Tuesday, June 19, 2012

How Congress Saved Baseball

Yesterday a jury acquitted former Major League Baseball pitcher Roger Clemens for, allegedly, lying during his testimony to Congress.  Clemens' testimony had come during a March 2005 congressional investigation into steroid use by MLB players.

Upon the news of Clemens' acquittal, people began jumping on Congress for involving itself in the baseball steroid scandal.  The common refrain is that Congress should have just stayed out and let the sport take care of the steroid problem.
Roger Clemens

We can debate the source of Congress' authority to investigate the national pastime all day long.  But there should be little doubt that Congress did the sport of baseball a huge favor by pushing baseball executives to confront the issue of steroids which was destroying the integrity of the game.

Statistics play an important role in the popularity of baseball.  Fans of the sport compare players from one era to another and debate whether, for example, Willie Mays is a better player than Mickey Mantle.  It is that history of the baseball, with players of different eras measured by statistics, that ties together fans across generations. 

It is critical to the integrity of the baseball statistics that the game be played essentially the same from one time period to another.  About the only slight hitch in that during last 100 years was the expansion of the season from 154 games to 162 games.  Then came the steroid era.

In the nine seasons before steroid testing, 18 players hit more than 50 home runs while six hit more than 60.  In the nine seasons after testing, there have been only six 50 home run seasons.  No one has hit 60 home runs.

Steroids had the effect of turning modest hitting players into sluggers, maybe not always capable of hitting 50 home runs, but finding 40 within reach.  So let's look at the 40 home run club, post 1961 the start of the 162 game season.

PRE-STEROID SEASONS
1961-1969  (nine seasons)
31 players hit 40 or more home runs

1970-1979  (ten seasons)
20 players hit 40 or more home runs
---'74, '75, and '76 seasons featured no one with 40 plus home runs

1980-1989  (ten seasons)
13 players hit 40 or more home runs
---'81 and '82 seasons had no one with 40 plus home runs

1990-1993  (four seasons)
11 players hit 40 or more home runs

STRIKE SHORTENED SEASONS
1994 (about 115 games)
2 players hit 40 or more home runs

1995 (about 144 games)
4 players hit 40 or more home runs.

STEROID ERA
1996-2005 (10 seasons)
120 players hit 40 or more home runs
--this includes double figure 40 plus home run seasons of 1996 (17), 1997 (12), 1998 (14), 1999 (12), 2000 (16), 2001 (12), and 2003 (10).

POST-STEROID SEASONS
2006-2011  (six seasons)
27 players hit 40 or more home runs
--only two players hit 40 plus home runs in 2010 and 2011.

NOTE:  There have been 8 seasons featuring ten or more players with 40 plus home runs since 1961.  Seven of those seasons fell within steroid era.  The other was 2006, the year serious steroid testing began, when there was 11 home runs.  Although I have placed that year outside the steroid era, players that year could well may have still been under the influence of steroids and other performance enhancing drugs that had been in use for a decade or longer.  Following 2006, there was a substantial drop off in membership in the 40 home run club:  2007 (5), 2008 (2), 2009 (5), 2010 (2), 2011 (2).

Now let's examine Congress' role in ending the steroid era in baseball.  Although MLB had started mandatory steroid testing in 2004, the program, which only called for "treatment" of a first time offender, didn't result in a single suspension.  In the Spring of 2005 faced with the spectre of a congressional investigation, Major League Baseball did finally adopt a policy that provided for a penalty for a first time offender, but even that penalty was mild - a mere 10 day suspension.   Following the 2005 season, facing the spectre of Congress taking action following the hearings, MLB finally got serious about steroid use adopting a new policy in November of 1995 that the first positive test would result in a 50-game suspension, a second positive test would result in a 100-game suspension, and a third positive test would result in a lifetime suspension from MLB.

Congress gets criticized for supposedly stepping outside of its authority to investigate steroid use in baseball.  But Congress did baseball fans a favor.  Congress saved baseball.  There I said it, let the ridicule begin.

