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Posner’s Definition of a “Private Sector” Response

TOTM Many observers have been shocked by the level of government involvement in the U.S. economy in recent days. Among other things, the government has (1) . . .

Many observers have been shocked by the level of government involvement in the U.S. economy in recent days. Among other things, the government has (1) bailed out an insurance company that got “too big to fail,” (2) decided to spend up to $700 billion buying the distressed assets of financial firms (and apparently directly investing in those firms), and (3) banned investors from short-selling the securities of a number of firms. Seems like a pretty massive governmental response, no?

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Financial Regulation & Corporate Governance

May Treasury Buy Newly Issued Securities of Ailing Financial Firms?

TOTM Last week I posted about Lucian Bebchuk’s thoughtful bailout plan, which would have expanded Treasury’s powers to include the ability to make direct investments in . . .

Last week I posted about Lucian Bebchuk’s thoughtful bailout plan, which would have expanded Treasury’s powers to include the ability to make direct investments in ailing financial firms (as opposed to just buying their distressed assets). I was under the impression the bailout legislation didn’t provide Treasury with such authority. An article in today’s WSJ, though, suggests otherwise.

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Financial Regulation & Corporate Governance

Now that the Bailout Has Failed, How About Bebchuk’s Plan?

TOTM I’ve avoided saying anything at all about the bailout because (1) I’m not an expert on banking, finance, etc. and (2) events are moving so . . .

I’ve avoided saying anything at all about the bailout because (1) I’m not an expert on banking, finance, etc. and (2) events are moving so fast I can’t keep up with the latest proposal. Nonetheless, since the bailout bill has just failed, this might be an opportune time to consider an alternative to the plan the House just rejected. The most intriguing alternative plan I’ve seen is that set forth by Havard Law’s Lucian Bebchuk in this paper (which was produced in record time!).

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Financial Regulation & Corporate Governance

Dr. Miles is Dead. Now What?

TOTM As regular readers of this blog will know, I was pretty stoked when the Supreme Court finally overruled its infamous Dr. Miles decision. The Leegin . . .

As regular readers of this blog will know, I was pretty stoked when the Supreme Court finally overruled its infamous Dr. Miles decision. The Leegin Court’s holding that minimum resale price maintenance (RPM) is not per se illegal constituted a major step toward an economically rational and theoretically coherent approach to vertical restraints. (And on a more personal note, Leegin‘s holding meant that I didn’t have to eat my hat, as I’d promised to do if the Court upheld the per se rule against vertical price-fixing.)

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Antitrust & Consumer Protection

Life After Dr. Miles

TOTM An article in today’s WSJ, Price-Fixing Makes Comeback After Supreme Court Ruling, reports that minimum resale price maintenance (i.e., the setting of minimum retail prices . . .

An article in today’s WSJ, Price-Fixing Makes Comeback After Supreme Court Ruling, reports that minimum resale price maintenance (i.e., the setting of minimum retail prices by product manufacturers) is increasing in light of last summer’s Leegin decision. That’s great news for me, because I’ve spent most of the summer cranking out an article on how exactly such price-fixing should be evaluated now that the Dr. Miles rule of per se legality is dead.

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Antitrust & Consumer Protection

Lipton on Shareholder Primacy

TOTM It should be no surprise that the inventor of the poison pill is pro-director, but Marty Lipton’s remarks at a June 25 conference at the . . .

It should be no surprise that the inventor of the poison pill is pro-director, but Marty Lipton’s remarks at a June 25 conference at the University of Minnesota Law School left no doubt that he truly believes in his heart of hearts that we’re better off with strong, unencumbered boards. According to the WSJ’s deals blog (quoted in today’s print edition), Lipton wondered aloud whether the move to shareholder-centric governance will “simply overwhelm American business corporations.”

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Financial Regulation & Corporate Governance

RPM and the NIE

TOTM I’ve just spent a couple of great days in spectacular Boulder, Colorado at a conference on the New Institutional Economics (NIE). (Not sure why the . . .

I’ve just spent a couple of great days in spectacular Boulder, Colorado at a conference on the New Institutional Economics (NIE). (Not sure why the “the” is required, but it always seems to be used.) The conference, organized by Colorado Law’s Phil Weiser and hosted by the Silicon Flatirons Center for Law, Technology, and Entrepreneurship, was designed to provide law professors with an overview of what the NIE is about and how it can inform legal scholarship. Geoff also attended and would probably agree that the conference was great fun.

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Antitrust & Consumer Protection

FTC to Dr. Miles: “I Wish I Knew How to Quit You!”

TOTM In April 2000, the FTC issued a Complaint against women’s shoe distributor Nine West, claiming that Nine West had engaged in minimum resale price maintenance . . .

In April 2000, the FTC issued a Complaint against women’s shoe distributor Nine West, claiming that Nine West had engaged in minimum resale price maintenance (RPM) (i.e., the setting of minimum prices that retailers could charge for its shoes). Apparently, Nine West was providing retailers with lists of “off limits” or “non-promote” shoes that weren’t to be promoted except during defined periods. Because Nine West sought acquiescence in those policies by threatening to terminate offending dealers, the FTC maintained that it had engaged in a minimum RPM agreement. At that time, such agreements were deemed to be per se unreasonable–and thus automatically illegal–restraints of trade. Nine West ultimately agreed to a broadly worded Consent Order requiring it to refrain from (among other things) fixing prices at which its retailers may sell, advertise, or promote its products; “otherwise pressuring” its dealers to adhere to resale prices; and “[s]ecuring or attempting to secure any commitment or assurance from any dealer concerning the resale price at which the dealer may advertise, promote, offer for sale or sell any Nine West Products.”

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Antitrust & Consumer Protection

Score One for Obama

TOTM I’ve been waiting for my old con law prof to take a political stand I could really get behind, and he finally has. Barack Obama . . .

I’ve been waiting for my old con law prof to take a political stand I could really get behind, and he finally has. Barack Obama is the only one of the presidential candidates to take a firm stand against this shamefully populist gas tax holiday. Good for you, Prof!

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