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Wednesday, March 12, 2008

Eliot Spitzer resigns

David Anderson with The Anderson Governance Group, in an interview with BNN this morning, said about the “narcissistic” Eliot Spitzer that he used his power without “scale or humanity.” He also said that public company directors and officers became afraid to take normal business risks for fear of Spitzer.

As Attorney General of New York, for instance, Spitzer would prosecute honourable public company directors and officers for “technicalities” and then prevent them from using their directors and officers (D&O) liability insurance to pay the huge fines he demanded, ensuring their personal financial ruin.

Spitzer announced minutes ago at a press conference that he will resign as Governor of New York effective Monday, March 17th for his involvement in a prostitution ring. I will raise a glass tonight in honour of the long list of victims and ruined lives caused by Spitzer’s anti-capitalist crusades.

UPDATE:

Prominent libertarian and editor of LewRockwell.com wrote that "...it is disturbing to see the central government bring down the governor of a state for unconstitutional victimless crimes." This is a valid point, and one Shotgunners have discussed, but Spitzer prosecuted people mercilessly for these same "unconstitutional, victimless crimes." While there is no virtue in schadenfreude, there is value in showcasing Spitzer's statist political record and his hypocrisy.

Spitzer set out to persecute business and financial leaders... to stop the motor of the world. I'm deeply relieved that his efforts have been, at least temporarily, diverted.

Posted by Matthew Johnston on March 12, 2008 in Current Affairs | Permalink

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I will raise a glass tonight in honour of the long list of victims and ruined lives caused by Spitzer’s anti-capitalist crusades.

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Not following NY politics / law making that much, whose life has he ruined?

Posted by: Snowrunner | 2008-03-12 10:48:09 AM

Spitzer also has super-delegate status and is a Clinton supporter (imitator?). I wonder if he will now show up at the Democratic Nomination Convention to exercise his muti-vote reward to Billary?

Posted by: John Chittick | 2008-03-12 11:00:02 AM

Re your "update" -- while I certainly can't say that I agreed with Spitzer's approach or his politics, I share Lew Rockwell's concern that there is too much zeal shown by too many in the face of all this for sections of law that aren't really aimed at much except "presumptive-protection" as opposed to actual protection of non-party and/or non-consensual victims. I believe we need strong laws against public solicitation, child prostitution (the violators there should go away for scores of years instead of months), and other laws aimed at addressing measurable harm or non-consensual action. I am NOT as convinced that even if we might feel a tinge of "serves him right" or "revenge is sweet" that we should pretend as if laws that aim to spend public resources attacking a completely private and consensual transaction, even if repugnant, are so normal and super in this day and age.

Posted by: Liam O'Brien | 2008-03-12 11:52:09 AM

The most high profile victim of Spitzer's crusade was Martha Stewart.

http://www.harrybrowne.org/articles/MarthaStewart.htm

http://www.lewrockwell.com/roberts/roberts29.html

Posted by: Matthew Johnston | 2008-03-12 12:32:26 PM

And one can fervently hope that Patrick Fitzgerald, fearless pursuer of political scalps such as Libby and Black, will follow his role model Spitzer in the not too distant future.

Posted by: Patrick B | 2008-03-12 1:25:22 PM

Update on earlier comment: Spitzer is no longer a super-delegate. Hillary will have to grovel elsewhere for delegates.

Show Trial for a show-trialer? He certainly deserves it. I would just as soon see his loyal wife give him a good bitch-slap on camera. This stoic, stand by your politician-man stuff is sickening and demeaning.

Posted by: John Chittick | 2008-03-12 3:08:32 PM

The man is a typical leftist hypocritical pig.
I fee sorry for his wife and daughters.

Posted by: John West | 2008-03-12 4:32:25 PM

And just like a typical Leftist government big spending pig ... paid about three time more for the service than he had to pay. I have met a thousand dollar hooker and they cannot possibly get any hotter than that. More government waste 4300. for a roll in the hay. Wonder what he'd pay to have a bridge built.

Posted by: John West | 2008-03-12 4:36:35 PM

Posted by: Matthew Johnston | 12-Mar-08 12:32:26 PM

I only read the first link, but essentially the guy (and I guess you) is pissed that Spitzer went after Stuart for insider trading.