Now that we've done something about juiced players, if only we could do something about that decade of juiced statistics that remain on the books.

34 comments:

Cato said...

Paul, regulating Baseball is not anywhere contemplated in Article 1.

Ignored in this is how Selig juiced the ball, as well as ignoring the players' enhancements. Bud didn't move his team into the Cubs' division without knowing he was sailing into a favorable seas.

Paul K. Ogden said...

Cato,

We have given Major League Baseball an anti-trust exemption. I don't have a lot of sympathy for baseball saying they don't want Congress involved when they did when they were given that gift by Congress.

Article 1 didn't contemplate airplanes either. Yet we allow the federal gov't to regular airlines.

Nicolas Martin said...

Paul's comment illustrates how one government intrusion justifies the next, ad infinitum. Congress has no moral or constitutional authority to impose anti-trust laws, and they are demonstrably harmful to competition. (As economists, not lawyers.) But once anti-trust laws exists, even an ostensibly libertarian-leaning Republican can rationalize a cascade of intrusions. This same pattern repeats itself in virtually every area of life into which congress intrudes. Congress jumped into medical care in the 1960s, and that move has justified a legion of programs and regulations. Same with education. Same with financial regulation.

If MLB found that steroid use damaged the game, then the owners had plenty of incentive of get tough. (Granted the owners would have more to worry about if their teams were not heavily subsidized, and immunized against losses, by state and local governments.)

I have no interest in pro hockey because it is more a fight-fest than a game. But the owners know that existing fans like the fights. Should congress intervene to end fistfights that make hockey unattractive to me? Not in my view. It is quite possible that modern baseball fans, despite their griping, like steroid-driven home runs more than the vaunted (and silly) purity of the game.

Jeff Cox said...

Nick,

Never seen an actual hockey game, have you?

And anti-trust laws are intended and designed to prevent monopolies, which are by definition non-competitive and usually (not always, as in the case of sports leagues, utilities, etc.) lower customer value.

Nicolas Martin said...
This comment has been removed by the author.
Nicolas Martin said...

Jeff, the first comment is par for your course and unworthy of a response. Considering the recent spate of reports about suicides by notorious pro hockey fighters, you are well out of loop.

An enormous body of economic work -- with which you are quite predictably unfamiliar -- demonstrates that monopolies do not sustain in free markets. On the other hand, governments create indestructible monopolies, such as the lawyer cartel that is immensely destructive to consumers. For some reason members of that cartel rush to the defense of laws that enrich them, which is pretty much all laws they craft. The most profitable conflict-of-interest in America.

Correct me if I'm wrong, but aren't you a member of a government-created cartel that charges the public infamously rapacious fees? Consumers can avoid almost any sort of business in free markets, but they can't avoid lawyers, can they? I can't hire a paralegal to fill out legal documents in Indiana, can I? I can't choose who I want to represent me in court unless that person has a state license, can I? Even the best lawyer in Canada couldn't represent me in an Indiana court, can he?

I'm betting that the a monopoly on legal services doesn't bother you at all. In fact, I'll bet you think it is indispensable, just as dentists think their cartel is indispensable, and physicians, and beauticians, and taxi cab companies, and the legion of other licensed monopolists.

Given that your own favored brand of political economy consists of corporatism (I was nice enough not to say fascism), and state-sponsored monopolies are central to corporatism, your sympathies on this topic are easy to predict.

Paul K. Ogden said...

I agree with Jeff Cox on why even the most fervent capitalist knows we need anti-trust laws. It's also the reason why we don't privatize things with 30 year contracts. A marketplace with no competitition is a bad thing.

Nicolas Martin said...

I am pleased to note that some lawyers are concerned with the economic harm that their profession does to Americans.

http://www.ij.org/ij-v-the-legal-cartel

"Across the nation, licensing laws protect established attorneys by burdening aspiring practitioners with superfluous educational requirements just for the privilege of taking a bar exam. A minority of states go as far as requiring attorneys to attend only those law schools accredited by the American Bar Association. In these states, even if an attorney has practiced for years with a stellar record, he or she cannot sit for the state’s bar exam—let alone become licensed—without graduating from an ABA-accredited school."

