Friday, February 27, 2009

Punching the Clock for Thousands of Years

In response to my FindLaw column and blog entry about billable hours earlier in the week, I received a number of supportive emails, including one plugging a software package that automatically keeps track of time---at least while one is using a computer; I don't see how it can track what case a lawyer is thinking about when he or she goes to the restroom, for example. And if it can, well that's truly scary!

Here I just thought I'd note that the relation between lawyering and timekeeping is a truly ancient one. In Plato's Dialogue Theaetetus, we hear Socrates (who was no fan of lawyers) disparage the notion that a lawyer could be a teacher. He asks (in his Socratic way):
Do you imagine that there are any teachers in the world so clever as to be able to convince others of the truth about acts of robbery or violence, of which they were not eyewitnesses, while a little water is flowing in the clepsydra? [Jowett trans.]
A "clepsydra" was a water-clock (similar to an hour-glass but employing water rather than sand) that was used by the Greeks to ensure that the lawyers for each side had equal time to make their respective cases to the jury. The clock was filled for the beginning of the presentation and the lawyer had to finish by the time the clock was empty. To my knowledge, Plato does not report whether lawyers in his day billed by the hour or worked on contingency.

Posted by Mike Dorf

Arrest the Man in the Yellow Hat!

I don't oppose the Captive Primate Safety Act, which recently passed the House and is awaiting action in the Senate. As just about every responsible person to comment on the legislation has observed, non-human primates are not domestic animals, and thus it is neither in their interests nor in the interests of human beings for non-human primates to be kept as pets. I would have an easier time taking seriously the professed concern for the welfare of non-human primates were they not subject to medical experimentation of the most awful sort, but this sort of hypocrisy---protecting some non-human animals while vastly larger numbers of non-human animals that are morally indistinguishable are subjected to horrific treatment---is commonplace and may even mark the beginning of a broader change for the better (as Sherry discussed in a FindLaw column on Michael Vick).

Here I'd like to make a different sort of point, however. Do we need a "Husband and Boyfriend Safety Act? According to the numbers quoted in various news stories and editorials (such as this one), there have been about 100 attacks on humans by pet monkeys and apes over the last 10 years, and there are currently about 15,000 non-human primate pets in the U.S. Is that a lot or a little? Well, let's compare it to domestic violence committed by human primates. According to the American Bar Association, a little over 2 million people (mostly women but a large number of men too) "are physically assaulted by an intimate partner annually in the United States." There are about 300 million humans in the U.S., and if we assume that each person physically assaulted is physically assaulted by a different human (which is not strictly true but true enough for this back-of-the-envelope calculation), that means that in any given year, the odds of any particular human physically attacking an intimate human partner is about 1 in 150, or 10 TIMES THE ANNUAL RATE OF PHYSICAL ATTACK BY NON-HUMAN PRIMATES ON ANY HUMAN.

So, if the tragic case of Travis warrants banning the interstate transportation of non-human primates to be kept as domestic pets on grounds of safety to humans, then the case is ten times stronger for a similar ban on the movement of humans.

But wait, you say. Chimpanzees are, pound-for-pound, much stronger than humans, and so the attacks aren't equivalent. Well, maybe, but we also need to take account of the fact that the attacks by humans often involve weapons that lead to still worse outcomes. Non-human primates are capable of using guns and knives if they have access to them, but they typically do not do so.

Okay, but what about the fact that attacks by non-human primate pets are likely under-reported, given that they can lead to the animal's confiscation or even death? That's true, but domestic violence is also under-reported and while we're at it, we should note that we're comparing human apples to ape and monkey bananas: the stats I quoted above are for ALL attacks by non-human primate pets, whereas the attacks by humans are only for attacks on intimate partners. If one includes all attacks by humans on humans the odds look even worse.

So, if we take the logic of the Captive Primate Safety Act seriously, then we should extend its logic to humans. Indeed, humans are a much easier case. We might amend the Mann Act---which forbids transporting any person across state lines for the purpose of engaging in prostitution or other illicit sexual conduct---to forbid taking any person across state lines for any purpose. This would obviously be crazy.

What then justifies the Captive Primate Safety Act? One possibility is that the cost-benefit analysis is different for humans and non-human primates: We get much more out of relationships with our fellow human beings than we get out of relationships with non-human primates. I agree with this for myself. Although I am happy to raise my human daughters and to care for my two canine pets, I think that I would be driven mad by trying to care for a chimp, a baboon, or a lemur---especially having now read what it involves (here). Still, there are lots of people who don't want to raise children, or care for cats or dogs, and who might find the idea of doing so incomprehensible; we ordinarily leave that to individual choice.

That brings us to the other possibility: that the Captive Primate Safety Act is justified on the basis of the safety of the non-human primates. It probably is so justified, but as noted above, this is hard to take seriously as a causal account, given the horrible ways in which non-human primates can be treated in other contexts. Moreover, it's worth recalling that the precipitating incident for the House passage of the Captive Primate Safety Act was a chimp attack on a human being that left the human victim literally without a face. True, the chimp also died, but it is very hard to imagine the case having gained the traction it had if a chimp had died in captivity without having first inflicted great harm on a human.

The fact that the Captive Primate Safety Act may be justified on balance may thus end up being almost purely fortuitous. The salience heuristic (which I discussed here) led the House to focus on the dangers of keeping non-human primates as pets because of one high-profile case. Legislation in response to spectacular events can be beneficial, but it raises serious questions about legislative agenda-setting and will often result in laws that neglect hidden costs.

Posted by Mike Dorf

Thursday, February 26, 2009

Leave Social Security Out of the Conversation

Earlier this week, I discussed President Obama's announcement that he plans to cut the deficit in half by the end of his first term, specifically addressing whether this suggested that he might foolishly enact contractionary policies that would undo any good flowing from his stimulus package. Happily, it appears that he is not going to make that mistake and that his talk of deficit reduction is in part genuine (carefully chosen tax increases and spending cuts that would not be contractionary) and in part political (reassuring deficit hawks in both parties that he is not going to permit the national debt to increase without limit). Continuing in my recent pattern of mixing optimism and pessimism, I must unfortunately note that Obama appears to be putting Social Security unnecessarily in danger as part of his effort to sound fiscally "responsible."

In his address to Congress on Tuesday night, Obama mentioned Social Security only once:
Now, to preserve our long-term fiscal health, we must also address the growing costs in Medicare and Social Security. Comprehensive health care reform is the best way to strengthen Medicare for years to come. And we must also begin a conversation on how to do the same for Social Security ... .
This might well be viewed as a throwaway line in the midst of a long speech that dwelled quite appropriately on other issues, but it might also suggest something less benign. First, Obama adopted the damaging habit of conflating Medicare and Social Security, suggesting that both are in serious trouble. That is false. Even the (deliberately?) pessimistic deficit projections that suggest long-term catastrophe indicate that Social Security is a very small part (~15%) of the problem, while Medicare is in trouble not because it is a big, bad government program but because (as Obama indicated) health care in general is in serious trouble in this country. (I discuss at some length the relative importance of Social Security and Medicare in long-term deficits here.)

Second, there is good reason to believe that this was not a throwaway line. The NYT reported earlier this week that "President Obama is eager to seek a bipartisan solution to ensure the long-term solvency of Social Security," and he is apparently trying to put together some kind of effort to "solve" the long-term issues facing Social Security. With George W. Bush's proposed privatization thankfully off the table, the theory apparently is that now is the time to do something about Social Security that Democrats can support.

Even if we assume for a moment that something must be done to "fix" Social Security, the idea that this is a good moment to do so is simply incredible. We know that Social Security has intense ideological support and just as intense opposition. We just witnessed how opponents of the stimulus bill brought out some of the most fatuous arguments ever seen to oppose the bill and saw that Obama's willingness to water down the bill had no impact on his ideological opponents. The notion that it would be a good use of the very limited resources (and even more limited attention span) of Congress to throw Social Security open for debate defies logic. (Somehow, there is little comfort in Sen. Lindsey Graham's comment that “I know he’s sincere about wanting to do something about entitlements generally, health care and Social Security. And I want to help him.” We heard that prior to the stimulus bill circus as well.) Even if Social Security had a pressing problem, it would be exceedingly treacherous to try to get anything done in the current environment.

Fortunately, there is no pressing problem. Social Security's projected long-term financial shortfall may or may not turn out to be real. Even the annual forecasts by the system's Trustees show that under very realistic assumptions, the trust fund will never be depleted. (While some call this the "optimistic" forecast, the underlying assumptions that produce that outcome are actually quite prosaic.) If a shortfall does ultimately develop, the worst case under current law is that thirty or forty years from now benefits would have to be cut 20-25% from levels that will be much higher than today's. Even cuts of that size could be phased in after we were sure that they had become necessary.

More generally, Obama's willingness to put Social Security on the negotiating table is another example of how his desire to seem open-minded exposes him to unnecessary political risks and puts a good program in unnecessary danger. He is trying to fix education, the environment, energy, and health care. (Oh, and there are a couple of wars to think about as well.) All of those really are pressing problems. He would do himself and everyone else a favor if he would simply stop talking about Social Security.

