Holman W. Jenkins Jr. swats away the predictable outcry for more regulation, and observes that when one finds oneself with a problem involving lemons, one should simply make lemonade.

Where was the SEC? Such is the plaint lofted in the wake of the Bernie Madoff scandal.

Huh?

When has the Securities and Exchange Commission ever found a fraud except by reading about it in the newspapers? …

What makes the Madoff story interesting, though not evidence of systematic failure of the regulatory or legal system, is that Mr. Madoff and some of his clients had dealt on a basis of trust for more than a generation. True Ponzi schemes, in which early investors are paid a “return” out of funds deposited by later investors, tend to falter at the first market downturn. Waning investor enthusiasm dries up new funds required to pay off earlier investors. The scheme collapses.

In all likelihood, Mr. Madoff was not running a pure Ponzi scheme, but had real assets. He was operating a blind pool, in which investors had no real idea what they owned or how it was performing, relying on Mr. Madoff who reported metronomic returns, brooked no nosiness into his methods, and seemed always willing to pay off investors who wanted to withdraw their money.

He may have been casual from the start about what money he used to pay withdrawals. It is almost inconceivable, though, that he could have built a true Ponzi scheme to a height of $50 billion, in which there were never any real assets, just his superhuman 40-year juggling act to ensure new investors were recruited as needed to provide funds to meet withdrawal requests from earlier investors.

If so, he is a genius who should immediately be put in charge of the Social Security and Medicare trust funds.

Beef and dairy cattle and hogs are part of the cycle of life. They breathe in oxygen and breathe out CO2, and their digestion of food produces methane as well. Living animals, at least domestic ones, from the perspective of environmentalists, thus constitute a major source of greenhouse gas air pollution, and consequently need to be taxed in order to discourage bovine respiration and porcine flatulence.

The EPA’s proposed addition of “greenhouse gases” under the Clean Air Act would amount to the imposition of major new taxes on domestic agriculture and on American consumers.

The American Farm Bureau offers some figures and notes that taxing US beef and pork production will only move that production outside US borders.

Most livestock and dairy farmers would not be able to pass along the costs incurred under this plan,” said Mark Maslyn, AFBF executive director of public policy. “Steep fees associated with this action would force many producers out of business. The net result would likely be higher consumer costs for milk, beef and pork,” said Maslyn, in comments submitted to EPA.

According to Agriculture Department figures, any farm or ranch with more than 25 dairy cows, 50 beef cattle or 200 hogs emits more than 100 tons of carbon equivalent per year, and thus would need to obtain a permit under the proposed rules. More than 90 percent of U.S. dairy, beef and pork production would be affected by the proposal, Maslyn noted.

Permit fees vary from state to state but EPA sets a “presumptive minimum rate” for fees. For 2008-2009, the rate is $43.75 per ton of emitted greenhouse gases. According to Maslyn, the proposed fee would mean annual assessments of $175 for each dairy cow, $87.50 for each head of beef cattle and $20 for each hog.

In addition, Maslyn said the proposed rules would be ineffective because of the global nature of greenhouse gases. “Reduction of a ton of greenhouse gases anywhere will make a difference, but if a ton is removed in Iowa and replaced by a ton in China, then no net effect occurred,” he said. “A livestock tax and regulation of greenhouse gases under the Clean Air Act will impose restrictions and added costs on the U.S. economy without reducing greenhouse gases in the atmosphere.

The Politico blog describes government in action enforcing honesty and fairness in campaign finance. John McCain should be proud of his own contributions to the present system.

The Federal Election Commission is unlikely to conduct a potentially embarrassing audit of how Barack Obama raised and spent his presidential campaign’s record-shattering windfall, despite allegations of questionable donations and accounting that had the McCain campaign crying foul.

Adding insult to injury for Republicans: The FEC is obligated to complete a rigorous audit of McCain’s campaign coffers, which will take months, if not years, and cost McCain millions of dollars to defend.

Obama is expected to escape that level of scrutiny mostly because he declined an $84 million public grant for his campaign that automatically triggers an audit and because the sheer volume of cash he raised and spent minimizes the significance of his errors. Another factor: The FEC, which would have to vote to launch an audit, is prone to deadlocking on issues that inordinately impact one party or the other – like approving a messy and high-profile probe of a sitting president.