Nicolas Martin said...

And, Paul, you also agree with him that we need a lawyer cartel/monopoly. Monopoly for me but not for thee.

Nicolas Martin said...

Name a market with "no competition."

I'll start the ball rolling:

Law...

Antitrust law is so absurd that the feds blocked the Office Depot-Staples merger on the grounds that the merged company would dominate the office products marketplace. This despite the fact that those two and OfficeMax had a piddly percentage of total office product revenues. The FTC excluded Walmart, Costco, Target, and other major sellers of office products from its definition of the office products marketplace. The FTC's decision to block the merger was a benefit to Walmart, not to consumers. Just as the attack on Microsoft's browser benefitted no consumer but employed plenty of lawyers at handsome hourly rates.

Nicolas Martin said...

By the way, as for the idea that "even the most fervent capitalist knows we need anti-trust laws," it is false. There are scads of economists, not all libertarians, who think antitrust law is at best useless, at worst counterproductive.

“I have gradually come to the conclusion that antitrust laws do far more harm than good.” -- Milton Friedman (1999)

It is much easier to become an expert about economics than to actually read books on the subject. Few people consider themselves experts on astrophysics, but everyone thinks he knows economics without ever cracking a book on the subject.

Antitrust law, like class action law, is a mountain of gold for the legal cartel.

Paul K. Ogden said...

Nic, we have many, many more lawyers than we have legal work to do. A shortage of lawyers is not exactly a problem. You can get a lawyer to clean your garage for $10.

Jeff Cox said...

Nick,

Like I said, you've never actually seen a hockey game, have you? I mean, an actual game, not highlights on ESPN?

Just because hockey goons are dying does not mean hockey is full of fighting. A goon's job is not to fight but to deliver cheap shots. It doesn't take a fight to cause an injury; just ask Sidney Crosby. Just because all ESPN shows are the fights doesn't mean they are commonplace, just as when John Kordick died it did not mean that hockey was full of steroids, as was later shown. I've watched hundreds of NHL games over the years and have seen maybe a dozen fights total.

You also have a basic misunderstanding of economic theory. An economic monopoly is fundamentally bad. It may have good points. It may even be natural and/or necessary, but it is fundamentally bad because as a general rule a monopoly does not provide either the best products services or the lowest prices. The reason for enforcement of the Sherman Anti-Trust Act was the Standard Oil Company, which used predatory pricing to drive out competitors, then as soon as they were gone jacked them up again. Once the competitors were gone, the barriers for entry into the market were so high that Standard Oil might never have had competition again.

This is typical of monopolies. You want a modern example? Try cable TV. Remember before the era of satellite TV when cable companies had virtual monopolies over their franchise territories? The channel choices were few, the service was bad, the equipment was poor and the prices were high. Think Comcast. Only with the advent of Direct TV did they start to shape up. Somewhat.

Want another? How about Microsoft? It has a virtual monopoly on computer operating systems. That can be a good thing, because it simplifies design issues for programmers and can actually help maximize software choice for consumers. Or not. Microsoft used its operating system monopoly to gain dominant positions in the office software and internet browser markets. They then gave us such quality products as Windows Vista, which was a big middle finger to the consumer. Yet for all the talk of Linux and Ubuntu, Windows is still the dominant operating system. A monopoly invariably abuses the power provided by that monopoly to enhance its profits and maintain that monopoly.

Now, there are some monopolies that are natural and in fact necessary. The major sports leagues and most utilities are examples. But even those require strict regulation or else they will do what Standard Oil, Comcast and Microsoft did. That's the reason foe the Sherman Anti-Trust Act, which is perfectly constitutional under Congress' Commerce Clause powers, or, more precisely, the pre-Wickard Commerce Clause powers.