-- Posted by Neil H. Buchanan

Wednesday, February 25, 2009

We Tried the Official Channels; Now to the Barricades

My post last Friday regarding the ill-fated and short-lived takeover of an NYU cafeteria led one of my current Cornell law students---who is a graduate of NYU---to comment that although "Take Back NYU" consists simply of kids play-acting as activists, if they had focused on just one demand they might have garnered widespread support among the student body. The demand? For a public accounting of NYU's finances. With NYU tuition having risen dramatically in recent years---even faster than at other major American universities, according to this alum---students want to know where their money is going.

Let's take all that as true, and let's also take as true the claim by TBNYU that they have tried, to no avail, to get a public accounting via official channels. Does it follow that (to borrow a concept from administrative law) having exhausted their official remedies, TBNYU was justified in moving on to a sit-in? Hardly. This sort of claim is at least sometimes persuasive, but it must depend on a number of factors.

Do the official procedures themselves provide a fair opportunity for voicing policy concerns? Even if the answer is no, direct activism may still be unwarranted, depending on the institution from which change is sought. We rightly expect more in the way of democratic organization from public institutions than from private ones, and (per Hirschman) the voluntary nature of attendance at NYU (i.e., the possibility of exit) can substitute to some extent for democracy (voice) at NYU.

Moreover, where official procedures are fair, given the nature of the institution, the fact that the outcome is "wrong" is not, by itself, a sufficient basis for civil disobedience. It must be something more like profoundly wrong or deeply unjust. And even then, because of the dangers to the whole social fabric when particular individuals decide what counts as profoundly wrong though democratically supported, people who engage in civil disobedience must be willing to pay a steep price---i.e., accept criminal responsibility---for their conduct.

Notwithstanding the conventionality of what I have just said, there is also a social and even quasi-legal norm under which non-violent but illegal protest is understood to be just another form of speech. Everyone knows that a legal march and rally for which the organizers have obtained permits in advance lacks the added "umph" one gets out of symbolic but illegal protests: volunteering to get arrested; chaining yourself to trees; taking over a building; etc. Even assuming that the kids participating in the TBNYU takeover were muddle-headed dolts, the genuine surprise some of them appeared to feel when they learned that they would be expelled and/or prosecuted for their conduct was reasonable. They had been led to believe by the slap on the wrists administered in other cases that what they were doing was only "technically" illegal.

Here I could make a broader point about the dangers of having an unofficial norm that is much more lenient than the official norm, but I'll save that point in my next post.

Posted by Mike Dorf

Tuesday, February 24, 2009

Obama's Apparent Budgetary Orthodoxy Is Actually Good News

The front-page, top right headline in Sunday's New York Times read: "Obama Planning to Slash Deficit, Despite Stimulus," with the sub-headline "Goal is 50% Reduction." My groan was audible. As one of my colleagues put it, it appeared that President Obama was replicating FDR's worst error -- following up his New Deal stimulus with deficit-cutting fiscal austerity measures, thus creating a recession during the long recovery from the Great Depression -- in only one month, whereas it at least took FDR four years before he caved in to his inner budget hawk. This worry seemed especially plausible when it turned out that Obama's planned 50% reduction in the deficit was to happen in only four years. With my heightened concern about Obama's backsliding on so many issues, and my suspicion that his economics team is too orthodox, Sunday seemed to be one of those days when it would be painful to be a macroeconomist who specializes in budget policy.

The article's sub-sub-headline, however, offered some reasons for optimism: "Cuts Are to Come From Iraq Withdrawal and Taxes on Wealthy." As I read the article, I concluded that there is, indeed, less to worry about here than initially met the eye. First, withdrawal from Iraq (which is long overdue on other grounds) is not the kind of spending cut that is likely to harm the economy. Studies have consistently shown that military spending is the least effective way to create jobs and that military hardware is the least job-intensive kind of government spending. With the virtual certainty that the Iraq withdrawal will not actually result in a reduction in the size of the army, there is no possibility of a repeat of the kind of joblessness that greeted so many WWII veterans in 1946. (The postwar recession is often forgotten, but it was a particularly cruel joke on returning veterans.)

Moreover, increasing taxes on the wealthy -- even if one believes (contrary to the evidence) that such taxes harm the long-term growth of the economy -- is highly unlikely to reduce aggregate demand. For the same reason that tax cuts for the rich are not stimulative, tax increases on the rich do not depress the economy (at least in the short run, which is what we need to care about right now). This is especially true in light of the rather small planned increases in taxes on the rich, for example the return of the top tax bracket to 39.6% from 35%. This is hardly the 91% level of the early 60's.

The third -- and most important -- piece of good news within the article was that Obama plans to level off the deficit at 3% of GDP in 2013 and thereafter, "which is the level that economists generally consider sustainable." That is correct. For example, the budgetary guidelines for membership in the EU include not a balanced budget requirement but a 3% annual deficit requirement (along with a limit on overall debt). Given the general expectation that a modern economy can average 3% growth over the long run, adding 3% to the public debt each year keeps the ratio of debt to GDP roughly constant over time, which is a much more meaningful definition of "balance" than the usual definition.

This suggests that Obama might actually be in the process of undoing one of the most foolish errors of the Clinton era. Many people might not remember this, but prior to Clinton's first term it was not the position of the Democratic party that we must balance the budget annually. Clinton, in what came to be his standard capitulation mode, apparently decided that it was too difficult to explain to people why we do not need to balance the budget every year, so he gave in to the fiscal hawks and announced that balanced budgets were the right goal. As it turned out, he (with a lot of help from the dot-com bubble) ended up running surpluses for a couple of years, which unfortunately seemed to validate a very bad policy move. Even at the time, we knew that there was no way that the budget would remain in surplus for the long haul; and reinforcing people's uninformed belief that annual balance was the right goal was sure to make future policymaking even more difficult than it would otherwise be. It has.

It might well turn out, of course, that the economy will not turn around as quickly as Obama hopes. If so, the larger-than-normal deficits will (and should) continue past 2013. Even so, we might already be on the road to understanding that annual balance is not a useful or meaningful goal for the federal budget. If so, that is a major step forward.

-- Posted by Neil H. Buchanan

Monday, February 23, 2009

Billable Hours

In my latest FindLaw column (here by around noon Eastern Time on Monday), I use a recent 9th Circuit opinion chastising lawyers for incompetence as an occasion for examining how clients can make educated choices about the value their lawyers are providing them. Among other topics, I discuss the billable hour, which is being seriously reconsidered at major law firms. I suggest that because of asymmetric information, no alternative to billable hours is perfect, but that clients may be able to develop outcome measures that do better.

Here I want to say a few words about the effect of billable hours. As an academic who occasionally practices law for paying clients, I must say that I don't enjoy keeping track of my hours. No doubt this is partly just a matter of habit. Most of my day is spent working on academic projects (scholarship, teaching, meeting with colleauges, etc), and while that time is typically scheduled, I don't have any reason to record exactly how long each segment takes. Further, part of the attraction of an academic career is the flexibility it affords. I can leave my office at 3:30 to take my daughters to gymnastics class, and prepare for the next day's class from 9 pm to midnight. If I take another break in between to read the newspaper or make a pot of tea, I don't have to stop any clock. I just get the work done eventually. Thus, when I turn to work for a client, I need to pay attention to time in a way that I don't otherwise.

Timekeeping is for me a small nuisance, albeit one that is justified by the rewards of occasional practice (both monetary and intellectual: I encounter issues in practice that I would miss purely as an academic). For law firms and their clients, the practice is potentially more destructive.

In my sixteen-and-a-half years as a legal academic, I have participated in a substantial number of formal and informal discussions about whether to tenure a junior faculty member, a decision reasonably analogous to a partnership decision for a law firm. In such discussions, I have never heard anyone argue that a junior faculty member should receive tenure because he or she devotes a large number of hours to the job. Hours are at best an indicator of something else--careful scholarship, devotion to students, service to the university--but never valuable in themselves. A colleague who is constantly in the library but never writes, or who meets for hours on end with students but leaves them hopelessly confused, or who attends committee meetings but is silent or, worse, bogs matters down in pointless discussions, would rightly get no credit whatsoever for the time wasted.

Billable hours skew things. To be sure, an associate who bills 3000 hours per year but produces terrible work-product would not make partner at a well-run law firm because he or she will eventually alienate clients. However, as between a brilliant and speedy associate who bills 1600 hours in a year and a merely very good, average-speed associate who bills 2500 hours, the firm has a good rationale for making the second one partner but not the first: The very good average-speed associate makes the firm much more money, given the practice of billing hours--even though the brilliant speedy associate may produce the same volume of work and with higher quality. Yet the brilliant speedy associate is clearly doing a better job by any other measure.

