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MPSA Annual Conference

I wanted to note briefly that I’m sorry I was unable to present at the Midwestern Political Science Association last week. I was scheduled to talk about Bingham on a Reconstruction panel, but my wife and I recently had a baby, and I had to cancel my talk as a result. If you see me around here less often in the coming months, that’s the reason.

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FAN 9.3 (First Amendment News) — S. Ct. Denies Review in Campaign Finance Case

Just 25 minutes ago the Supreme Court denied review in Iowa Right to Life Committee, Inc. v. Tooker.  

Though Erin Murphy and Bobby Burchfield were in the limelight for their victory in McCutcheon, James Bopp (the noted campaign finance lawyer) was hardly out of the picture. He had, after all, another campaign finance case up his sleeve, and what seemed to be a good one at that.Unknown

The claims in Iowa Right to Life were twofold: (1) Whether an Iowa ban on political contributions by corporations (and certain business entities), but not by unions, violates the Equal Protection provision of the Fourteenth Amendment, and (2) Whether such a corporate-contribution ban runs afoul of the First Amendment. The facts of the controversy involved an attempt by the Iowa Right to Life Committee (a non-profit corporation) to contribute $100 to Brenna Findley, a candidate for Iowa Attorney General. Iowa law, however, prohibits such corporate contributions, but does not bar unions from making political contributions. This disparity in treatment notwithstanding, the U.S. Court of Appeals for the Eighth Circuit upheld the law and later declined to rehear the case en banc, whereupon James Bopp petitioned the Supreme Court to hear the case.

After suggesting that there was a conflict of law in several lower courts and that the Supreme Court should grant review to reconcile them, Bopp argued that “corporations and unions are similarly situated regarding their interest in making political contributions. Yet in Iowa, corporations, but not unions, are banned from making political contributions. Iowa must justify this disparate treatment. And Iowa must do so under strict scrutiny, both because fundamental rights are involved and because the corporate-contribution ban is content-based.” On the First Amendment side of the constitutional ledger, Bopp had to work around a hostile 2003 precedent, Federal Election Commission v. Beaumont, a case which he argued and lost to none other than Paul Clement (the co-counsel in McCutcheon). That ruling, decided before the advent of the Roberts Court, established that a direct contribution prohibition to nonprofit advocacy corporations is consistent with the First Amendment. For his part, Bopp argued forcefully that “Beaumont is on shaky precedential ground in the light of Citizens United.”

But it all proved to be of no constitutional moment: cert. denied.   

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Welcoming Back Jeffrey Kahn to the Blog

This month, we are lucky to have Professor Jeffrey Kahn back with us for another guest blogging stint. Professor Kahn joined the SMU Law faculty in Fall 2006.  He teaches and writes on American constitutional law, Russian law, human rights, and counterterrorism.  In 2007-2008, he received the Maguire Teaching Fellow Award from the Cary M. Maguire Center for Ethics and Public Responsibility at SMU for his seminar, “Perspectives on Counterterrorism.”  In 2008-2009, he was named a Colin Powell Fellow of the John Goodwin Tower Center for Political Studies. In 2010, he received SMU’s Outstanding Faculty Award, a university-wide award given each year to a junior, tenurefaculty-kahn-track faculty member for excellence in teaching, curricular development, and scholarship.  In 2011, the year he was tenured and promoted to associate professor, he received the Law School’s Excellence in Teaching Award.

His latest research on U.S. legal topics focuses on the right to travel and national security law.  His most recent book, Mrs. Shipley’s Ghost: The Right to Travel and Terrorist Watchlists(University of Michigan Press, 2013), critically examines the U.S. Government’s No Fly List.  Among other publications, his articles have appeared in the UCLA Law ReviewMichigan Law Review, and the peer-reviewed Journal of National Security Law and Policy.

