Thursday, May 31, 2012

Further Evidence Regarding the Intellectual Bankruptcy of the Austerions

-- Posted by Neil H. Buchanan

One of the unexpected benefits of writing on a blog is that readers -- both in comments and in off-line correspondence -- often ask questions and offer insights that spur further reflection, or spark a healthy digression, or sometimes simply provide further evidence supporting an argument that I have made in a post. No one, after all, can hope to read even a slice of everything that is out there, and any writer should be grateful to those who point to evidence that would otherwise have escaped notice.

In my extended and repeated critiques of government austerity, I have been especially fortunate to have readers who respond to my posts by adding to the pile of evidence that shows just how weak the pro-austerity case is. Last year, for example, when I wrote a Verdict column about the shockingly bad economic studies that claim to make the case for expansionary austerity, much of my work was done for me by a reader who provided not only URL's but direct quotations from some of those utterly weak pieces of pro-austerity scholarship. Referring to the evidence provided by that reader, it was easy to show just how bad is the argument (based, in this instance, on cross-national data) that purports to show that cuts in government spending during a recession will lead to increased incomes and reduced unemployment.

My column last week had a similar history. I had written a Dorf on Law post earlier in the month talking about the disastrous consequences of austerity, and a reader pointed out that there are right-wing advocacy groups who are now claiming that austerity policies have not even been tried. Shocked that this silly argument was extant in the land, but grateful to learn that even such a basic error was now being pushed by right-wing ideologues, I wrote last week's Verdict column, in which I examined the nonexistent case for the idea that the US, UK, and Europe have not truly been practicing fiscal austerity. In some ways, it feels like a waste of time to have to write such things, but one responds to the arguments that are out there. I would not have come across that particularly bad argument, had it not been for the interactions of blogger and helpful reader.

As soon as I wrote that column (and my follow-up post on Dorf on Law), a reader provided yet more evidence that the other side of this debate has no response to arguments such as those that I had made. (This reader apparently removed the comment from the blog after posting it, but I saved the email from Blogger that automatically notified me of the comment.) Although the reader admirably restrained himself by simply posting a quote (one that allowed the pro-austerity argument to indict itself) accompanied only by the words "a different point of view" as introduction, he might as well have said: "Professor Buchanan: As if to prove your points, here is what one of the anti-government 'think' tanks is promulgating these days."

I do not post the URL's for these things, because I see no reason to re-broadcast the distortions of a well-financed propaganda machine. Here, however, is the text to which the reader pointed:
"We can further demonstrate the existence of the fiscal factoid by comparing changes in the output gaps and general government structural balances. In the accompanying table, the first column records the output gap. When the gap is positive (negative), actual output is above (below) the economy's potential. The second column in the table is the general government's structural balance. When it is negative (positive), a fiscal deficit (surplus) exists. The third and fourth columns record the changes in the output gap and general government structural balance, respectively. A positive (negative) change in the output gap implies an economic expansion (contraction), and a negative (positive) change in the general government structural balance implies a fiscal stimulus (consolidation).

"If the fiscalists are correct, we should observe an inverse relationship between changes in the rate of growth in output (the third column of the table) and the budget balance (the fourth column of the table). From 2001 through 2016, as projected by the International Monetary Fund, the U.S. economy does not behave in the way that Prof. Krugman and other Keynesians have asserted and proselytized. Indeed, the number of years in which the economy responds to fiscal policy in an anti-Keynesian fashion is more than double those in which the economy follows the Keynesian dogma."
Ignore the turgid and absurd prose, if you can. The important point is that the Austerions' case against Keynesian policies amounts to nothing more than this: "Keynesians say that fiscal policy is always expansionary, but it's not." This is, in fact, a perfect example of the logical error about which I recently wrote, here on Dorf on Law. Right-wing extremists apparently believe that everyone is as extreme and lacking in nuance as they are, with left-wing thinkers simply being mirror images of right-wingers. The thing is, it just is not true. Again, the opposite of: "Fiscal policy is never expansionary," is not "Fiscal policy is always expansionary."

Keynesians do not believe that the economy will always expand when government spending rises. In fact, Keynesians do not believe that fiscal policy is always the right answer, even in a weak economy. We do, however, believe that it is the right answer now, when the economy remains incredibly weak, and when interest rates have been pushed as low as they can go. (Yes, monetary stimulus -- quantitative easing -- is a good idea right now, too. But it is too weak, alone, to do what is needed.)

Yet the case against Keynesian "dogma," as quoted above, states: "From 2001 through 2016, as projected by the International Monetary Fund, the U.S. economy does not behave in the way that Prof. Krugman and other Keynesians have asserted and proselytized." Krugman et al. have neither asserted nor proselytized that the economy should respond to fiscal changes in 2002 or 2006 or (we hope) 2016 as it would in 2010 or 2012. This is a classic straw man argument.

Consider an analogy. Suppose we were trying to determine whether a new medication will return to normal the red blood cell counts of people suffering from anemia. After studying 16 people (2001 through 2016), we find that most of them do not, in fact, see their red blood cell counts change in response to the therapy. Do we conclude that the medication is useless? Of course not, because we have indiscriminately used it on people without anemia, whose bodies were already regulating their red blood cell counts in the way that healthy bodies do.

If the medication's backers had claimed that everyone who takes the drug will see her red blood cell count rise, then they would be wrong. If, on the other hand, they had said that people who take appropriate doses of the drug will end up with healthy red blood cell counts, then the evidence from the study is simply irrelevant to evaluating the truth of that claim. If the medication's backers were as responsible as Keynesians are, moreover, they would say that it is a bad idea even to try to stimulate red counts in non-anemic subjects.

Tomorrow, I will return to some other anti-Keynesian arguments to which readers have pointed, all of which are equally specious. For now, I will simply thank all of our readers here at Dorf on Law for their responses, especially those that fortify the arguments that we have offered here. We are always open to contrary evidence, of course, but when the evidence cuts so clearly in our favor -- such as in the Keynesians versus Austerions debate -- further evidence of the other side's bankruptcy is always welcome.

Wednesday, May 30, 2012

Mandatory Ultrasounds and the Adoption Alternative

by Sherry F. Colb

In my Verdict column for this week -- Part 1 of a 2-part series -- I discuss the set of Texas amendments to the state's Woman's Right to Know Act, a group of amendments that I call "the Sonogram Law."  The Sonogram Law, passed approximately one year ago, requires abortion providers to give women an ultrasound at least 24 hours prior to her abortion (or 2 hours prior, if she certifies that she lives at least 100 miles from a provider) and display the ultrasound image for the woman, explaining in detail the contents of the image, playing any audible fetal heart sounds, and explaining those sounds to the woman as well.  A group of Texas providers challenged the constitutionality of the Sonogram law as it affects physicians, but my column focuses on the constitutionality of the law as it affects women seeking an abortion.  I examine how the Sonogram law resembles and differs from abortion regulations that the Supreme Court has considered in the past.

In this post, I want to take up the related question of what happens to women who decide to remain pregnant after seeing an ultrasound, not because they want a baby, but because they feel pressured by their "informed consent" session into taking their pregnancies to term.

In discussing the burden of an unwanted pregnancy, I have generally focused on the intrusion of such a pregnancy on a woman's bodily integrity.  To force her (or pressure her with targeted emotional appeals) to remain pregnant against her will is to support a monumental invasion of her body that burdens her organ systems, her health, and even her ability to sleep and to breathe comfortably.  Regardless of what one believes about the moral status of an embryo or fetus, the physical imposition of pregnancy provides a compelling argument for protecting a woman's access to abortion.  I have described this basis for an abortion right as "The Bodily Integrity Interest" (or "Bii") in a symposium piece about the rights and interests of future generations.

In thinking about the Texas ultrasound law, however, I have given some more thought to another argument for  protecting a woman's right to have an abortion, particularly in the early stages of an unwanted pregnancy:  the  interest in avoiding the emotional pain involved in giving up a child for adoption.

For someone who truly believes that a fertilized egg is a "child," I recognize that my argument here will not be persuasive.  Unlike the bodily integrity interest, the interest in avoiding an emotional bond that will subsequently be severed cannot justify killing someone (as opposed to terminating something that will later become someone).  On the other hand, to the extent that we have doubts about when exactly a zygote or developing group of cells becomes "someone" who can meaningfully be considered a "child," it becomes legitimate to consider the impact of unwanted bonding on someone who will not be able to keep her baby once he or she is actually born.

