Category: Law

The Farrago of International Travel Restrictions

International travel restrictions are a farrago built on fear, statistical confusion, and out-dated information. The US, for example, is still requiring a virus test to enter the US but not proof of vaccination. In other words, a fully vaccinated citizen can now fly to Canada (with Canadian requirements) but if they want back in they need to have had a virus test. Ridiculous.

Even more ridiculous, Chinese, European and British citizens are still not allowed into the United States. Why? China, for example, has almost no COVID cases–thus there is no reason to restrict Chinese citizens from traveling to the United States. Indeed, President Trump rescinded these restrictions at the end of his term but Biden reinstated them immediately. Why?  Travel is now banned from many countries with low COVID and high vaccination rates while allowed from many countries with high COVID rates and low vaccination rates.  There is no rhyme or reason to the travel bans and restrictions.

I propose we eliminate the farrago with a simple rule. Anyone vaccinated with a full dose of any WHO approved vaccine should be allowed to visit the United States without restriction. People on twitter responded “but even a vaccinated person could still be a carrier!” No kidding. So what? We cannot eliminate all risk. The logic of allowing vaccinated travelers into the United States is simple–a fully vaccinated visitor is safer than the average US citizen. Thus, allowing more vaccinated people into the United States is not especially risky and is having beneficial effects on the economy.

“Vaccine passports” became politically charged but what we have now is a bizarre combination of “testing passports” and “no passports.” In contrast, a vaccination requirement for travel is simpler, cheaper, more convenient and more effective than a test and it creates greater freedom than no passport at all. A vaccine requirement is no more difficult to enforce than a testing requirement. Indeed, the United States has in the past required vaccination prior to arrival so this would hardly be unprecedented. For special cases, a test could be allowed in lieu of a vaccine, especially if it was followed up with an airport vaccination but vaccination should be the primary requirement.

To recap: Anyone vaccinated with a full dose of any WHO approved vaccine should be allowed to visit the United States without restriction.

Addendum: A mix and match from any two WHO approved vaccines counts as a full dose!

Why vaccine passports are a welfare-dominated approach

Use monetary rewards (or penalties) if need be.  Here is Joshua Gans applying some game theory to the vaccine passport idea:

Vaccine hesitancy is modelled as an endogenous decision within a behavioural SIR model with endogenous agent activity. It is shown that policy interventions that directly target costs associated with vaccine adoption may counter vaccine hesitancy while those that manipulate the utility of unvaccinated agents will either lead to the same or lower rates of vaccine adoption. This latter effect arises with vaccine passports whose effects are mitigated in equilibrium by reductions in viral/disease prevalence that themselves reduce the demand for vaccination.

A “utility tax” is rarely a good idea.  Besides what happens if you lose your smart phone?  Don’t have one to begin with?  Arrive from another country with an incompatible information/verification system?

With cases falling in both the UK and Netherlands, the vaccine passport idea, at the governmental level, is looking worse and worse.  That said, I am all for private entities making their own decisions on these issues, and generally I am happy when I see employers require vaccination.

Addendum: Here is a Gans tweet storm on the paper.

Electric shock devices on humans now allowed once again

A Massachusetts school can continue to use electric shock devices to modify behavior by students with intellectual disabilities, a federal court said this month, overturning an attempt by the government to end the controversial practice, which has been described as “torture” by critics but defended by family members.

In a 2-to-1 decision, the judges ruled that a federal ban interfered with the ability of doctors working with the school, the Judge Rotenberg Educational Center, to practice medicine, which is regulated by the state. The Food and Drug Administration sought to prohibit the devices in March 2020, saying that delivering shocks to students presents “an unreasonable and substantial risk of illness or injury.”

Although the F.D.A.’s ban was national, the school in Canton, Mass., appears to be the only facility in the United States using the shock devices to correct self-harming or aggressive behavior…

The treatment, in which students wear a special fanny pack with two protruding wires, typically attached to the arm or leg, can deliver quick shocks to the skin when triggered by a staff member with a remote-control device.

Here is the full NYT story.  You might argue this treatment can be useful in many cases, but what exactly is the error rate here?  How high an error rate should we be willing to accept?  What recourse do the victims have, noting that many probably live under guardianship?  How might you model the incentives of the staff at the facility who use this?  How well do “prison guards” behave more generally?

As a side note, I think this matter should be handled by legislation rather than the FDA.