Professor Kahn has been incredibly busy since his last guest visit. This past fall, he was the third O’Brien Fellow-in-Residence at the Centre for Human Rights and Legal Pluralism at McGill University’s Faculty of Law.  This semester, he is a Visiting Professor at Washington & Lee School of Law. Professor Kahn recently served as a testifying expert witness in the first federal trial of the constitutionality of the No Fly List and federal watchlist system.  The plaintiff, Rahinah Ibrahim, won the bench trial and the Justice Department decided not to appeal (having lost two prior appeals in the case to the Ninth Circuit). The paperback edition of his book on terrorist watchlists, Mrs. Shipley’s Ghost: The Right to Travel and Terrorist Watchlists(University of Michigan Press, 2013), is scheduled for release later this spring.

Professor Kahn’s latest work is a contribution forthcoming in a title in Springer’s Ius Gentium series edited by ABA President James Silkenat.  The essay evaluates Russian rule-of-law shortcomings through the lens of my experience as one of the experts selected by former Russian Constitutional Court Justice Tamara Morshchakova to contribute a report on the conviction of Russian oil oligarch Mikhail Khodorkovsky, who was recently released.

 

 

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Thanks and Some Additional Comments

I wanted to thank Frank Pasquale for organizing and hosting this symposium and all of the participants for the time they took reading The Economic Dynamics of Law and providing their thoughts. I wanted to say a little about the most recent posts, even though it’s possible that something more might appear before the weekend is out.

I’m happy to accept Livermore’s suggestion that systemic risk avoidance and keeping open a robust set of economic opportunities can be thought of as an incompletely theorized agreement about goals. He may be right that in fact avoiding systemic risk is efficient, but I doubt that all climate disruption cost-benefit analysis (CBA) would necessarily reveal that. Showing that most current CBA would call for some action on climate disruption does not suffice to show the congruence between CBA and avoidance of systemic risk taking into account collateral negative consequences (which is narrower than taking into account all costs under my normative framework). First, there is a historical problem. Prominent early CBA and much of the CBA from a few years ago would not invite vigorous measures to address climate disruption (although some CBA did early on). Even today, there may be a discrepancy between what scientists tell us we need to minimize significant risk, a phase-out of fossil fuels, and what some of the CBA is telling us. CBA is basically guesswork, and does not yield a reasonably specific answer when substantial uncertainties exist. Read More

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The Civil Rights Act of 1964

I just finished reading Clay Risen’s terrific book on the debate that culminated in the enactment of what he calls “The Bill of the Century.”  Here are some things that I learned:

1.  “Judge” Howard Smith, the segregationist chairman of the House Rules Committee, famously amended the Act to include “sex.”  I’ve always understood that this was a poison pill that failed to derail the bill.  It turns out, though, that Smith was a strong advocate for (white) women’s rights throughout his career.  So he may have been sincere (or at least have had mixed motives).

2.  Much of the debate early on centered on whether the Act should rely on the Commerce Clause or on Section Five of the Fourteenth Amendment.  The Commerce Clause was chosen for a couple of reasons, but one factor that I had not considered was that the Fourteenth Amendment was seen as a “Republican” way of handling the problem whereas the Commerce Clause was seen as the “Democratic” way.  That just shows how far we’ve come in the last fifty years.  Nobody today thinks of the Fourteenth Amendment in partisan terms.

3.  The book argues that LBJ gets too much credit for the passage of the Act, and that many other people (Hubert Humphrey, Mike Mansfield, Nick Katzenbach, Everett Dirksen) did more.  I think this assessment is correct, though I’m much more skeptical of the book’s implication that JFK would have gotten the Act passed had he not been killed.  Partly I suppose that’s because I’m not a JFK fan (for one thing, he gave us Justice Byron White, one of the worst modern Justices on a par with Blackmun and Burger.)

 

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Notes from Abbrevia: A Response to Bottlenecks

Imagine two worlds. In one world—let’s call it Expansia—a writer writes 260 thoughtful and engaging pages exploring his chosen topic. In the other world—Abbrevia—a writer has at most 1000 words of blog post to respond to the first writer.