In a book entitled The Girls Who Went Away, author Ann Fessler relates the stories of women (whom she interviewed) who gave birth in the decades before the Supreme Court decided Roe v. Wade, a period during which many single young women were treated as presumptively unfit parents who should be forced or pressured to surrender their babies for adoption by more suitable families (i.e., married couples).  With no legal abortion option, the women whose stories fill the book gave birth and then promptly lost their children.  Their tremendous suffering, grief, and disorientation comes through very clearly and poignantly in the book, and many of them never recover from the loss.  If a woman is not going to be able to keep her baby, it is a special sort of cruelty to force or strongly pressure her nonetheless to gestate and give birth to that baby, only to have to say goodbye.

I cannot avoid observing here that a grotesque version of what confronts women in these circumstances confronts every dairy cow within the industry, including on allegedly "humane" farms.  Like humans, other mammals form extremely strong emotional bonds to the babies to whom they give birth.  In dairying, we forcibly impregnate dairy cows on a "rape rack" and then, after they give birth and express no greater yearning than to nurse and to be near their new babies, we take away their babies, one after another, so that we can consume the mother cows' breast milk.  In thinking about the reproductive abuses that women unjustly confront, in Texas and elsewhere, it is worthwhile to think too about our nonhuman counterparts whom we daily condemn to similar reproductive anguish with our consumption choices.

Tuesday, May 29, 2012

Bumpkin Savants and Detectives (It's About Money)

by Bob Hockett

The past year - or two, depending on whether you look both directions or only to rightward - seems to have brought something new to the long sorry annals of money-crankery.

What was new two years ago was the emergence of sizable numbers of people - benighted, sure, but nonetheless numerous people - who seemed to believe they held 'theories' of money. These were of course sundry 'tea party' and crypto-libertarian types who viewed Ron Paul as something more than a droll drooling bumpkin savant. They took him seriously. Some appeared even to take him for some sort of 'prophet.' Let's call him the Apostle Paul, for reasons that I'll elaborate more fully below.

In following Paul these poor people began losing their innocence - their monetary virginity, so to speak. They began learning to pronounce words associated with recondite subjects the existence of which people like this had not known before. Before long they began speaking declaratively in tones that suggested they now 'opined' about money. I suppose everyone thinks about money sometimes - how to earn more of it, how best to spend or to save and invest it, that sort of thing. But do most people 'opine' or 'theorize' about money - contemplate 'what it is, whence it came, why it matters,' if I may be permitted the pleasure of sounding a Galbraithian tone for the moment? Do most people even know what it would be, or to look like, to do that?

Yet here were these lumpen proletarian white people in Bermuda shorts and tee-shirts, looking anything but the courtly constitution-writing, Virginian violinist 'gentleman planter' types they took themselves to be channeling, all of them learning to use phrases like 'fiat currency' while wearing 'concerned,' 'troubled' looks on their faces and threatening to lynch Ben Bernanke. Money-cranks are, of course, a hardy perennial of American public life. But what was once more like syphilis - an obscure, vaguely scandalous subject that folk tried not to talk about in polite society - suddenly became a 'hot topic' among growing numbers of yayhoo cognoscenti two years ago.

What became new more like one year ago was something yet stranger. This was when sizable numbers of self-imagined 'progressives' began sounding themes like those we'd been hearing from the aforementioned tea-types. Call me obtuse, but had this been going on before? I only began noticing once I began getting involved with the 'Occupiers' last autumn - many of whom actually are colleagues at this point on several working groups.

I was surprised first by how many at Zuccotti Park held signs bearing images of Ben Bernanke with devil horns or swastikas, and by some who would dress as poor Ben and parade 'round with nooses encircling their necks. What gives, I asked some of these colleagues-to-be. The first answers I heard were not all that surprising - they were the answers of those who believe that the Fed's been 'in bed' with the big bad bankers who 'took down the economy.' That is of course in many ways a misunderstanding - at least of the Bernanke Fed - but not an un-understandable one.

Yet before long I found myself dismayed by encounters with some in Zuccotti whose bill of particulars against Ben included his plans to ... ready? ... 'take us off of the gold standard and debase the currency.' Let me end this paragraph there so that that can soak in.

After doing the requisite spit-take, I sounded some of these people out a bit more in hopes of getting a bead on where they were getting and where they were going with this. And, lo, it emerged that many were reading the same brain-virus materials as were followers of Paul. What in heavens name's happening here?, I marveled. Don't these people know that the gold standard was the cause celebre of all those white-moustached, black-tailed and top-hatted 'big city' London and New York bankers against whom the original Progressives inveighed at the turn of last century? What about the ruin of all those agrarians by gold-shackled tight money back in the late 19th century? And how about FDR's ueber-progressive decision at last really to take us off gold - a decision that led Maynard Keynes enthusiastically to declare in an OpEd, 'the President is splendidly right!'? I thought lefties - not commies, but lefties - liked FDR!

I've got a provisional 'theory' about this, probably not unlike that held by many others, which takes me back to my 'Apostle Paul' proposal for christening Saint Ron.

Many years ago, while a student, I worked now and again at a rather distinguished art museum, best known for its remarkable Asian collection, to earn spending money. Those of our readers who attend such museums know that they have very well developed security apparati, often heavily staffed. Often these staffs, for their part, are led by people who once were, or perhaps wished to be, police or private detectives. Wannabe gumshoes and secret agents. One of these upper level fellows at my museum always looked much the part, with side-parted Vitalis-slicked hair and a sort of permanent squint in one eye. He always seemed to be sizing you up, figuring your angle, ready to stop you before you left work that day with the Ming scroll or Rembrandt rolled up in your rucksack. 

So one day I heard that this fellow had once been a student at a nearby school of theology that trained mainline Protestant ministers. I wondered what had led to his change of career paths - disappointment at learning there's no longer an Inquisition, perhaps? - so I just up and asked him. Suddenly his eyes narrowed, he calculated a moment, then cautiously motioned me in closer, casting a sidelong glance or two rightward and leftward before answering. 'I don't know how to tell you this,' he said, 'but I know some things about the Apostle Paul that you don't wanna hear about.' This of course brought a spit-take of its own, along with a guffaw of delight, from your faithful reporter. Our fellow humans are such marvelous creations!

But the tentative lesson I drew from this episode is that some people, at least, simply require occult understandings of things, quite irrespective of such attributes as plausibility. Presumably it stems partly from whatever leads children to love ghost stories, as well as to like being frightened or chased by adults impersonating inexplicably malevolent bad guys or monsters - some need to be wowed by mysterious and dangerous extramundane stuff. (Life's otherwise boring?) Surely it also has something to do with a deeply felt need on the one hand for readily intuited explanations of painful and bewildering developments, accompanied by a felt inability to put in the time or the effort required to get to the real bottom of the thing. And Lord knows there's been much bewildering pain lately, much of it tied up with money - a notoriously elusive phenomenon that even (non-monetary) economists often are flummoxed by. 

As significant a source of the new money crankery as that latter one is, though - accounting, perhaps, for the newly large numbers of cranks - I can't help but think that the first one is more fundamental. Some people simply prefer the bizarre and occult explanation, even when able to grasp the more plausible mundane one. A deep-seated 'theological' need, perhaps. Whatever it is, I conjecture the pied piper Paul and his passel of merry followers are drawn into money-crankery by much the same forces as led my seminary-dropout conversant to what passes these days for 'detection.'

There is a real problem here, though, for all of the twinkle-eyed Chaucerian amusement it brings. For the new wave of 'goldbugs' and 'sound money' cranks actually is calling the shots with some folk in the legislature. Neil has written a great deal on that to illuminating effect. I'll offer my own two cents too - backed by no more than copper - as a sequel to this post in the not-too-distant future. In the meanwhile, please trust in Ben, not in Ron.