The wisdom of Ilya Shapiro

Civil-Rights Law as Lawyer Full-Employment Act The data that Eric Kaufmann presents and explains about ideological prejudice, social intolerance, and “affective polarization” (“Political Discrimination as Civil-Rights Struggle,” July 12) are as disturbing as they are depressing. Progressive authoritarianism is a growing problem, particularly among young elites and thus at the commanding heights of business, culture, and education. But the solution Kaufmann proposes – expanding anti-discrimination law to cover political belief – is worse than the disease.

There’s a reason why legal protections for ideology are currently found only in places such as Seattle and Washington, D.C.: They’re progressive innovations, one more barnacle on the crusty hull of employment law. Each time a new protected category is added to civil-rights laws that were originally enacted to break Jim Crow – talk about “systemic racism”! – it further burdens employers and enriches lawyers. Indeed, Kaufmann’s proposal is a lawyer full-employment act, with easily foreseeable litigation about whether a particular ideological belief is a “bona fide occupational qualification.”

“Legislators and courts would need to define terms tightly,” Kaufmann allows, but how confident are we that they would, or will long continue to do so? If discrimination “on the basis of sex” can be read 50 years later to include sexual orientation and gender identity – see last year’s Bostock v. Clayton County, which did just that to federal employment law – then even the tightest statutory definitions will loosen over time. In other words, the idea that narrow exemptions for political parties (what about think tanks?) from a ban on political discrimination won’t eventually be read to allow forced adherence to corporate diversity/equity/inclusion statements is laughable. And then we’re back where we started, except with more billable hours.

That is his letter to National Review, the response of Kaufmann can be found at the same link.

Covid protection in Oaxaca

On the flight from Houston to Oaxaca, not everyone took off their masks to eat and drink, as they would on most internal U.S. flights, even if only for “faux mask removal-motivated drinking” [FMRMD].

You have to fill out some forms, through an app, on your smart phone in advance.  When you arrive they ask: “Did you fill out the forms?”  Say yes if you did.

They let you in, no test required, no other questions asked.  They do check your baggage tag against the bag you take away.

Nearly everyone in central Oaxaca city wears a mask all the time in public, including outside.  It is like San Francisco at its mask-wearing peak.

They spray the sides of the parks with something that smells like hand sanitizer.

If you wish to enter a store, you have to accept some hand sanitizer.  This is perhaps an efficient tax on browsing.  Toward the end of the day, however, they dispense with the tax.

Some establishments spray your clothes when you enter, maybe it is water?  Some spray you front and back.  Staff compliance does not seem to be grudging, rather the “Mexican petty bureaucracy” seems to be mobilized and out in force and with real enthusiasm.

There is a place along the local highway where they stop all cars, and have everyone get out to accept a dose of hand sanitizer.

I wonder how the equilibrium operates.  Of all the above measures, perhaps only the masks stand a chance of helping?  Does the rest of the security theater make it easier for them to largely stay open?

Here is some NYT coverage of U.S. tourists in Mexico.

Supported decision-making vs. guardianship

In the last decade, and especially after the 2013 Virginia court case of Ross and Ross v. Hatch, there has been a dramatic increase in knowledge, use, and legal recognition of supported decision-making (SDM) in the United States. SDM is a methodology in which people work with trusted friends, family members, and professionals who help them understand their situations and choices so they may make their own decisions and direct their lives. After the Hatch case, in which a young woman with Down syndrome defeated a petition for permanent guardianship by demonstrating that she uses SDM, this methodology has increasingly been considered and used as an alternative to guardianship to enable people to retain their legal rights and make life choices to the maximum extent possible. This article reviews the guardianship laws of the 50 U.S. states and the District of Columbia. Using criteria we developed, in light of the findings and values expressed in Hatch, we assessed the extent to which those laws recognize or encourage the use of SDM as an alternative to guardianship and as a means to enhance self-determination for people in guardianship. We then offer recommendations for future SDM research, policy, education, and advocacy efforts.

That is from a recent paper by Jonathan Martinis, et.al., via the excellent Kevin Lewis.  Guardianship is not the only alternative to “chaos,” now is the time to be truly Woke.

Britney fact of the day

A systemic issue that I think is shocking is that Britney has to pay for everyone. In this case, she not only pays for her own court-appointed counsel, she pays for her dad’s lawyers — he has multiple sets of lawyers who are actively fighting against her wishes in court. Recently, one set of her dad’s lawyers billed $890,000 for roughly four months of work, which is about $10,000 a day. And that includes PR specialists that were defending the conservatorship to the media.

Here is further information.  Sounds optimal to me!  After all, I have a friend who knows somebody who is in a coma and needs a guardian.  Nothing to see here, move on people…why would you ever expect the political economy of this issue to yield suboptimal results, given how well the rest of our bureaucracies work…?

