Utah's Third Attempt To Regulate Keywords Fails 68
Eric Goldman writes "Earlier this month, we discussed HB 450, the Utah Legislature's third attempt to regulate keyword advertising after the past two efforts failed miserably. The latest attempt barely passed the Utah House, aided in part by a 'yes' vote from Representative Jennifer Seelig, who also happens to be a lobbyist-employee of 1-800 Contacts, the principal advocate of HB 450. Nevertheless, HB 450 died in the Utah Senate without a vote when the Utah Legislature adjourned last night. Despite the seeming good news, it would be surprising if the Utah Legislature didn't try a fourth time to regulate keyword advertising in a future session."
Wow... (Score:1, Insightful)
Government prevents the few from harming the many (Score:2, Insightful)
"if Bush-era deregulation is the cause of the U.S. market woes, then why is the European Union, the world's most stringently-regulated capitalist "country", in recession too?"
What you are missing through your fog of suspect thought patterns is that European financial problems, as well as those of Asia and most of the rest of the world, were the direct result of American (US) lack of regulation and the interconnected nature of the current global economic system. To put it country simple, it only takes ONE APPLE to spoil the barrel, and that rotten apple was destined for an American apple pie.
Re:But that's what government is for - to regulate (Score:5, Insightful)
Your signature suggests a bias. Might look into changing that.
I think what bothers a lot of people is that we were told for many years "Oh, no. We have to have free markets. We must deregulate everything!", and then many decided to take an unethical approach to how they go about their business and it turned out that they might not have been trustworthy after all. In the last days of the previous administration, they reversed course into a "worst of both worlds" scenario: Remove all limitations and then fund them to keep them afloat when their machinations didn't pan out. (I don't know where the new administration is going with this, I'm giving them the benefit of the doubt that a huge policy swing towards "No more federal aid" might not make as much sense as a gradual approach towards change.)
But, to answer your question, heavily-regulated markets in Europe didn't keep them from investing outside of their local market. We fucked up, and so the impact doesn't stop at our borders, every foreign investor gets to feel the pinch as well.
Nothing to do with Law (Score:4, Insightful)
I can't imagine any legislature would even consider this seriously since there is no way for them to enforce this except for those businesses that deal in keywords and have servers in Utah and the company only deals in Utah (i.e. not on the internet). I would think that other than that, the interstate commerce clause of the Constitution applies and they would not be able to regulate it at the state level. Is this the case? I am usually wrong so I would like someone with a better sense of the law to comment on this.
This has nothing to do with the law; it has to do with politics.
You grossly over estimate the altruism, intelligence, and motives of politicians. This legislation is designed to get votes. Period. Some cry baby vocal minority out there wants this and the rest of the population, more than likely, doesn't give a shit.
In the meantime, the politicians get the support of the vocal obnoxious cry baby group (volunteer labor and money), which then enables said politicians get to keep their over paid cushy jobs.
Simple.
In short (Score:4, Insightful)
Basically these characters want "free markets" when they are doing well and taxpayer-funded socialism when they are not. Whereas what we had in the U.S. until the '30s was the "boom and bust" cycle, fueling ever greater bubbles and collapses until it finally became apparent that the nation couldn't take much more of this nonsense. And then along came the Neonuts and it was back on the ferris wheel again.
But yes, everything you say is spot on and cogent.
Re:But that's what government is for - to regulate (Score:5, Insightful)
Actually, the member states of the EU are in widely varying degrees of recession. The UK is totally and utterly screwed, near bankruptcy -- mainly because it was Bush's lapdog for a decade, because its Neues Arbeit Regime looked after itself first, and because they are nothing more than the willing puppets of corporate interests.
Iceland is screwed because it depended on the UK too much. France and Germany are affected, but they do have much more banking regulation and it's nothing like as bad. The other member states are affected less still for the same reasons.
This is why there is so much disagreement at the G20 talks right now -- many EU countries are actually doing ok, despite the recession, and don't want the US and UK imposing desperate Keynsian burn and spend tactics. Since, they don't need them, and would that probably drive them further into depression and instability, just like the US and UK.
The whole of this mess though, does relate to this article. The fundamental problem in today's society is that corporate interests overrule the will of the people. Governments everywhere are bought and sold. I have no idea how we fix this -- corporations are too powerful. However, we really, really, really need to. All of us, in every country.
Maybe it starts with corporate employees from grassroots up. If you work for a corporation, why do you allow all life on Earth to be exploited for your masters bidding? You can change things, you have free will, and a duty to us all. Those of us who don't work in corporations really can't do anything it seems.
