Cyrillic Partners

It’s illegal to sue the University of California for patent infringements because the school is protected under the doctrine of sovereign immunity.

I’ve been hearing how frustrating this can be from entrepreneurs who have dealt with the school first hand.

I’m no strict constructionist, but I have to agree with this assessment of the silly protection, excerpted from the WSJ:

Stanford Law School professor Mark Lemley: “The underlying problem is that the Supreme Court is applying an antiquated doctrine — the 11th Amendment — to circumstances in which it was never intended to apply,” he says. “The Framers never contemplated states suing people for patent infringement.”

Dean Calbreath has a neat editorial comparing the current “credit crisis” to that of the great depression.

When FDR took office, the nation was seeing an average of 1,000 foreclosures a day.

During his first year in office, Roosevelt created the Home Owners Loan Corp., or HOLC, to help debt-laden borrowers pay off their mortgages. The HOLC took borrowers out of their high-interest loans and put them into 15-year loans – financed through federal bonds – with rates fixed at about 5 percent. Unlike many government bureaucracies, this was specifically designed to be a short-term program, intended to extend loans for three years and then oversee those loans for an additional 15 years.

With the HOLC and the Federal Housing Administration, the Roosevelt administration virtually created the long-term loan, which soon evolved into the 30-year, fixed-rate mortgage.

It’s unlikely such a plan could pass today’s government–but no matter how dire times seem, they’re not as bad as the great depression days. At least not yet…

[Image from AMNY.com]

Federal Reserve Chairman Ben Bernanke told Congress today that he was in favor of President Bush’s Economic stimulus package.

From the NYT Story: Mr. Bernanke said that whatever action Congress takes should be designed as a quick jolt to revive a languishing economy, and that measures like spending on infrastructure or long-term tax relief, which might take months or years to be felt, would be counterproductive.

Sound familiar? It’s the Iraq “surge” plan in action again! Many were skeptical that a short, sharp shock would do any good in Iraq, or that a “temporary” troop increase would be that. The plan seems to have been borne out though after a year. Perhaps the fiscal stimulus package will be effective too. Continue Reading »

President Bush offered his opinion that the state of the economy is unclear, but whatever Democrats were planning to do about it was wrong.

Seriously. I couldn’t make this stuff up: “recent economic indicators are increasingly mixed,” he said [via NYT]. More from the NYT story: Mr. Bush is sticking to the theme of warning against doing anything that would harm the economy at a precarious time. He emphasized that Democrats should not increase wasteful spending or raise taxes, and that they should pass three pending trade agreements to boost the export sector, which right now is the strongest part of the economy.

When asked what Bush himself would do, his staff gave a characteristic response: ask us again when we get back from an eight-day tour of the middle east.

[Image from Lolpresident]

Tradable emissions permits markets were all the rage when I was in school. It seemed like the perfect opportunity to solve a social problem in a sane, economically-justified libertarian way. The professors painted a picture of economists saving the day by pointing the invisible hand of the marketplace toward an intractible social problem.

Well, fast forward a few years and the cracks in the system are starting to show. My friend Katie Fehrenbacher’s great site, Earth2Tech.com, has a great description of what’s going on:

The fragility of the nascent carbon offset economy is front and center this week. As the U.N. was kicking off its Framework Convention for Climate Change in Bali yesterday, on the other side of the world Irish certified emission reduction (CER) credit provider AgCert saw its stock tumble over 70 percent. The collapse occurred following the company’s announcement that it would not be able to deliver all of the 7.2 million tons of United Nations-approved carbon offsets if had committed for 2008.

This follows Friday’s report from the WWF that a full fifth of U.N. carbon credits issued through the Clean Development Mechanism (CDM) are bogus and actually increase emissions. None of this bodes well for the struggling carbon market. The cap-and-trade carbon solution is the favored mechanism for carbon emissions control, but the U.N.’s top climate change official Yvo de Boer warned last month at the Carbon Forum Asia that the carbon trading market “could disappear more quickly than it appeared.”

Reporter Craig Rubens does a good job of wrapping up the recent developments in cap-and-trade systems and says that much of the future of the current carbon trading program relies on what happens in Bali in the next two weeks.

We’ll be keeping an eye on it.

Corporate Average Fuel Economy (CAFE) standards set the minimum gas milage an automobile maker’s fleet can obtain and has been a matter of contention for years.

Congress is expected to vote on higher standards for miles per gallon Wednesday. SFGate has a good quick history of the legislation:

If the bill passes, it would shake up the fuel economy of the U.S fleet, which has been stagnant for two decades. After Congress passed the program in 1975, fuel economy of passenger cars doubled in 10 years, from 14 miles a gallon to 28 miles per gallon by 1986. But as oil prices dropped in the late 1980s, automakers began selling SUVs, trucks and sedans that were bigger and more powerful - features consumers enjoyed.

Critics complained that, without any push from Washington, auto companies have let fuel economy flatline. Current law requires 27.5 miles per gallon for cars - the same as a decade ago - and 22.2 miles per gallon for light trucks.

Generally speaking, the position of V and I is that government should stay out of the way of the “invisible hand” of the marketplace for solving social problems. One of the big problems with legislation of this type is the bizarre incentive structure it establishes. And every piece of legislation has its loop holes.

CAFE is the perfect example. The legislation was designed, in part, to give farmers a break. It recognized that there was a subset of the U.S. population that needed serious trucks for agricultural work and it didn’t want to screw those people over.

But times change (always faster than Congress legislates) and light trucks became increasingly popular for the general public as commuter vehicles. The SUV became a favorite tool for suburban “soccer moms.” And automakers classified SUVs as light trucks, which are held to a lower CAFE standard.

So as SUVs became more popular, the percentage of vehicles on the road that had to actually achieve the 27.5 mpg fleet average decreased. I don’t know the stats, but I’d wager that the mpg average of all vehicles on the road was actually much, much closer to the light truck standard than anyone in Washington ever imagined.

So much for the “standard.”

More on this legislation later.