Friday, May 25, 2012

Fair Tests of Predictions: Stimulus and Austerity

-- Posted by Neil H. Buchanan

In my new Verdict column this week, I discuss the last-ditch efforts by economic conservatives to defend "expansionary austerity," the claim that cutting government spending (and, for at least some fans of the theory, raising taxes) will -- contrary to decades of accepted Keynesian wisdom, as found in nearly every economics textbook -- result in a net increase in a country's economic output and employment. This non-Keynesian result, we are told, will occur because of an increase in spending by businesses and consumers that will more than make up for the government's drag on the economy.

The most surprising economic story of the last few years has been that the governments of nearly every advanced economy have publicly embraced austerity measures, putting into disastrous practice an anti-government ideology that was surely going to exacerbate our profound economic troubles. And as Keynesians predicted, those economies have weakened, rather than strengthened. Anyone who has read my posts over the past few years, or anything by Brad DeLong or Paul Krugman (among many others), will recognize this story.

When the world's major economies continued to stagnate (or worse) in the face of austerity measures, the first line of defense from the believers in the Confidence Fairy was that the theory would start to work any time now. It simply had to work, they said, because there was empirical evidence showing that austerity is, indeed, expansionary. As I described in a Verdict column last December, however, the studies to which austerity's advocates pointed, to prove that governments can slash their way to prosperity, were simply irrelevant to our current circumstances. (For example, there have been times when some countries cut government spending at the same time that they were experiencing export booms, with purchases by foreigners allowing the countries to avoid recession. That does not, however, mean that we can simply count on an export boom -- or any other fortunate event -- to offset austerity today.)

My new Verdict column discusses the next stage of denial by the Austerions. The defenders of the faith now say that we never actually tried austerity at all, making the victory laps by Krugman and others completely inappropriate. How do we know that we never tried austerity? Because government spending in the major countries went up (or, in some cases, did not go down by a lot) over the last few years. That cannot be evidence of austerity, can it?

Actually, it can, and it is. Interested readers can look at yesterday's Verdict column to read my full argument. Short version: Austerions confuse cause and effect, thinking that a government is not slashing spending (and harming people) merely because the consequences of those cuts result in even more human need for other types of spending. That we are not seeing huge spikes in total government spending in the current period -- when we should otherwise expect discretionary spending to remain constant (or to rise), while emergency spending (unemployment benefits, Medicaid, food stamps, etc.) should be expected to increase in response to economic weakness -- is evidence of the very deliberate cuts in government spending that have been enacted in the U.S. and elsewhere.

As I was thinking about the effort to claim that expansionary austerity has not been disproved, I began to think about how I have recently been in what might seem to be a similar position. One of the talking points from the right for the last few years, after all, has been: "We know Keynesian economics is wrong, because we passed the stimulus, and it did not work." The short-hand version of the response from me and my ilk has been: "No, stimulus was never given a fair test." At least in form, therefore, this looks an awful lost like the defensive move in which the Austerions are currently engaged. The similarity, however, is entirely superficial.

[On a grander scale, Professor Dorf mentioned to me (after reading my new Verdict column) that this "never tested" meme also captures the attitude of believers in Communism. They argue, quite plausibly, that Marx's writings simply are not the basis for so-called Communist regimes in the 20th Century. They thus claim (perhaps not as plausibly) that Stalinism, Maoism, and other real-world regimes that have been labeled Communist are wrongly used to smear an idea that has never been given a chance to succeed or fail. Professor Dorf pointed out that the defenders of austerity would certainly never credit the idea that Communism was never fairly tested -- just as, I would add, those same people vociferously reject any defense of fiscal stimulus. Professor Dorf's point raises a set of larger questions that require -- at the very least -- a separate post. Pending breaking news and other developments, I plan to return to this topic soon.]

So, how can I argue that stimulus was never fairly tried and tested, but austerity was?

As a matter of theory, the case for stimulus is straightforward, whereas the case for austerity is (at best) counter-intuitive. Because of basic national accounting, we know that cuts in government spending will put downward pressure on GDP, while increases in spending push GDP upward. We also know that, under more normal economic conditions, government borrowing increases interest rates, which depresses spending by businesses and households. This, however, will not be true when the economy is weak, because interest rates will not respond to government borrowing so long as private businesses have no reason to try to expand. And private businesses will only expand if government spending rises first (or if we are lucky enough to experience some unanticipated positive event, such as an export surge). As a matter of describing what should happen in theory, then, advocates of stimulus (Stimulators? Stimulants? Stimuloids?) argue that spending increases (and some tax cuts) during a recession will put people back to work, without any "crowding out" of the government's stimulative measures.

By contrast, Austerions have to explain how private actors overcome the logic of recession. Families and private businesses are understandably terrified of the weak economy, and they reduce their spending in response. Because of the first-mover problem, each family and business waits for others to start spending, hoping that others will get the ball rolling. They have no reason to believe that acting alone will do them much good, so they continue to hunker down. When the government cuts spending, people see that yet more people will soon lose their jobs. This gives them still more reason to be prudent.

For reductions in government spending to be expansionary, moreover, we not only have to believe that families and businesses will respond in a way that is contrary to their most natural impulses, but we must believe that they will do so in a big enough way to more than overcome the drag from the government's spending reductions. That is possible, and it is ultimately an empirical question, but when austerity makes matters worse, it is not easy to say: "But there must be something wrong with what we are seeing, because it just make so much sense for consumers and businesses to spend more in a weak economy when the government is reducing demand even further."

On the theoretical level, therefore, the Keynesian story is straightforward, whereas the case for austerity requires that a lot of unlikely things happen at the same time (and with sufficient quantitative force). Still, it is possible for counter-intuitive stories to turn out to be true. As an empirical matter, how do we compare the real-world "tests" of stimulus and austerity?

First, we have to ask whether the predicate action was taken in each case. That is, did we really do what Keynesians wanted to do, and (after the supposed failure of the stimulus in the U.S.) did we do what Austerions wanted to do? As noted above, my Verdict column makes the latter case: The U.S. and other major countries have deliberately cut spending (and have refused to increase spending, where doing so would otherwise be called for), for the past several years. Government workers are being laid off. Programs are being canceled. Benefits are being reduced or eliminated. Austerity is happening.

As to the question of whether there ever was ever any stimulus spending, the answer continues to be: Yes, there was some, but not enough. The U.S. stimulus package was heavily weighted toward tax cuts that were known not to be especially stimulative. Moreover, state and local governments were cutting like crazy, making the net stimulus from the government sector quite small. People like Krugman said these things, in advance.

Second, we have to ask if we saw what we should have expected to see, under each theory. Austerions told us that private businesses and households would excitedly respond to austerity policies by expanding their own spending. That has not happened. At all. Europe is in free-fall, even though Greece and Spain (and Ireland and Italy and Portugal) have been forced to cut their deficits.

We can expect some Austerions now to claim that the problem was that people were worried that austerity policies might be abandoned. If that is our test, however, then we really have entered the realm of wishful thinking, without any hope of subjecting our policy agendas to real-world tests. If austerity policies could only work in a world where everyone believes that those policies could never be reversed or modified, then we could only test austerity by permanently abandoning democracy (see France, Greece). And not only must we abandon democracy, but we must also believe that we have permanently abandoned it, and that the people who would take over our governments will never themselves think to abandon austerity.

Back on this planet, we can ask whether the results of U.S. stimulus policies supported the claims of Keynesians. Did the recession end, as Obama's people foolishly suggested it would? (They said at the time that the stimulus was not too small, after all.) No. Does that mean that the stimulus did not work? Again, no. Importantly, the economy strengthened somewhat during the time that the weak stimulus was in effect, and it weakened again when the stimulus died out (and the U.S.'s version of austerity started to kick in, under the post-midterms political regime). Moreover, the unemployment rate responded (both qualitatively and quantitatively) as we should have expected, given the relative size of the stimulus. We did not actually "do stimulus" very well, but the economy reacted as the theory said it would.

In short, there is no equivalence between Keynesians' claims that the stimulus was never fairly tried, and the claims by Austerions that austerity was never fairly tried. The theory was always stronger for stimulus than for expansionary austerity, and the evidence supports the Keynesians' theoretical predictions (about both stimulus and austerity). We used a little bit of stimulus, and we saw a little bit of positive response. We (and especially the Europeans) have tried a lot of austerity, and we have seen a lot of negative response. Doubling down on stimulus would have been twice as good (or more). Doubling down on austerity simply reflects ideological intransigence and an unwillingness to face reality.