Finally, I suspect that the practice of billing hours makes work seem like a chore. When I was younger and was paid by the hour in varioius jobs, I invariably kept an eye on the clock, making me time-oriented rather than task-oriented. Or, for a more vivid example, consider the episode of The Sopranos, in which Vito Spatafore, hiding out in New Hampshire after his fellow mobsters discover he is gay, takes a job performing manual labor by the hour. We hear Vito's mental monologue as he tells himself that he has only 2 hours to go until lunch, then an hour and a half, and so on. When Vito finally looks at his watch and realizes he has over-estimated how much time has elapsed, he despairs, leading him eventually to give up on life as a wage slave and to return to his old life in the north Jersey mob---and within a few episodes, he is killed.

Posted by Mike Dorf

Saturday, February 21, 2009

Muddled Activism

Mike's Friday afternoon post, "Activism as a Package Deal," described a recent incident at NYU involving a comically unfocused group of protesters who wanted, among other unrelated things, "annual scholarships for 13 Palestinians" and "NYU library access for the general public." After an interesting digression on the nature of revolutions and successful efforts to co-opt public support for otherwise unpopular causes, Mike argued:
My main point is that the muddle one sees among activists on the American left is not principally a result of a large organized effort. Rather, it reflects a kind of parochialism that assumes that people who share some of your concerns share all of them. An example: At a January rally in San Francisco organized by ANSWER in protest of the Israeli offensive in Gaza, some protesters were simultaneously demanding full equal rights for LGBT Americans and expressing solidarity with not just civilian Gazans (fair enough) but with Hamas, a fundamentalist movement that would and does oppress people for what it regards as perversion.
I have nothing to add to the substance of this argument. Because today is Saturday, however, I thought I'd point out that "Saturday Night Live" captured the essence of Mike's point in a 2003 sketch that depicted an anti-war rally prior to the U.S. invasion of Iraq. I could not find a video of the sketch, but the transcript is here. The opening:
[ open on anti-war rally in front of the Lincoln Memorial ]

Protest Leader: Yeah. We're here today, on the steps of Lincoln Memorial, to send a message to the war hawks - or, should I say, chicken hawks - right here in Washington, D.C.! For diplomacy.. for.. no.. war.. in Iraq!

[ the crowd cheers their enthusiasm ]

Protest Leader: Yeah! That's right! That's right! You see, the Bush administration.. must know the reason.. for this protest. We demonstrate for peace! My voice.. your voice.. thousands of voices! Rising up as one!

[ the crowd cheers their enthusiasm ]

Gay Protestor #1: [ raising his voice above the cheers ] We're HERE! We're QUEER! Get USED to it!

Protest Leader: [ dismayed at the unexpected outburst ] No, no, no, no, no, no, not exactly! But, yes! We are people from all walks of life, who are coming together today for a
single purpose, yeah!

Gay Protestor #1: For GAY RIGHTS!

Protest Leader: No. Not gay rights.

Gay Protestor #1: You're against gay rights?!

Gay Protestor #2: Homophobe!

Protest Leader: That's not.. that not what I meant. I support gay rights, alright? But today - today, people - we are gathered here to protest the Bush administration's.. illegal war!

Stoned Protestor #1: [ in another unexpected, perhaps malicious, outburst ] Yeahh!!

Stoned Protestor #2
: Stop the drug war!

Protest Leader: No! Not that war!
It just gets better from there, moving onto saving the whales and protecting unborn children. Enjoy.

-- Posted by Neil H. Buchanan

Friday, February 20, 2009

Activism as a Package Deal

I can't improve on the hilarious coverage of the NYU cafeteria takeover on Gawker (e.g., here), so I'll begin with a simple recap: A group of students calling themselves Take Back NYU barricaded themselves inside the Kimmel Center and issued demands; the university threatened to suspend the students; and thus the takeover just about ended. The demands were a very odd hodge-podge, including:

1) Amnesty for protesters (okay, CYA, but really, should that be your FIRST demand?);

3) and 4) Full public disclosure of NYU's finances;

9) Annual scholarships for 13 Palestinians (why 13??);

10) "That the university donate all excess supplies and materials in an effort to rebuild the University of Gaza" (or as Gawker put it, "overhead projectors for Gaza");


13) NYU library access for the general public.

What to make of all this? One earnest student over at HuffPo thinks the pathos of this little drama is emblematic of deeper failures of his generation, although I think that's somewhat unfair. It's tempting to see in this episode the periodic repetition of history as farce, or as Gawker put it:
Sure, you could say that this entire fiasco was a big failure marked by muddled thinking and incoherent goals, and completed with a total lack of any progress towards the laughably unrealistic set of "demands" the protesters set forth. And we said that. But then again, if you can't occupy a building while you're in college, when else are you gonna get the chance? Take over a building when you're 20 and it's Animal House; try it when you're 30 and it's Dog Day Afternoon. We hope you guys had fun, sincerely.
Still, I'd like to suggest that the incoherence of the Take Back NYU demands was not a result of any special muddle-headedness on the part of the student organizers (some of whom, apparently were not NYU students at all). Rather, for as long as I can recall, conflation of causes has been a characteristic of left-leaning activism. We're only so conditioned to hearing such slogans as "sex, drugs and rock and roll" that we forget that there's no more of a logical relationship among these matters than there is among alcohol, tobacco, firearms, and explosives.

Some of this is actually a matter of deliberate conspiracy: Studying the history of revolution, leftists learned that mainstream progressive rallies were good opportunities to co-opt public support, and while that hasn't been very effective in the U.S., it has sometimes worked elsewhere. Indeed, the method is hardly limited to the left: The Iranian revolution had disparate elements but was eventually co-opted by religious fundamentalists. That these fundamentalists now sometimes ally themselves with left-wing leaders like Chavez does not change their basically reactionary character.

But I digress. My main point is that the muddle one sees among activists on the American left is not principally a result of a large organized effort. Rather, it reflects a kind of parochialism that assumes that people who share some of your concerns share all of them. An example: At a January rally in San Francisco organized by ANSWER in protest of the Israeli offensive in Gaza, some protesters were simultaneously demanding full equal rights for LGBT Americans and expressing solidarity with not just civilian Gazans (fair enough) but with Hamas, a fundamentalist movement that would and does oppress people for what it regards as perversion.

That's just one of many examples I could give. As a vegan, a progressive, and a civil libertarian, I often encounter people who share my generally liberal/left views on some issues and therefore assume that I must also share their views on everything. This assumption is off-base even for people who share basic values and the same socio-economic-educational background, so of course it's wildly off-base across larger divides.

I've talked about the left here because I'm much more familiar with generally left/liberal causes but the same phenomenon no doubt exists on the right: Go to a sufficiently large NRA rally and you'll no doubt find people assuming you're anti-abortion and want to withdraw from the UN too.

Posted by Mike Dorf

How Employer-Based Health Care Makes the Recession Worse

It is by now reasonably well known that American subsidization for home ownership has contributed to our current economic woes. The combination of the home mortgage interest deduction, low interest rates, banking deregulation, and the bubble that ensued, all in turn allowed lenders to externalize foreclosure risks, until the bubble burst. And this leaves us with bad options: People who are underwater and either walk away or go into foreclosure further exacerbate bank losses and real estate devaluation, while people who stay in their underwater homes lack the mobility that might enable them to find work elsewhere. (For a fuller version of the case against home ownership---and more---see Neil's posts here, here, here, and here.)

Here I want to note how another familiar American institution---employer-based health insurance---impedes economic recovery. A small number of public and private employers have experimented with unpaid furloughs and reducing hours in response to hard times (smaller budgets for public sector employers; reduced demand for goods and services of private firms). Yet on the whole, cuts have meant layoffs, rather than reductions in hours worked. And as a growing number of experts have begun to realize (and was explained to me by my colleague Bob Hockett) that's unfortunate.

Consider a schematic example. Suppose that a sporting goods store employs a sales staff of 10 people, each working 40 hours per week, for 400 worker-hours. And let's assume that all sales staff earn the same hourly wage. Now let's suppose that reduced demand means that in order to maintain a measure of profitability, the store needs to reduce its staff to 320 worker-hours. It could lay off 2 workers but it might alternatively reduce all workers to 32 hours per week, with corresponding pay cuts. The latter approach would share the pain more equitably and at the macro level would have less of a negative cascading impact on the economy as a whole. By contrast, under the layoff approach, the two completely laid-off workers require unemployment insurance compensation and may default on home loans or other debts. Meanwhile, the remaining 8 workers start tightening their belts and saving as much of their paychecks as possible, thus reducing demand for goods and services and exacerbating the recessionary spiral. When the pain is spread among all 10 workers, a higher percentage of the total wages paid will end up back in the economy because, with less disposable income (due to the reduced hours), the 10 workers can save less than could 8 workers at higher incomes. And that is to say nothing of the adverse psychological consequences that go with outright unemployment.

To be sure, not all tasks performed by all workers are interchangeable in the way that the foregoing illustration assumes. For instance, demand for ski equipment might drop by a larger margin than demand for guns and ammo, and so, assuming specialized knowledge, it would make sense to simply lay off one of two ski equipment salespeople rather than to cut both of their hours and reassign some of their hours to gun sales. But these sorts of issues aside, there could be circumstances in which an employer would be at least indifferent as between some layoffs and some hours reductions, or might even favor the hours reduction as a way to recoup investments in human capital should the business climate eventually improve.