Utah? Can we replace your star? (Score:5, Insightful)
Re:But that's what government is for - to regulate (Score:5, Insightful)
Right? At least that's what (almost) everybody keeps telling me. "We need government to regulate business because a free market doesn't work, as we discovered with the current recession." Utah's Legislature is just regulating the advertising market as it's "supposed" to do. They are doing their job, so where's the problem?
Nice attempt at a strawman using an absolute blanket statement (typical Repuglican tactic) but you're wrong. The free market usually works most of the time. Sometimes however regulation is an absolute necessity because companies only have one obligation and that is to make a profit.
Making a profit != Best interests of America
Consider the current economic mess the U.S. is in. I'll throw you this bone, it DID start under Clinton when he pressured Fannie/Freddie to loosen lending requirements to let more people borrow. Fannie and Freddie worked for so many years because they DID have such tight lending requirements.
When it became possible for everyone with a pulse to get a mortgage by not using Freddie/Fannie but with unregulated companies taking their place, you have the rise of the CDOs against mortgage backed securities and the problem with these CDOs is that they can be resold and resold countless times without regulation.
Credit Default Swaps written against these is ultimately what brought America into this. SO it's not a partisan issue although you could say with CDOs/CDS being sold for 8 years under Bush why they never looked into it.
It was pure greed. The system worked fine under Fannie/Freddie when the tight requirements (READ: REGULATION) was in place.
Here's another analogy since I can't write it in crayon for you.
Imagine that your neighbor buys his 16 year old son a $30,000 V8 Mustang to celebrate the kid's newly acquired driver's license. Say you think the kid is going to wreck the car, because you know what a reckless brat he is. So you take out an insurance policy for the value of his car. Only you don't take just one. You take 100, maybe 1000. Say everyone else in your neighborhood does the same thing, because there are no insurance regulations that prevent it. Now you have a $30,000 dollar unsecured asset insured for $300,000,000, underwritten by an entity with nowhere near the assets to cover all the bets if the kid wrecks the car. Throw short sellers into the mix, and you have some of the neighbors giving the kid a fifth of Jack Daniels before his Friday night date.
Sometimes regulation is a good thing.
Re:Government prevents the few from harming the ma (Score:3, Insightful)
Although that is the accepted explanation, by no means is it complete. There was an enormous real estate asset bubble in Europe (most notably in Spain) and one in the Middle East (the UAE and Qatar). It was inevitable that these bubbles would burst, but the one in the USA burst first.
One major cause of the current fiasco is that the Regulatory Agencies were simply not doing their jobs. The incompetence and sloth of the "civil servants" is what is meant by the term of "failure of oversight". What good are more regulations if regulators fail to enforce the existing ones?
Re:Call her what she is please (Score:4, Insightful)
Some of us don't look at the party affiliation before determining whether the position is stupid or not. Unlike the Neonuts who will complain about something when a Democrat does it and then laud it as just beneath the second coming of Christ when a Republican does it.
Re:But that's what government is for - to regulate (Score:3, Insightful)
Sometimes regulation is a good thing.
And sometimes regulation causes major economic failures. Like the one we're dealing with now.
See, the risk of market regulation is that it gives people a false sense of security. And that's *exactly* what happened with the sub-prime mortgage securities. They were based on models that were so complex regulators couldn't understand them, so the regulators contracted out the analysis to basically the same bunch of investment banks that were pushing them. But hardly anybody *buying* the securities realized this. They looked at the AAA ratings, listened to the assurances from the sellers and said "These guys can't be lying because the SEC would be stomping them into the ground if they were".
The existence of regulation basically eliminated due diligence. People trusted that the regulators were doing their job, because the regulators and regulations WERE in place! But whether it's just that the business had outpaced the regulators or the regulators were asleep at the wheel, the controls that everyone believed were in place were not.
The cause of the sub-prime fiasco wasn't that there was no regulation. The problem was *ineffective* regulation, which wasn't known to be ineffective, and that is a thousand times worse than no regulation.
Re:But that's what government is for - to regulate (Score:4, Insightful)
So basically you're saying that, since people lie, there's no point in making any rules.
I'm just going to go ahead and disagree with you on that one.
