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May 21, 2008

Just When You Thought Congress Couldn't Get More Idiotic

They manage to top all expectations and come up with this

WASHINGTON (Reuters) - The House of Representatives overwhelmingly approved legislation on Tuesday allowing the Justice Department to sue OPEC members for limiting oil supplies and working together to set crude prices, but the White House threatened to veto the measure.

The bill would subject OPEC oil producers, including Saudi Arabia, Iran and Venezuela, to the same antitrust laws that U.S. companies must follow.

The measure passed in a 324-84 vote, a big enough margin to override a presidential veto.

What kind of complete morons are these people? Oh wait, it's an election year, so they are pandering morons. There is absolutely no reason why foreign companies in foreign countries should be subject to US anti-trust laws, or any US laws, for that matter. Of course OPEC is a cartel and limits supply to try and keep prices elevated; it doesn't matter. If they were a US based group then something Congress does might have relevance. Oh sure, if Congress really cared about taking a stand against OPEC they would say "because they are a monopoly we are not going to allow any of their products into the US; that'll teach 'em." And that would be the extent of what they could do. Our legislative authority extends to our borders, and that's it. It is a very very dangerous idea to try and extend it with stupid ploys like this, because then it must be a two-way street. Should US-based companies, whose products are produced in the US, be subject to foreign laws? I don't think so.

I mean, that would be like allowing the author of a book who lives in America and the book was published in America to be sued in, say, a British court for libel. Completely insane, right?

Election year economic populist legislation such as this leads to towering examples of Solomaic wisdom as expressed by this noted thinker:

"This bill guarantees that oil prices will reflect supply and demand economic rules, instead of wildly speculative and perhaps illegal activities," said Democratic Rep. Steve Kagen of Wisconsin, who sponsored the legislation.

It does nothing of the sort. In fact, were I OPEC I would institute an immediate cut in production of, say, 1/2% to spike prices some more and show the complete impotence and incompetence of the US Congress. How do you like them supply apples now, Rep. Kagan? What are you going to "do" about it now, big guy?

How about approving the building of some nuke plants, approving ANWR drilling and oil sand extraction?

Oh, and wind farms off of Hyannis Port would be nice, too.

Posted by Mr. Bingley at May 21, 2008 06:42 AM


Ted Nelson, Customer: But why do they put a guarantee on the box?
Tommy: Because they know all they sold ya was a guaranteed piece of shit. That's all it is, isn't it? Hey, if you want me to take a dump in a box and mark it guaranteed, I will. I got spare time.

- From the movie, Tommy Boy, of course

Posted by: Nobrainer at May 21, 2008 07:58 AM

Election years really suck, y'know?

Posted by: The_Real_JeffS at May 21, 2008 09:15 AM

What has happened to FREEDOM OF SPEECH???? we should be allowed to read this book and buy it in UK. if its true then it should be told. if not true then be allowed to form your own opinion, but no judge should bar this from the UK. they are dictating what we can and cannot read. another political intervention into our lives.
harry jacobson, Bridgwater, United Kingdom

I found that a bit interesting right after the article about the Arab libel tourist. What a load of shit. Society sucks ass worse than it used to I think. As for Harry, he should start wearing a V mask and getting ready for big brother.

Posted by: Ebola at May 21, 2008 11:57 AM

I think you have a questionable interpretation of our laws, Bingley.

If OPEC wants to do business in the US, they have to comply with US laws. This is not a new concept. Anti-trust laws are pretty bad, and I'm not in favor of them, but it's hardly novel to enforce them.

OPEC submits to US jurisdiction by doing business in our country. If they don't want to submit, they are free to stop doing business here.

Frankly, I wish they would. That way we can get serious about drilling for our own oil. And it's about time we used some muscle to squash their cartel. Now that we have partial control of Iraq, we just might succeed. If Iraq ignores the quotas, the cartel can't survive.

Posted by: Skyler at May 21, 2008 12:11 PM

But Skyler, they're not exactly doing business here. We're buying it over there.

