Law

Solve for the Dutch equilibrium

by on January 29, 2018 at 2:26 am in Current Affairs, Law | Permalink

Police in the Dutch city of Rotterdam have launched a new pilot programme which will see them confiscating expensive clothing and jewellery from young people if they look too poor to own them.

Officers say the scheme will see them target younger men in designer clothes they seem unlikely to be able to afford legally – if it is not clear how the person paid for it, it will be confiscated.

The idea is to deter criminality by sending a signal that the men will not be able to hang onto their ill-gotten gains.

…He [the police chief] said the young men targeted often have no income and are already in debt from fines for previous convictions but wearing expensive clothing.

This “undermines the rule of law” which sends “a completely false signal to local residents”, he explained.

I know how this would play out in New Jersey or Rhode Island, but the Netherlands?  Here is the full article, and for the pointer I thank the excellent Samir Varma.

Surgery (and many medical specialties, esp. highly compensated ones) should be on the list of ‘Bad at finding best talent.’ There’s no way to show aptitude for a surgical specialty before medical school, and there is no mechanism for good surgeons to rise to the top, and bad surgeons to be identified and punished. If you make it into a surgical residency, you will succeed, even if you faked your way into med school and your surgical success rate is terrible. There is essentially no mechanisms to make sure aging surgeons learn the newest techniques, and no checks on waning competency. It is only because the training is so long and difficult that it isn’t a complete disaster.

Policing should also be on the list. It’s another job where, like being a surgeon, once you’ve made it into the profession, you have to fail spectacularly to be kicked out. At least half the police officers I know shouldn’t be allowed to carry firearms, much less have the power of life and death over ordinary citizens.

That is from Kevin, based on my earlier post on this question.

Diversity versus Equality

by on January 28, 2018 at 10:56 am in Economics, Law | Permalink

The Australian Behavioural Economics Team conducted a randomized trial of hiring in which applications for senior positions in the Australian Public Service were reviewed and ranked. By comparing outcomes in treatments in which gender, minority status and indigenous status could be inferred with outcomes using de-identifyed applications the researchers were able to test for bias and the effect of de-identification.

We found that the public servants engaged in positive (not negative) discrimination towards female and minority candidates:

Participants were 2.9%
more likely to shortlist female candidates and 3.2%
less likely to shortlist male applicants when they were identifiable, compared with when they were de-identified.

Minority males were 5.8%
more likely to be shortlisted and minority females were 8.6%
more likely to be
shortlisted when identifiable compared to when applications were de-identified.

The positive discrimination was strongest for Indigenous female candidates who were 22.2% more likely to be
shortlisted when identifiable compared to when the applications were de-identified.

Interestingly, male reviewers displayed markedly more positive discrimination in favour of minority candidates than
did female counterparts, and reviewers aged 40+ displayed much stronger affirmative action in favour for both
women and minorities than did younger ones.

The study was small and the participants knew they were in a study (although not what the study was studying).

This reminds me of the important Williams and Ceci paper which also found positive gender discrimination in academic hiring (with one notable exception of equal treatment):

The underrepresentation of women in academic science is typically attributed, both in scientific literature and in the media, to sexist hiring. Here we report five hiring experiments in which faculty evaluated hypothetical female and male applicants, using systematically varied profiles disguising identical scholarship, for assistant professorships in biology, engineering, economics, and psychology. Contrary to prevailing assumptions, men and women faculty members from all four fields preferred female applicants 2:1 over identically qualified males with matching lifestyles (single, married, divorced), with the exception of male economists, who showed no gender preference.

Hat tip: Phil Magness.

You can certainly add having bought the right properties in the right cities in the 1970s and 1980s to the list of drivers of inequality, but I don’t think it is a big piece of the puzzle. Instead, I think it is more accurate to point out that one of the first and most valuable amenities people purchase when they become wealthier is wealthier neighbors. Wealthy people self-segregate, and the places to which they self-segregate become valuable, because the way you get a place limited to wealthy people is by bidding up the price of being in that place. The community, or the city, is gated for a reason.

Here is much more by Steve Randy Waldman.  So given this not so ideal preference is in place, might building restrictions be a relatively efficient way to satisfy it?  Compare to violence, racism, or more direct interference with individual mobility?

Tax Design

by on January 26, 2018 at 12:31 pm in Economics, History, Law | Permalink

Dutch canal houses are another classic example of how rules and regulations can shape structures. Taxed on their canal frontage rather than height or depth, these buildings grew in tall and thin. In turn, this typology evolved narrower staircases, necessitating exterior hoist systems to move furniture and goods into and out of upper floors.