Now, you may or may not think that insider trading is a bad thing, but it is against the law. Sure, there were some bigger fish they should have gone after (Enron), but Martha had the misfortune to be with her company in New York State, not in Texas, otherwise she'd probably just gotten a letter telling her to be less obvious next time.

You can hate Spitzer as a person or for whatver reason, but to hate him because the guy was doing his job and actually throwing the book at her surprises me a bit. Usually the WS crowd is screaming about how linient the courts and prosectuors are and demand tougher sentencing and punishment, but when a guy like Spitzer goes after someone with the full force of the law you don't like it either, because she was just doing business, even though it involved breaking the law.

BTW, considering that you seem to think that Government involvement in business affairs is a bad thing, I expect your next post to rail against the bailouts the banks are getting right now with the several billions of $ that the central banks all over the world are throwing at them so that the poor poor execuitves don't sink with their ships.

No worries though, the first managers already figured out a way how to keep their paychecks:

http://consumerist.com/366783/wamu-rewrites-executive-bonus-plan-to-avoid-subprime-meltdown-responsibility

Posted by: Snowrunner | 2008-03-12 7:27:09 PM

Oh, as an addendum, Martha Stewart still seems to do brisk business despite her conviction, so how she could be branded as a "victim" is a bit beyond me.

Posted by: Snowrunner | 2008-03-12 7:28:00 PM

John - to be technical, I think that $4300 covered two hours and included an advance to give him a credit with the agency - as well as transportation for the woman.

Heidi Fleiss says, specifically, that he was pressuring the women to engage in unprotected anal sex. I'd guessed the first and last words of that right - but the middle hadn't occured to me. I'll defer to Heidi in this area.

More to the point, the issue here isn't really - to my mind - whether prostitution is right or wrong or should be legal or illegal. The issue here is that for a married man and a law-enforcement official, one who engaged in busting prostitution rings, to be engaged in it is incredibly hypocritical.

But, even more than that, I don't think that this scandal would have been enough to drag down a lot of other politicians. It was enough to drag down Spitzer because, really, everyone hated him. They feared him - but they also hated him. The man was a graceless thug who destroyed reputations, bullied without cause, and who abused the law to his own benefit. If he was a good man and he'd made some friends, he probably could have apologized and survived. If he wasn't married he probably could have responed that this was "no one's (expletive deleted" business and survived. This is New York, after all - Ed Koch was in the closet for a decade as Mayor in the 1970's and 80's and no one cared.

This is karma in action. It doesn't always work but, in Gov. Spitzer's case, a life of being a jerk came back to haunt him when he really needed true friends.

Posted by: Adam Yoshida | 2008-03-12 9:46:50 PM

Adam

Sounds like the best dirt hasn't hit the fan yet. The specific "action" he was looking for indicates a leaning toward the same sex. I wonder how long before he gets "outed".

Posted by: dp | 2008-03-12 10:15:48 PM

From http://cafehayek.typepad.com/ March 10th post...

Gov. Eliot Spitzer says that his patronage of prostitutes is a "private matter" ("Spitzer Is Linked to Prostitution Ring," March 10). He's correct; that matter is between himself and his family and is no one else's business. I wish only that Mr. Spitzer understood that many of his most famous crusades - for example, against musical-recording companies aggressively marketing their products, against banks lending money to lower-income consumers, and, indeed, even against prostitution rings(!) - were crusades against behaviors that in each case is a "private matter."

If Mr. Spitzer wants us to butt out of his private affairs, he should from here on in set an example by butting out of everyone else's private affairs.

Sincerely,
Donald J. Boudreaux

... Well said!

Posted by: TM | 2008-03-12 10:35:20 PM

Oh, I don't know about that. I have it on good authority that, in recent years, it's become fairly popular among heterosexuals as well.

Indeed, one of the tragedies of the way in which gay activists and Christian conservatives have politicized AIDS education is that, by a massive margin, the easiest way to get AIDS is through anal sex, whether straight or homosexual. It's just a plain unsafe act in general. Having written on this in the past, I'm working from memory - but the posted odds difference between the odds of catching HIV (or many other STD's, for that matter) from anal sex versus straight sex is in the thousands or tens of thousands. Indeed, if memory serves, repeated and lengthy studies of HIV sero-discordant couples showed only a handful of cases of the disease passing heterosexually - and in most of those cases there were other factors involved.