Posted by: Ken S, Fifth String on the Banjo of Life at May 21, 2008 12:28 PM

Exactly right Ken. OPEC does no business here. None. We go overseas and buy from OPEC members. I freely admit to not being a law student, Skyler, but I think the stretch, the over-reach, is clearly on Congress' part.

And I think it's a very perilous one; well, "perilous" only if you believe in liberty and don't have some enlightened world government as your ultimate goal.

Posted by: Mr. Bingley at May 21, 2008 12:48 PM

Skyler, OPEC is a cartel, more of a merchant's association coordinating oil production, but not a company with assets. That's the crux of the matter; if you're going to sue, you need to be able to seize assets.

That law would make somewhat more sense if that law authorized law suits against the nations controlling the oil supply, or the national companies doing the business for the nations, not unlike seizing the assets for companies and countries that support terrorism.

Targeting OPEC? 'Tis to laugh!

Posted by: The_Real_JeffS at May 21, 2008 02:21 PM

Yes, I know it's a cartel. Cartels are illegal in the United States. We are more than within our legal rights to deny them the right to do business with us if we so choose. It's not a stretch at all. It's not even unusual.

That it's made up of nations is of little consequence. Nations have assets. Most have assets in our nation. We'd simply seize those assets. Easy peasy.

Now, whether it's wise is a different matter. I think it is. I think we should squash those bugs and let them live in the dark ages like they prefer their citizens to live. I think we should then go in and take the oil that they sit on by coincidence alone.

Posted by: Skyler at May 21, 2008 03:22 PM

Skyler's right, folks: this is not any kind of particularly novel jurisdictional overreach. And while I haven't read the legislation itself, the story says "OPEC members," i.e., member states, not the cartel itself which as far as I know has very little if any legal existence separate from its membership.

"Our legislative authority extends to our borders, and that's it."

That's just plain mistaken and incorrect, Bingley. Do you oppose Congress having made it a federal crime to murder a US citizen anywhere in the world (which is current law)? What protections do you think your passport provides? Do you think Bin Laden's indictment for conspiring to blow up our embassies in east Africa should be dismissed for lack of jurisdiction? Do you think the Alien Tort Claims Act of 1789, passed by the First Congress, is unconstitutional for making the federal courts a forum for suits alleging violations of international law (whether or not that's good policy)? Do you think contracting parties overseas should not be able to subject their agreements to the laws of US states and to the jurisdiction of US courts by agreement through choice-of-law and choice-of-forum clauses?

"Should US-based companies, whose products are produced in the US, be subject to foreign laws? I don't think so."

If their products enter into the stream of commerce in those countries, then they most likely are. While I question whether this bill is a good idea, I'd even argue that it's superfluous: CURRENT antitrust law (the Sherman and Clayton Acts), combined with the "commercial activity" exceptions in the Foreign Sovereign Immunities Act, already provide for suit against OPEC members under exactly this theory, and the statute just makes explicit and definite preexisting law.

Posted by: Dave J at May 21, 2008 08:54 PM

Ah Dave, you ruin all my fun. You're off the blue cheese cheeseburger Christmas list.

Here's the text of this, btw.

Anyhow, ignoring for a moment the inconvenient fact that all the lawyers have declared me wrong:

-I would imagine that it being a federal crime to murder a US citizen anywhere has deterred...zero murderers. What has deterred them is the threat of retaliation by pissed-off Presidents using the military; "law enforcement" Presidents just got more people killed.
-My passport, as proof of citizenship, allows I suppose for Consular contact (things agreed to via diplomatic negotiations amongst nations and not via fiat from Congress) should I get arrested but unless I am extremely well connected I will still be 100% subject to local laws and jurisdictions...as I should be.
-We have jurisdiction on Bin Laden because US Embassies are US territory. I think that's a bit different than if he blew up, say, a Hooters in Nairobi.
-Why would I think a bunch of alien tarts are unconstitutional? Part of Congress' duty is to regulate commerce with foreign nations, but I simply do not think that extends to allowing power hungry state AGs to start filing lawsuits against Nigeria to "make" them pump more.
-Of course contracting parties should be able to agree to whatever terms they so desire in the contract, but that's not the issue here. The issue is the Congress in effect telling them how much product to produce.