Nonetheless, our system (if it can be called anything so rational as a system) of employer-based health care distorts employers' incentives by lowering the marginal cost of additional hours for existing workers relative to the cost for new workers. The employer who pays 10 workers for working 32 hours each plus health care benefits pays more than the employer who pays 8 workers for working 40 hours each plus health care benefits. The benefits are basically a fixed cost per worker, more or less independent of how many hours he or she works. For high-wage employees, Social Security contributions exacerbate the problem, because of the regressive nature of payroll taxes: neither employer nor employee makes payments on income over $106,800 (in 2009).

Even with the help in paying for COBRA that the stimulus plan provides, it's pretty obvious that our regime of employer-based health care will make life very difficult for laid-off workers and their families should they remain unemployed and develop serious health issues. But I'm suggesting that, on top of that, employer-based health care is going to make the downturn worse than it would be if we had either fully portable or single-payer universal health insurance. And that's not counting the health care costs that put American industry at a competitive disadvantage relative to firms in other countries even in good times.

Posted by Mike Dorf

Thursday, February 19, 2009

How Do We Know Anything?

In my tax policy seminar this week, we discussed the estate tax. I assigned readings that made various theoretical and empirical claims about the effects of the estate tax in the U.S., including the usual politically contentious questions about whether the estate tax breaks up family farms and businesses (clearly not) and whether it is "inefficient" in the standard sense of that term (not even close, in comparison to any other way to raise revenue). Even though the state of knowledge on those empirical questions is pretty clear, the readings included some assertions contesting those basic findings in the course of making moral and political arguments against the estate tax. This put some of the students at a loss. Given that they are law students and not statisticians, they did not feel competent to assess the empirical claims. As one student put it:
I’ve unconsciously set up a heuristic based on a belief adopted over time that any data put before me is either the result of faulty methodology, framed imprecisely to skew my perception, incomplete in its presentation, or fatally compromised by some other flaw or combination of flaws. Why? Because I know that I can Google around and find a study refuting everything the one I’m reading says, written by someone who is apparently qualified to weigh in on the subject. I don’t know how to figure out who is right and who is full of it, so I simply don’t know how to think about the issue beyond what my gut tells me.
As a social scientist and an educator, this statement scared me. It made me realize just how ill-equipped people are to assess the empirical claims that they hear every day. Still, I asked the students how they knew anything at all, including things that ultimately rely on facts or knowledge beyond their own experience and expertise. Do they believe that Global Warming is happening? Do they believe that smoking causes cancer? Clearly, none of the students has the knowledge or training necessary to assess conflicting claims on these topics, yet they were certain that they knew the answers. (Yes to both, for those of you keeping score at home.) And there are certainly people who deny each of these things, people who hold advanced degrees with which a layperson might be impressed. Why do the students believe each of these things yet doubt who is right about the empirical claims with respect to the estate tax, when the professional consensus on them is also quite strong?

My questions were somewhat unfair, because I was really asking my students to discuss epistemology in fifteen minutes. Our discussion, unsurprisingly, did not break new ground in philosophical discourse, but the conversation was interesting and lively. In the end, I explained that the reason I wanted them to discuss this larger question is that I view a big part of my job as trying to identify when some contentious questions really should not be contentious. We can disagree about whether, say, the tax code should be more progressive, but we should be able to have some way to determine objectively just how progressive it currently is. (I generally resist the overuse of the positive/normative distinction, but it is at least a reasonably useful way to characterize the difference between fact and opinion.) If people are not capable of seeing through specious empirical claims, what can we do to make it clear when the "two sides to every issue" framework makes it appear that there is more doubt than really exists?

The short answer, of course, is that this is not possible -- or, at least, there is no generally applicable formula that allows us to know when reasonable minds can no longer disagree. What scares me even more is that there seems to be no connection between the degree of certainty that we have about an empirical result and the degree of public confusion about it. Empirical work on the death penalty overwhelmingly and repeatedly fails to find a deterrent effect, yet so long as the occasional study comes along to keep the deterrence claim alive, the question remains "controversial" and leaves people like my students saying, "How can I tell who is right?" (As Mike's discussion on Monday suggests, the frequently repeated false claims about the U.S. tort system are another example of this type of degraded debate.)

As if that were not bad enough, it now appears that issues that were once well settled can be thrown into doubt with no apparent justification. We have recently "learned" that the New Deal caused the Great Depression, not on the basis of any new evidence or theory, but simply because some people have decided that it is now advantageous to say so. Imagine my surprise to hear that hiring people to build and repair things is not stimulative, and that "in the history of mankind and womankind, government -- federal, state or local -- has never created one job. It's destroyed a lot of them."

The great philosophical questions will be with us always. Is it impossible to do something about the most egregious nonsense?

-- Posted by Neil H. Buchanan

Wednesday, February 18, 2009

When Pretexts Make Sense

In my findlaw column today, I discuss the recent guilty plea by Miguel Tejada (for lying to Congressional staffers about the use of steroids in baseball), and I argue that such pretextual prosecutions (for lying about misconduct rather than for the misconduct itself) demonstrate governmental hypocrisy and diminish public respect for legal institutions. In this post, I want to provide an important caveat to the message of the column: pretextual governmental activity is sometimes appropriate and necessary.

Pretextual conduct is behavior that is motivated by a different set of concerns than those cited by the actor regarding his own conduct. If you are angry with your sister for winning a chess game against you, for example, you might insult and yell at her for forgetting to lock the door, even though you actually don't much care about the practice of door-locking.

The sort of pretextual governmental activity I would condemn targets relatively insignificant conduct whose criminal status is itself questionable (such as, for example, the use of steroids). If the underlying targeted activity may not even merit criminal prosecution, it seems especially inappropriate to send investigators to ask the target questions about that activity and then use his predictably false answers as a foundation for building a prosecution for "lying."

In other cases, however, the underlying offense is far more serious, while it remains difficult or impossible -- for a variety of reasons -- to prosecute directly for that offense. When a person cannot be prosecuted directly for committing rape, for example, because the statute of limitations for the offense has run, it would seem (to me) acceptable to find some independent basis for prosecuting him (tax evasion, for example). In such a case (which resembles those brought against past organized crime figures such as Al Capone), the injustice of impunity -- of allowing a person to get away with his vicious and violent acts -- may be legitimately balanced against the harms of pretext ( which include charges of hypocrisy, the opportunity for the discriminatory exercise of discretion, and the risk that one is in fact wrong about the truth of the underlying claim).

We sometimes say, in defending the strong presumption of innocence in a criminal case, that it is better for ten (or a hundred or more) guilty men (or women) to get away with their crimes than for one innocent person to suffer wrongful conviction. While true enough, however, it is worth remembering nonetheless that it is a bad thing when ten (or more) guilty people get away with inflicting criminal harm onto others. In the interest of avoiding a particular instance of such an outcome, a pretextual prosecution can sometimes be a positive good.

Posted by Sherry F. Colb

Update on Wednesday AM Post

In response to a very helpful exchange on the comments board regarding my post this morning -- originally titled "What? He's Not a Cynical Hypocrite?!" -- I have changed the title and re-written the final paragraph. The new title is: "Maybe He's Not the Kind of Cynic I Hoped He Was." The updated post is here. I hope that this clarifies my intent.

-- Posted by Neil H. Buchanan

Maybe He's Not the Kind of Cynic I Hoped He Was

It is common, I suspect, to imagine that we agree with our friends about nearly everything. Learning that a friend likes a particular kind of music or food or sport can be jarring. If I were to tell my friends tomorrow that I am secretly a big fan of, say, NASCAR racing or polka concerts or post-modern dance, I daresay that they would be surprised. And for good reason. Even though we have never talked about these things, my friends have good reason to think that they know me well enough to predict my views on such matters.

Applied to politicians, this phenomenon suggests that we imagine "our guy" to hold the same core set of beliefs that we hold. Even clear evidence to the contrary can be studiously ignored, such as the Religious Right's adoration of Ronald Reagan despite his non-attendance at religious services and his administration's failure to deliver on the fundamentalist Christian social agenda -- or to a large degree even to try to do so. (Yes, his judicial appointments were conservative, but they included a fair number of judges who were business conservatives with no religious zeal. They were nothing like the Bush II judges.) Once religious conservatives had become convinced that Reagan was their guy, it no longer seemed to matter what he did.

Among liberals, there must surely be a similar type of cognitive defense at work. Late in the 2004 Presidential campaign, John Kerry went hunting; and even though I strongly believe that hunting is immoral and disgusting, my response was simply to shrug. Kerry obviously thought he had to make a show of being a Regular Guy, and I could confidently imagine that he was as disgusted by the display as I was. I was certain that, once in office, Kerry's decisions would not be guided by the views of the voters whom he was so cynically trying to court. (This example is particularly memorable, of course, because it was so transparent. Everyone viewed it as insincere and obviously calculated.) He could not say publicly that he favored strong gun control, and as President he might not even make public moves in that direction, but at least I could feel confident that his administration would not move in the wrong direction.