Thursday, May 24, 2012

The Catholic Dioceses' Lawsuits Against HHS: A Guide to the Perplexed

By Mike Dorf

The lawsuits recently filed by Catholic dioceses around the country raise a number of interesting legal questions.  In this post, I'll take a look at the main issues.  I'm using as my point of departure the lawsuit filed by the Fort Worth, Texas Diocese (complaint available here) but the analysis would be the same for other cases.

I'll begin with a very brief overview.  As part of the Patient Protection and Affordable Care Act (PPACA), employer-provided health insurance plans must cover preventative care for women, including, as interpreted by the executive branch, sterilization and contraception, which in turn includes contraception that works by preventing implantation (and is thus regarded by some people as a form of abortion).  Such insurance plans cannot include any extra co-pays or premiums for this coverage.

Religious employers are exempt but the regulations define religious employers to refer (more or less) to churches and the like, rather than broader religiously affiliated entities, such as religiously affiliated schools and hospitals that serve people outside the faith.  Under a compromise that the Obama Administration accepted earlier this year, the insurer rather than the employer must pay for the cost of contraception, etc.  The Administration reasoned that because such coverage is cost-effective, premium increases would not simply be passed on to the employer and employee.  (I discussed the underlying economic assumptions here.)

Although some Catholic charitable organizations were satisfied with the compromise, others weren't, leading to the current litigation.  The strongest religious liberty claim goes like this: Catholics have religious obligations to tend to the needy by feeding, educating and providing medical care to them, regardless of whether the needy are Catholic; thus Catholic institutions will not qualify for the narrow exemption for religious employers (which only extends to institutions that "primarily" serve and employ co-religionists); but Catholics are also bound by a religious prohibition on supporting abortion and birth control, and so the legal obligation to provide health insurance that includes such coverage puts them to a choice between violating their religious obligation to tend to the needy of all faiths or violating their religious prohibition on supporting abortion and birth control.

The Fort Worth Diocese complaint sets out nine claims, but the first two go to the heart of the case.  They contend that the regulations violate the Diocese's religious liberty as protected by the Religious Freedom Restoration Act (RFRA) and the Free Exercise Clause.  RFRA, readers may recall, was held unconstitutional as applied to state infringements on religious liberty in the Boerne case.  However, the Act remains valid as applied to the federal government (as illustrated by its application in the O Centro case). Because the requirement being challenged is contained in a federal law, the PPACA, it is limited by RFRA.  Thus, the Forth Worth Diocese and other comparably situated dioceses are entitled to an exemption if, per RFRA, they can show that the application of the contraception coverage obligation (1) substantially burdens (2) the exercise of religion, unless (3) the PPACA obligation is narrowly tailored to advance (4) a compelling government interest.

Because RFRA was modeled on constitutional case law, the same test will apply under the First Amendment
if the Diocese's free exercise rights are implicated.  Employment Division v. Smith, the case that RFRA sought to overrule, held that general laws that incidentally burden religion do not trigger heightened scrutiny under the Free Exercise Clause, and so it might appear that the free exercise claim fails.  To be sure, the Diocese includes a claim that because the PPACA requirement is subject to various exceptions, it is not neutral, but this strikes me as a losing objection.  There is no singling out of religion or particular religions here.

The better reason to think that Smith may not bar the free exercise claim relates to what the complaint calls (in Count V), "Interference in Matters of Internal Church Governance."  Per custom, the complaint does not cite case law, but this claim pretty clearly aims to build on the Supreme Court's decision earlier this year in the Hosanna-Tabor case.  There the Court held that Smith does not apply to internal governance claims.  Better yet for the plaintiffs here, Hosanna-Tabor also interpreted the "ministerial exception" broadly, to go beyond the right of a religious body to decide on its own pastors.  So too here, the Fort Worth Diocese and the plaintiffs in other cases will undoubtedly argue, the exception for churches and the like but not religious schools, hospitals and charities, is too narrow.

Yet in the end, it probably does not really matter whether the plaintiffs succeed on the internal governance argument, because even if they do, all they will get under that doctrine is the application of the same test to which they're independently entitled under RFRA.  To be sure, there is a bit of wiggle room here, because the internal governance doctrine interprets both the Free Exercise and Establishment Clauses, so it's possible that it is not even subject to the strict scrutiny test: Prima facie violations of the Establishment Clause generally mean the government loses, full stop.  However, I doubt the courts would apply the constitutional test that way.  It seems to me much more likely that in this context, a finding that internal governance is implicated, would trigger strict scrutiny rather than per se invalidation.

Accordingly, I believe the case will come down to the application of the RFRA test, certainly as a matter of RFRA itself and maybe via the First Amendment too.  Here is where the government should probably win.  Religious freedom claimants rarely lose on the ground that their claims aren't sincere, so let's assume that the Diocese really does operate under a religious prohibition against facilitating contraception, even for non-Catholics.  The Diocese then argues that the PPACA substantially burdens its ability to act in accordance with that prohibition and that in doing so, the PPACA is not narrowly tailored to advance a compelling government interest.  After all, the Diocese says, if the government wants to make contraceptives more widely available, it has many means of doing so without enlisting religious organizations in violation of their beliefs.

Convincing?  I don't think so.  The problem with the Diocese's argument is that it utilizes a too-encompassing notion of participation in conscience-violating activity.  Consider a reasonably closely related hypothetical.  Suppose that Section 3 of the Defense of Marriage Act, which defines marriage as straight marriage, is repealed, and that the federal government treats marriages as valid or not depending on state law.  Now suppose that a Catholic or other religious hospital in New York objects to making Social Security payments for some or even all of its employees on the ground that such payments will go to support Social Security disability and survivor benefits for the same-sex spouses of people married under New York law, and thus under federal law.  Let's imagine that the tenets of the religion with which the hospital is affiliated really do forbid the Social Security payments.  Nonetheless, the hospital loses--probably even before a court gets to applying strict scrutiny.  For a law to substantially burden the exercise of religion, the religious claimant must be claiming something that is not too "external" to the claimant.

The point is apparent in two pre-Smith cases, i.e., cases decided at a time when the Court was still willing to subject government laws and policies to strict scrutiny even if they didn't single out religion.  They are the Lyng case, in which the government was permitted to build a road on land holy to a Native tribe, without having to satisfy strict scrutiny, and the Roy case, in which the plaintiffs unsuccessfully objected to the government's assignment of a Social Security number to their daughter on sincere religious grounds.  Whatever one thinks of the precise results in these cases, they illustrate a broader principle that there are limits to what counts as coerced participation in religiously impermissible activities.

A requirement that Catholic hospitals perform abortions or dispense contraception pretty clearly triggers strict scrutiny under RFRA.  A requirement that Catholic hospitals and schools make Social Security payments for their employees, which payments may then be used to pay benefits to same-sex spouses (or under current law, to spouses who were previously divorced), pretty clearly should not trigger strict scrutiny under RFRA.  To my mind, the requirement to provide health insurance that includes coverage for contraception etc. falls on the no-strict-scrutiny side of the line.  The Catholic institutions are not being required to provide goods and services they deem immoral.  They are not even being asked to pay for such goods and services.

That doesn't mean I'm confident that some judge won't rule for a plaintiff in one of these cases.  I'm enough of a legal realist to understand that ideology will lead different judges to see these issues differently.  But I do think that I have zeroed in on the right question: At what point does conscientious objection fail because one cannot plausibly describe the relevant activity as "participation" without infringing the rights of others or social policy more broadly?  As I've said before, that is not an easy question.

Tuesday, May 22, 2012

Connecting the John Edwards and Dharun Ravi Cases: Moral Luck

By Mike Dorf

As I write, the jury in the John Edwards case is still out, deliberating about the fate of the former Senator.  Here I want to reflect a bit about the seeming peculiarity of an element of two of the crimes that the prosecution has attempted to prove.  As I noted nearly a year ago, as a predicate for finding that Edwards violated campaign finance laws with respect to the money provided by Bunny Mellon, the government must prove that Mellon intended the money as a campaign contribution.  The oddity on which I want to remark is the notion that a criminal defendant's guilt or innocence turns on a third party's mental state.  My analysis will lead me to note a connection to the Dharun Ravi case.