Re:Call her what she is please (Score:1, Insightful)
All Democrat and all Republican politicians are bad people, and I do mean ALL. You know who is a good person? Someone who wants to vote out EVERY incumbent in every position in every level of government in the entire country, those crooks, liars, and cheats, and replace them ALL with people who are self-employed or small business owners or managers from middle America. Why business owners or managers? You need the management experience and business sense or you can't be expected to run a country. Why small business? Because these big business mother fuckers who currently run our country are not actually representative of most of us. Small business owners are, however. They personally operate their business. They are in touch with the people in their community. They know which government regulations hurt them, their business, and their community, because they feel it in their own pocket, unlike big business, which just hires an extra department to take care of compliance with absurd laws, laws which serve to do absolutely nothing good for the country, laws which serve ONLY for the sole purpose of raising the barrier to entry so these big businesses can remain big in the comfort of knowing that someone in his garage won't come up with a better way. No, we're sick of these people who come from some kind of high flying mega-inter-galactic-corporation to tell us how to live our lives while they do whatever they want, live above the law, and stuff their pockets and the pockets of their friends with our tax dollars, which they tax away at frankly outrageous rates. We need to vote out every damn incumbent. They've spent enough time there and with the amount of laws and regulations on the books tripling every five seconds, things are not getting better in America, they're becoming worse. When a Democrat does something, it borders on crime. When a Republican does something, it borders on crime. Bah! Vote them ALL out, send them ALL home, and replace them with new people. That's what I say.
Re:But that's what government is for - to regulate (Score:3, Insightful)
I think the point is regulation is only as good as the regulators. If the regulators aren't worth their salt, then regulation won't do jack. If we aren't going to regulate properly, then there isn't much point talking about how "deregulation is bad", or "we need more regulation"
Re:Government prevents the few from harming the ma (Score:2, Insightful)
However, what de-regulation and free-market theory fails to address is human nature, and corruption in the short term. Free market normalization is not a fast process. It is very easy for the selfishness of a few, the willingness of a few to game the system to their own short-term profit, to ruin everything for a large number of honest people.
Cases in point. Major de-regulation and the fascination with Wall St. basically started with Reaganomics. Since then, every major economic calamity in the US has been a result of the short term greed and borderline criminality I described in the above paragraph. And in each of those calamities, free market theory did not have an answer.
- Savings & Loan scandals, a la Keating 5 etc.
- 2001 Dot Com bubble
- 2007 Financial collapse
Just to name a few of the major ones. All results of a specific group of greed-crazed people who gamed the system where little or no regulation existed. If the Free Market were allowed to correct these over-zealous maneuvers, it would have had to do so at great expense to everyone else.
All that said, I am not a proponent of that much regulation. I think the responsibility also lies in the hands of all the shareholders and bondholders out there who invested their money in these questionable securities. Most people violated the very first rule of investing (at least to me): If you don't understand how you're going to get your profit, or you don't understand how the company you're investing in makes its money, don't invest.
If you get taken by a con-man, chances are you weren't paying enough attention.
Re:Wow... (Score:4, Insightful)
It's like Quebec and the referendum they try to push through every so often. Basically, it sucks for everyone except the person trying to push their agenda through.
They can try to push through their agenda a hundred times. All it takes is a single ONE of those to go through, and everything is fucked forever. Because once it goes through, there's no way it will ever go back again.
I see it as akin to brute-forcing a password or something. Keep trying over and over again, and eventually you'll get through. And once you do, it can't be undone.
Re:But that's what government is for - to regulate (Score:4, Insightful)
>>>since people lie, there's no point in making any rules
No. Since businessmen and politicians lie ("Yeah it's safe to buy a $400,000 home even though you only earn $20,000 a year"), you can't trust either of them. Neither corporations nor governments can be trusted, so stop looking to them for advice. Instead rely on yourself.
Re:But that's what government is for - to regulate (Score:4, Insightful)
On what planet was the financial system deregulated? This occurred in one of the most extremely regulated and least free industries we have. It makes other "heavily regulated" industries look positively libertine.
The problem was not with "deregulation", but with pervasively *bad* regulation that was designed more for political expediency than robust markets (e.g. FASB 157). The market will always find the equilibrium tacitly created by the government, but the government never takes responsibility for the unintended consequences of its regulatory actions even when the potential consequences were well understood at the time the regulations were implemented. The problem was not deregulation, it was too much bad regulation.
Compounding this was a lack of enforcement of regulations, due in large part to regulatory capture. I would point out, for example, that Obama appointed Mary Schapiro to be the head of the SEC, the very same person responsible for ignoring or stonewalling whistleblowers in a number of high-profile fraud cases, including the Madoff case. When a person so obviously incompetent at enforcing regulations or policing fraud gets promoted to the top enforcement position, it strongly suggests that regulations are not about regulating.