McCain, on the other hand, accepted the $84 million in taxpayer money, which not only barred him from raising or spending more – allowing Obama to fund many times more ads and ground operations – but also will keep his lawyers busy for a couple years explaining how every penny was spent.

Through the end of September, McCain had socked away $9.4 million in a special fund to pay for the audit.

The Obama campaign does not expect to be audited, but spokesman Ben LaBolt said it would be ready in the event it is.

Henry G. Manne predicts a long period of the expansion of statism, economic stagnation, and freedom’s retreat.

The political direction of the country is now determined for a long time to come, and it is inevitably leftward. Politicians would never resist a popular but massive demand for more government regulation (even the few with enough brainpower to recognize what is going on). The business community has never been a strong supporter of free market capitalism, and it certainly cannot be counted on to change its stance this time around. The media, the various leftist trend-setting elites and university faculties have been waiting a long time for an opportunity just like this, and we can be sure that they won’t squander it. The shrillness of their attacks on free markets will reach new heights of righteous indignation and assumed moral and intellectual superiority.

No policy issue based on private property, low taxes, small government or free trade will escape the charge that any unregulated free market will lead to disastrous excesses just as happened with the great financial crisis of 2008. This will be true for such soon to be rebuffed ideas as tuition vouchers for private schools, private health care, lower estate taxes, deregulation in its many forms, reduced use of eminent domain, tort liability restraint and free trade.

We can anticipate a new reign of mercantilism, as the protectionists among us wield this strong new weapon against globalization and open markets. And all of this is true in large degree regardless of who wins the forthcoming election.

If Sarbanes-Oxley was any indication of the kind of legislation that results from crisis, then we can be sure that even more ham-handed regulation of all kinds will be the main product of the next Congress. Henry Waxman’s grandstanding this past week about bankers’ greed has been merely the warm-up for what is to follow.

Bankers eager for federal help now will find themselves regulated not far short of total federal control of their business behavior. Banks won’t be permanently nationalized, but what we will get will differ from that result semantically more than factually. Derivatives, for all their promise of alleviating panics and distributing risk, will not now be allowed to evolve into the brave new system once predicted for them. Accounting rules will become even more convoluted as we continue to ask for more information out of double-entry bookkeeping than it can ever deliver.

Still, there is a glimmer of hope left to those who detest this seemingly inexorable slide into socialism or its first cousin, the super-regulatory state. That glimmer comes from the ghosts of Adam Smith, Milton Friedman and Friedrich Hayek, who still haunt the halls of the left. And in spite of all the claims made that this debacle marks the demise of free market philosophy, it won’t go away so easily.

Read the whole thing.

Investors Business Daily observes that, although the left is ready to blame the subprime fiasco on an insufficiency of regulation, as lenders eliminated credit standards, government was right there encouraging their actions.

Commercial banks threw lending standards out the window in their rush to get new business. Like S&Ls of the 1980s, they would have gone wild without Gramm-Leach-Bliley. Washington, if anything, egged them on, but not because of free-market dogma. Banks and mortgage brokers were pumping up the homeownership numbers in America, and politicians were eager to take credit for that.

Wall Street, meanwhile, became a victim of its own innovation. It created new classes of derivative investments that spread — and, through leverage, amplified — the risk from the subprime mortgages produced by the banks. A new multitrillion-dollar market emerged almost overnight, lacking in transparency and reliable price signals. With their asset values in doubt, investment banks lurched toward insolvency.

If regulators failed here, it wasn’t because of policies adopted years before. It was more of the same story that has played itself out over and over in modern finance: Innovation races ahead of the rules. Crises tend to take almost everyone by surprise — including the major players as well as the regulators.

Read the whole thing.

Carel Brest van Kempen and friend

An August 25 WSJ article blamed a management plan by outside environmentalists which prevented feeding of komodo dragons (Varanus komodoensis) by residents of Kampang Komodo for the large monitor lizard’s increased opportunism and aggression, and for occasional incidents of human predation.