The complete jury charge in the Edwards case can be found here.  For count 2, the judge summarized the charge as follows: 
[B]efore you can find Mr. Edwards guilty, the government must prove beyond a reasonable doubt that, while he was a candidate for president, Mr. Edwards knowingly and willfully accepted or received, or knowingly and willfully caused another to accept or receive on his behalf, contributions from Ms. Mellon that totaled $25,000 or more during calendar year 2007.
Count 3 of the indictment charged the same conduct for calendar year 2008.

One way that Edwards could be found not guilty on these counts is if the jury finds that the money given by Bunny Mellon were not campaign contributions.  As other instructions relevant to these counts make clear, whether the money counted as campaign contributions turns on whether Mellon intended the money to influence the outcome of the election.  The jury was told that this is a factual question to be determined based on "evidence about the intent, motivation, and goals of Ms. Mellon, evidence about the statements made surrounding the solicitation and acceptance of the money, how the money was actually spent, and other evidence of all the surrounding circumstances . . . ."

As I noted in my post last year, I find it difficult to imagine that Mellon did not intend the money she gave to influence the election.  Here is what I wrote then:
It is nearly inconceivable that the money for hiding the Hunter affair was not "for the purpose of influencing" the 2008 Presidential primary.  What other possible purpose could it have served? Even if we assume that the Mellons and John Edwards were very close personal friends, what kind of human being gives a close personal friend over $700,000 to hide his affair from his wife?  It's possible that Mellon, over 100 years old, was not aware of exactly how Edwards planned to spend the money but it's hard to believe that she just happened to give Edwards this enormous sum of money as a gift just when he happened, by sheer coincidence, to be running for President.
Now I should add the important caveat that I have not followed the trial all that closely and so it is possible that the evidence presented differed from what was described in the media a year ago.  But assuming that the evidence at trial more or less tracked the public story, I would be surprised if Mellon's intent ends up being crucial to the Edwards defense.  And from what I understand, the Edwards defense has mostly focused on his state of mind--arguing that he was out of the loop on Andrew Young's efforts to get money from Mellon.

Now let's focus on what I'm calling the main oddity here: The requirement that, as part of the prosecution's case against Edwards, it must prove Mellon's intent with respect to the money she provided.  As I understand criminal law in general, for Mellon's intent to be an element of the crime, the jury must find beyond a reasonable doubt both: (1) that Mellon intended the money to influence the election; and (2) that Edwards knew that Mellon intended the money to influence the election.  (The actual jury instructions require more than knowledge from Edwards; they require willfulness; but knowledge is enough for my purposes.)

Let's suppose that Edwards in fact knew all about the fact that Mellon was giving money to Young to hide the Hunter affair from Elizabeth Edwards.  But consider two further possible scenarios:

Scenario A: Bunny Mellon writes a note to Edwards in which she says: "You're the best hope of the Democratic Party.  I'm giving you this money to help you become President."  Secretly, however, Mellon does not want to influence the election.  Unbeknownst to Edwards, she contemporaneously writes in her diary: "I know that Hillary or Barack will crush that cad John in the primaries so I know this money won't make a bit of difference in the campaign.  But I feel so bad for Elizabeth.  I hope that John uses this money to spare her feelings."

Scenario B: Bunny Mellon writes a note to Edwards in which she says: "John, you are a cad and I hope you don't become President.  I'm only giving you this money so you can protect Elizabeth from learning of your betrayal."  Secretly, however, Mellon hopes to influence the election.  Unbeknownst to Edwards, she contemporaneously writes in her diary: "I feel so guilty helping John Edwards get the nomination but I just know that he's got a better chance of winning the general than Hillary or Barack."

In both scenarios, Edwards is not guilty.  In Scenario A, Mellon lacks the intent necessary for a campaign contribution, while in Scenario B, Edwards lacks the requisite knowledge of Mellon's intent.  To me, the more problematic result is A, because in that scenario, Edwards has taken action which, had the world been as he thought, would have resulted in his committing a crime.  He was just fortunate that--through nothing traceable to him--facts in the world made him not guilty.  By contrast, Scenario B is not problematic at all, because there Edwards himself lacks the requisite mental state to commit a crime.

Upon reflection, it appears that what's peculiar in the Edwards case is actually quite a common feature of the criminal law: the problem of how to deal with moral luck.  Scenario A is arguably the flipside of the Dharun Ravi case.  Like Edwards in Scenario A, Ravi had the requisite intent to commit a criminal act.  But whereas Ravi had the bad "luck" to have had his criminal act lead to a suicide, Edwards in Scenario A has the good luck to not even commit a crime due to something completely outside of his control.

The Domain of Moral Hazard

By Mike Dorf

My latest column on Justia's Verdict uses the JPMorgan Chase trading loss as a point of departure to discuss a common conservative argument against regulation: That providing people and firms with express or implied insurance will lead those people and firms to take risks that are not cost-justified.  In the column, I briefly discuss bailouts of banks and the auto industry, deposit insurance, and at the end, health insurance.  Although the column does not use the term "moral hazard," it does invoke that concept, which is slightly broader than the notion that insurance dampens incentives.  Moral hazard includes the idea that people will be more willing to spend others' money than their own.  In this post, I want to say a few more words about the idea of moral hazard in the health field.

The ideologically conservative argument against third-party health insurance goes much like the argument against insurance in other contexts: In a well-functioning market, the price of a good or service will be set by the intersection of the supply and demand curves; health insurance enables patients to get health services for substantially less than their true cost (because the insurer pays most of the cost); that leads to too much health care and artificially inflates the price of health care.

The problem with the foregoing logic is not so much that it is wrong, but that it is incomplete.  I can't speak for everyone, but personally, I don't like going to see a doctor.  It's potentially unpleasant.  (E.g., the doctor may need to draw blood.)  It takes me away from other things I need to do (work) or want to do (play, spend time with family).  And it could lead to bad news ("I'm sorry but you have scrofula" or "you need to lose 25 pounds"), which, in principle would be welcome because for most conditions early diagnosis increases the likelihood of a cure, but in fact, most people tend to avoid learning bad news even though such information could help them.

Accordingly, it strikes me that there are strong non-economic disincentives to going to the doctor, so the notion that we need policies that further discourage people from using medical services seems wrong.  Co-pays do in fact suppress demand for medical services but I'm not persuaded that they are mostly suppressing unnecessary, as opposed to necessary, trips to the doctor.

Perhaps the real moral hazard problem in medicine is the moral hazard of the providers (chiefly doctors and hospitals).  Suppose that Dr. X is trying to decide whether to recommend that patient Y undergo some procedure (let's say prostate surgery).  In a perfect world, we would want the doctor to make a recommendation based on the expected costs and benefits of the procedure, without regard to cost.  But in our actual world, of course, that's impossible.  Money spent paying for prostate surgery is money not available for other (medical and non-medical) goods and services (for this patient or for others).  And so a rational system would include some consideration of cost.

Our fee-for-service system does consider cost but in a peculiar way: The more procedures that Doctor X performs, the more money that he makes, and so it is in Dr. X's economic interest to over-treat.

That doesn't mean that any particular doctor will in fact over-treat.  Professionalism is supposed to lead doctors to make recommendations strictly on the basis of the patient's best interest.  But basic human psychology will tend to induce doctors to think that they are making decisions and recommendations based on patient well-being, even when their own economic interest colors their perception of such well-being.  (Most of what I have just said about doctors also applies to lawyers, accountants, plumbers, and others who bill by the hour, but I'm discussing health care here, so I'll just note that fact and move on.)

Do the incentives of fee-per-service doctors cancel out the incentives of patients--deterred from visiting doctors by co-pays and the unpleasantness of the experience?  That would be a happy coincidence, but I doubt it is true.  The factors that keep patients away from the doctor will tend to keep them away from visiting regularly or early, thus meaning that when serious conditions are diagnosed, they're more costly to treat.  Meanwhile, the incentives of fee-per-service doctors are to maximize expensive treatments, not office visits.  Accordingly, it looks like we have a set of economic and other incentives that combine to undermine the cost-effectiveness of medical treatment.