I once suggested that the best anti-HIV approach would be running ads showing the comely behinds of various men and women with phrases like "Don't Enter Through the Exit" and "It's Just Not Meant for That" written over them in red. But, alas, I was shouted down.

Posted by: Adam Yoshida | 2008-03-12 10:39:47 PM

Adam

One effective way to convince men that this practise is undesirable is to remind them they don't need a woman for this.

Popular or not, it's still a red flag for latent homosexuality.

I totally agree with your approach in the campaign against HIV. Sometimes you have to get down and dirty to convince people.

I guess the hooker in question decided it was worth the risk for that kind of money.

Posted by: dp | 2008-03-12 10:55:27 PM

Liam??? Just what in the hell are you talking about??? This wasn't about 'Joe Blow' getting caught in a sting, it w a s a Gov'nor! Not just any Gov'nor either!
Sheeesh bud!

Maybe it's just me......this guy has always been a creep, guess it just took a bit of time to prove it.

Posted by: prairie dog | 2008-03-12 10:55:54 PM

Might the real offense(legal) here be the misappropriation of government funds? It seems that he took advantage of his out of city trips to indulge his appetite for illicit sex. How were his trips paid for and how much of them should have been written off as business and how much as pleasure? Please don't liken his encounters to good restaraunt meals.

Posted by: DML | 2008-03-12 11:55:24 PM

Snowrunner - I believe in law and order, but laws must be built on rational, moral foundations. Laws must be reasonable and just. We oppose the mistreatment of Ezra Levant, for example, because while "laws" exist to constrain political speech we don't accept their legitimacy.

The presence and enforcement of unjust laws is tyranny.

Removing the specifics of the Martha Stewart case from the discussion for a moment, do you accept that individuals should oppose unjust laws?

Posted by: Matthew Johnston | 2008-03-13 12:43:33 AM

...and no reasonable free market-minded person supports the bank bailouts in the US.

American capitalism is under attack...from people like Spitzer and the Federal Reserve bankers working hard to monetize America's debt.

Posted by: Matthew Johnston | 2008-03-13 12:54:20 AM

I'd describe the Federal Reserve as a necessary evil. There's a reason why there's been exactly one Depression in the last one hundred years - caused, in large measure, by missteps in monetary policy - and why there was one pretty much every decade in the 19th Century.

While it might be better, in a pure free-market sense, to let the banking system and economy come crashing down every ten or so years, I just don't think that such a process would be politically sustainable or lead to desirable results. Look what the last depression hath wrought. Hell, look at the response to this and the 1991 recession - if we suffered through cyclical depressions the way we once did, we'd have full-on communism by now.

This is the helicopter money phase we're seeing now. It'll cause problems, to be sure, but it seems like it's going to be enough to get the economy over the hump. As a result, it looks like we're headed for a minor recession - or possibly not even a full recession, merely a slow-down followed by a few years of sluggish growth as the Fed and work banks tighten up in order to control inflation.

There are things which ought to be done, to be sure, but I think that the Fed is a reasonable solution to a very difficult problem.

Posted by: Adam Yoshida | 2008-03-13 1:08:43 AM

Removing the specifics of the Martha Stewart case from the discussion for a moment, do you accept that individuals should oppose unjust laws?

Posted by: Matthew Johnston | 13-Mar-08 12:43:33 AM

Sure, but it is not the job of the prosecutor to oppose these laws, his job is it to prosecute (as the name says). It is each individuals responsiblity to fight these and get the laws changed. That still doesn't fault Sptizer for doing his job.

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American capitalism is under attack...from people like Spitzer and the Federal Reserve bankers working hard to monetize America's debt.

Posted by: Matthew Johnston | 13-Mar-08 12:54:20 AM

We have different takes on this. The banks gambled, they gave lines of credit to people who should have never GOTTEN credit in the first place, then they tried to hide the bad news and sold it to other banks who just blindly believed in it.

The bailout of the banks is due to their own greed. They wanted to make as much money as they could, they lost that roll of the dice and now *I* (and you and everybody) is going to pay for that? I haven't seen one Manager at a bank getting fired for approving these loans / pushing them forward, there is no acountability. How can it be a Free "self regulating" market if there are no consequences for bad behaviour?

