Law

Getting paid to tell tourists about D.C. history will no longer involve passing a 100-question test or paying a fee. Anyone can just show up and talk without fear of arrest.

On Friday, the U.S. Court of Appeals for the D.C. Circuit threw out a 108-year-old city code requiring every “sightseeing tour guide” in the city to be licensed after correctly answering 70 out of 100 multiple-choice questions.

The decision is a victory for Tonia Edwards and Bill Main, the married couple who together operate the (illegal, until Friday) Segway tour company Segs in the City and have battled the regulations since 2010.

The $200 cost of the licensing process was too high for many of their guides, they said, often recent college graduates who work in the business for only a few months.

There is more here.  “Small steps toward a much better world,” as they say…

…my reading of the available evidence convinces me that a social policy that channels benefits through work and thereby encourages paid employment has important advantages over a UBI [universal basic income] in helping the disadvantaged to live full, happy, productive, and rewarding lives.

What evidence? Let’s start with the well-established finding that unemployment has major negative effects on well-being, including both mental and physical health. And the effects are remarkably persistent. A study using German panel data examined changes in reported life satisfaction after marriage, divorce, birth of a child, death of a spouse, layoff, and unemployment. All had predictable effects in the short term, but for five of the six the effect generally wore off with time: the joy of having a new baby subsided, while the pain of a loved one’s death gradually faded. The exception was unemployment: even after five years, the researchers found little evidence of adaptation.

Evidence even more directly on point comes from the experience of welfare reform – specifically, the imposition of work requirements on recipients of public assistance. Interestingly, studies of the economic consequences of reform showed little or no change in recipients’ material well-being. But a pair of studies found a positive impact on single mothers’ happiness as a result of moving off welfare and finding work.

There is more here.  And Ross Douthat offers related remarks on whether it really is possible to encourage work — how well have previous welfare reforms succeeded in this end?

Inside the razor wire on Eagle Crest Way, in rural Clallam Bay, Wash., telephone calls start at $3.15. Emails out, beyond the security fence, run 33 cents. Money transfers in, to what pass for bank accounts, cost $4.95.

Within that perimeter lies the Clallam Bay Corrections Center, a state prison — and an attractive business opportunity. One private company, JPay, has a grip on Internet and financial services. Another, Global Tel-Link, controls the phones.

The problem of course is unfettered monopoly, not the private companies per se, but private companies are often more efficient at exploiting the gains from potential monopoly power.  Still, government is in on the act too:

In Baldwin County, Ala., for instance, the sheriff’s department collects 84 percent of the gross revenue from calls at the county jail.

The story is here, and for the pointer I thank Henry Farrell.

It is excellent throughout, here is one good sentence:

The funny thing about Piketty is that he has a lot more faith in returns on invested capital than any professional investor I’ve ever met.

Here is another:

The result of all that is the effective death of the IPO. The number of public companies in the US has dropped dramatically. And then correspondingly, growth companies go public much later. Microsoft went out at under $1 billion, Facebook went out at $80 billion. Gains from the growth accrue to the private investor, not the public investor…

Most American retirement savings is invested in the public stock market. Most Americans can’t invest in private companies and most Americans can’t invest in venture capital and private equity funds. They’re actually prohibited from doing so by the SEC. If you both prohibit them from investing in private growth and wire the market so they can’t get into public growth, then you can’t be invested in growth. That raises the societal question of how are we going to pay for retirements. That’s the question that needs to be asked that nobody asks because it’s too scary.

The full interview is here.

In the major fields of domestic policy responsibility assigned to the new devolved institutions, such as health, education, local government, there have been remarkably few initiatives. A system of local government, reorganised in 1996 on the basis of 32 multi-purpose local authorities and designed by the preceding Conservative UK government, has been largely left untouched. As in England a grossly inadequate system of council tax inherited from the preceding Conservative government and crying out for reform, has been left untouched by the first two Labour/Liberal Democratic administrations and the two successor SNP administrations. And under the latter the system has been shored up by Scottish government funding to facilitate a council tax freeze and containment of local government expenditure.

Or try this:

A 2012 Audit Scotland report has also indicated little change in health inequalities within Scotland in the last decade. Despite avoiding the major structural reorganisations experienced by the NHS in England, and being more generously endowed with public funds, the NHS in Scotland does not seem to have made, under devolution, any fundamental change to the pattern of relatively poor health outcomes. Devolution did not involve much change in the governance of health in Scotland in as much as the ministerial, civil service and medical leadership continued as before but within a new ministerial structure. What was new was the Scottish Parliament and it does not seem to have made much difference.