That’s from an excellent post by Kurt Kohlstedt at 99% Invisible who gives many other examples of taxes having long-lasting effects on the built environment.

Hat tip: Devon Zuegel.

Police Union Privileges

by on January 25, 2018 at 7:28 am in Economics, Law | Permalink

Earlier I wrote about how police unions around the country give to every officer dozens of “get out of jail” cards to give to friends, family, politicians, lawyers, judges and other connected people. The cards let police on the street know that the subject is to be given “professional courtesy” and they can be used to get out of speeding tickets and other infractions. Today, drawing on the Police Union Contracting Project, I discuss how union contracts and Law Officer “Bill of Rights” give police legal privileges that regular people don’t get.

In 50 cities and 13 states, for example, union contracts “restrict interrogations by limiting how long an officer can be interrogated, who can interrogate them, the types of questions that can be asked, and when an interrogation can take place.” In Virginia police officers have a right to at least a five-day delay before being interrogated. In Louisiana police officers have up to 30 days during which no questioning is allowed and they cannot be questioned for sustained periods of time or without breaks. In some cities, police officers can only be interrogated during work hours. Regular people do not get these privileges.

The key to a good interrogation is that the suspect doesn’t know what the interrogator knows so the suspect can be caught in a lie which unravels their story. Thus, the Florida Police Bill of Rights is stunning in what it allows police officers:

The law enforcement officer or correctional officer under investigation must be informed of the nature of the investigation before any interrogation begins, and he or she must be informed of the names of all complainants. All identifiable witnesses shall be interviewed, whenever possible, prior to the beginning of the investigative interview of the accused officer. The complaint, all witness statements, including all other existing subject officer statements, and all other existing evidence, including, but not limited to, incident reports, GPS locator information, and audio or video recordings relating to the incident under investigation, must be provided to each officer who is the subject of the complaint before the beginning of any investigative interview of that officer.

By knowing what the interrogators know, the suspect can craft a story that fits the known facts–and the time privilege gives them the opportunity to do so.

Moreover, how do you think complainants feel knowing that the police officer they are complaining about “must be informed of the names of all complainants.” I respect and admire police officers but frankly I think this rule is dangerous. Would you come forward?

How effective would criminal interrogations be if the following rules held for ordinary citizens?

The law enforcement officer or correctional officer under interrogation may not be subjected to offensive language or be threatened with transfer, dismissal, or disciplinary action. A promise or reward may not be made as an inducement to answer any questions.

What does it say about our justice system that the police don’t want their own tactics used against them?

In the United States if you are arrested–even for a misdemeanor or minor crime, even if the charges are dropped, even if you are found not guilty–you will likely be burdened with an arrest record that can increase the difficulty of getting a job, an occupational license, or housing. But even in the unlikely event that a police officer is officially reprimanded many states and cities require that such information is automatically erased after a year or two. The automatic erasure of complaints makes it difficult to identify problem officers or a pattern of abuse.

Louisiana’s Police Officer Bill of Rights is one of the most extreme. It states that police have the right to expunge any violation of criminal battery and assault and any violation of criminal laws involving an “obvious domestic abuse.” Truly this is hard to believe but here is the law (note that sections (2)(a) and (b) do not appear, as I read it, to be limited to anonymous or unsubstantiated complaints).

A law enforcement officer, upon written request, shall have any record of a formal complaint made against the officer for any violation of a municipal or parish ordinance or state criminal statute listed in Paragraph (2) of this Subsection involving domestic violence expunged from his personnel file, if the complaint was made anonymously to the police department and the charges are not substantiated within twelve months of the lodging of the complaint.
(2)(a) Any violation of a municipal or parish ordinance or state statute defining criminal battery and assault.
(b) Any violation of other municipal or parish ordinances or state statutes including criminal trespass, criminal damage to property, or disturbing the peace if the incident occurred at either the home of the victim or the officer or the violation was the result of an obvious domestic dispute.

In an excellent post on get out of free jail cards, Julian Sanchez writes:

…beyond being an affront to the ideal of the rule of law in the abstract, it seems plausible that these “get out of jail free” cards help to reinforce the sort of us-against-them mentality that alienates so many communities from their police forces. Police departments that want to demonstrate they’re serious about the principle of equality under the law shouldn’t be debating how many of these cards an average cop gets to hand out; they should be scrapping them entirely.

Equality under the law also requires that privileges and immunities extend to all citizens equally.

Hat tip: Tate Fegley.

The slums are the only free market housing in Mumbai.