Things like the SEC, laws against insider trading etc. exist EXACTLY because human greed knows no bounds and the idea that the market will "correct itself" can be squarely put back into the grave where many dig it out from with this bailout.

As for the American Capitalism being "under attack". Have you actually looked how these capitalistic numbers come together? Most of the US GDP is generated by consumer spending, how this is is a healthy environment someone needs sto explain to me. If you don't produce anything, just consume then there is a large part missing from your equation.

Nope, sorry, those bailouts are a band aid trying to prevent a system from falling in on itself that is propped up by strings and a prayer and the sooner we stop trying to pretend it's working the better for all of us (and no, that won't be pretty, for a lot of people, but delaying it won't make the final outcome any better).

Posted by: Snowrunner | 2008-03-13 7:27:40 AM

Posted by: Adam Yoshida | 13-Mar-08 1:08:43 AM

As you are a financial expert Adam, please tell me exactly what Money is.

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Posted by: Adam Yoshida | 13-Mar-08 1:08:43 AM

Okay, so what you are saying is this: Unfettered capitalism requires stark corrections every decade. The problem is that if that continues then people would want to abandon the capitalistic system because everything they have worked for will be wiped out every 10 years?

If that's the case, wouldh't youy agree the the capitalistic system DOES NOT work? Or else, why would people have abandoned it by now and turned towards communism?

---------------

Posted by: Adam Yoshida | 13-Mar-08 1:08:43 AM

And that assessment is based on what? The numbers I am looking at (and that goes back almost 40 years) tell me a different story. But I am curious to hear what had you come to this conclusion.

---------------------

There are things which ought to be done, to be sure, but I think that the Fed is a reasonable solution to a very difficult problem.

Posted by: Adam Yoshida | 13-Mar-08 1:08:43 AM

Right, so cheapening the US dollar, which causes pretty much all goods to go up in price because commodities are priced in USD is an appropriate repsonse to prevent banks from being punished for being greedy? By making life more expensive for everybody that is a measured response?

It was a neat trick in the past to cheapen the USD in order to pay your debt back cheaper, but that really only works if you actually DO pay back your debt, not if you have to borrow more and more money to pay for a little war and other "out of pocket" expenses.

But hey, if it is a good idea to just print money, can I have my own money press? I could use some extra cash too, and apparently it isn't a problem just to print up a few hundred billion when you need them.

Posted by: Snowrunner | 2008-03-13 7:38:08 AM

prairie dog: you seem to be responding to something I didn't say. . . where did I defend Spitzer or his actions? I made a comment about a separate issue.

Posted by: Liam O'Brien | 2008-03-13 8:25:05 AM

Just for the record, Snowrunner: In 2004, Stewart was convicted on charges of conspiracy, obstruction of justice and making false statements and her former Merrill Lynch stockbroker, Peter Bacanovic, was convicted on four of five counts against him. They couldn't make charges of Insider trading stick because she was not an insider of Imclone. The process of the ill-premised investigation created the crime by getting her to lie about her trades. In other words it was the charges that caused the crime - Spitzer's connection.

Carry-on with your pathetic attack on Capitalism as if the current system isn't a twisted convoluted product of decades of market intervention, over-regulation, subsidies, rent-seeking and cronyism. Just keep growing that Leviathan and blame all results on the system that is being destroyed.

Yoshida, you could bone-up on monetary economics - try Rothbard's "America's Great Depression".

Posted by: John Chittick | 2008-03-13 11:06:08 AM

Posted by: John Chittick | 13-Mar-08 11:06:08 AM

Oversimplify much? The current system is considered capitalism. And if you really think that a no holds barred, no rules capitalism would bring prosperity then I would like you to explain to me how that systme would work.

If I have no rules, if there are no limits and no guidlines contracts and agreements would be nil. Who cares if I promise you to pay X for your work? Once it's done I decide I don't want to pay that much if anything at all. And hey, that's fine too in an uncontrolled system, I am just looking out for myself.

