The economic pox of light rail is even filtering down to New Mexico, which enjoys one of the least densely populated areas in the nation. Despite the absurdity of this economic boondoggle, this common sense analysis keeps a straight face while evaluating the light rail proposal.
Berkshire Hathaway’s decision to roll over and provide government investigators anything they want in connection with the multiple investigations into the transactions between Berkshire General Reinsurance Corp. and American International Group, Inc. is starting to look like a very costly one.
This Wall Street Journal ($) article reports that federal prosecutors are examining whether Joseph Brandon, chief executive of General Re and a close confidant of Berkshire’s icon, Warren Buffett, played a role in the transaction between General Re and AIG that has spawned a cottage industry of investigations into General Re, AIG, and other companies that have engaged in similar “finite risk” structured finance insurance transactions. The 46 year old Mr. Brandon — who took over as General Re’s CEO in 2001 — is the highest-ranking executive at General Re to be investigated in the matter who is still employed at General Re.
A portion of the WSJ article describing the investigation underscores the absurd length to which the government will now go in its campaign to criminalize agency costs:
The fact that Mr. Brandon learned about Gen Re’s accounting for the AIG transaction as a loan rather than insurance around the time of the conversations with Mr. Buffett may not present problems for him in the eyes of regulators, people close to the situation say. But if investigators determine that Mr. Brandon also understood the purpose of the transaction for AIG and how AIG accounted for it, he might be vulnerable to charges, the people close to the inquiries say.
Stated another way, prosecutors appear to be suggesting that if Mr. Brandon was informed that the transaction was beneficial for AIG from an accounting standpoint, then he committed a crime.
It is simply impossible to square the foregoing theory of criminal liability with the following language of Chief Justice William Rehnquist in the Supreme Court’s recent Arthur Andersen decision:
We have traditionally exercised restraint in assessing the reach of a federal criminal statute, both out of deference to the prerogatives of Congress, . . . and out of concern that “a fair warning should be given to the world in language that the common world will understand, of what the law intends to do if a certain line is passed.”
What a difference a year makes.
Last year at this time, this post about the Stros reflected the overwhelming pessimism that surrounded the team — the hitting was lousy and the pitching staff was reeling from the loss of Wade Miller and the sore elbow of Andy Pettitte. Of course, that club turned things around dramatically during the last third of the season to take the Wildcard playoff spot and come within a game of the World Series.
On the other hand, this year, the Stros strutted into the All-Star Break on a 29-13 run, the Rocket and Roy O are the top two pitchers in the league, 3B Morgan Ensberg is having a career year, Bidg is performing remarkably, and Berkman is hitting his stride after returning late from off-season knee surgery. As opposed to last season, the overall feeling is one of sunny optimism.
The funny thing about the foregoing is that this season’s Stros team (44-43) has lost only one less game than last season’s club (44-44) at this time. Expectations certainly color attitudes toward performance, don’t they?