There is more here, by Norman Bonney, interesting throughout.  The pointer is from www.macrodigest.com.

I interviewed him.  You will find the full version here, the edited version here.  Not surprisingly, I prefer the full version.  Here is one excerpt:

TC: If I look back at your career, I see you’ve been fighting various kinds of wars or struggles against a lot of different injustices. If you look back on all those decades, during which time you’ve been right about many things, what do you think is the main thing you’ve been wrong about?

RN: Oh, a lot of things. Nobody goes through these kinds of controversies without making bad predictions. I underestimated the power of corporations to crumble the countervailing force we call government. We always knew corporations like to have their adherents to become elected officials; that has been going on for a long time. But I never foresaw the insinuation of corporatism as a policy in one agency after another in government. Franklin Delano Roosevelt foresaw some of this when he sent a message to Congress when he started the temporary national economic commission to investigate consecrated corporate power. That was in 1938. In his message he said that whenever the government is controlled by private economic power, that’s facism. Now, there isn’t a department or agency in Washington where anyone has more power—over it and in it, through their appointees, and on Congress, through lobbyists and political action committees. Nobody comes close. There’s no organized force that comes close to the daily power to twist government in the favor of Wall Street and corporatism, and to disable government from adequately defending the health, safety and economic well-being of the American people.

TC: Let’s say we look at the U.S. corporate income tax. The rate on paper is 35 percent, which is quite high. When you look at how much they actually pay after various forms of maneuvering or evasion, maybe they pay 17–18 percent, which is more or less in the middle of the pack of OECD nations. So if corporations have so much political power in the United States, why is our corporate income tax still so high?

…Sweden, a country you cited favorably, taxes capital income much more lightly than the United States does—not just on paper but in terms of what’s actually paid.

I also ask him about the Flynn effect, whether America needs a new kind of sports participation, and how much American churches have resisted corruption through corporatization, among a variety of other topics.  I tried to avoid the predictable questions.

By the way, you can buy Nader’s new book, Unstoppable: The Emerging Left-Right Alliance to Dismantle the Corporate State.  I very much enjoyed my preparation for this interview, which involved reading or rereading a bunch of his books and also a few biographies of him.

The sharing of intelligence information has exploded since 9/11, so one way to avoid national restrictions on your intelligence service is to have someone else’s intelligence service do the actual spying.  Henry Farrell reports:

There’s been relatively little discussion of whether there is a problem in principle with international surveillance, and most of what there has been has concerned the question of whether or not privacy is a universalhumanright. But the recent Der Spiegel revelations combined with some earlier material points to a narrower but very troubling set of problems for liberal democracies. Cross national cooperation between intelligence services has exploded post-September 11. This cooperation is not only outside the public space but, very often, isn’t well known to politicians either. Such cooperation in turn means that intelligence services are in practice able to evade national controls on the things that they do or do not do, directly weakening democracy.

Henry concludes:

This implies that national security liberalism, to the extent that it ever was a credible position, isn’t any more. Liberals who embrace national security and extensive foreign intelligence gathering do so on the rationale that there is a clear distinction between national politics (where we owe obligations to our fellow citizens not to torture them or invade their privacy) and international politics (where they believe that at best a much weaker set of rights and obligations applies). But if national intelligence agencies are working across borders, creating a pool of shared information that systematically undermines national protections, then national security liberalism is at best incoherent, and at worst active apologetics on behalf of measures that not only corrode global rights, but the national level rights that they claim to care about too.

There is more here.

Does any sentence better illustrate the human condition in all its political, social and biological complexities than this sentence?

New York state lawmakers have passed a bill banning residents from taking “tiger selfies” — a rising trend on dating websites in which single men post photos of themselves posing with the ferocious felines in hopes of impressing potential mates.

Dissertations are waiting to be written.

Responding to the recent Henry Paulson piece, Paul Krugman writes today:

In policy terms, climate action — if it happens at all — will probably look like health reform. That is, it will be an awkward compromise dictated in part by the need to appease special interests, not the clean, simple solution you would have implemented if you could have started from scratch. It will be the subject of intense partisanship, relying overwhelmingly on support from just one party, and will be the subject of constant, hysterical attacks. And it will, if we’re lucky, nonetheless do the job.