That’s me in the latest video from MRUniversity, an on-the-ground look at the consequences and political economy of rent controls and affordable housing in Mumbai, India. Rent controls have been in place for so long in Mumbai that buildings are literally collapsing. Moreover, the approval process is so slow that just about the only new housing being built is condos for the well-off while at the same time a large fraction of the housing stock lies vacant.

Reuben Abraham is very good on how government housing is captured by the rich and why any solution to the affordable housing problem must focus on increasing supply.

It’s interesting how similar land policy is around the world. In the United States today, we don’t have collapsing buildings like they do in Mumbai (see video above) but the fanatical fear of density and the slow approval process are the same. Berkeley Mayor Jesse Arreguín, for example, says a bill that would allow higher density construction near transit hubs and bus lines is “a declaration of war against our neighborhoods.” And a new report finds that in San Francisco:

in 2000, it cost approximately $265,000 per unit to
build a 100-unit affordable housing building for families in the city, accounting for inflation. In
2016, a similar sized family building cost closer to $425,000 per unit, not taking into account
other development costs (such as fees or the costs of capital) or changes in land values over this
time period.

Did you get that? Inflation adjusted construction costs have increased in San Francisco over the last 16 years by 60% not including changes in land values.

Interviews and focus groups identified four local drivers of
rising construction costs: city permitting processes, design and building code requirements,
workforce regulations and ordinances, procurement (small and local business) requirements,
and environmental regulations.

the most significant and pointless factor driving up construction costs was the length of time it takes
for a project to get through the city permitting and development processes.

Washington also seems to be full of economists. We have 10 economists for every one member of the clergy, whereas in New York City there are 15 members of the clergy for every economist.

D.C. is the only major metropolitan area with more economists than clergy.  The Miami area is the one with the highest ratio of chefs to economists.  Here is the source, via Paul Winfree.

That is the topic of my latest Bloomberg column, here is an excerpt:

Like it or not, this law is not going away — and there are some good reasons to have it. The U.S. has been the world leader in taking on corruption, and we shouldn’t give up that position without a fight. There has been a payoff, as other countries move in the American direction with tougher anti-bribery measures. Getting rid of the FCPA now would send the very worst possible message to the world. Furthermore, some aspects of the FCPA are useful in helping U.S. multinationals limit the demand for bribes, by claiming they are unable to comply for legal reasons.

Rather than junking the FCPA, we should consider reforming it, lowering its costs while simultaneously making it harder to use as an instrument of political retribution…

To improve the law, commentators have recommended adding a “willfulness” requirement for corporate criminal liability, limiting liabilities from the activities of subsidiaries or from previous acquisitions, clarifying exactly who counts as a “foreign official,” and more generally swinging the presumption back closer to innocence, especially for companies with active and responsible compliance programs. All of those changes could build in more safeguards for ambiguous cases and for companies that are basically engaged in honest business. Recently announced Department of Justice guidelines do take some steps in these directions, for instance by encouraging voluntary disclosure and remediation of infractions.

The column has plenty of information about how many companies violate FCPA — lots — and what is their chance of prosecution.  We would have to make the penalties at least eight times stiffer to make compliance profit-maximizing, at least on average.

Here is the video of my 30-minute debate — and yes it was a debate not really a dialogue — with Luigi Zingales on this question (click through for the video).  At the link is an associated transcript too, though the vigor of the back and forth was lots of fun.

In the movies I’ve seen people who try to get out of a traffic ticket by telling the police officer they made a donation to the policeman’s ball, but those were comedies. I had no idea that not only does this exist there are official cards. In fact, the police in New York are livid that the number of cards is being limited:

The city’s police-officers union is cracking down on the number of “get out of jail free” courtesy cards distributed to cops to give to family and friends.

Patrolmen’s Benevolent Association boss Pat Lynch slashed the maximum number of cards that could be issued to current cops from 30 to 20, and to retirees from 20 to 10, sources told The Post.

The cards are often used to wiggle out of minor trouble such as speeding tickets, the theory being that presenting one suggests you know someone in the NYPD.

The rank and file is livid.

“They are treating active members like s–t, and retired members even worse than s–t,” griped an NYPD cop who retired on disability. “All the cops I spoke to were . . . very disappointed they couldn’t hand them out as Christmas gifts.”

A Christmas gift of institutionalized corruption.

Here’s another article on these cards which just gets all the more stunning.

First, there are tiers of cards. Silver cards are the highest honor given to citizens. It’s almost universally honored by officers, and can also help save money on insurance. Gold PBA cards are only given to police officers and their families. You’d be hard-pressed finding a cop who won’t honor a gold card.