Welcome to Abbrevia. Responding adequately to Joey Fishkin’s wide-ranging and incisive book Bottlenecks is no easy task. Doing so in a blog post is impossible. Undoubtedly the right answer to this quandary is to take Fishkin’s work as a jumping off point for a related set of ideas. This is an ideal approach for a blog post. Alas, dear Reader, this contribution to the symposium takes a different tack. What follows is my attempt to identify five of my favorite things about Bottlenecks, and then to list five of my lingering questions.

1. For starters, a stylistic note: Bottlenecks is beautifully written. It’s full of accessible prose, pithy articulations of complex philosophical ideas, and evocative imagined worlds that illustrate key concepts. Some of these imagined worlds Fishkin invents, and some he culls from the philosophical canon; in both cases, his alternative universes are far more effective than my Expansia and Abbrevia. The “big test” society is emblematic: This is a world, drawn by analogy to Bernard Williams’ warrior society, and not so very far from our own, in which everyone’s opportunities for many different kinds of lives are all determined by a single evaluation at a particular age. The big test makes vivid the idea of a bottleneck, which limits opportunities both for those who fail (because they can’t reach the opportunities on the other side) and for those who pass (because it shapes their preferences and ambitions).

2. Relatedly, Bottlenecks is a story about equal opportunity with far more emphasis on the opportunity than the equality. For everyone who ever wondered if equality theory or antidiscrimination law is leading us towards the dystopian world of Vonnegut’s Harrison Bergeron—where everyone is literally weighed down in direct proportion to her talents, whether mental or physical—Fishkin’s account offers a lucid answer: We should care about equality to the extent that it serves the goal of expanding individual opportunities (and inclinations) to pursue diverse concepts of the good—to become, per Raz, “‘part author of his life.’” An illustrative passage is this:

“A pluralistic opportunity structure . . . provides the structural conditions for the kind of freedom that makes autonomy possible. It is the difference between seeing only one path that leads to anything of value—a path one must pursue at all costs—and seeing many paths, leading to different lives marked by different combinations of forms of human flourishing, so that one must decide for oneself what to value and pursue.”

Reducing inequalities is thus instrumental to freedom, rather than the primary end we are seeking—at least as I read Fishkin.

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Now What? Applying the Economic Dynamic Approach to Financial Reform

Echoing the earlier commentators, I commend Professor David Driesen on his important contribution to legal scholarship and public policy with The Economic Dynamics of Law. I am hopeful that the economic dynamic approach can be used in the academy and on the front lines of financial reform.

As Driesen observes, the centerpiece of financial reform in the U.S., the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) “mandates only minimal structural reform.” Moreover, efforts persist to rollback, dilute and delay the modest improvements accomplished through Dodd-Frank. The result has been to emphasize bank-collapse intervention tools without sufficient focus on prevention. Consider that this modest reform effort began while the 2008 crisis was still fresh in mind. As memories fade and passions cool, the ability to enact structural reform diminishes.

And, this is exactly where use of an economic dynamic analysis is needed. Let me present just one real-life fact pattern. This coming Tuesday morning, the U.S. House of Representatives Committee on Financial Services has scheduled a hearing entitled, “Who’s In Your Wallet: Examining How Washington Red Tape Impairs Economic Freedom.” The invited witnesses are the general counsels of five federal financial agencies, including the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the Federal Reserve Board, the National Credit Union Association, and the Office of the Comptroller of the Currency. In the memo announcing the hearing the following agenda is described:

“Among other things, the hearing will examine how federal financial regulatory agencies evaluate the costs and benefits to consumers of their regulatory, enforcement, and supervisory actions. The Committee will explore whether products or services are no longer being offered to consumers because of agency actions and the steps federal regulators take to measure the impact on consumers if they no longer have access to specific products or services as a result of regulatory action. The Committee will also consider the procedures or standards agencies follow in determining whether to engage in formal rulemaking under the Administrative Procedures Act.”