I would put it this way: climate change is like neither the financial crisis nor the Obama health care plan, but above all it is an international problem requiring an international solution.  And it’s not like banning land mines, where most countries have little reason to continue with the practice.  It is also not like ozone, where a coordinated solution is relatively low cost, more or less invisible to voters, threatens few jobs, and involves few incentives for defection.  A climate change solution requires a lot of countries to turn their back on coal-generated pollution long before we did (as measured in per capita income terms) and long before the Kuznets curve suggests they otherwise are going to.  A climate change solution, if done the wrong way, will look to China like a major attempt to unfairly deindustrialize them and, if it is backed by trade sanctions, it will look like an act of war.  Trade agreements do best when most or all of the countries already wish to act cooperatively toward much lower tariffs.  For a green energy solution, China (among others) in fact has to want to solve the problem, as do we.  And the already-installed or in-process coal base in China is…forbidding.

The problem isn’t just coming up with “something better.”  Think of today’s fossil fuels as a stock in the ground.  The problem is coming up with something “better than the lower and falling prices for the fossil fuel stock once some countries start going green.”  That’s really tough, because it means competing against a lower fossil fuel price than what we see today.  What will Africa choose?

In other words, a climate change solution has to involve a relatively cheap form of energy, relative to the status quo.  Not just cheap to citizens because it is subsidized, but cheap to governments and cheap at the national level too.  Alternatively, you could regard all of this as reason to be pessimistic.  But in the meantime, it is entirely reasonable to insist on solutions which can generalized, and that means solutions which are relatively cost-effective.

It seems so:

Despite the conflicts in Syria, Iraq and Afghanistan, the armed uprising in Ukraine and turmoil in other hot spots in the Middle East and Africa, one of war’s most insidious weapons — antipersonnel land mines — have been largely outlawed and drastically reduced, a monitoring group said in a report released Monday.

In the 15 years since a global treaty prohibiting these weapons took effect, the use and production of the mines has nearly stopped, new casualties have plummeted, and more than two dozen countries once contaminated by land mines buried since old wars have removed them, said the report by the group, the International Campaign to Ban Landmines.

“The Mine Ban Treaty remains an ongoing success in stigmatizing the use of land mines and mitigating the suffering they cause,” said Jeff Abramson, the project manager of Landmine Monitor, the group’s research unit.

There is more here.  The United States, however, still has not signed the treaty.

The Anti-Nanny State

by on June 21, 2014 at 7:15 am in Economics, Law | Permalink

A new report from the Migration Policy Institute calculates that:

The US government spends more on its immigration enforcement agencies than on all of its principal criminal federal law enforcement agencies combined. In FY 2012, spending for CBP, ICE and US-Visit reached nearly $18 billion. This amount exceeds by nearly 24% total spending by the FBI, Drug Enforcement Agency (DEA), Secret Service, US Marshals Service, and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) which stood at $14.4 billion in FY 2012.

In other words, the Federal government spends more on preventing trade than on preventing murder, rape and theft. I call it the anti-nanny state. It’s hard to believe that this truly reflects the American public’s priorities.

border fence1

…the UK government should have pressed much harder for the 800,000 Scots who live in England – the natural pro-union constituency – to get a vote. Allowing the break-up of the country to be passed by a simple majority also looks careless. The bar for constitutional change in the US is set much higher.

The rest of the Gideon Rachman FT piece, on Cameron’s UK, is excellent throughout and here.

Here is a new paper by Christin, Egelman, Vidas, and Grossklags, entitled “It’s All About the Benjamins”:

We examine the cost for an attacker to pay users to execute arbitrary code—potentially malware. We asked users at home to download and run an executable we wrote without being told what it did and without any way of knowing it was harmless. Each week, we increased the payment amount. Our goal was to examine whether users would ignore common security advice—not to run untrusted executables—if there was a direct incentive, and how much this incentive would need to be. We observed that for payments as low as $0.01, 22% of the people who viewed the task ultimately ran our executable. Once increased to $1.00, this proportion increased to 43%. We show that as the price increased, more and more users who understood the risks ultimately ran the code. We conclude that users are generally unopposed to running programs of unknown provenance, so long as their incentives exceed their inconvenience.

The article is here (pdf), for the pointer I thank Bruce Schnier.

In Ill-Conceived, Even If Competently Administered: Software Patents, Litigation, and Innovation Shawn Miller and I recounted the logic by which software patents had gotten out of control.