One of the lesser-known features of Obamacare is its support for experimentation around alternatives to fee-for-service payment systems.  (This goes beyond the experiments in Medicare and Medicaid.)  In principle, there ought to be cross-ideological support for these experiments, because they build on the insight that moral hazard is real.  But at least so long as health care reform remains highly politicized, we can expect these alternatives to be attacked.

Monday, May 21, 2012

Yet Another Exam

By Mike Dorf

           Continuing my tradition of posting my exams, below is the Federal Courts exam I gave this past semester.  Students had 8 hours and were permitted to use whatever materials they wished (other than the interactive contents of another mind).  They were required to answer each of the four questions, which were weighted equally.  I also included the following general instructions: Assume that Hughes is a State of the United States.  The (fictional) Federal District Court for the State of Hughes is within the (fictional) Twelfth Circuit.  In answering all questions, assume that you are a law clerk to Judge Barbara Hand, who sits on the Federal District Court for the District of Hughes.

Once again, I set this out as an exercise.  If you find this interesting, feel free to comment, but I won't grade comments.  Grading the real exams was enough of a treat!

            The following facts pertain to questions I, II, and III.

            In August 2011, Congress enacted last-minute legislation raising the debt ceiling and providing for automatic budget cuts beginning in January 2013.  See Budget Control Act of 2011, Pub. L. No. 112-25.  Those automatic cuts could have been averted if Congress approved legislation proposed by the bipartisan “super-committee” but the super-committee failed to agree on recommendations.

(Everything in the prior paragraph is true.  Now we come to the made-up facts.)

            Due to unexpectedly sluggish tax revenues and a rise in interest rates, the current debt ceiling will be reached earlier than originally expected, on November 27, 2012.  Immediately after his narrow re-election in early November, President Obama announces that he is ready to negotiate a deal with Republicans (who retain control of the House and gain seats in the Senate) but that if no deal is reached by November 27, 2012, the President says that he will unilaterally authorize borrowing beyond the current limits of the debt ceiling.  President Obama states that his issuing of “Presidential bonds” is necessary to avoid a violation of Section 4 of the Fourteenth Amendment. [1]

Congress fails to enact a bill raising the debt ceiling by the deadline and so beginning on November 27, the Treasury Department issues new bonds despite the fact that they bring the face value of outstanding debt beyond the limit set by the debt ceiling.  Because investors are uncertain of the validity of the Presidential bonds, interest rates on them are somewhat higher than on bonds sold the previous week.  Meanwhile, Republicans and some Democrats in Congress denounce the Presidential bonds as violating the separation of powers because Congress, not the President, has the power to borrow money.  Political pundits also criticize the Presidential bonds.  Perhaps most ominously, a person described as “a high-ranking Chinese government official speaking on condition of anonymity” is quoted in the Wall Street Journal stating that “if the legality of these bonds is not quickly resolved, we will need to adjust our portfolio.”

With the crisis deepening, Congress and the President reach an agreement that is enacted in legislation passed on December 4, 2012.  It is the Bond Legality Assurance Act (“BLAA”) of 2012.  The BLAA raises the debt ceiling by $2 trillion and further provides in pertinent part:

Section 101.  This Act is passed pursuant to Congress’s powers to borrow money, to provide for the general welfare, to regulate interstate commerce, to enforce Section 4 of the Fourteenth Amendment, to make laws that are necessary and proper to carrying out its other powers, and/or any other powers that may be pertinent.
*  *  *

Section 201.  Notwithstanding any other provision of law, all bonds issued by the United States government from November 27, 2012 through the enactment of this Act are fully legal and backed by the full faith and credit of the United States government.

Section 202.  No court of the United States shall have jurisdiction to enjoin, invalidate, or otherwise call into question the legality of federal government bonds issued from November 27, 2012 through the enactment of this Act.

Section 203.  This Act hereby expressly abrogates the sovereign immunity of any State that is or may be sued for its failure to treat bonds issued by the United States government from November 27, 2012 through the enactment of this Act as fully legal and backed by the full faith and credit of the United States.

Hart & Wechsler Investments is a private investment management company, organized as a partnership under Hughes Law and headquartered in Hughes City, Hughes. Hart &Wechsler promises its clients “modest but secure growth.”  Its standard contract provides: “At all times, no less than fifty percent of each portfolio shall consist of U.S. government bonds backed by the full faith and credit of the United States.”  During the period from November 27 through December 4, 2012, approximately $30,000 of U.S. bonds in the portfolio of Ingrid Investor matured.  Hart & Wechsler invested $20,000 of that money in corporate bonds but in order to prevent the total portfolio from falling below fifty percent in U.S. bonds, Hart & Wechsler also purchased $10,000 worth of Presidential bonds for Investor’s account.  In addition, Hart & Wechsler purchased approximately $100,000 worth of Presidential bonds for other clients with portfolios in similar circumstances.

When Ingrid Investor (who resides in Hughes City, Hughes) received her monthly Hart & Wechsler statement in mid-December, 2012, she contacted a lawyer, and a week later she filed a lawsuit against Hart & Wechsler, alleging breach of contract on the ground that the Presidential bonds were not “U.S. bonds backed by the full faith and credit of the United States” because they were issued by the President in violation of the Constitution’s assignment to Congress of the power to borrow money.

Hart & Wechsler filed an answer that made the following points: (1) There is no jurisdiction in light of Section 202 of the BLAA; (2) Quite apart from BLAA, there is no jurisdiction under 28 U.S.C. § 1331; (3) If there is jurisdiction, the case should be dismissed for failure to state a claim because the bonds were valid under Section 201 of the BLAA; (4) Investor suffered no damages as a result of the purchase of the Presidential bonds because they have since been guaranteed by Section 201 of the BLAA; and (5) Hart & Wechsler has the affirmative defense of impossibility under the contract law of Hughes.
The case is assigned to Judge Hand.  She has asked for a memorandum addressing the following questions:

Question I: Does Section 202 of the BLAA validly strip the district court of jurisdiction?

Question II: In the absence of Section 202 of the BLAA, or assuming that Section 202 of the BLAA has no legal effect because it is unconstitutional, is there jurisdiction over Investor’s lawsuit under 28 U.S.C. § 1331?

Judge Hand has assigned other issues (such as the question whether Investor has standing and the question whether the state law defense of impossibility is applicable) to her other law clerk, so please confine your answers to the questions posed.

The following facts pertain only to Question III.

Meanwhile, another lawsuit arising out of the Presidential bonds has also been assigned to Judge Hand.  This second case is a suit against Hughes State Treasury Secretary Tom Treasurer in his official capacity.  Filed by a class of Hughes civil service workers, some of whom reside out of state, it alleges that from November 27 through December 4, the State Employee Pension Fund refused to purchase U.S. bonds as its existing bonds came due, instead investing $20 million in risky foreign government bonds that have since lost half of their value.  The lawsuit raises state law claims of breach of fiduciary duty and breach of contract, alleging that the Fund was obligated to purchase U.S. bonds, and asserting federal court jurisdiction pursuant to 28 U.S.C. § 1332(d).  It seeks an order to Treasurer to pay roughly $10 million from the State Treasury to the Fund, to make up for the losses incurred from the State’s refusal to purchase U.S. bonds during the contested period.

Treasurer files a pre-answer motion to dismiss on the ground that the lawsuit is barred by the state’s sovereign immunity or, in the alternative, the State was not contractually obligated to purchase Presidential bonds because they were constitutionally
invalid when they were issued.

Judge Hand asks you to address the following question in your memorandum:

Question III: Is the lawsuit barred by state sovereign immunity?  Assume that Hughes has not waived whatever sovereign immunity it enjoys against the lawsuit.

The following facts pertain only to Question IV.

            One night in February, 2011, police responded to a 911 call notifying the dispatcher that shots had been fired on Schwab Street in Hughes City, Hughes.  Upon arriving at the scene, police discovered George Trigger kneeling over the 120-pound 5-foot, 4-inch dead body of 15-year-old Victor Victim.  Trigger admitted to the police that he shot Victim but maintained that he did so in self-defense.  Trigger said that he was patrolling outside of his house as part of a neighborhood watch program, when he saw a “suspicious looking man loitering with no apparent purpose.”  Trigger approached the man and asked what he was doing, but the man refused to respond.  When Trigger told the man to move along, the man “simultaneously reached into his pocket for a gun and lunged at Trigger.”  Trigger says that at that point he fired three bullets from his semi-automatic pistol at the man at close range, killing him.  The “man” turned out to be Victim.  The police retrieved a mobile phone from Victim’s jacket pocket but found no gun or weapon other than Trigger’s own pistol.  Trigger nonetheless insisted that Victim had a gun that “must be around here somewhere.”  However, a police search did not reveal any weapon.