We don’t want the Komodo dragon to be domesticated. It’s against natural balance,” says Widodo Ramono, policy director of the Nature Conservancy’s Indonesian branch and a former director of the country’s national park service. “We have to keep this conservation area for the purpose of wildlife. It is not for human beings.”

This sounded like a good story to me and I blogged it here.

On the other hand, I have since found via Steve Bodio, that Carel Brest van Kempen, a Nature artist who knows his Oras as well as the local area, has a very different perspective, and makes a persuasive case contradicting the WSJ.

Mr. van Kempen says the village traces its origin to a penal colony, was settled by piratical Bugis fisherman from Sulawesi (whose ancestors were so naughty, he alleges, they inspired the English term “bogeymen”). The village has grown to 1600 residents, and Mr. van Kempen disapproves. “An unchecked human explosion will doom the dragons, ” he believes. Drastic measures were imposed by a 25-year plan drafted by outside experts. Mr. van Kempen endorses that plan, considering it “a thoughtful and practical attempt at a rather Sisyphean task.”

That Sisyphean task is obviously keeping the ora habitat free of local settlements.

The Management Plan bans a number of destructive and effective fishing methods, including explosives and poisons, reef gleaning, long lines, gill nets and demersal (bottom) traps, effectively restricting fishermen to using hook and line and traditional light nets. It also imposes catch limits and denies access to grouper and Napoleon Wrasse spawning grounds. A long list of fish species is proscribed, as are all marine invertebrates except squid. Some rather Draconian measures have been taken on land. All immigration has been disallowed; not even marriage confers a right to residency in the Park. Dogs and cats have been banned, as have most other domestic animals save goats and chickens, and restrictions have been put on use of fresh water. The gathering of firewood is no longer allowed and the laws prohibiting hunting of deer, pigs and buffalo are being strictly enforced. It’s the fishing restrictions, though, that have impacted the already struggling villagers the hardest, and they’ve caused considerable anger. There have been shootouts between rangers and fishermen, resulting in several deaths. Balancing the needs of the burgeoning villagers and those of the finite ecosystem is difficult, and the fact that it’s being imposed from outside causes real resentments.

If one actually reads the plan, one is obliged to conclude that the poor ignorant villagers, persons of low education who thoughtlessly reproduce themselves and get in the way of ecological progress are being first prevented from fishing by the most effective techniques and for the most marketable catch. Meanwhile, a totalitarian regime regulating intimate details of daily life (Don’t spray pesticides! How much water are you using? No dogs or cats, or wives from off-island, either!) must make things unpleasant indeed for residents, who are clearly being not all that subtly nudged to pack up and go away.

Once they’re gone, in comes the multi-million-dollar beach resort for eco-tourism, offering reef snorkling and dragon watching for beaucoup dollars per diem.

Steve Bodio and Matt Mullinex were dazzled by the details that van Kempen throws around, and by his obvious personal acquaintance with the neighborhood. I’m not persuaded. I remain permanently suspicious of Sarastro and all his expert planners, and on the basis of habitual preference for underdogs, I remain on the side of those local fishermen who are clearly getting pushed around.

The oras will clearly make out. The Indonesian government can make a good buck selling glimpses of this kind of unique wildlife to tourists, so they’ll be well protected.

No retraction from me.

Stephen Moore, in the Wall Street Journal, describes how the environmental movement has come to claim the right to regulate, tax, and control every aspect of every American’s life.

Earlier this month, while visiting a friend in San Francisco, I almost spilled my latte in my lap when I read this on the front page of the Chronicle: “S.F. Mayor Proposes Fines for Unsorted Trash.”

The story began: “Garbage collectors would inspect San Francisco residents’ trash to make sure pizza crusts aren’t mixed in with chip bags or wine bottles under a proposal by Mayor Gavin Newsom.” Isn’t that what homeless people do — rooting around in other people’s garbage? If Bay Area residents are caught failing to separate the plastic bottles from the newspapers, according to the newspaper story, they could face fines of up to $1,000.

“We don’t want to fine people,” the mayor is quoted saying reassuringly. “We want to change behavior.” Translation: Do exactly as we say and no one gets hurt. And San Francisco considers itself one of the most progressive cities in America!

