Well these Danish cartoon protests are really getting out of hand in all respects. Thankfully the Danish government is sticking by it's guns and reaffirming it's committment to freedom of speech. Governments really have no reason to be regulating what people can and cannot say in this realm. The US Surpreme Court states that speech can only be reigned in if it constitutes a "clear and present danger" to national security or if it advocates directly and specificly for violent action. The purpose is to prevent speech that lacks any value and has considerable negative consequences. I tend to agree with this standard. It maximizes the best case scenarios of free speech while minimizing it's worst case scenarios.

Many people seem to be arguing that religion is somehow above criticism and that criticism of religion should be punished while criticism of other beleifs should not be punished. However, it is often hard to establish the difference between a religion and a philosophy or system of beliefs. Certainly, there are many examples that seem to be somewhere inbetween. Generally, religion is just a system of beliefs which makes certain assumptions about what happens before and after life. The cognitive dissonanced produced when taking such elaborate assumptions for granted often leads people to be insecure about their beliefs. So they tend to gather in groups and respond to criticism angrily or even violently.

I could come up with a number of criticisms of the Islamic belief system. By the same token, I could come up with a number of criticisms for all of the organized religions and even most belief systems in general. No logical system (that is, a set of axioms and their results) can be unequivically true, though they can be self-consistent. Godel proved this, though I don't see anyone protesting him. The idea that religion should be above criticism is utterly absurd. Why should these people care what some cartoonist wrote thousands of miles across the globe? Why should they care if they said it right next to them? It doesn't affect them in the slightest. The only explanation for such a violent response is extreme intellectual insecurity. The fact that the US government took such an apologetic stance shows only that they've been intimidated and have put short term security concerns above our most basic freedom.

It's kind of ironic then that down the block in Austria, a man was sentenced to three years in jail simply for stating his beliefs. The fact that he questioned the extent of the Holocaust shouldn't really have factored into the decision. Sure his beliefs were unpopular, and probably plain wrong, but he was doing no harm to the society. I highly doubt he could have caused another surge of facism in Austria of all places. Why the Austrian government is trying to stop facism by stomping on the freedom of speech is beyond me.

Some friends and I got into talking about bankruptcy law after taking a class on finance. First of all, we were pretty shocked at the way the incentive system works these days. Our prof showed us this binomial model of pricing (ie, businesses have a good year or a bad year) and proved that it was in the shareholders' best interest to maximize risk. That means that smart moves like JetBlue and Southwest hedging their bets with oil futures would have been opposed by shareholders, and in the case of Southwest, the shareholders were actually quite angry that this was done.

The binomial model he presented actually expands out into a more robust model known as Black-Scholes options pricing, and it yields the same results: maximize risk. That means that all of these corporate goliaths are running around teetering on the edge of bankruptcy and loving it. In fact, mayn of them probably want to go bankrupt so they can unload those pesky pension plans (USAir for instance).

In the end, what I take away from this is that bankruptcy laws have a huge effect on how corporations act. And as I see it, there is no obviously or definitively correct way to structure bankruptcy. Currently the system holds that liabilities (pensions, bonds, etc.) are to be paid with the corporations remaining money, and any money owed after that is defaulted on. This leads essentially to a liability black hole. If you look at liability as a good (albeit one with negative value), then what you have here is ill-defined property rights, which results in intrinsic efficiency losses.

One solution I could conceive of is actually going to the shareholders and asking them for the extra money to pay the liabilities, since they own the corporation after all. Naturally, you would make them pay in proportion to the fraction of the company they own. This would actually open the shareholders up to a potentially unbounded loss, but it would certainly make people more weary about what kinds of corporations they invested in. People would be very preferential to stable companies with sound business plans. Not only that, they would love companies that followed the laws and didn't get involved in shady deals.

In general equilibrium, individual investors may end up opting for mutual funds or holding funds in order to sheild them from risk, or they could buy bankruptcy insurance for a particular stock. These mutual funds would have a massive interest in keeping the companies in line, and could certainly be trusted to enforce, since there seem to be ecomies of scale in that area.

And there you have it, the issue of corporate liability is solved. Maybe it's a pipe dream. Maybe someone has to work out a model to see if it'll work. But it sounds real good to me.

"And they call me an assasin. What do you call it when the assasins accuse the assasin? They lie... they lie and we have to be merciful for those who lie."