Your comments about lawyers suggest a certain jealousy that is unwarranted, and yet another misunderstanding of economics. Lawyers are by definition not monopoly, because they compete with each other. At worst, they comprise a guild, but since guilds typically set prices for everyone, even that definition is not technically true. The requiremnts for education and testing were not intended as barriers to entry, thogh they are often used that way anymore. They are rather intended to protect the consumer who doesn't have the training necesary to tell the good from the bad to assurea "minimum level of competency" by anyone claiming to be a lawyer or doctor. Thank thousands of years of shyster lawyers and quack doctors for that. Neither profession is a new one. Remember Shakespeare's jokes about lawyers. Litigation goes back at least as far as the Roman orator Cicero, and the fampus Trojan War case of Odysseus v. Telamonian Ajax. But ask anyone in law or medical school, or preparing to take the bar or the boards if they actually enjoy showing the "minimum level of competence."

Cato said...

Cox, dude, really, um, seriously, be careful. You're about to get flattened. Nic is highly educated in economic theory and will take pleasure in dismembering you, especially given your neocon scent that particularly enflames his breed of wolf.

I'd correct you with some Rothbard and Von Mises on monopoly, but this is Nic's vengeance to take.

Consider this while you wait for the axe to fall: how powerful is any monopoly in absence of governmental support? As you consider famous monopolies, ponder whether they existed alone or had the government as armed auxiliaries.

Jeff Cox said...

Cato,

Paul Krugman is an "expert on economic theory," too. Even got a Nobel Prize for it. Many other "experts on economic theory" have accepted the bright idea that food prices should not be counted in the official inflation index. Sounds like the bar for being an "expert on economic theory" is pretty low.

Libertarian economic theory in particular amounts to "buyer beware" and seems completely unconcerned about the needs and interests of the consumer. If the marketplace does not meet the needs of the consumer or even abuses the consumer (see, eg telemarketing) libertarians have no Plan B because that would involve (gasp!) government. That's a problem.

So count me unimpressed.

Jeff Cox said...

BTW,

Cato, you might want to bone up on that whole Constitution thing. Your first comment suggests that you think anti-trust law is impermissible under the Constitution. It actually falls under Congress' Commerce Clause powers. That is, the Commerce Clause before Wickard twisted it out of all recognition.

Cato said...

Cox, I read the Commerce Clause, and I didn't find the word "anti-trust" anywhere in it.

You might want to bone up on the ratification portion of the Constitution. Supreme Court reporters are not the Constitution, and the Supreme Court is not a running constitutional convention. I almost wish it were, as the product of a constitutional convention is put to the vote of state legislatures.

Nowhere did the Constitution allow an inferior branch unfettered and immediate amendment power.

Jeff Cox said...

Cato,

The Connerce Clause says in relevant part that Congress may "regulate commerce ... among the several states."

So, your argument is that prohibiting interstate monopolies does not count as "regulat(ing) commerce." Got it.

Good luck with that.

Jeff Cox said...

"Connerce" = "Commerce." Stupid iPhone keyboard.

Cato said...

Cox:

1. Busting monopolies does not logically follow from "regulating commerce among the several states." Iowa imposing tariffs on Kentucky goods does.

2. Even if monopolies were within the ambit of the clause, nowhere does the Supreme Court get constitutional permission to monkey around with such monopolies, as that power would be reserved exclusively to the Congress.

You'd benefit from some study at the VonMises Institute.

Jeff Cox said...

Cato,

Your argument is like saying I have permission to make a sandwich, then complaining that no where did you say I could use bread. Prohibiting commercial monopolies is regulating commerce. Your position is nonsensical.

Cato said...

The Constitution doesn't permit Congress to "regulate commerce." That's a statist's dream of open-ended government and allows one clause to supersede its document.

The Constitution permits Congress to "regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes."

Big difference. Unless New Mexico is treating California commerce differently than Connecticut commerce, the clause isn't invoked. Virginia cannot disallow Kentucky buyers from appearing on its docks to receive their wares from Spain. Remember, the Constitution is merely a charter for a national government, binding states to one another.