When I was a kid, the environmentalists promoted their clean skies and antilittering agenda mostly through moral suasion — with pictures of an Indian under a smoggy sky with a tear rolling down his cheek or the owl who chanted on TV: “Give a hoot, don’t pollute.” Such messages made you feel guilty about callously throwing a candy bar wrapper on the ground or feeling indifferent toward car fumes. Back then I was a devoted recycler, but not for sentimental reasons. It was the financial incentive: You got up to a nickel for every bottle you brought back to the grocery store. So I would scavenge the landscape to find unredeemed bottles to buy baseball cards and candy.

But now the the environmental movement has morphed into the most authoritarian philosophy in America.

Read the whole thing.

Let’s all go out and pollute something.

Joel Salatin is one of those slow food, energy conserving, tree-hugging whackos, but even he finds that in today’s over-regulated world everything I want to do is illegal.

Hat tip to Bird Dog.

France is just a little further along the same path of progressive statism we ourselves are headed down.

Dominique Poirier (our European correspondent) forwards a recent item from the London Times demonstrating that the ambitions and the potential scope of a state regulatory regime are limitless, as well as humorless.

Country and western has become so big in France that the country’s bureaucrats have decided to bring the craze under state control.

The French administration has moved to create an official country dancing diploma as part of a drive to regulate the fad. Authorised instructors who have been on publicly funded training courses will be put in charge of line dancing lessons and balls.

The rules, which come into force next year, come after the rapid spread of country and western in France, where an estimated 100,000 people line dance several times a week. Jean Chauveau, the chairman of the country section of the French Dance Federation, said: “It’s growing at a crazy rate. There are thousands of clubs and more are springing up all the time.”

He said the French shunned the square dancing that is popular among country and western fans in the United States because it involved physical contact. “They don’t want to take anyone by the hand or anything like that,” he said. But they were passionate about line dancing, where participants follow the steps without touching anyone else. “I think this corresponds to the individualism of our times,” Mr Chauveau said.

Village associations boast dozens, and sometimes hundreds, of members; competitions are flourishing, and a country music festival is expected to draw 150,000 people this summer, he said. “Britain caught the line dancing bug a long time before us, but now we are really going for it,” Mr Chauveau said. “It’s complete madness here.” …

In a peculiarly Gallic approach to the phenomenon, French civil servants say line dancing should be submitted to the same rules as sports such as football and rugby. This means imposing training courses for line dancing teachers and a state-approved diploma for anyone who wants to give lessons or run clubs.

Amateur instructors will have to take 200 hours of training under the new rules. Professionals will get 600 hours, including such subjects as line dancing techniques, “the mechanics of the human body” and the English (or at least Texan) language. They will also learn how to teach line dancing to the elderly.

The cost of the courses, about €2,000 (£1,570) for the professionals and €500 for the amateurs, will be largely met by taxpayers. Mr Chauveau said the regulations highlighted the French state’s obsessive desire to organise all public activity. “France is the only country in Europe apart from Greece where sport is controlled through the state,” he said. “Line dancing is now considered a sport, so it is being controlled, too.”

In the year 2008 the Lord came unto Noah, who was now living in England and said:

‘Once again, the earth has become wicked and over-populated, and I see the end of all flesh before me. Build another Ark and save two of every living thing along with a few good humans.’

He gave Noah the CAD drawings, saying: ‘You have 6 months to build the Ark before I will start the unending rain for 40 days and 40 nights.’

Six months later, the Lord looked down and saw Noah weeping in his yard, but no Ark.

‘Noah!’ He roared, ‘I’m about to start the rain! Where is the Ark ?’

‘Forgive me, Lord,’ begged Noah, ‘but things have changed. I needed Building Regulations Approval and I’ve been arguing with the Fire Brigade about the need for a sprinkler system.

My neighbours claim that I should have obtained planning permission for building the Ark in my garden because it is development of the site, even though in my view it is a temporary structure.

We had to then go to appeal to the Secretary of State for a decision.