Certainly the same phenomenon applied to many of the members of the Senate who voted for the resolution to authorize the invasion of Iraq. Kerry's supporters in 2004, and Hillary Clinton's in 2008, tied themselves in knots trying to justify their candidate's votes, when everyone knew the real explanation: Kerry, Clinton, Edwards, and others had made a nakedly political calculation that they could not be viable presidential candidates if they were seen as soft on terrorism. By the end of the 2004 campaign, even I had managed to suspend reality enough to believe Kerry's explanation for his vote.

Which brings us back to religion. As an atheist, I have always found it easy to imagine that shows of piety from the politicians I support are purely for show. It is relatively easy to go to church on a regular basis and to make sure that the public knows about it. The controversy over Obama's former minister in Chicago thus seemed especially absurd to me, because it seemed that Obama's presidential candidacy was being threatened by having chosen the wrong fig leaf to cover his secret non- (or tepid) religiosity. He probably was not an out-and-out atheist, but I imagined that his ties to churches were more a matter of political necessity than anything else.

When the controversy over the fundamentalist minister Rick Warren erupted prior to Obama's inauguration, my angry denunciations (here, here, and here) were ultimately rooted in my sense that this was all politically calculated and that Obama was being more accommodating to the Religious Right than was necessary to accomplish his political goals. If Obama wants to neutralize the Republicans' base, I thought, let him try; but be realistic about it and make sure that the quids and the quos add up. Inviting Warren to give the invocation on January 20 thus seemed like a naive negotiating strategy, given the low likelihood of any serious payoff and the effect that such a move had on Obama's pro-gay civil rights (and pro-science, and pro-choice) supporters. It also seemed to suggest that Obama was likely to give too much to the Warren crowd in the future.

Earlier this week, the editors of The New York Times expressed disappointment that Obama had failed to reverse one of President Bush's executive orders "authorizing religious-oriented recipients of federal funding to hire and fire on religious grounds." Obama the candidate had promised to extend Bush's so-called faith-based initiative, but he had promised to end religious discrimination in these programs. The Times thus rightly called Obama to task for breaking an important campaign promise.

This incident, at first glance, seemed to support my take on Obama and religion. He had made the political calculation that he could not be seen as anti-religion and had thus promised to continue a program that I oppose; but he had made that decision tolerable by promising to negate the worst aspects of Bush's program. Now, he was continuing his capitulation to the Warren crowd. Validation, no?

Maybe not. It is becoming at least equally plausible to conclude that Obama is actually religious in a way that goes beyond using organized religion as a stand-in for basic morality, that his moves are not political calculations designed to walk the very thin line between being politically viable and being committed to secularism in public policy making. Instead, he might have been counting on the secular left to believe that deep down he is one of us, and we are now learning to our dismay that he is not. In other words, I wanted and expected him to be a cynic, in exactly the way that any national politician must bow to certain expectations to be viable. It might turn out, though, that he was playing people like me rather than playing the religious crowd -- in other words, that he really does like polka. I feel so used.

-- Posted by Neil H. Buchanan

Tuesday, February 17, 2009

Supreme Tortship

I recently read Chistopher Buckley's very funny novel, Supreme Courtship, and thought I'd take this opportunity to make a few points about the book and about the way in which law is portrayed in pop culture. (Spoiler Alert: I don't give away anything below that would undermine the pleasure of the book, but those who like to know next to nothing of a book's plot before reading it should probably stop here.)

The book begins with a President attempting to fill a Supreme Court vacancy. Obstructed in his first two nominations by a self-important and bloviating Chair of the Senate Judiciary Committee who thinks he himself is best qualified for the position, the President eventually nominates one Pepper Cartwright, good-looking, gun-toting, sassy judge on a popular tv show (something like Judge Judy or The People's Court). Hilarity ensues.

During the Fall, Buckley made the rounds of the talk shows, in part because of the acceptance of his offer to resign as a columnist at the National Review (founded by his late father, William F. Buckley, Jr.) in penance for having endorsed Barack Obama for President in a piece for The Daily Beast. Chris Buckley understandably took the opportunities to pitch his book, although in a way that strikes me now--having read the book--as somewhat overstating his own prescience. Buckley pointed to the similarities between his book and the 2008 Presidential campaign as it unfolded after he wrote the book. He highlighted the fact that the Democratic Party had nominated for VP a bloviator who had been the Senate Judiciary Chair and that the Republican Party had nominated for VP an attractive, folksy, gun-toting woman with non-traditional qualifications.

Why are the similarities not so prescient? Well, for one, Senator Dexter Mitchell is so obviously based on Joe Biden that Buckley shouldn't score any points for having predicted the existence of Biden---and in the book, Mitchell does not become Vice President. Nor, for that matter, does Cartwright run for VP. As for her similarities to Sarah Palin, they strike me as less important than the differences. Cartwright was not angling for a Washington job and even tries to turn down the offer to nominate her, whereas we know Palin is quite ambitious (a fact that surely does not distinguish her from other politicians). Palin's core appeal was to religious Christians whereas Cartwright, although the daughter of a mega-church preacher, is an atheist. And perhaps most importantly, Cartwright is, well, smart and educated: She knows Shakespeare, she was an excellent student at Fordham Law School, and when true to herself she displays not just folksiness but balanced judgment. Enough said.

Most of the humor of Supreme Courtship stems from its exaggerations. For example, the confirmation process as portrayed for the two nominees who precede her and for Cartwright herself is ridiculous---albeit in a way that rings true: minor personal peccadilloes take on preposterous significance, while substantive views are danced around.

I do have one substantive objection to Supreme Courtship that will seem at first (but not, I hope, in the end) like nit-picking. A case that takes on central importance to the plot involves the question whether a criminal can successfully sue a gun manufacturer for the malfunction of his gun during the commission of a crime. In Supreme Courtship, the case makes it to the Supreme Court, but this would be impossible in the real world: The issue presented is entirely one of state law. Although the lower federal courts would have had jurisdiction because the plaintiff and defendant are from different states (and thus the case falls within federal diversity jurisdiction), the Supreme Court has long interpreted the statute governing its appellate jurisdiction as only authorizing Supreme Court review of such cases where the result of the case turns on the resolution of an actual contested issue of federal law.

Before you accuse me of being the sort of pedant who objects to the "whoosh" sound made by the Enterprise at the opening of Star Trek---there being no air, and thus, no sound, in space---understand that my jurisdictional objection has a substantive point: I believe that Buckley chose a torts example, notwithstanding the jurisdictional problem, because he wanted to illustrate a conflict between the law in its technicality and justice in its commonsensicality. (Buckley also illustrates this conflict by having his Justices constantly including Latin phrases in their opinions and even in their casual conversation.)

Of course, Buckley wants us to think, a criminal should not be able to sue a gun maker for his gun's failure; any idiot can see that, just as any idiot can see that people who smoke should be responsible for the damage it does to them (a point, albeit not the only point, of the libertarian Buckley's Thank You for Smoking) and that people who spill hot coffee on themselves should be responsible for the damage. The fact that the law sometimes allows recovery in these cases supposedly shows how out of step American tort law is with common-sense values.

Yet in fact, nearly the opposite is true. In the Supreme Court, hyper-technicalities are most frequently used to defeat the claims of deserving plaintiffs, as in the now-Congressionally-overruled Ledbetter case or even worse, in Bowles v. Russell (which I discussed here.) Conversely, the American tort system--though a highly inefficient means of delivering compensation to those who have suffered injuries--increasingly imposes arbitrary limits on jury awards to deserving plaintiffs and rarely sustains grossly disproportionate recoveries. Indeed, notwithstanding its iconic status as poster case of the tort system run amock, the McDonald's coffee case nicely illustrates the point: At the end of the day, the plaintiff, who suffered third-degree burns, only recovered compensation for the difference between the injuries she would have suffered from ordinarily hot coffee and the injuries she in fact suffered from the dangerously hot coffee that McDonald's served despite repeated complaints. And vindicating the beneficial regulatory effects of tort law, McDonald's now serves its coffee at less dangerously high temperatures. (For a sustained debunking of this and other torts-gone-wild chestnuts, see Why Lawsuits Are Good for America by Carl Bogus.)

So, armed with that warning, enjoy Supreme Courtship.

Posted by Mike Dorf

Monday, February 16, 2009

The Proposed Judiciary Act of 2009

In two posts last fall (here and here) I described the latest paper by Duke law professor Paul Carrington and my colleague and former Cornell Law Dean Roger Cramton urging reform of the structure of the Supreme Court. More recently, C&C have addressed their proposal to the Obama administration and Congress in the form of draft legislation (which I have posted here). The latest proposal comes in four parts, and in order to maximize support, C&C have permitted individual academics to endorse the parts separately. In addition to publicizing the proposal, I thought I'd take the opportunity here to explain why, even though I'm generally sympathetic to the proposal as a whole, I only ended up endorsing one of the four parts.

