Impact of the Ethanol Boom on Livestock and Dairy Industries: What Are They Going to Eat?

Increased demand for corn for ethanol production has helped push grain prices to record levels. This has increased livestock production costs, and producers have responded with changes to production systems. This paper explores the degree to which costs can be mitigated with alternative feeds, the effect this might have on physical performance, and the impact of alternative feeds on the competitive position of different species.cattle feeding, corn, cost of production, ethanol, Agribusiness, Farm Management, Livestock Production/Industries, Production Economics, Research and Development/Tech Change/Emerging Technologies, Q12, Q13,

Paintbrushes and Crowbars: Richard Rorty and the New Public-Private Divide

In an often-quoted passage, Richard Rorty wrote that “J.S. Mill’s suggestion that governments devote themselves to optimizing the balance between leaving people’s lives alone and preventing suffering seems to me pretty much the last word.” In this Article, I show why, for Rorty, maintaining a strong public-private divide that cordons off final vocabularies—the religious, racial, ethnic, sexual, gender, philosophical, and other terms so important for citizens’ private pursuits of self-creation and self-perfection—from public political discourse is a crucial means to accomplishing both of these goals in post-secular liberal democracies. Public political justifications should instead be articulated in the foundation neutral terms of a shared national vocabulary. Like paintbrushes and crowbars, final and shared vocabularies are different tools for different purposes, and a strong public-private divide helps ensure that no harm comes from their misuse

What’s the Harm in Issuer-Licensed Insider Trading?

There is growing support for the claim that issuer-licensed insider trading (when the insider’s firm approves the trade in advance and has disclosed that it permits such trading pursuant to published guidelines) is economically efficient and morally harmless. But for the last thirty-five years, many scholars and the U.S. Supreme Court have relied on Professor William Wang’s “Law of Conservation of Securities” to rebut claims that insider trading can be victimless. This law is purported to show that every act of insider trading, even those licensed by the issuer, causes an identifiable harm to someone. This article argues that the Law of Conservation of Securities is not helpful to answering the moral question of whether insider trading is a victimless crime because it either proves too much or too little. It either proves that all profitable trades (or profitable trade omissions) in advance of firms’ material disclosures are morally impermissible (an absurdity), or it tells us nothing at all about the moral permissibility of such trades. Of course, once the Law of Conservation of Securities is neutralized, other moral criticisms of issuer-licensed insider trading that rely on this law also fail. Professor Leo Katz’s claim that morality does not permit one to consent to a system that openly allows issuer-licensed insider trading is offered as one example of an argument that fails once considered in light of a proper understanding of the Law of Conservation of Securities

Greed, Envy, and the Criminalization of Insider Trading

In October 2011, a U.S. district court sentenced Raj Rajaratnam to eleven years in federal prison for insider trading. This is the longest sentence for insider trading in U.S. history, but it is significantly less than the nineteen to twenty-four-year term requested by the government. Such harsh prison terms (equal in some cases to those meted out for murder or rape) require sound justification in a liberal society. Yet jurists, politicians, and scholars have failed to offer a clear articulation of either the economic harm or the moral wrong committed by the insider trader. This Article looks to fill this gap by offering a rigorous analysis of insider trading, its criminalization, and its punishment from multiple economic and moral perspectives. This analysis reveals that of the three forms of insider trading currently proscribed under section 10(b) of the Securities Exchange Act of 1934, two are economically harmful and morally impermissible, but, surprisingly, one is not-nonpromissory insider trading, where the insider trades on material nonpublic information while having made no promise or other commitment not to trade. Having reached this conclusion, this Article explores alternative justifications or explanations for criminalizing nonpromissory insider trading. Virtue theory offers an alternative justification for the criminalization of nonpromissory insider trading, particularly the vice of greed. But while insider trading often reflects the vice of greed, a moralistic contempt for this character flaw cannot justify the criminalization of otherwise morally innocent conduct, as this would violate the firmly held, liberal harm principle famously articulated by John Stuart Mill. If the criminalization of nonpromissory insider trading cannot be justified, it must be explained. The sociopsychological theory of cognitive dissonance (as articulated by Dan Kahan and Eric Posner) is entertained as an explanation for how morally innocent conduct such as nonpromissory insider trading might first become criminalized and then later perceived to be immoral by a population. Under this theory, actors generally regarded as moral innocents may initially be targeted for punishment as scapegoats in the wake of a disastrous social event. Over time, to avoid cognitive dissonance between the belief that conduct is morally permissible and the act of punishing it, society simply drops its shared belief in the moral permissibility of the conduct. This theory of cognitive dissonance fails to explain, however, why nonpromissory insider traders would be targeted as scapegoats to begin with. The moralistic contempt for the vice of greed in some insider traders offers one motivation, but the public\u27s own vice of envy concerning the easy money made by insiders may offer another. Since neither motivation supplies a justification for criminalization in a liberal democracy, and since envy in particular has its own harmful effects on society, this Article concludes with the cautionary note that we should rethink our laws and reconsider our attitudes concerning nonpromissory insider trading

