Category Archives: regulation

Spotify and Crony Capitalism

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Spotify AB wants to do an initial stock offering, an IPO, on the New York Stock Exchange, and the company wants to do it without benefit of bank underwriters.  Oddly, the NYSE has to ask the SEC for permission to amend its own rules to allow this.  Even more strange, the SEC is dithering over granting that permission—to allow the private enterprise, the NYSE, to conduct its own business as it sees fit, and more proximately, to allow the private enterprise, Spotify, to conduct its business as it sees fit.  The SEC is claiming, with a straight face, that it has until the middle of February to make up its mind.

That the Government agency even thinks it needs to think about this is shady.  Government mandating bank involvement in a private enterprise company’s public offering? That would be textbook crony capitalism.

The SEC had concerns that Spotify’s direct listing could open the door for other companies with potentially risky financial profiles to access the public markets without giving investors sufficient protection[.]

Caveat emptor.  Government-favored bankers Us investors don’t need the protection of Big Brother. I understand that personal responsibility is anathema to Government bureaucrats, but this is a shield too far.

The SEC needs to reject such…stuff…stop dithering, and grant the permissions out of hand.

Whose Information Is It?

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Information belongs to the government of the People’s Republic of China, apparently.  Especially when it’s investment information, information that might facilitate the prosperity of individual citizens and their businesses, information that might lessen their dependence on and control by, that government.

A Chinese quasi-regulator told the country’s top raters of investment funds to stop publicizing the sizes of money-market mutual funds, in what is being seen as another attempt by Beijing to slow the industry’s rapid pace of asset accumulation.

Because an informed investor can make his own decisions instead of the decisions Government wants him to make.

A copy of an internal directive reviewed by The Wall Street Journal told firms that rate and rank investment funds to avoid publishing the asset sizes for money-market funds, which could have the effect of drawing more investors to the largest funds.

Which would (in a free market) have the knock-on effect of competition raising rates paid investors in those not-largest funds, which would benefit the investors.  And the further knock-on effects of drawing yet more money into the funds and of adding liquidity to these short-term instruments which would facilitate the short-term borrowing (useful for inventory control, meeting payroll, etc) of businesses.  Which would have the further knock-on effect of spurring the private economy and not the Communist Party of China’s controlled economy.

Gotta keep the peasants down on the farm.  The cities are collecting too many of them, anyway.

Unless it’s proprietary or a matter of national secrets, information isn’t controlled by Government beyond a couple of laws protecting intellectual property and those secrets.  In free nations, anyway.

Job Cut Worries

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The Left has them in the Department of Education.  It seems that the DoEd is sharply cutting back staff in its Office for Civil Rights.

[C]ritics say the move will blunt the office’s response to issues like sexual assault on college campuses and racial discrimination in public schools.

And

Some civil rights advocates are…saying the buyouts [to encourage departure] are determined by department chiefs who they say are targeting the civil rights office.

I certainly hope so.

Law enforcement and crime, including sexual assault, are matters for the police and the DoJ.  DoJ also has its own civil rights section. DoEd has—or should have—nothing to say on these matters.

The duplication needs to be eliminated altogether, and not just with a few job cuts.  All of the should be jobs cut, and DoEd’s Office of Civil Rights should be completely eliminated.

Good for Workers, Good for Business

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Recall the National Labor Relations Board’s case of a couple of years ago, Browning-Ferris Industries.

Browning-Ferris concerned a recycling center staffed by contractors. The original [NLRB] ruling found the contractors were jointly employed by a staffing firm and Browning-Ferris.

This ruling, if allowed to stand (the case also is in the Federal court system) would have allowed contractors like those at Browning-Ferris, McDonald’s, and any other franchise-centered corporation not only to form unions at individual franchises (which they’ve always been able to do), but also to form a grand union across the corporation.

President Donald Trump appointed a couple of folks to the NLRB to fill vacancies created when two ex-President Barack Obama (D) appointees quit in a snit over Trump’s election.  Now the NLRB has voted to overturn that prior NLRB ruling.

This is good for both business and for employees.  It’s good for business because modern unions have devolved into extortion rackets that threaten a business’ ability to exist through crippling strikes unless the unions get pay and benefits that they demand, even when those things cost more in their per-employee aggregate than the employee’s work is worth.

It’s good for the workers because it means, with labor costs allowed to match the value of the work done, labor won’t be replaced by automation that’s cheaper than the union-elevated labor costs.  Jobs will be preserved, and more hiring will occur.  It’s also good for workers because it frees them to negotiate their own wage and benefit package instead of being dragooned into whatever a union might impose on them.

The Question is a Non Sequitur

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John McKinnon and Brent Kendall, in their Wall Street Journal piece, asked Is FTC Up to the Task of Internet Regulation?

His piece is about the split between what the FCC (the erstwhile “regulator” of the Internet, courtesy of the Obama administration) and the FTC are qualified to regulate.

The question is a bit of a non sequitur, though. The Internet is merely a transport medium, and it needs very little regulation. The FTC is fully up to the task of regulating (ideally with a similarly light touch) trade, which is independent of the medium—highway, railroad, snail mail, or electronic—over which the traded products are transported.

And: lightly regulated commerce is highly conducive to innovation.  Just look at our communications system since the breakup and deregulation of Ma Bell.  And the Internet between its inception and the Obama FCC-imposed impediment.