Part 1 would authorize the President to make a new appointment to the Court every 2 years, cap the active roster of Supreme Court Justices at 9, and (after a transitional period for Justices currently sitting), relegate Justices who had served 18 years to a reserve bench of "Senior Justices" from which they would be drawn to substitute in cases of recusal, while more generally retaining the more minor powers of an active Justice (such as the ability to serve on lower federal courts).

Part 2 would establish procedures for the involuntary removal of Justices deemed no longer able to perform their duties.

Part 3 would make the office of Chief Justice a 7-year term, thus ensuring that the substantial administrative duties that currently fall on the Chief are shared. (After serving as Chief, a Justice would return to his or her duties as an Associate Justice.)

Part 4 would assign much of the responsibility for deciding what cases to hear to a newly created "certiorari division" of the Court, staffed by judges of the lower federal courts.

There is much to recommend these proposals, as the draft legislation itself argues. Nonetheless, I end up only supporting Part 3.

I believe that Part 1 would, if constitutional, improve the functioning of the Supreme Court. I also believe that there are sound arguments for its constitutionality. However, I also worry that it bears an uncomfortable resemblance to the Judiciary Act of 1802, in which Jefferson and his party eliminated judgeships filled by Federalists because they disagreed with the likely decisions the Federalist judges were expected to render. To be fair to Jefferson and the Republicans of the time, though, the provisions of the Judiciary Act of 1801 that created "midnight judges," and which the 1802 Act attacked, were themselves highly problematic as a form of court-packing.

But speaking of court-packing, Part 1 also suggests Roosevelt's Court-packing plan. My worry is not that C&C are attempting to achieve substantive outcomes via organizational changes to the judiciary. I have no doubt of the purity of their motives. Rather, my concern is that adoption of this proposal by other than constitutional amendment would make easier the enactment of all manner of proposals for "jurisdictional gerrymandering" that would threaten judicial independence. Over the years, proposals to strip the Supreme Court (and the lower federal courts) of jurisdiction to hear cases involving busing, school prayer, abortion, and most recently, habeas corpus, have been justified on the ground that Congress retains substantial authority over the organization of the federal courts. On prudential grounds, I therefore come to the reluctant conclusion that I do not favor Part 1.

If Part 1 were adopted, I would have no difficulty with Part 2. However, without Part 1, I believe that there is too great a risk that Justices will (at least unconsciously) see advantage to be gained by seeking the ouster of colleagues based on illness when the President who would appoint a successor is in ideological sympathy with the Justice reporting the disability of a colleague. With appointments scheduled at regular 2-year intervals, this problem would not arise, but because I do not favor Part 1, I cannot support Part 2 either.

Part 3 strikes me as sensible. I think my first choice might be to reduce the administrative responsibilities that have been given to the Chief Justice in recent decades, but I also see the advantage of having the Chief supervise the administration of federal court business. C&C are clearly right that the same person need not do this for many many years, and 7 years seems about right for a term.

As I noted in my earlier post, I disagree with what is now offered as Part 4, as I think the Court's certiorari process functions reasonably well. It may well be true that the Court could decide more "unimportant" cases, but because I believe that our Supreme Court should be understood as something like a constitutional court in the European sense, I have no difficulty with its time spent mostly on important matters. And even under the current system, the Supremes decide a fair number of "boring" cases.

In any event, despite my signing on to only one of the four proposals, I think Carrington & Cramton deserve enormous credit for re-thinking fundamentals that are so often taken for granted.

Posted by Mike Dorf

Friday, February 13, 2009

Long-Term Benefits of Performance-Enhancing Drugs

As a law-professor, I haven't been tempted to take anabolic steroids, HGH or other performance-enhancing drugs (other than caffeine!). Thus, my knowledge of their effects is admittedly amateurish, based as it is on casual sports fandom, internet surfing, and watching the movie Better, Stronger, Faster. From what I've been able to figure out, depending on the drug, the benefits decay at different rates over time. Thus, a baseball player who took drugs to build muscle mass in, say, 2001, 2002 and 2003, and then stopped, would see the most benefit during those years, but depending on his fitness regime to maintain that mass and the particular drug, would continue to benefit in later years. For this reason, it's hard to take seriously the claim that use of PEDs taints performances during the period when those drugs are taken but not thereafter---a claim being made at least tacitly by A-Rod and others.

An analogy might be useful here. Consider the case of Oscar Pistorius, the South African runner who was originally forbidden from international competition because his artificial limbs were thought to give him an advantage over runners with intact legs and feet. The Court of Arbitration for Sport later overturned that ruling, although Pistorius failed to run a fast enough time to qualify for the Beijing Olympics. But suppose a clearer case. Suppose that a mediocre baseball pitcher named Lefty undergoes surgery and has installed in his arm socket a mechanical device that enables him to throw a 150 mph fastball with movement and control. Suppose further the surgery does not violate any rule of baseball. When the results of the surgery become apparent, however, Major League Baseball decides to ban this and related surgical improvements to players. Even though Lefty didn't violate any rules of baseball by having the surgery, it would be perfectly sensible to apply the rule to him because he derives a continuing advantage from it.

So why wouldn't we apply the same principle to past use of PEDs? Indeed, baseball players who used PEDs when baseball did not ban them were still breaking the law because these were controlled substances obtained illicitly, so they have less cause to complain than does Lefty, because Lefty's surgery was legal. The real problem here is simply one of enforcement: Because various PEDs decay over time, we don't have a good way now to figure out who is deriving continuing benefits from past PED use. Records we do have---such as the samples taken before baseball banned PEDs---were obtained only on a promise that they would not be used to discipline players, and thus cannot be used because of a kind of exclusionary rule.

But to repeat, those are practical problems about enforcement, not reasons in principle why athletes who continue to derive benefits from PEDs are somehow entitled to those benefits because they have stopped taking the drugs. To the extent that the PEDs work like Lefty's artificial super-arm, they confer an ongoing unfair advantage.

Posted by Mike Dorf

Thursday, February 12, 2009

Apparently, It's Never a Good Time to Invest in Our Future

In late December, I initiated a series of posts (here and here) discussing how a severe economic crisis can open up opportunities to change the way industries work and to revise our basic assumptions about how the government can affect our lives. "A crisis presents a rare opportunity to shake off the conventional wisdom and to gather the political will to create better ways of doing things." We have now experienced our first major legislative battle of the Obama presidency, and the possibility of overcoming old assumptions seems further off than ever.

Among many disappointing aspects of the debate over the stimulus bill, perhaps the most worrying is the claim that we should not vote for infrastructure investment because such spending cannot be done fast enough to stimulate the economy. It is, in fact, simply not true to say that infrastructure spending cannot happen quickly. Sadly, decades of our willful failure even to pay for basic maintenance of roads, water systems, and so on have left us with a backlog of projects that could be started almost immediately if the spending were approved. The American Society of Civil Engineers estimates that we need to spend $2.2 trillion over the next five years just to repair and upgrade our existing infrastructure.

Even so, it is true that there are many new infrastructure projects that could take years or decades to plan and build. My hope had been that we could turn the proverbial lemons into lemonade during this crisis by authorizing large-scale public investment projects (such as high-speed rail) that would be not only wise investments purely in dollar terms but would also have enormous environmental and social benefits. Under non-crisis conditions, such projects have never gotten far in Congress because of the combination of reflexive anti-government ideology and the short-term thinking inherent to our political system. As we now face the possibility of global depression, it seemed at least possible that we would think big and start to fund some of these far-reaching projects that could change the world that we pass on to future generations.

Instead, we could not even get enough money to fix crumbling school buildings. Why? Because opponents of the bill stuck to their story that infrastructure spending is too slow, so the only spending that should even be included in a stimulus bill is that which will be immediately stimulative, no matter its long-term pay-off. Admittedly, there is a certain logic to this, because we surely want to know when a stimulus bill that has some price tag on it ($829 billion, or whatever) will actually affect the economy. There is no reason, however, why Congress cannot pass a bill and include that information in the bill itself. We would also want to know whether the spending on longer-term projects will be soaking up labor and capital when -- knock wood -- the economy is prosperous again. If that is our concern, however, then we even more urgently need to choose projects that will pay off even if they displace some amount of private economic activity.

In other words, because we fail to invest in sensible long-term projects during prosperous times, we need to use a crisis as an excuse to initiate projects that would be sensible under any circumstances. That is exactly the opposite of what seems to be happening. We now seem to be saying that, because some public investments do not kick in soon enough, then we should ignore their long-term benefit to the economy and get back to them "later." Forgive me for suspecting that later will never come.

This situation is a variation on Keynes's famous description of a stimulus program in which the government would bury tubes of money in abandoned mines. Private enterprise would then spring forth to create jobs "efficiently" in the money-retrieval industry. Keynes was being sarcastic, of course, and he was careful to say that he would prefer that the government instead finance sensible projects like improved housing for the poor; but if the "captains of industry" insist that the government must not build anything useful, then it is better during a downturn to spend money on something stupid than not to spend it at all.

And here we are. We cannot invest during good times, precisely because times are good. We cannot invest during bad times, precisely because times are bad. We have stumbled onto a perfect plan for long-term decline.

