Up until recently, I always assumed that Obama would, sooner or later, despite the protests of the environmental community. In March 2012, for instance, he spoke positively about the proposed pipeline, which would bring oil mined from the tar sands of Alberta, Canada, to refineries along the Gulf of Mexico. In addition, approval of the pipeline is important to the government of Canada, our neighbor and ally.
But several things happened in 2014 that now make me think he will turn it down. The first is that the glut of oil — largely because of the increase in U.S. production — has made the oil from the tar sands unnecessary, at least for now. Second, as the president moves into legacy mode, saying no to Keystone could firm up his credentials as a leader who tried to do something about climate change. And, finally, Republicans, who will control both the House and the Senate in January, have vowed to send the president a bill approving construction of the pipeline. Vetoing that bill would be very much in keeping with the bolder, more confrontational persona that Obama has displayed since the midterm elections.
Will insider-trading prosecutions disappear?
Thanks to a recent decision by the U.S. Court of Appeals for the Second Circuit, they just might. The ruling overturned the convictions of two hedge-fund managers who had made stock trades based on information they received, third- or fourth-hand, from corporate insiders. Because they didn’t know the identity of the insiders — or whether those insiders were receiving any tangible benefit for leaking information — the court ruled that the fund managers had not committed a crime. Thus did the appeals court define insider trading narrowly, making it difficult to charge anybody who did not directly pay off a source for information.
To some degree, the Department of Justice and the Securities and Exchange Commission are reaping what they sowed. There is no law that defines the crime of insider trading; instead the rules for what is, or is not, illegal have evolved through court cases. For years, that suited the government, which could try to stretch the definition from case to case. But now the judiciary is drastically shrinking that definition. James B. Stewart, The Times business columnist, recently wrote that the country needs an insider-trading statute to define the crime, once and for all. He’s right.
Will the average college football coach make more than the average professional football coach?
Well, it probably won’t happen in 2015, but we are headed in that direction. As of this fall, the average pay for the head coaches in the five wealthiest football conferences (the “Power Five”) was $2.96 million. Professional coaches made nearly twice as much, $4.85 million. But more and more, colleges are luring top coaches by offering them pro-like salaries. The most recent example is Jim Harbaugh. Paid $5 million a year to coach the San Francisco 49ers, he has reportedly agreed to leave the pro ranks for the University of Michigan for $8 million a year.
No doubt, the Michigan trustees calculated that he would be worth that much if he returned the school to its former football glory. But it’s another reminder that college football is every bit the multibillion-dollar business that the NFL is. Except, of course, that the players don’t get paid.
I’m only being partly facetious. Uber has an enormous war chest and is a popular service that now operates in 255 cities. But it has a serious problem: It keeps bumping into government resistance. When a company like, say, Skype began offering free phone calls, it disrupted the telephone industry. But the phone companies couldn’t do much about it. Uber, however, is disrupting services that are controlled and regulated by governments. Uber can argue all it wants that those government regulations are outmoded. It can even be right.
But it doesn’t matter. Governments have the power to push back. Uber has been ruled illegal in Nevada. South Korea went so far as to indict Travis Kalanick, Uber’s chief executive, charging that the company violated “local licensing laws,” according to The Times. There are lots more examples.
Compare Uber’s hyperaggressive business practices to those of Airbnb, the company that is disrupting the hotel industry. Facing much the same kind of government resistance, Airbnb has lowered its rhetoric and taken steps to comply with local regulations. That approach seems to be working.
They say you catch more flies with honey than with vinegar. Uber should try it sometime.
© 2014 New York Times News Service