You're also forgetting who actually wants all these subsidies and other "meddeling" who is usually asking for it? It's usually not the little guy on the street until way later in the game, these money transfer schemes are usually cooked up in boardrooms where they utter threads of closing down plants and taking jobs with them if they don't get what they want.

Simple put: Humans are greedy, it's in our nature to try and get the most, to think that a free for all system would be better than one with controls that actually work and lay the base line for everybody is wonderful but far from reality.

The current system IS broken, it can't get fixed out of a variety of reasons, but I can't see anybody wanting to start over, be it with a well though out regulated system or a "free for all" as some people on here seem to prefer.

But please, prove me wrong. Go forth and lay out how YOU would like things to change.

As for Martha Stewart, as I said before I did not follow this, I picked it up in the news and personally think there would have been more worthwhile targets. I still think going after Spitzer over him doing his job is still pathetic, you don't like the guy, fine, but to blame him for trying to get a conviction is just funny. As for her "getting nailed for lying", you seem to strongly imply that if this evil Mr. Spitzer wouldn't have goine after her she wouldn't have been forced to lie. In other words: It was all HIS fault that she ended up in jail, if he just had left her alone, then she wouldn't have had to lie and hide stuff and she would have had such a traumatic experience.

Posted by: Snowrunner | 2008-03-13 11:46:33 AM

Snowy:

I would be interested in what terms you would describe a man who made a career as a hard-nosed prosecutor and whose record includes busting up two prostitution rings.

Bear in mind that he is a customer of an activity which, with the full power of the secular state, he deemed worthy of prosecution.

In another unrelated but similar case of sexual impropriety, former students at the Alberta School for the Deaf in Edmonton are suing the state-sponsored institution for alleged rapes and other improper breach of trust issues.

Who is to blame? Do these two examples mean the state cannot be trusted because it did not root out hypocrites pedophiles?

Can lawmakers ever pass enough laws that can evolve human nature? Will sociopaths always be among us?

Posted by: set you free | 2008-03-13 12:46:16 PM

I would be interested in what terms you would describe a man who made a career as a hard-nosed prosecutor and whose record includes busting up two prostitution rings.

Bear in mind that he is a customer of an activity which, with the full power of the secular state, he deemed worthy of prosecution.

Posted by: set you free | 13-Mar-08 12:46:16 PM

So? And looks like he's going to have to answer for that. Would it have been okay with you if he wouldn't have gone after the prostitution rings because he was involved in it himself (later)?

Or are you trying to paint him as a hypocrit because he was "biting the hand that he fed" later?

I am not quite sure what you are gunning for here.

Posted by: Snowrunner | 2008-03-13 10:06:11 PM

Snowy:

This is about as clear-cut a case of hypocricy anybody could have ever imagined.

I'm sure you can figure out the hypocricy in this situation.

A man who used (an arguably abused) his position as a prosecutor.

A man who acted as it the state is the supreme moral authority and who used (and arguably abused) that power in a way that violated any sense of privacy the people he went after believed they had.

Unfettered capitalism is in nobody's interest, but an unfettered state has shown it is even less trustworthy.

Can you not see how hypocritical this is?

If the man had been prosecuting bank robbers and then was discovered to be robbing banks himself?

Your apparent faith in the moral authority of the state seems somewhat displaced.

The state never has been and never can be a moral authority on individual behaviours.

I know you smoke a bit of ganja and, quite frankly, that's your choice. I'm assuming you know the long-term health risks.

I can tease you about it, but if you want to continue to smoke ganja, there's not much I can do.

The difference is that Spitzer was in a position where he could prosecute a judgemental outlook on others. He's a damned bully, for Gawds sake.

How you could have any sympathy for him at all is beyond my comprehension.

Posted by: set you free | 2008-03-13 10:23:34 PM

I'm not sure about the US, but in Canada most prostitution rings are controlled by organized crime (Hell's Angels in Canada). I don't imagine it's much different down there.

Imagine the potential for extortion this guy exposed himself to. I would imagine a polititian would not go unnoticed by the people running the business. If you're already committing a major crime, why not pocket a little extortion money?

Reminds me of Godfather 2. I'd say it's lucky for the people of New York that he got caught. He could have started a new era in Mafia controlled politics.

Posted by: dp | 2008-03-13 10:47:18 PM

I'm sure you can figure out the hypocricy in this situation.