-- Posted by Neil H. Buchanan

Wednesday, February 11, 2009

When Even Your Ideology Fails, Try Gibberish

The debate over the Obama stimulus package has been enlightening in an unexpected way. Faced with the worst economic crisis since the Great Depression, and with overwhelming support among both economists and the public for spending to mitigate or end the recession, the mostly-Republican opponents of the plan are willing to say virtually anything in opposition to the plan. It is no longer merely a matter of viewing the world through a warped, extreme ideological lens. We have now seen conservatives move on to making statements that are inconsistent with their own ideology, that are self-negating, and that ultimately are pure gibberish.

The arguments offered by the opponents of President Obama's plan generally take the form of simple statements of belief (e.g., "We need more tax cuts!") that are impervious to any countervailing logic or evidence. Moreover, some of their accurate statements actually undermine their own policy conclusions. For example, as Mike's comments yesterday suggest, the statement that the New Deal did not end the Great Depression, while true (which is not to say that the New Deal did not do a lot of good, as far as it went), actually leads to the conclusion that we should make sure that we have a bigger spending package now than even President Obama has proposed. But that is not the lesson that conservatives draw. "I tried exercise; but three minutes of deep knee bends each week didn't take off the pounds. Exercise doesn't work."

Much of this, again, is simply a matter of conservatives not letting reality get in the way of their ideological verities. After trying out the line that "it's not a stimulus bill, it's a spending bill," and having been rightly laughed out of the room, Republican senators were reduced to simply reciting line after line from the bill as if stating the items separately would make them seem less acceptable. A billion for the census? How ridiculous! (Why would we want to stimulate the economy by hiring census takers and trying to fulfill this constitutional duty accurately?) Millions to insulate buildings? How wasteful! Even a moment's reflection on the items that the senators held up for ridicule indicated that the items would, almost without fail, put money into the economy quickly and would actually buy useful things.

With nothing left to do, therefore, the bill's opponents resorted to the most opportunistic of arguments. Moreover, some of their claims were directly contrary to conservative ideology. For example, the new chair of the Republican National Committee, Michael Steele, was appropriately ridiculed when he tried to claim that the bill would create "work," not "jobs." What went largely unnoticed was his attempt to justify this sophistry. His claim was that because these government programs have specific end dates -- thus insulating the bill from conservative accusations that this is a stealth plan to make people permanent government employees -- the "workers" would not have "jobs" as they would in the private sector, which creates permanent positions.

This is particularly odd coming from the chair of a party that fights so hard to maintain at-will employment as the default condition for labor law in this country. Not only do they not want jobs to be permanent, they do not even want jobs that a worker can depend on from day to day. Saying that the stimulus bill's "work" is inferior to private-sector jobs, therefore, is not only bizarre word play, but it ultimately relies on a claim that conservatives would generally disavow. The whole point of "dynamic labor markets," after all -- usually used to describe U.S. labor markets as opposed to "sclerotic" European labor markets that are bogged down by all those worker protections -- is that workers cannot and should not count on any job being permanent.

And when all else fails, why not just go for outright gibberish? Democratic Senator Ben Nelson of Nebraska said (on Monday night's "Rachel Maddow Show") that he would not have voted for the House version of the stimulus package, which is why he had worked with some Republicans to make it palatable (to himself and to them). Asked why his group had insisted that funding for education be cut, Nelson noted that he had been a governor once and that he and other governors had not liked it when the federal government had imposed unfunded mandates on the states. When Maddow asked, incredulously, if he was saying that it was a bad idea to give money to states for education now because it had failed to give them money for education at other times, he simply repeated his previous claim. He might as well have been wearing a hat made of aluminum foil.

As a pragmatist, I do not understand pure free market ideologues. Sometimes markets work very well, and sometimes they do not. When they don't, we should see if we can make them work better. Even so, I have gotten used to the fact that some people simply hate the government with a blind fury. What I had not anticipated was the willingness of some politicians to say simply anything -- anything at all, no matter how nonsensical -- and keep a straight face. I am not sure why I find this so surprising. I'll know better next time.

-- Posted by Neil H. Buchanan

Tuesday, February 10, 2009

Vouchers Instead of Tax Cuts

Some of the Republican opposition to the bailout stems from deep-seated skepticism about Keynesianism. Some of that skepticism is simply confused, as when Republicans say that the New Deal didn't end the Great Depression; World War II did. If that's true (and I think it is), that's because the New Deal did not provide a large enough stimulus (and because FDR foolishly tried to balance the budget after the initial bout of spending) to make up for the idled productive capacity, but WW II did. To be sure, one can find conservative economists who think that Keynesianism never works; their argument is that the Great Depression, like earlier depressions, eventually just ran its course, and the economy turned around.

But I strongly suspect that there are enough Republicans (i.e., at least a couple) willing to give Keynesianism a try that sufficient support could be constructed for the right stimulus measure. The real problem is that like Dems seeking to use the economic crisis as an opportunity to do what they/we want for the long term, Repubs want to do the same in different directions. That explains why the Senate bill, which needed Republican support to get to 60 votes [footnote on this point below], has more tax cuts than the House bill, even though tax cuts are likely to be largely ineffective if people simply save the money---which is entirely rational under the circumstances.

Which brings me to my proposal: Instead of tax cuts, how about vouchers? Republicans frequently argue that individual people, rather than the government, should be deciding where to direct their stimulus. Well, the way to do that is to give people---by which I mean both employed and unemployed people---monthly vouchers with monthly expiration dates. These could be targeted based on income or they could simply be given to everybody aged 18 or older with a social security number: $100 per month to spend on any goods or services you want; the catch is that you can't bank them.

Sure, there would be some enforcement issues. We can imagine retailers that launder vouchers for banks, but we can impose stiff penalties for such behavior and hire a cadre of newly unemployed accountants and lawyers to enforce the rules. There will also be some people who will spend their vouchers and then save some money they otherwise would have spent. But that effect is likely to be substantially smaller than what we see from straight out tax cuts.

So, if House and Senate negotiators are having a hard time getting to yes in ironing out their different bills, vouchers---an idea conservatives love in other contexts and should love in this one---can bridge the gap.

[Now the footnote: Another way to get to 60 votes in the Senate would be to seat Al Franken, wheel in Ted Kennedy, and tell Arlen Specter---up for re-election in 2010 in what has become a very blue state---that if he doesn't vote for the Democratic version of the bill, Barack Obama will personally campaign for and raise money for his next challenger. Or Harry Reid could start talking about the "nuclear option."]

Posted by Mike Dorf

Monday, February 09, 2009

Phelps, Pot and the Law

My latest FindLaw column asks whether Tim Geithner, Michael Phelps and Rod Blagojevich were treated "unequally" because their particular infractions led to results that differ from what we would have expected for ordinary people. I argue that much of the discussion of these characters confuses questions of role modeling with questions of equality. Here I'll focus briefly on Phelps and pot.

My column accepts the notion that Kellogg---which chose not to renew its endorsement deal with Phelps, although then claimed that this had nothing to do with the bong pic---was within its rights to disassociate its product from Phelps. Kellogg presumably was getting pressure from parents who were worried that their kids would see Phelps on a box of corn flakes and thus conclude that smoking pot is not just cool, but helps you win gold medals in the Olympics.

There is something at least a little far-fetched in those fears. After all, had Kellogg kept Phelps on, they wouldn't exactly have put a picture of him doing bong hits on the cover of the corn flakes box. Still, I get the objection. Teenagers would read or hear about Phelps's extracurricular activity and still see him on the cereal box.

But suppose that you think---as I think---that marijuana shouldn't be illegal. What exactly is the message you're trying to convey to them that Michael Phelps is undermining? My kids are 7 and 4, so we haven't had this conversation yet, but I imagine it would go something like this:
Marijuana is illegal to use in this country, and even though you or I might think that it ought to be legal, in a democracy if you disagree with a law, you can try to change it, but while it remains on the books, you obey the law. Also, even though marijuana probably isn't any worse than other, legal drugs, if you don't have glaucoma or loss of appetite, it's certainly not good for you, and because it's illegal, obtaining marijuana will put you in potential danger because you'll be exposed to people who are involved in more serious criminal activity. Finally, even if marijuana were legal, there would be a minimum age you'd have to be to get it, and you're younger than that minimum age.
This little speech is vulnerable at a number of points. Is there even a prima facie duty to obey the law simply because it is the law? Some legal philosophers think not, and even those who say there is acknowledge that this duty can be overridden. To be sure, smoking pot to get high isn't exactly civil disobedience of an unjust law in the Thoreau/MLK tradition, but try explaining that to a teenager. And of course, everybody breaks some laws for convenience reasons alone: driving 50 mph in a 45 mph zone, coming to a rolling stop at a stop sign, etc. At the end of the day, it's hard to distinguish these sorts of minor infractions from pot smoking, except on prudential grounds.