The intent appears to be to treat as a cost the potential failure to satisfy individual preferences in the present without considering broader costs and harms that particular financial products can create for individuals and the system at large. As Driesen describes in Chapter 2, by emphasizing allocative efficiency, “the law of financial regulation ceases to function as a means of avoiding a depression, and instead becomes thought of as a product of balancing a proposed regulation’s benefits against its costs.”

Consumers may have had preferences for very low-money-down, negatively amortizing mortgages for which there would or could be a payment shock upon recast.  And many did show those preferences (even when the bank in-house marketing studies showed the product had to be pushed on them with minimal disclosure). However such toxic products and others led to millions of foreclosures and bank safety and soundness problems, and ultimately a global financial meltdown.

It will be interesting to see whether the witnesses on Tuesday reject the assumptions underlying how the hearing has been framed and instead apply an economic dynamics approach to their testimony and answers.

 

 

 

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Symposium on McCutcheon v. FEC

Over at SCOTUSblog they have been posting pieces on the Court’s latest campaign finance case, McCutcheon v. FEC.Shaun McCutcheon  The posts are a part of an online symposium they are doing. Here is the lineup:

Pics: (AP photo of Shaun McCutcheon & Roll Call photo of Fred Wertheimer)

Meanwhile, check out Rick Hasen’s Election Law Blog, which has been posting a steady list of articles on the McCutcheon case and related matters.

 

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Driesen’s book is an important reminder of the need for environmental lawyers to engage with a discipline outside their own

From an environmental law perspective, The Economic Dynamics of Law is an important contribution to environmental law scholarship in at least two ways. First, it evidences the need for environmental lawyers to critically and carefully scrutinise distinct economic thoughts and their impact on environmental law. Chapter 7, in particular, makes this point apparent by discussing the narrow but prevailing law and economics framing of property rights, which projects these almost exclusively as purposed to facilitate economic growth and efficient market exchange (p. 121). Such ideas have greatly impacted environmental law scholarship and environmental policymaking, especially on the use of market-based mechanisms and deregulation in the context of climate disruption, discussed in Chapter 11. Challenging these well-established frameworks is difficult (see Fisher and others, ‘Maturity and Methodology: Starting a Debate about Environmental Law Scholarship’ (2009) 21 Journal of Environmental Law 213). Driesen, however, manages to do so by applying an alternative lens – the economic dynamics of law – through which he revisits some of the founding writings on this topic – for instance, Hardin’s ‘Tragedy of the Commons’ (p. 128) – and reframes neoclassic economic understandings of a range of legal subjects, including property rights but also antitrust and national security. As such, Driesen makes a much-needed call not only to environmental law scholars but also to property law scholars to challenge conceptualisations informed by disciplines outside their respective fields.

Following from this, The Economic Dynamics of Law makes a significant contribution in setting the ground for a framework of analysis, in which such tests and challenges can be carried out. As the other commentators on this blog have already explained, Driesen analytical framework, the economic dynamic theory, is synthesised in terms of three parameters: focus (change over time), goal (avoiding systematic risk while keeping economic opportunities open), and method (applying economic dynamic analysis to analyse problems and propose reforms (p. 225). As a next step in these debates, two important issues need to be considered. One concerns legal culture. In a joint piece – D. Driesen and S. Bogojević, ‘Economic Thought and Climate Disruption: Neoclassical and Economic Dynamic Approaches in the USA and the EU’ (2013) 25 Journal of Environmental Law 463 – Driesen and I discuss this point and the way in which economic ideas have influenced climate disruption laws both in the USA and the EU but with distinct outcomes. The point here is to demonstrate that economic thoughts impact environmental law, but the particular understanding and ultimately implication of economic thoughts on a legal system is inevitably context-specific. Second, The Economic Dynamics of Law leaves the question of potential challenges with creating laws and legal regimes in line with the economic dynamic theory open. Driesen does not set out to assess such challenges and therefore these questions are justifiably left with the reader. An interesting link, nevertheless, could be drawn to an emerging strand of scholarship on adaptive management. Jan McDonald and Megan C. Styles provide an excellent study (forthcoming in Journal of Environmental Law) on this topic, highlighting core difficulties in creating legal frameworks that recognise dynamism of the natural systems and accommodate technological, managerial and economic innovations, as well as behaviour shifts.

