Capital Is A Coward

Capital is a coward

The Washington Post reports that “corporate CEOs and trade groups are asking their lawyers the same question: How can we get our companies involved in this political election season without leaving tracks?” Well, if that is how CEOs feel about the fight for political freedom, I hope they do not get involved, much less “leave tracks” on the battlefield of liberty. They would only sully holy ground.

How are we to understand the socio-economic generalization that ‘capital is a coward”? The generalization is true: When threatened capital simply flees. Such pragmatism has its economic advantages, no doubt. But it cannot be the basis for a restoration of economic liberty in the United States.

The Great European Shower-Gel Trust

Bloomberg reports that the EU Competition Commission is going to conduct an in-depth review of Unilever’s planned acquisition of Sara Lee Corporations shower-gel and European detergent business. Commissioner Joaquin Almunia said that: “We need to make sure that if there are competition concerns these are duly addressed so that consumers are not harmed.”

I can almost understand that people might be concerned if an individual, such as John D. Rockefeller, controlled 90 percent of oil refining in the United States. I can almost understand that they believed they could see consumers would be better off if he didn’t own quite so much. But does anyone imagine that a group of European bureaucrats can determine the long-range costs and benefits of Unilever’s taking over Sara Lee’s European shower-gel production?

Almunia , be it noted, was formerly chief economist at a Spanisk trade union associated with that country’s Socialist Workers’ Party.

Will Goldman Sachs Settle?

John Carney of CNBC reports : “Goldman Sachs is unwilling to enter into the typical Wall Street settlement—paying a fine and agreeing not to commit further violations, while neither admitting nor denying the accusations—because it insists on denying that it intentionally committed fraud, sources familiar with the matter say. The SEC has accused Goldman of fraud under both the Securities Act of 1933 and Exchange Act of 1934 and is unwilling to abandon those claims for lesser offenses, those sources say.”

But, says Carney: “A technical legal difference in the fraud sections of the Securities Act and Exchange Act may allow both the SEC and Goldman to walk away happy. . . . The SEC accused Goldman with violating Section 10(b) of the Exchange Act and Section 17(a) of the Securities Act. Both are anti-fraud provisions. Like most anti-fraud statutes, Section 10(b) requires the government to prove a fraudulent intent. The first subsection of Section 17(a) also requires proof of fraudulent intent. But the second and third subsections of 17(a) do not require any proof of intent to defraud. This makes accusations based on the second and third subsections much easier to prove—and perhaps easier for Goldman to stomach.”

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