Then the Department of Transport demanded a bond be posted for the future costs of moving power lines and other overhead obstructions to clear the passage for the Ark ‘s move to the sea. I told them that the sea would be coming to us, but they would hear nothing of it.

Getting the wood was another problem. All the decent trees have Tree Preservation Orders on them and we live in a Site of Special Scientific interest set up in order to protect the spotted owl. I tried to convince the environmentalists that I needed the wood to save the owls – but no go!

When I started gathering the animals, the RSPCA sued me. They insisted that I was confining wild animals against their will. They argued the accommodation was too restrictive, and it was cruel and inhumane to put so many animals in a confined space.

Then the County Council, the Environment Agency and the Rivers Authority ruled that I couldn’t build the Ark until they’d conducted an environmentalimpact study on your proposed flood.

I’m still trying to resolve a complaint with the Equal Opportunities Commission on how many disabled carpenters I’m supposed to hire for my building team. The trades unions say I can’t use my sons. They insist I have to hire only accredited workers with Ark-building experience.

To make matters worse, Customs and Excise seized all my assets, claiming I’m trying to leave the country illegally with endangered species.

So, forgive me, Lord, but it would take at least 10 years for me to finish
this Ark. ‘

Suddenly the skies cleared, the sun began to shine, and a rainbow stretched across the sky.

Noah looked up in wonder and asked, ‘You mean you’re not going to destroy the world?’

‘No,’ said the Lord. ‘……….the British Government beat me to it.’

Labour policies resulted in food rationing continuing in post-WWII Britain until 1954. Today’s Global Warming bugaboo may again offer renewed opportunities to both regulators and black marketeers, the Daily Mail reports.

Every adult should be forced to use a ‘carbon ration card’ when they pay for petrol, airline tickets or household energy, MPs say.

The influential Environmental Audit Committee says a personal carbon trading scheme is the best and fairest way of cutting Britain’s CO2 emissions without penalising the poor.

Under the scheme, everyone would be given an annual carbon allowance to use when buying oil, gas, electricity and flights.

Anyone who exceeds their entitlement would have to buy top-up credits from individuals who haven’t used up their allowance. The amount paid would be driven by market forces and the deal done through a specialist company.

MPs, led by Tory Tim Yeo, say the scheme could be more effective at cutting greenhouse gas emissions than green taxes.

But critics say the idea is costly, bureaucratic, intrusive and unworkable.

The Government says it supports the scheme in principle, but warns it is ‘ahead of its time’.

The idea of personal carbon trading is increasingly being promoted by environmentalists. In theory it could be used to cover all purchases – from petrol to food.

The Guardian describes how Europe’s intensely regulated employment policies are resulting in a generation of losers.

With inflation soaring, property prices sky high, wages relatively static, labour markets gridlocked and sluggish or slowing economies, ..tens of millions of Europeans raised to expect that their degrees and diplomas will assure them a relatively high quality of life.. are now realising that the world has changed. The disappointment is a shock with big political, social, cultural, even demographic consequences. …

In 1973, only 6 per cent of recent university leavers in France were unemployed; now the rate is 25 to 30 per cent; salaries have stagnated for 20 years while property prices have doubled or trebled, though the overall proportion of French people living in poverty has not changed. Whereas in the 1960s the poor were mainly the old, now they are the young; in 1970, salaries for 50-year-olds were only 15 per cent higher than those for workers of 30; the gap now is 40 per cent.

‘Some talk of a war between the generations, but that’s a little simplistic. It is more that the system means that the haves are keeping what they have and no one is helping the have-nots,’ said Chauvel. ‘The big determinant in France now of success is not your educational level but the wealth of your parents, if they can support you during your twenties as you fight your way into a closed employment market.’

French economists speak of ‘insiders and outsiders’. The insiders are those who already have a job and are well-defended by the battery of French laws protecting the workforce and the unions. The outsiders are those without work which, naturally, include newcomers on the job market. Chauvel says the problem is particularly bad in Latin countries where parents are expected to support their children much longer.

But, cheer up, Europe! we have a political party right here in the United States firmly committed to bringing us European-style labor market regulations, too. They call themselves democrats, and they are favored to win in November.

H/t to MeaninglessHotAir.