Of course, this is basic constitutional law, which explains why you never learned it in law school. Lawyers want much broader government and more expansive permissions for federal intrusions.

Jeff Cox said...

Cato,

So you're now saying that "regulate commerce ... among the several states" does not mean actually regulating commerce among the states. Got it.

This sounds a lot like those anti-2nd Amendment arguments that say "the right to keep and bear arms shall not be infringed" doesn't actually protect a right to keep and bear arms.

Cato said...

"So you're now saying that "regulate commerce ... among the several states" does not mean actually regulating commerce among the states. Got it."

You're committing the fallacy of presuming the thing at issue, and you're fallaciously using circular argumentation.

"This sounds a lot like those anti-2nd Amendment arguments that say "the right to keep and bear arms shall not be infringed" doesn't actually protect a right to keep and bear arms."

Glad you brought us here. Your deliberate misreading of the commerce clause as extending to the people in the states and not to the states, alone, is a similar exercise in sophistry to that proffered by those nitwits who read the Second Amendment only to the word "militia," and say "See? The 2A only covers the National Guard."

"Among the states" is not surplussage, Cox. Don't merely stop at "regulate commerce" and think you've read all you need.

Cato said...

The pureed peaches are warm, so I'll spoon feed this.

A rule by the Commissioner of Baseball regulating the quality, supply, distribution and price of hot dogs "among the several teams" does not govern a hungry fan who buys all the dogs at the third-base vendor's cart. This fan, Bill, really likes ballpark dogs, so he bought the stand out. Baseball enacted the rule to ensure that all MLB parks served a decent dog and to ensure that the White Sox didn't lock up an exclusivity arrangement with the only decent dog supplier in America.

Bill's sharing the dogs with his family, and he's taking the rest home for his lunch tomorrow and to share with his workmates. The fans in his area are angry, as the only other hot dog stand is on the first-base side. It's a ten-minute walk to get a first-base dog.

Bill really doesn't want to part with his dogs, as Jack at work really likes ballpark dogs and will likely do a few favors for Bill if Bill drops a few dogs on Jack's desk. Bill is, however, willing to part with any dog for double the face value.

A fan cries "foul!" and complains to Bart Giamatti, sitting just a few seats down. Bart rightly says "Whatta Ima Suppose to do? Unlessen he's the Mets or the Dodgers, Iza gotta no control."

In looking at any contract, always ask who created it and who does it bind. Lawyers call this "privity." A compact among states binds the states. Monopolies may possibly be made illegal through other means, but it's illogical to try to force the justification through the Commerce Clause without destroying the Clause.

Nicolas Martin said...

Paul, free markets reveal whether there are enough or too much of things, and since there is no free market in law it is impossible to conclude whether there are too few or too many lawyers. We know that the cost to consumers of legal services is much lower in states that allow paralegals to prepare simple documents, etc. We can speculate, and studies have shown, that consumers would benefit from an end to the legal cartel/monopoly. Under Reagan the FTC even threatened to bring suit to end the law cartel. Guess why that didn't happen.

Every government-created cartel defends its monopoly in roughly the same ways. Members claim that consumers benefit from their monopoly, and that an end to the cartel would produce inferior product and economic chaos. Economists have knocked down these fallacies a gazillion times. They sustain only because the monopolists buy continued privilege from politicians. Or in the case of lawyers they ARE the ruling politicians.

Consumers are not yearning to pay $250 an hour for legal services, and if there were "too many lawyers" it begs laughter to think that that this price would not decline. Has it? Has the alleged surfeit of attorneys caused the cost of legal services to fall to consumers? Proof?

Since the economic law of supply and demand has not been repealed even in the case of lawyers, it makes no sense that more supply equals same or higher prices. It makes no sense unless the market is controlled by a cartel.

