TWO NEW FTC COMMISSIONERS AND THE NATIONAL DO-NOT-CALL REGISTRY:
Debbie Majoras takes over as Acting Chair of the FTC, along with Jon Leibowitz. Both are very able lawyers and people of great character, smarts, and integrity. Which will be needed, of course, to help the Commission recover from the "Zywicki interregnum." Seriously, Majoras and Leibowitz are excellent choices to continue the amazing successes of the FTC over the past few years, under the leadership first of my new colleague Bob Pitofsky and then my old colleague Tim Muris. As recess appointees they can serve until 2005. The Post has an article today.
And a word on the National Do-Not-Call Registry, which is mentioned in the Post as being a "big government" initiative, and as such, has been criticized by many libertarians and conservatives. I believe the criticism is misplaced--the DNC registry is simply law & economics in action. It took an ambiguously defined property right (when can telemarketers call you), defined it clearly (telemarketers can call you whenever they want to), and provided a low-cost way of reallocating the property right (register on the DNC). Thus, it is nothing more than the Coase Theorem in action.
But even more, the DNC is actually the first example I can think of that illustrates a Contracts principle of an efficient minoritarian default rule. Usually contract default rules are allocated so as to create a majoritarian default rule (i.e., what the majority of people would want). Based on the registration numbers, a majority of Americans want to be free from telemarketing calls. So why not make the default rule "no calls" and make the telemarketers get your permission? Leaving aside the logistical problems (Would calling you to ask you if you want to be called count as a telemarketing call?), the minoritarian default rule is efficient because the transaction costs of reallocating are so munch lower for consumers than for telemarketers, especially because the FTC made registration so easy.
So the government was just creating and enforcing contractual transfer of property rights in an area where rights were unclear--what is so wrong about that?
And a word on the National Do-Not-Call Registry, which is mentioned in the Post as being a "big government" initiative, and as such, has been criticized by many libertarians and conservatives. I believe the criticism is misplaced--the DNC registry is simply law & economics in action. It took an ambiguously defined property right (when can telemarketers call you), defined it clearly (telemarketers can call you whenever they want to), and provided a low-cost way of reallocating the property right (register on the DNC). Thus, it is nothing more than the Coase Theorem in action.
But even more, the DNC is actually the first example I can think of that illustrates a Contracts principle of an efficient minoritarian default rule. Usually contract default rules are allocated so as to create a majoritarian default rule (i.e., what the majority of people would want). Based on the registration numbers, a majority of Americans want to be free from telemarketing calls. So why not make the default rule "no calls" and make the telemarketers get your permission? Leaving aside the logistical problems (Would calling you to ask you if you want to be called count as a telemarketing call?), the minoritarian default rule is efficient because the transaction costs of reallocating are so munch lower for consumers than for telemarketers, especially because the FTC made registration so easy.
So the government was just creating and enforcing contractual transfer of property rights in an area where rights were unclear--what is so wrong about that?