Solving the Paradox of Insider Trading Compliance

Regulators demand the impossible when they require issuers to design and implement effective insider trading compliance programs because insider trading is a crime that neither Congress nor the Securities Exchange Commission has defined with any specificity. This problem of uncertainty is then compounded by the threat of heavy civil and criminal sanctions for violations. Placed between this rock and hard place, issuers tend to adopt overbroad insider trading compliance programs, which comes at a heavy price in terms of corporate culture, cost of compensation, share liquidity, and cost of capital. The irony is that, since all of these costs are ultimately passed along to the shareholders, insider trading enforcement under the current regime has precisely the opposite of its intended effect. This is the paradox of insider trading compliance for issuers, just one more symptom of a dysfunctional insider trading enforcement regime that is in need of a dramatic overhaul. There are a number of conceivable paths to resolving this paradox. The most obvious solution would be for the Securities Exchange Commission to issue a rule or for Congress to promulgate a statute defining insider trading with greater specificity. But while simply fixing definitions to the elements of insider trading under the current regime would improve matters, this Article calls for a more radical solution. It suggests that the current enforcement regime be liberalized to permit insider trading where an issuer approves a trade in advance and has disclosed that it permits such trading pursuant to regulatory guidelines. It argues that such reform would lead to a more rational, efficient, and just insider trading enforcement regime. Moreover, by aligning the interests of issuers, shareholders, and regulators, this reform would also offer the most effective solution to the paradox of insider trading compliance

A Tale of Two Cities: Mark Cuban, David Einhorn, and the Ethics of Insider Trading Reform

The similarities between the insider trading stories of Mark Cuban and David Einhorn suggest that their circumstances are not uncommon, and the contrasting results also help to illustrate some significant differences between the common law fraud-based insider trading regime in the U.S. and the statutory parity-of-information regime in Europe. And, as Congress and the SEC continue to weigh the merits of reform in the U.S., the examples of Cuban and Einhorn are particularly instructive for the reasons to be developed in the remaining sections of this Article. First, as will be explained in Part II of this Article, contrasting the enforcement actions against Cuban and Einhorn throw into stark relief the lack of ex ante guidance under the U.S. regime for good-faith traders who must make real-time decisions for themselves and for those who are relying upon them to invest their money. The examples help to illustrate why the ethics of legal certainty, due process, and the principle of legality weigh in favor of following Europe in adopting a relatively clear statutory insider trading enforcement regime. Second, however, it will be argued in Part II of this Article that if statutory reform is needed in the U.S., the liability imposed upon Einhorn despite the fact that his conduct (as I will argue) was neither deceptive nor unfair, shows why adopting the Europe\u27s broad parity-of-information model would be a mistake

When Does Corporate Criminal Liability for Insider Trading Make Sense?

It is clear that not all insider trading is victimless, and not all employers of insider traders are innocent. But I am convinced that these critics are correct to point out that the current enforcement regime is absurdly overbroad in that it affords no principled guarantee to corporate victims of insider trading that they will not be indicted for the crimes perpetrated against them. The law should be reformed to ensure that corporations are only held criminally liable where they are guilty of some wrongdoing

The Final Step to Insider Trading Reform: Answering the It\u27s Just Not Right! Objection

This Article proceeds as follows: Section I sets the table by dismissing the notion that economic analysis of law should enjoy some privileged status (as more precise, rigorous, or scientific) over ethical analysis of law. Rather, it is suggested that economic and ethical reasons are best understood as different tools suited for different roles in legal reform. It is then argued that, given the current climate, ethical reasoning is the best tool for overcoming the remaining obstacles to insider trading reform in the United States. Section II begins the ethical analysis by arguing that even if it were admitted that insider trading harms society and is morally wrong, the current enforcement regime would still be unjust, incoherent, irrational, and in desperate need of reform. Section III proposes the legalization of issuer-licensed insider trading as one effective means of reforming the current regime but anticipates the it\u27s just not right objection. Section IV confronts the it\u27s just not right objection on its own ethical terms and demonstrates that, while it is true that some forms of insider trading are not morally permissible on either consequentialist or deontological grounds, issuer-licensed insider trading is morally permissible. Nevertheless, some object to insider trading, not on consequentialist or deontological moral grounds, but because it reflects the vice of greed. Section V closes by addressing this ethical concern. It is argued that criminalizing issuer-licensed insider trading is not only a poor means of combating the character flaw of greed, but that criminalization on such grounds would be moralistic (like laws against sodomy or same-sex marriage) and would therefore conflict with our society\u27s increasingly shared repugnance toward such laws. Finally, if our criminalization of issuer-licensed insider trading cannot be justified on moral or ethical grounds, it must be explained. Some have suggested that society\u27s envy of those who earn easy money offers the explanation. However, envy is perhaps the worst of all vices, and the Article closes by cautioning against its seduction