What really bothers me is that this is a completely useless exercise in mental masturbation by these blowhards who are only looking to November and it has the potential to lead to a lot of retaliatory measures. Should we let the Chinese sue us for not growing enough soy for them?

It's absurd when you think about it. Foreign goods coming here are subject to our laws to be allowed in, for example poison Chinese dog food or lead paint kiddie toys. They can make as few or as many harmful things as they like, but our laws say they can't bring them in here. And that's fine and good. Now, with this, Congress is saying they have to produce more oil and send it here.

It's the opium addicts trying to control the foreign poppy market.

Posted by: Mr. Bingley at May 21, 2008 10:27 PM

"I would imagine that it being a federal crime to murder a US citizen anywhere has deterred...zero murderers."

Not really my point. As above, I'm not specifically arguing whether this is good or bad policy, just whether Congress has the authority to do it.

"We have jurisdiction on Bin Laden because US Embassies are US territory."

But Bin Laden never entered into the embassies. Saying that his agents did and thus he's culpable by principal theory, or that he conspired to, still goes beyond your original premise that Congress only has authority over US territory rather than more broadly with respect to acts impacting or directed towards US territory, persons, property or other legal interests. His own acts took place entirely outside US territory, but they are acts which Congress legitimately has the power to proscribe.

"The issue is the Congress in effect telling them how much product to produce."

That may be what some in Congress think they're doing, but antitrust law doesn't provide a direct remedy that could compel more production or specifically set prices. What it purports to prohibit are combinations in restraint of trade, i.e., cartels. That a particular cartel is between nations rather than companies is secondary. That I think the entirety of antitrust law rests on demonstrably false 19th-century premises is beside the point of whether Congress has the power to do it.

I personally think it's a stupid bill, but not because Congress is exceeding its authority.

Posted by: Dave J at May 21, 2008 11:07 PM

There's "authority", Dave, and then there's "power".

Congress can pass a bill making π = 3.00000000. They have the authority to do so. But that requires a certain arrogance to do, because π = 3.14159..... forEVAH. Congress does not have the power to change the fundamental elements of the universe in that fashion.

It's much the same thing here. Sure, Congress has the authority to pass this bill. But if they don't have the power to enforce it, as you say, it's a stupid bill.

I really can't decide which enrages me more: the fact that Congress actually expects the world to take this bill seriously; that looking stupid is the normal operating mode for Congresscritters; or that they think we are so stupid and naive as to swallow this turd whole and unquestioningly.

Posted by: The_Real_JeffS at May 21, 2008 11:56 PM

"Congress can pass a bill making π = 3.00000000. They have the authority to do so."

How? Regulation of Weights and Measures, I suppose. But mathematical laws are nowhere the near the top of what politicians can never repeal: #1 is the Law of Unintended Consequences.

Posted by: Dave J at May 22, 2008 12:21 AM

Fair enough, Dave. The blue cheese is on it's way.

It's the unintended consequences that frankly worry the hell out of me. And I freely admit that as a commodities trader I may see things in a different light than others. The inflationary scenario you can easily see in all of this is frightening.

Posted by: Mr. Bingley at May 22, 2008 07:42 AM

Deterrence is only one reason for a criminal law. Another is punishment.

"What really bothers me is that this is a completely useless exercise in mental masturbation by these blowhards"

That describes about 99% of what those people do.

Posted by: Skyler at May 22, 2008 11:17 AM

"Deterrence is only one reason for a criminal law. Another is punishment."

Skyler, as a prosecutor I believe both are valid but only secondary purposes. The main one is protecting public safety.

Posted by: Dave J at May 22, 2008 09:43 PM