If there are lawyers who can't get work -- and I don't know this to be a fact -- it probably means one of two things. They expect that work to yield a certain income that they are not getting and they feel deprived. And/or the system is rigged so that lawyers can only find work in certain contexts, such as group firms, and those firms have no interest in hiring. both explanations are consistent with a cartelized market. The cost of legal services is so high that it has led to outsourcing of legal services to other countries. That helps established attorneys and firms, but it isn't so good for recent law school graduates.

Here is the article on antitrust in the Concise Encyclopedia of Economics.

http://www.econlib.org/library/Enc/Antitrust.html

Virtually any durable monopoly that one can think of is actually a creation of government. The sugar monopoly, sustained by tariffs, is one good example. All licensed professions are in that category.

Nicolas Martin said...

"Lawyers are by definition not monopoly, because they compete with each other."

That is amusing. They don't compete on price, do they? No need for cartel members to do that. Price is a rather important consideration for consumers.

Not until the US Supreme Court knocked down the ban were lawyers even allowed by their bar association overlords to advertise.
------

The NHL Playoffs Have Been Hijacked By Violence And Cheap Shots, And It's An Absolute Joke
http://goo.gl/8dU9D
-----

"an antitrust policy is a blunt instrument wielded by people all too easily driven by the desire to make headlines... Are you sure you wouldn't rather trust the market, with all its flaws?" -- Paul Krugman
http://goo.gl/OJQX7

Jeff Cox said...

Nick,

If you're quoting Paul Krugman, then you've lost the debate.

And lawyers sure as hell compete on price. Barnes & Thornburg and Ice Milller charge what they do because they have big names, are big firms and have big offices. A sole practitioner typically charges much less. The prices reflect in part the education level needed for entry into the legal profession (read "student loans") for, again, that "minimum level of competence."

That's the problem with libertarian economic theory. They assume that a lack of competence will be weeded out in the marketplace. Historically that has not been the case, and in any event people are often irreparably harmed in the interim. Libertarians don't seem to care about that. It's always "buyer beware."

Cato said...

"The prices reflect in part the education level needed for entry into the legal profession"

Again, circular reasoning. In a free market, the prices would reflect the service provided. You don't get to impose a requirement that a consumer may or not pay for as a foundation for the argument.

"Libertarians don't seem to care about that. It's always "buyer beware.""

The cost of a market perfecting itself is always lower, and far more free, than protectionists corrupting the market with paternalism.

I'll take freedom, pitfalls included, over your mandatory protectionism.

Jeff Cox said...

Cato,

Your last post just proves what I said earlier: libertarians only want the law of the jungle.

Nicolas Martin said...

Has anyone ever seen a legal ad in which an attorney or firm advertised a better price than competitors? What is routine in free markets is rare-to-nonexistent in legal practice.

Let's not forget that those arguing for the legal cartel also directly profit from it. Lawyers are appalled by any conflict of interest but their own. These ardent anti-trusters carve out a profitable exception for themselves.

The idea that free market competition is the "law of the jungle" is pregnant with comedy. The jungle is rife with "might makes right," which is the essence of politics and government. Jeff Cox makes no bones about his affection for government violence in many contexts.

Nicolas Martin said...
This comment has been removed by the author.
Nicolas Martin said...

Cato, Mr. Cox never found an issue he couldn't demagogue, and he has never exhibited any evidence of actually having read libertarian-Austrian school writers (or much of anything else). So, my suggestion is to plant tongue firmly in cheek when responding to his authoritarian bluster and saddle-worn cliches. If a brown shirted mob were marching down the street, it would be no surprise to find Cox amidst it.

Nicolas Martin said...

Here, in a new Slate article, is another example of how a government-created cartel screws not only the public but most workers. In this case the drivers play a comparable role to that of recent law school grads. Medallion owners are like established lawyers, ferociously defending their cartel.

Taken for a Ride
The taxi medallion system in New York and other cities raises fares, impoverishes drivers, and hurts passengers. So why can’t we get rid of it?
http://tinyurl.com/d4otdo3