It is clear that Driesen’s book raises a series of important questions for legal scholars and policymakers to reflect upon and engage with. I will keep returning to this book in many years to come.

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Overlapping Interest in Systemic Risk and Economic Opportunity

In an earlier post, I proposed two readings of David Driesen’s Economic Analysis of Law. One was an ambitious reading, which evaluates Driesen’s “economic dynamic theory” as a critique of, and alternative to, the mainstream economic perspective. The second reading viewed economic dynamic analysis from within the economics tradition. I offered the view that the book made a more substantial contribution on that second reading than the first.

Here, I offer a third interpretation, which might not be at all what Driesen intended, but which I find attractive. “Avoiding systemic risk” and “providing economic opportunity” (the normative goals/commitments that Driesen defends in his book) are not ends unto themselves. They are, instead, intermediary goals that serve some other morally important purpose. And, indeed, there are a variety of moral frameworks in which “avoiding systemic risk” and “providing economic opportunities” might be seen as valuable. Brett mentions Sen’s capabilities approach; that certainly could be one. The prioritarianism defended by Matt Adler is another. I would offer that standard economic efficiency considerations would favor avoiding systemic risk and providing economic opportunity. The subjective well-being standard proposed by Jonathan Masur and others would also value these goals.

This framing allows Driesen’s economic dynamic theory, and the normative conceptions it embraces, to serve as a kind of “incompletely theorized agreement.” We don’t need to agree on first-order moral principles to agree that these are valuable social goals. Rather than attempting to critique or supplant alternative moral priorities, economic dynamic theory exists at a point of overlap. I don’t believe that this is how Driesen describes his project, but I think there is something appealing about it.

Similarly, under this reading, Economic Dynamic Analysis (EDA) allows us to proceed with analysis, without coming to agreement on whether economic efficiency, capabilities, welfare, happiness, or something else is the goal of policy. We make a general “commitment” to reducing systemic risks and   improving economic opportunities and evaluate policy in terms of how well it forwards those goals, recognizing uncertainty, the fact that policy change occurs over time, and the existence of “collateral negative consequences.”

From my perspective, I would see EDA as a useful piece of a more complete cost-benefit analysis. For the folks who think that CBA is a terrible idea, we can agree on the EDA part and disagree on the rest. On this reading, Driesen’s criticisms of “neoclassical economics,” law and economics, and cost-benefit analysis are beside the point, and in fact reduce the force of his argument. The point would not be “whether avoidance of systemic risk and keeping open a reasonably robust set of economic opportunities constitutes a more important goal for society than allocative efficiency.” Rather, the emphasis would be on the ways in which efficiency considerations (along with many other forms of moral reasoning) counsel in favor of avoiding systemic risks and maintaining economic opportunities, and then working together from there. This is not the argument that Driesen makes, but perhaps that was a missed opportunity.

In a similar vein, I think it is a serious mistake to downplay the extent to which mainstream economic analysis counsels for aggressive efforts to address problems such as climate change. Outka notes that “if the dominant approach to policy analysis [CBA] suggests climate action is not economically justified . . .  something is dangerously wrong.” Indeed, there would be, but in fact, there is broad consensus within the economics community that action on climate change is needed. Today, Nature published a Comment that I coauthored with economists Ken Arrow and Larry Goulder and several others, noting that a variety of mainstream economic models show that climate risk needs to be addressed. While the social cost of carbon adopted by the Obama Administration does not incorporate a number of important risks, it is certainly enough to justify a lot more than we’re doing right now.

Just as areas of agreement between environmentalists and economists create opportunities for political progress, Driesen’s economic dynamic theory (as interpreted here) can create opportunities for intellectual and analytic progress—not as an alternative to other approaches, but as a set of recommendations that can be endorsed both from within the law and economics tradition and from many other perspectives, as well.