Trigger voluntarily accompanied the police to the station, where he was given his Miranda warnings and then gave a statement along the lines described above.  He was later charged with the murder of Victim.  At trial, the police introduced Trigger’s statement as well as physical evidence.  Trigger took the stand to tell his story and on closing his attorney, Saul Goodman, argued self-defense.  The jury was instructed that in order to find Trigger guilty of first-degree murder under Hughes law, it had to find beyond a reasonable doubt both that Trigger intentionally or knowingly killed Victim and that Trigger did not act in self-defense.  Subject to exceptions not relevant here, Hughes law permits the use of deadly force against another person when a person reasonably believes that such other person is using or about to use deadly force against him or her.

The jury convicted Trigger of first-degree murder and following a separate sentencing phase of the trial, recommended a death sentence based on the aggravating circumstances that Victim was “especially vulnerable” and that the murder was racially motivated.  Trigger was sentenced to death.

Trigger filed a timely appeal to the Hughes Circuit Court, raising the following two grounds for reversal: (1) there was not sufficient evidence to prove absence of self-defense beyond a reasonable doubt; and (2) there was insufficient evidence of racial bias to justify the jury’s finding of that aggravating factor.  The Hughes Circuit Court rejected both claims in a brief opinion reviewing the evidence.  Trigger did not seek discretionary review with the Hughes Supreme Court or the U.S. Supreme Court.

Two months after the Hughes Circuit Court ruling, Trigger--now represented by a new lawyer, Atticus Goldfinch, filed a state habeas petition in the Hughes District Court, alleging that his trial counsel, Saul Goodman, was constitutionally ineffective for failing to conduct or order an independent crime scene investigation.   Such an investigation, the petition contended, would have discovered that the surveillance camera on a neighboring apartment building recorded the entire incident, and the recording would vindicate Trigger’s version of the events.  Under Hughes law, the first time that a defendant may raise ineffective assistance of trial counsel is on state collateral review.  The judge denied Trigger’s petition without reaching the merits of the ineffective assistance claim, because the collateral review petition was filed one day after the deadline and, under Hughes law, the filing deadline is jurisdictional and so cannot be extended.  (Goldfinch apparently miscalculated the filing deadline based on the erroneous assumption that Columbus Day was an official state holiday.)  The Hughes Circuit Court denied Trigger’s appeal in a one-sentence order stating: “The trial court correctly determined that the petition was not timely filed.”  Trigger sought discretionary review by the Hughes Supreme Court, which was denied.  He did not seek certiorari in the U.S. Supreme Court.

Represented by a third lawyer, Sandra Hackett Stevens, Trigger filed a timely habeas corpus petition in Federal District Court for the District of Hughes.  The petition alleges that Trigger received ineffective assistance of counsel at trial and during his state collateral review proceeding.  It further alleges that Trigger is, in fact, “actually innocent,” as would be shown by the video recording from the neighboring apartment building.  The case is assigned to Judge Hand.  She asks you for a memorandum addressing the following:

Question IV:  To what relief, if any, is Trigger entitled?

End of Exam

[1] You can find a description of something resembling what is imagined here in Neil H. Buchanan & Michael C. Dorf, How to Choose the Least Unconstitutional Option: Lessons for the President (and Others) from the Debt Ceiling Standoff, Colum. L. Rev. (forthcoming 2012), draft available at   You are strongly advised to do no more than glance at the article during the exam time, as the article does not address issues relevant to this exam.

Friday, May 18, 2012

This Week in Deficit Politics: The Consequences of Well-Meaning (but Foolish) Choices

-- Posted by Neil H. Buchanan

Even for those readers who do not obsessively follow such matters (that is, normal people), this week was a rather interesting one in the politics of deficits and debt. Speaker of the House John Boehner announced on Tuesday that he and the Republicans are planning to use the debt ceiling later this year to try to extort more spending cuts from the White House. He made it clear that they would refuse to raise the debt ceiling, unless the increase in the ceiling is matched by larger spending cuts. (It is not at all clear why that is a helpful or meaningful metric, even in the twisted minds of anti-government fanatics. Why not a two-for-one tradeoff? Or more? Why are the two even connected? But let us leave that aside for now.)

The same day, Republican Presidential nominee-to-be Mitt Romney tried to change the subject from gay marriage back to the economy by excoriating President Obama for the increase in deficits and debt during Obama's Presidency. “A prairie fire of debt is sweeping across Iowa and our nation, and every day we fail to act that fire gets closer to the homes and children we love," he said. To use a technical term: Yeeesh.

A few reactions:

(1) The Republicans still apparently believe that there is nothing wrong with threatening to destroy the full faith and credit of the United States, by bringing strongly into doubt whether the Congress will authorize the borrowing necessary to pay the obligations to which Congress itself has committed the country. One House Republican said that the notion of default is "a complete red herring," adding: "The only way that our sovereign debt would be compromised is if the president and Treasury chose not to pay it. The real jitters come from the fact that again we have racked up more debt in three years than in the previous 200. It’s unsustainable.”

What? This is, at best, an argument that the President can "prioritize" spending, so that he can violate every other legal obligation in the name of paying holders of the national debt (principal and interest, or just principal?). That argument is wrong, but at least it is coherent.

At worst, however, the quote above is gibberish. How bad are the "real jitters" in the financial markets, jitters that would supposedly send U.S. interest rates sky-high? So bad that the U.S. Treasury can now borrow long term at rates well below 2%, which is at or below 0% after adjusting for inflation. That is, savvy investors are giving money to the United States government and are gladly accepting in return money that will buy less than the principal could buy today. The Treasury is now effectively a safe deposit box, charging handling fees. Rational investors' willingness to do this is based on jitters, but not about the last 3 years of deficits.

By the way, the Member of Congress who uttered that word salad is not some mindless back-bencher. He was their pick to co-chair last year's failed "super-committee." You know, the guys who were specially selected for their expertise on deficits and debt!

(2) As a matter of my own careerism, I must say, "Thank you, Republicans!" I have never much wanted to be a talking head, but it worked out that way last summer. For a few weeks, I was heavily in demand. This was because I was one of the people calling on President Obama to deem the debt ceiling statute unenforceable, because it violates the Constitution. Now that Professor Dorf and I have written our article on that topic, to be published in Columbia Law Review in October, the timing could not be better. Expect to see us all over the place as this issue goes nuclear. Maybe everyone else should be saying, "Thanks a lot, Republicans." After one or two media appearances, I will probably feel the same way.

(3) Where is the payoff that President Obama's political advisors promised from his "pivot" to deficit reduction in 2010? The whole idea, remember, is that Obama was going to show his "responsibility" by being willing to discuss deficit reduction (in the midst of the worst economic downturn since the Great Depression, for crying out loud!), thus blunting Republicans' efforts to paint him as fiscally irresponsible. My argument then was that -- purely as a political matter -- I would rather defend, say, $20 trillion in debt to a country with 6% unemployment than $16 trillion in debt to a country with 8% unemployment (and the threat of an imminent return to recession).

And what are we seeing? Romney is not running on numbers. He is not saying: "Look, it would have been OK if the debt were only, say, $14 trillion, but because it is about to hit $16.4 trillion, Obama must be stopped." He is saying: "Debt bad. Deficits high. Obama's fault." There was no scenario in which Obama could blunt the political assault that any Republican was sure to mount, because the "grand compromise" approach will not work when any mindless politician can say: "Wow. Look at that huge number! I mean, trillions and trillions. Debt is too high."

There was no way to make the deficit go down in the short term, because the subsequent effect on the economy would have wiped out any deficit reductions; and certainly there was no way to make the debt go down in a few short years to a number that did not have the word "trillion" in it. If this is not political malpractice, what is?

(4) I actually accept the sincerity of Obama and other people who hold center-right views on economic policy. They believe that deficit reduction is very important to the long-run well-being of the country. They apparently believe that they are the only thing preventing the whole political system from throwing caution to the winds, with liberal Democrats spending like mad and Republicans cutting taxes like mad.