Fortunately it was just ruled that Britney can hire her own lawyer to represent her.

Via Shaffin Shariff.

“The Crypto Revolution Will Not be Public”

That is the title of my latest Bloomberg column, here is one excerpt:

In a remarkably honest yet radical speech last month about stablecoins, Fed Governor Randal Quarles argued that current payments systems already incorporate a great deal of information technology — and they are improving rapidly. The implication is that a central bank digital currency, or CBDC, is a solution in search of a problem.

Quarles also suggested that the Fed tolerate stablecoins, just as central banking has coexisted and indeed thrived with numerous other private-sector innovations. Stablecoins can serve as a private-sector experiment to see if individuals and institutions truly desire a radically different payments system, in this case based on crypto and blockchains. If they do, the system can evolve by having some but not all transactions shift toward stablecoin.

There need not be any “do or die” date of transition requiring a perfectly functioning CBDC. But insofar as those stablecoins can achieve the very simple methods of funds transfer outlined above, market participants will continue to use them more.

Quarles argued that with suitable but non-extraordinary regulation of stablecoin issuers, such a system could prove stable. He even seems to prefer the private-sector alternative: “It seems to me that there has been considerable private-sector innovation in the payments industry without a CBDC, and it is conceivable that a Fed CBDC, or even plans for one, might deter private-sector innovation by effectively ‘occupying the field.’”

In essence, Quarles is willing to tolerate a system in which privately issued dollar equivalents become a major means of consummating payments outside of the Fed’s traditional institutions. Presumably capital requirements would be used to ensure solvency.

For many onlookers, even hearing of innovation in finance raises worries about systemic risk. But perhaps the U.S. would do better by letting information technology advance than trying to shut it down. And if you are afraid of instability, are you really so keen to see foreign central bank digital currencies fill up this space?

If you are still skeptical, ask yourself two final questions. First, which has been more innovative on these issues: the private sector or the public sector? Second, how realistic are the prospects that Congress takes any effective action at all?

This is now a world in which radical monetary ideas are produced and consumed like potato chips. I say, pass the bag.

Recommended.

My Conversation with Alexander the Grate

Here is the audio and transcript, recorded outside in SW Washington, D.C.  And no, that is not a typo, he does call himself “Alexander the Grate,” his real name shall remain a secret.  Here is the event summary:

Alexander the Grate has spent 40 years — more than half of his life — living on the streets (and heating grates) of Washington, DC. He prefers the label NFA (No Fixed Address) rather than “homeless,” since in his view we’re all a little bit homeless: even millionaires are just one catastrophe away from losing their mansions. It’s a life that certainly comes with many challenges, but that hasn’t stopped him from enjoying the immense cultural riches of the capital: he and his friends have probably attended more lectures, foreign films, concerts, talks, and tours at local museums than many of its wealthiest denizens. The result is a perspective as unique as the city itself.

Alexander joined Tyler to discuss the little-recognized issue of “toilet insecurity,” how COVID-19 affected his lifestyle, the hierarchy of local shelters, the origins of the cootie game, the difference between being NFA in DC versus other cities, how networking helped him navigate life as a new NFA, how the Capitol Hill Freebie Finders Fellowship got started, why he loves school field trip season, his most memorable freebie food experience, the reason he isn’t enthusiastic about a Universal Basic Income, the economic sword of Damocles he sees hanging over America, how local development is changing DC, his design for a better community shelter, and more.

And:

And:

Recommended, you won’t find many podcast episodes like this one.  It is noteworthy that Alexander has a better and bigger vocabulary than the median CWT guest.  Also, this is one episode where listening and reading are especially different, due to the ambient sounds, Alexander’s comments on the passing trains, and so on — parts are Beckettesque!

Why Do Women Earn Less Than Men? Evidence from Bus and Train Operators

From a forthcoming issue of the Journal of Labor Economics (ungated) by Valentin Bolotnyy and Natalia Emanuel, both excellent labor economists.

We show that a gender earnings gap can exist even in an environment where work tasks are similar, wages are identical, and tenure dictates promotions. The 11 percent earnings gap in our setting arises from female operators taking fewer overtime hours and more unpaid time off than do male operators. Consequently, we observe that gender neutral policies can have differential effects on the two sexes.

We find that female operators value time, as well as schedule controllability, conventionality, and predictability more than male operators. Male and female operators choose to work similar hours of overtime when they are scheduled months in advance, but male operators work nearly twice as many overtime hours when they are scheduled on short notice. