The Stone City

Words Made to Last

Tuesday, September 27, 2005

Winter of Discontent

Protection racketeer Eliot Spitzer has started to arouse more vocal opposition. Stephen Bainbridge, writing at Tech Central Station, thinks "Spitzer Goes Over the Line":
Spitzer has no statutory or regulatory power over mutual funds fees. He simply isn't entitled to decide whether Alliance Capital's fees were too high or not. As such, his oft-stated plan to require fee reductions as part of any settlements he reaches with fund companies is a gross abuse of prosecutorial power. Alliance's fee structure had nothing to do with the legitimate charges against it -- late trading and market timing. It's as though you got busted for pot possession and the DA said you had to give up snowboarding. What business does the prosecutor have using his leverage that way?
On his blog, Mr. Bainbridge also points to a Wall St. Journal editorial:
Unquestioned by a media that live off his news leaks, and unchallenged by businesses afraid of retribution, Mr. Spitzer has expanded his power to usurp the legitimate roles of elected officials and federal regulators.
and to a federal lawsuit filed against Mr. Spitzer by a mutual fund firm.

It is clear that Mr. Spitzer has prospered from his past extortions. Only force or the credible threat of force can stop him from continuing to turn the crank. New York's courts have proven incapable of stopping him; let's hope the federal courts can do better.