from the Wall Street Journal, a remembrance of Henry Manne- A Champion of Law Informed by Economics:

From “Bring Back the Hostile Takeover,” June 26, 2002:

Since Enron, there has been an outbreak of regulatory fever in Washington: A tide of “solutions” has sluiced from the pens of journalists and the mouths of politicians. Apparently forgotten is how Enron and other recent scandals were the direct result of regulatory and judicial efforts to stem abuses in the takeover arena 20 and more years ago. They still haven’t learned just how high the cost of interfering with salutary market forces can be.

Among current proposed guardians of executive morality are auditors, lawyers, analysts, financial intermediaries, independent directors, and government officials. But no proposal involving these actors addresses the real problem. New scandals will continue until we bring back the most powerful market mechanism for displacing bad managers: hostile takeovers.

From “For Milken, Verdict First, Trial Later,” Feb. 3, 1990:

The government wants $1.8 billion in RICO forfeitures from [Michael] Milken and his co-defendants. The government claims that Mr. Milken’s alleged securities infractions were RICO violations, which made Drexel part of a RICO “enterprise,” which means he must forfeit all his Drexel compensation. Kafka, hell; anyone for Torquemada?

Every American’s basic civil liberties are critically endangered by this hysterical, politically inspired drive to demean our financial markets and convict or at least disgrace targeted individuals. That the principal defendant has been a disruptive and unsettling innovator in the usually staid financial world makes it all the more important to be vigilant about possible abuse of fair procedures. We hardly need a regime of civil liberties to protect passive, unventuresome members of the community. Tough business competitors should get at least the same legal fairness we normally give Klansmen or crack dealers.

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