Gold and silver cards! It gets better. You can buy these cards on eBay. Here’s a gold New Jersey card on sale for $114. A silver “family member” shield goes for $299. Some of these are probably fake. The gold and silver are rare but remember, cops get 20 to 30 regular cards so you can see why they might be upset at losing them.

The regular cards have become more common as NYC hires more police. The union may in fact be trying to bump up its monopoly profit by restricting supply.

The cards don’t just go to family members. The rot is deep:

Union officials say the cards are also public relations tools and tokens of appreciation handed out to politicians, judges, lawyers, businessmen, civil service workers and members of the news media.

A retired police officer on Quora explains how the privilege is enforced:

The officer who is presented with one of these cards will normally tell the violator to be more careful, give the card back, and send them on their way.

…The other option is potentially more perilous. The enforcement officer can issue the ticket or make the arrest in spite of the courtesy card. This is called “writing over the card.” There is a chance that the officer who issued the card will understand why the enforcement officer did what he did, and nothing will come of it. However, it is equally possible that the enforcement officer’s zeal will not be appreciated, and the enforcement officer will come to work one day to find his locker has been moved to the parking lot and filled with dog excrement.

He’s not kidding. Here is what seems like a real police officer on a cop chat room (from Mimesis law)

It’s important for me to get in touch with shield [omitted] and ask him why he felt it necessary to say “I’m not even going to look at that” to my PBA card and proceed [sic] to write a speeding ticket on the Bronx River Parkway yesterday afternoon to my fukking WIFE!!!!!!!!!!!!

I’ll show him the courtesy he so sorely lacks by not posting his name on a public forum.

Any help would be appreciated.  Please inbox me.

I will find you.

I find these cards especially odious as more and more police are funding themselves through fines and forfeitures. Discriminatory taxation increases the tax rate. It’s one rule for the ruler and another for the ruled.

The cards are not a secret but I agree with my colleague Mark Koyama who remarked:

Sometimes you find out something about the country you live in that makes it appear little better than a corrupt, tinpot, banana republic.

Galesic, M., Barkoczi, D., & Katsikopoulos, K. (2018). Smaller crowds outperform larger crowds and individuals in realistic task conditions. Decision, 5(1), 1-15.

Decisions about political, economic, legal, and health issues are often made by simple majority voting in groups that rarely exceed 30–40 members and are typically much smaller. Given that wisdom is usually attributed to large crowds, shouldn’t committees be larger? In many real-life situations, expert groups encounter a number of different tasks. Most are easy, with average individual accuracy being above chance, but some are surprisingly difficult, with most group members being wrong. Examples are elections with surprising outcomes, sudden turns in financial trends, or tricky knowledge questions. Most of the time, groups cannot predict in advance whether the next task will be easy or difficult. We show that under these circumstances moderately sized groups, whose members are selected randomly from a larger crowd, can achieve higher average accuracy across all tasks than either larger groups or individuals. This happens because an increase in group size can lead to a decrease in group accuracy for difficult tasks that is larger than the corresponding increase in accuracy for easy tasks. We derive this non-monotonic relationship between group size and accuracy from the Condorcet jury theorem and use simulations and further analyses to show that it holds under a variety of assumptions. We further show that situations favoring moderately sized groups occur in a variety of real-life situations including political, medical, and financial decisions and general knowledge tests. These results have implications for the design of decision-making bodies at all levels of policy.

I have heard a number of CEOs and directors claim that organizations change fundamentally once they start exceeding fifty employees, a number only slightly above the cited optimum here.  But if only for reasons of sales and marketing and branding, it does in fact make sense, on net, for many institutions to exceed that number of employees.

Here is the paper, and for the pointer I thank the excellent Kevin Lewis.

The government estimates that 10 percent of New Hampshire residents — about 130,000 people — are addicted to drugs or alcohol.

Here is much more from the NYT.

A man threw his body onto a self-driving car — a GM Cruise AV — causing a car vs. pedestrian collision at the 16th and Valencia intersection earlier this month, the DMV reported Wednesday.

Operating in “autonomous mode,” the Cruise AV was stopped at a green light, facing northbound on Valencia, waiting to make a right turn onto 16th Street as pedestrians crossed.

Suddenly, a man ran across Valencia Street against the “do not walk” sign, shouting, and struck the left side of the car’s rear bumper and hatch with his entire body. This is all according to a report the self-driving car manufacturer must file with the DMV in the event of a collision.

The man sustained no injuries, but the car did. It suffered “some damage to its right rear light,” according to the report.

Here is the full story.