Perhaps most fundamentally, the problem with this speech is its first premise: that we have a functioning democracy with respect to our drug laws. Despite the lessons supposedly learned from Prohibition, we have repeated the experience with drugs, including relatively benign drugs like marijuana. That suggests that there is something fundamentally broken with our politics. For example, last year Barney Frank managed to get 23 co-sponsors (including Ron Paul and my own Congressman, Maurice Hinchey) for a bill that would remove federal penalties for medical marijuana made legal under state law. The bill would not have removed federal penalties for marijuana generally, and even if it had passed, it would have still left in place state penalties. Even this modest measure died without a vote.

This is an issue simply crying out for political leadership and there are at least some hopeful signs in some states. (See, e.g., this editorial re NY's Rockefeller Laws.) But at the federal level, don't expect much action. During the transition, had a section in which readers could vote for questions to ask the President-elect. A question about legalizing marijuana rose to the very top (which is, admittedly, bizarre, given the urgency of the economic situation). Here was the exchange:
Q: Will you consider legalizing marijuana so that the government can regulate it, tax it, put age limits on it, and create millions of new jobs and create a billion dollar industry right here in the U.S.?

A: President-elect Obama is not in favor of the legalization of marijuana.
Dude, that is so not change we can believe in.

Posted by Mike Dorf

Sunday, February 08, 2009

The Reasonable and the Rational

The CPR report on Cass Sunstein’s nomination to head OIRA made a little splash last week, largely for two incredible claims: (1) that Sunstein is some kind of climate change denier, and (2) that there has never been a risk in occupational safety or environmental regulation which has turned out to be less serious than first thought. These two unfortunate slips of hyperbole aside, CPR’s report—and the scholarly work of several of CPR’s members—raises important questions that the Obama Administration is facing.

First. Climate change is intimately connected with everything (shameless plug for Penn State’s own lecture series and symposium here). As MIT’s John Sterman has argued forcefully, the public is not appreciating the threat climate change represents with anything like the urgency it should. Of course, taking CC seriously doesn’t mean you should turn off your lights and heat and sell your car. It means we must urgently and collectively seek system-wide replacements for fossil fuel—in everything from behavioral change and technological improvement to diplomatic breakthroughs—before our options narrow any further. Obama’s plans for greater analytical integration of traditionally stove-piped programs in the Depts. of Energy, Commerce, Interior, Transp., EPA, etc., are a step in the right direction. But they will need the help of skilled bureaucratic turf managers. People like Sunstein, Jody Freeman, and the other counselors being assembled almost certainly lack those skills because they are gained from a lifetime spent in government. If the Administration doesn’t enlist or elevate big talent to address the managerial challenges confronting them, they will almost certainly fail.

Second. What constitutes a “reasonable” interpretation of a statute that does not close the list of permissible choice factors for an agency making discretionary policy calls? Lay aside the problems of statutory interpretation for a moment. Assume that many critically important statutory provisions (like several in the Clean Air Act) leave the list of permissible choice factors open for those to whom they delegate. Is the conduct of “cost benefit analysis” wrong wherever it isn’t explicitly required? The major arguments against it are that (1) CBA is no more determinate than its alternatives and that it purchases whatever precision it does achieve at the expense of distributive justice; (2) CBA requires that we put a price on the priceless (like statistical lives); and (3) CBA is unduly opaque and excludes the public from the processes of government.

Each of these is an important objection to CBA as it has been practiced. The Republican exponents of CBA from Graham back to Stockman and most in between have made it the fifth column of their anti-regulatory reign. But Sunstein and Obama aren’t those people. The real question is whether, as a family of techniques, CBA can be used to improve the making of necessary decisions. And the weight of the evidence collected in studies like Revesz & Livermore’s, Farber’s, and others is that it can do so if used properly. Perhaps a little more rigidity in the rules structuring OIRA’s work would be a good thing (rigidity in the form of notice and comment, CFR codification, etc.). I’m ambivalent about that myself. The biggest caveat to CBA or any other decision procedure is that it is only as good as the information used to carry it out. Information collection and management—and, thus, reducing the costs of collecting and sharing information—are the keys. And bureaucracies are notorious for mismanaging information, absorbing uncertainty, and miscommunicating normative reasoning.

Still, our agencies are under gargantuan responsibilities to protect the health and safety of the public and slow the pace of environmental depletion and toxification. The rational regulator can’t know where to start on a limited budget without CBA of some sort. This Administration will no doubt replace Bush’s Executive Order 13422 and restructure OIRA’s review process in detail. Unfortunately, the CPR report offers little counsel on what should replace it.

The supposed alternative in vogue among some is a so-called “feasibility” approach: is the conduct norm being set “feasible” for the market actors it governs? But this merely shifts the factors of choice regulators must use from a relatively standard assessment of market adaptability to a relatively unique assessment of the ingenuity, flexibility, and sincerity of regulated actors when we ask them: can you achieve this? That kind of ‘feasibility’ analysis, in fact, just amplifies the importance of the weakest elements of CBA, increasing the information burdens on regulators and strengthening the hands of the regulated.

In my view, though, our trouble is compounded most by the frequency with which agencies add and subtract the choice factors in their programs after a presidential transition. Not that I’m for unilateral disarmament on the left here: there are a lot of dubious decisions to be reversed by this Administration. But this is becoming a crisis of agency credibility. The Administration must take care not to erode public (or judicial) confidence in regulators any further. Reforming rather than rejecting the practice of CBA and making it a better approximation of its high ideals is the right thing to do. Besides, CBA is not necessarily the enemy of swift, transformative action on climate change. A major analysis by McKinsey & Co. here shows that.

Posted by Jamie Colburn

Friday, February 06, 2009

What's the Difference Between John Lynch and Rod Blagojevich?

John Lynch is the Democratic Governor of New Hampshire. Republican Judd Gregg told Lynch and President Obama that he, Gregg, would only give up his Senate seat to become Commerce Secretary if Lynch named a Republican to succeed him. The quid pro quo was fulfilled when Lynch named former Gregg staffer and Republican Bonnie Newman to represent the Granite State. Newman is a moderate who backed Lynch for Governor and as part of the deal has agreed not to run for the seat in 2010. Meanwhile, Wisconsin Senator Russ Feingold has argued that all of this deal-making simply underscores the need for an amendment that would require runoff elections for open Senate seats, stripping Governors of the power to make even the interim appointments they now make.

The deal that led to Newman-for-Gregg is certainly unusual but is it comparable---as the title of this post provocatively asks---to Rod Blagojevich's efforts to sell Barack Obama's vacated Senate seat for something that would benefit him? The obvious difference is that Blagojevich sought personal gain in exchange for the nomination---a well-paying sinecure for himself or his wife. By contrast, Lynch got nothing personal. All of the relevant actors in the deal---Obama, Gregg, and Lynch---were seeking to advance their respective political/policy agendas: Obama wanted Gregg because he thought him well qualified and to demonstrate bipartisanship; Gregg also wanted to display bipartisanship and presumably prefers being a Cabinet Secretary to being a member of the clearly minority party in the Senate; and Lynch was happy to facilitate his party's interest (by helping Obama and by selecting someone less conservative than Gregg who will abandon the seat soon enough) and his state's interest (by putting someone from New Hampshire in a powerful position in the administration).

That is a very important distinction---not only in principle but in law---but we still might worry that the deal departs from how Governors should go about picking interim Senators. The Constitution does not expressly constrain their discretion at all in this regard, but that doesn't mean that there aren't better and worse ways to go about picking an interim Senator. I can think of three plausible approaches (which may overlap to various extents in particular cases):

1) Name the person who you, the Governor, believe would do the best possible job;

2) Name the person who you, the Governor, think would best advance the interests of your party by, for example, retaining the seat when it soon comes up for election;


3) Act as the voters' surrogate and name the person who you, the Governor, think best approximates the views, values, temperament, and politics of the Senator you are replacing. (By this measure, for example, David Paterson should have asked himself who is most like Hillary Clinton, or perhaps he should have asked who Eliot Spitzer would have thought is most like Hillary Clinton).

Although one can make an argument that Lynch's agreement to name a Republican to replace Gregg was, on balance, beneficial (given Lynch's view of the public interest), it is hard to argue that this sort of dealmaking honors any appropriate conception of how a Governor should exercise the appointment power. Consider a somewhat fantastical hypothetical example: Suppose Gregg had simply retired from the Senate for personal reasons; suppose further that a wealthy eccentric offered to donate $20 billion to finance health care and education projects for New Hampshire, on the condition that Lynch name a Republican to the Senate to replace Gregg. Even though the deal would not benefit Lynch personally and even though it might be a net boon for New Hampshire, is there any doubt that Lynch would be acting wrongly in accepting the deal? And is the actual deal to which he agreed so different?

To be sure, in my hypothetical case, Lynch would score political points as the Governor who landed the $20 billion for New Hampshire's needs, but in the actual case too, Lynch scores some political points that may help him down the road with New Hampshire voters. The point is not that Lynch's agreement to the deal is nearly as bad as what Blagojevich attempted. It clearly is not. But one would hope for more from our politicians than they merely be not as bad as Blagojevich.

Posted by Mike Dorf