The subject matter of a patent is supposed to be a process, a machine, a manufacture, a composition of matter, or a design. Patents are supposed to protect inventions, not ideas. A pharmaceutical patent, for example, protects a specific set of closely related chemical structures, but you cannot patent a particular means of curing cancer as “any means by which cancer is cured” and thereby exclude every other means of curing cancer. In theory, the same rules apply to software, but in practice the courts have allowed software patents to be much broader and much more abstract than in other areas.

…Consider U.S. Patent #5,930,474 (Dunworth, Veenstra, and Nagelkirk 1999). The patent’s primary claim is simply “A system which associates on line information with geographic areas.” The patent gives this example of what they intend to patent: “[I]f a user is interested in finding an out-of-print book, or a good price on his favorite bottle of wine, but does not want to travel outside of the Los Angeles area to acquire these goods, then the user can simply designate the Los Angeles area as a geographic location for which a topical search is to be performed” (ibid.). In any ordinary reading the patentee has a patent on an abstract idea, thus gaining the right to exclude others from using such an idea. In any other area of patent law, this type of patent would not be allowed. It is allowed for software, however, because software patents such as this one go on to detail the means of implementing such a function. Namely,

A…system comprising: a computer network wherein a plurality of computers have access to said computer network; and an organizer executing in said computer network, wherein said organizer is configured to receive search requests from any one of said plurality of computers, said organizer comprising: a database of information organized into a hierarchy of geographical areas wherein entries corresponding to each one of said hierarchy of geographical areas is further organized into topics…. (ibid.)

In other words, the means of the patent is the Internet. By merely adding some entirely nugatory terms such as computer, database, and display—nugatory because any modern method would use these devices—the patentee has turned an unpatentable idea into a patentable, and potentially very profitable, method.

The Supreme Court has today in ALICE v. CLS decisively rejected this process:

…the mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention. Stating an abstract idea “while adding the words ‘apply it’” is not enough for patent eligibility. Mayo, supra, at ___ (slip op., at 3). Nor is limiting the use of an abstract idea “‘to a particular technological environment.’” Bilski, supra, at 610–611. Stating an abstract idea while adding the words “apply it with a computer” simply combines those two steps, with the same deficient result. Thus, if a patent’s recitation of a computer amounts to a mere instruction to “implemen[t]” an abstract idea “on . . . a computer,” Mayo, supra, at ___ (slip op., at 16), that addition cannot impart patent eligibility.

I see this ruling as a big win for Mark Lemley who focused on the functional claiming issues of software patents and also as a loss in prestige for the Federal Circuit. It’s evident that the Supreme Court thinks, as Dourado and I argued, that the Federal Circuit has become ideologically captured by the patent bar and in a series of cases the SC has imposed its less parochial view and reasserted its dominance over patent law.

I have written a review of this book, subtitled The Great Housing Disaster, for the Times Literary Supplement of 13 June 2014.  As I explain in the review, he tried to write a book about housing problems in the UK without accepting the Avent-Yglesias analysis that legal restrictions on supply are a big part of the problem.  Rather than looking to supply and demand, Dorling instead tries to blame “inequality, selfishness and hoarded extra bedrooms.”  It doesn’t succeed.  Here is an excerpt from my review:

There is not much of an argument in this book against a greater reliance on additional building and thus cheaper house prices.  Dorling refers to “slum landlords and cowboy builders” and complains that not all housing for low-income groups will be of high enough quality.  But that’s more of a general complaint about the nature of poverty than a problem with the way the housing market works.  He then retreats to the claim that the mobilization of space and empty bedrooms around the country, combined with refurbishing, will solve the problem.  On any given night, he argues, most bedrooms in the country are not being slept in.

But how to redistribute this unjust largesse of sheets and pillows?  It is not as if a bureaucratic authority can scour the country for the empty bedrooms of the elderly and hand over keys to struggling young families.  Dorling repeats the incantation that housing inequality is immoral, but without much of a recipe for turning spare rooms into cheaper housing.  Refurbishment, as the author suggests, is all to the good.  But why isn’t more of that happening already?  Either regulatory forces are holding back redevelopment (a suggestion Dorling is reluctant to entertain), or landlords are waiting because it is not yet clear which kinds of investments will be best on a piece of land.  In that latter case, the law would be unwise to force the matter too quickly and, more generally, legal control could well discourage entrepreneurs from refurbishing at all.

As I write in the concluding section of the review: “You can’t write a good book which attempts to repeal the laws of economics, especially when it focuses on an economic topic.”

I don’t yet see any link on line, not even a gated one.