s highest-ranking clerics before an honor guard ceremoniously carried his coffin through the imposing red brick cathedral and lowered it back into the same spot where part of his skull and other bones were found in 2005,” The Associated Press reported.

A tombstone now identifies him as the founder of the heliocentric theory, but also a church canon, a cleric ranking below a priest. The tombstone is decorated with a model of the solar system, a golden sun encircled by six of the planets, The AP added.

Scientists began searching for the astronomer’s remains in 2004 and eventually turned up a skull and bones of a 70-year-old man – the age Copernicus was when he died. A computer reconstruction made by forensic police based on the skull showed a broken nose and other features that resemble a self-portrait of Copernicus.

In a later stage of the investigation, DNA taken from teeth and bones matched that from hairs found in one of his books, leading the scientists to conclude with great probability that they had finally found Copernicus.

In recent weeks, a wooden casket holding those remains has lain in state in the nearby city of Olsztyn, and on Friday they were toured around the region to towns linked to his life.

Wojciech Ziemba, the archbishop of the region surrounding Frombork, said the Catholic Church is proud that Copernicus left the region a legacy of “his hard work, devotion and above all of his scientific genius.”

Saturday’s Mass was led by Jozef Kowalczyk, the papal nuncio and newly named Primate of Poland, the highest church authority in this deeply Catholic country.

Jacek Jezierski, a local bishop who encouraged the search for Copernicus, said that he considers Copernicus’ burial as part of the church’s broader embrace of science as being compatible with Biblical belief.

Copernicus’ burial in an anonymous grave in the 16th century was not linked to suspicions of heresy, according to The Associated Press report.

When he died, his ideas were just starting to be discussed by a small group of European astronomers, astrologers and mathematicians, and the church was not yet forcefully condemning the heliocentric world view as heresy, according to Jack Repcheck, author of “Copernicus’ Secret: How the Scientific Revolution Began.”

The full attack on those ideas came decades later when the Vatican was waging a massive defense against Martin Luther’s Reformation.

“There is no indication that Copernicus was worried about being declared a heretic and being kicked out of the church for his astronomical views,” Repcheck said.

“Why was he just buried along with everyone else, like every other canon in Frombork? Because at the time of his death he was just any other canon in Frombork. He was not the iconic hero that he has become.”

Copernicus’ major treatise – “On the Revolutions of the Heavenly Spheres” – was published at the very end of his life, and he only received a copy of the printed book on the day he died – May 21, 1543.

Criminalization of free market economics

Author Laurence M. Vance offers some common sense thoughts on “victimless crimes,” including charging excessive interest rates, price gouging and ticket scalping.

Usury, Vance writes, involves charging an “illegally high” interest rate, whatever the government determines that to be. This artificial distinction between interest and usury is a crime in all 50 states.

The entire legal concept of usury is flawed, he argues:

Usurers – that is, moneylenders, have been despised throughout history. In Dante’s The Divine Comedy, usurers are in the seventh circle of hell along with blasphemers and sodomites. But as the late economist Murray Rothbard pointed out, moneylending is a business in the market like any other business: “If the number of usurers multiplies, the price of money or interest will be driven down by the competition. So that if one doesn’t like high interest rates, the more usurers the better!” Although it might be immoral to charge above a certain rate of interest in some circumstances, it should certainly not be illegal. How could anyone possibly calculate what the maximum rate of interest should be and then apply that to every situation? And what should be the basis of the rate? Should it be the prime rate, the federal funds rate, the discount rate, or the LIBOR rate? The common-sense approach is simple: If you don’t want to borrow a sum of money at what you believe is a usurious rate of interest, then don’t borrow the money. But, some will say, we need the state to regulate interest rates to protect consumers. But how is preventing a willing lender and a willing borrower from doing business helping consumers?

Price-gouging laws are predicated on the fallacy that there is a just price for every good and service, Vance writes:

The U.S. Department of Energy even maintains a “Gas Price Watch Reporting Form” where people who know nothing about supply and demand, refinery capacity, gasoline futures, world surplus production capacity, and the price of a barrel of crude oil can report price gouging by gas stations. These laws are very similar to usury laws. In some circumstances, it might be immoral to charge above a particular price, but it should certainly not be illegal. There is no such thing as a just price. One cannot support price-gouging laws without ascribing omniscience to the state. How else could the state determine what the correct price should be? From an economic standpoint, we know that what is called price gouging is simply nothing more than charging what the market will bear. Price-gouging laws violate the property rights of resource owners, they hinder the price system’s signaling ability, they contribute to the misallocation of resources, and they cause shortages. Once again, the common-sense approach is the simplest: If you don’t like what you think is the inflated price of an item, then don’t buy it.

Vance calls ticket scalping one of the most ridiculous examples of a victimless act ever labeled as a crime.

“What precept of any ethical system would frown upon a willing seller and a willing buyer exchanging tickets for cash, as long as it was not violating the property rights of the owner of the ground where they made their exchange? Ticket scalpers perform a valuable service and should be applauded not condemned.”

(Hat tip: Wrisley.com)