They are right that deficits can be too high. They are wrong that we are anywhere close to being in danger of spending too much right now -- on either counter-cyclical policies, or on long-run investments in public goods. They are even more wrong that the only choice is between mindless anti-deficit/debt rhetoric and fiscal insanity. And they are completely deranged in imagining that the next Republican administration would not turn all of the Democrats' compromises on spending into an excuse for further tax cuts, thus fueling another fake "deficit crisis."

Now, after years of hanging their heads in shame about deficits and spending, these self-styled political realists are stuck defending themselves against an accusation that everyone knew would be leveled against them. The accepted narrative says that Republicans can win by screaming about deficits and debt. Obama and his associates, following in the footsteps of Bill Clinton and all the others who claimed that it would be "political suicide" not to surrender on deficits, now find that they are presiding over a weak economy, with no politically salable defense against the charge that they are responsible for too much borrowing. (Yes, it was Bush's fault. But would you rather say that, or actually be operating in a political environment where your party had not given up any ability to defend deficit spending?)

For the country's sake, I hope that the Obama people can find ways to get voters to think about other issues. As it stands, however, Obama has simply made himself an easy target on deficits. He reinforced the narrative, leaving him with no room to maneuver.

Thursday, May 17, 2012

What I Said ... What They Heard

-- Posted by Neil H. Buchanan

Let us start with the obvious: Humans have well-known limitations on their capacity for perceiving and processing information. Those limitations can make it especially challenging for those who try to offer nuanced or complicated arguments.

For example, litigators who represent defendants in criminal trials say that a jury has to have someone to blame. Even if the legal question before them is whether there is a reasonable doubt that the defendant committed the murder, it turns out that juries will often (usually?) convict, if the answer is "no" to the following question: Is there someone else who seems more likely to have committed the murder than this defendant? That the evidence against the defendant is weak, mutually inconsistent, or lacking credibility apparently matters little. "My client didn't do it," in jurors' minds, can only be supported by proving that "This other guy really did it."

The combined roles of teacher, scholar, and pundit offer similar (though less immediately consequential) lessons in dealing with twisted and incorrect responses from listeners and readers. Saying, "I do not like X," does not necessarily mean that "I dislike X," because it is also possible for one neither to like nor to dislike X. This is all covered in Logic 101 (or, at my undergraduate institution, a course called "The Nature of Argument"), but the burgeoning sub-fields of psychology that feed various behavioralist explanations of behavior -- often revealingly called "cognitive distortions" -- offer evidence that real life continues to offer endless examples of people making logical errors.

None of which is news, of course. Still, it is worth remembering the broader phenomenon when confronted with specific examples of unjustified logical leaps. For me, a good example of such an error is offered by reactions to my recent decision to buy a house. I made light of this error in my post discussing that decision, but the basic error is still rather simple and seductive. I have been saying, for quite some time: "It is not true that everyone should own their residence." What many people have heard me say is: "No one should own their residence."

Of course, there are strong and weak versions of what I said. The weak version is merely that every decision is fact-specific, and thus a choice between buying and renting should be driven by the facts. While weak, that statement still has some real power, because it denies the conventional wisdom that says that -- especially because of the deductibility of mortgage interest and property taxes -- owning a home is always the preferred choice.

The stronger version of my argument is that it is more likely than not that the better choice will be to rent rather than to own. The basis for that stronger claim (as I noted in my earlier post) is based on simple economic theory: supply and demand considerations are likely to make apples-to-apples own-versus-rent comparisons come out in favor of renting, rather than buying. Other factors might cause a specific situation to deviate from that global expectation, but the rebuttable presumption is that renting will dominate buying. My decision to buy a house was thus simply a case of the specific facts of a case leading to an unexpected conclusion.

Even so, I once received an email from a student that read as follows: "Professor Buchanan, I am going to be married this weekend, and I will be on my honeymoon next week. I hope that you don't have the same attitude about marriage as you do about home ownership, because I would like to be excused from class next week." Let us assume that this email was serious (which, based on other evidence not worth relating here, seems a safe assumption). What the student seems to have heard was that Professor Buchanan is against home ownership, which I never said. (In the next class meeting, without identifying the student, I admitted that I actually do have the same attitude about home ownership and marriage: Both can be great ideas, but there are plenty of reasons to suspect that social norms push far too many people into both home purchases and marriages that are bad ideas.)

So, is this merely a matter of my own inability to be clear? Maybe, but if so, I am not alone. In a blog post last summer, Paul Krugman wrote:

"I’m not the first person to notice this, but whenever you read conservatives trying to critique what they think the other side believes, you find them assuming that their opponents must be mirror images of themselves. The right believes that less government spending is always good, regardless of circumstances, so it assumes that the other side must always favor more government spending. The right says that deficits are always evil (unless they’re caused by tax cuts), so they assume that the center-left must favor deficits in all conditions."

Regarding deficits in particular, I certainly receive the same illogical feedback that Krugman identifies. Moreover, this is not merely the reactions of unthinking anti-government ideologues. In a talk last Fall at a good law school, I found myself compelled to clarify that I do think that deficits can be bad (and, in other circumstances, good). I added: "I'm not echoing Dick Cheney's infamous statement that 'Reagan proved deficits don't matter.' " What I had said was: "The deficits that we have been running since 2008 are not a long run problem." What they heard was: "Deficits are never a problem."

This tendency of people to make unjustified leaps motivated the title (and, of course, the content) of one of my law review articles (from 2006): "Is it Sometimes Good to Run Budget Deficits? If so, Should We Admit it (Out Loud)?" My question was posed as a non-universal statement: "sometimes," not "always." Even so, if the answer to the question was "yes" (and it is, as post-2006 events have demonstrated yet again), then it might still be dangerous to say so, if people were to hear me saying that deficits are not a problem at all, as a categorical (rather than a conditional) statement.

I ultimately concluded that it is worth taking the risk that people might misunderstand, because the consequences of acting as if deficits are always bad are so unambiguously awful. Even so, it is disheartening to be confronted over and over again with examples of how people jump to the "mirror image" argument.

Another of my law review articles (from 2009), "What Do We Owe Future Generations?" skeptically confronted the repeated-ad-nauseum assertion that we must reduce deficits "for the sake of our children and grandchildren." Looking at projections from the Social Security Administration (the same projections that are used to try to convince people that the Social Security system is going bankrupt), I showed that the income levels of people living in the US 75 years in the future are forecast to be from two to four times higher than today's (inflation-adjusted) income levels, on average. Further, I argued that the inter-generational lens is unhelpful in assessing what is ultimately a claim about distributive justice.

What I said, therefore, was: "Future generations are apparently going to be doing rather well (assuming that average income levels are what matter), so we need not form policy based on the ill-informed notion that we are impoverishing future generations." Even so, more than one colleague has said to me words to this effect: "But as you said, Neil, we shouldn't worry about future generations, right?"

In a way, that comment is at least partly correct: I did argue that inter-generational comparisons are not the right way to think about distributive justice, meaning that I arguably said that we should not worry about future generations qua future generations. Yet that is ultimately not the point, because I certainly never argued that we should not worry about how policies will affect people in the future. Moreover, some listeners seem to have heard me say that there is never anything to worry about, because of the forecasts that I cited. This would be like hearing someone say, "We don't need to turn the steering wheel to the right, because the road ahead is straight," and hearing, "We need to turn the steering wheel to the left" (or perhaps, "We don't need to steer at all").

Which brings me back to Krugman's reaction to this kind of logical error. Describing his conservative antagonists, Krugman wrote: "What seems beyond their intellectual range is the notion that other people might have subtler beliefs than their own. Keynesianism, in particular, is not about chanting 'big government good.' " While I certainly agree that liberal deviations from "Deficits bad!" are almost always met with "So you LOVE deficits, don't you?!" there is plenty of evidence that people are often making these errors for non-ideological reasons. My experiences with colleagues' comment re my work on future generations, for example, cannot be explained through a liberal/conservative framework, nor can the misreading of my comments about home ownership. There is something larger at work here.

So, what I just said was: "People often hear non-categorical statements, and incorrectly interpret them as categorical statements." I hesitate to imagine what some people will hear.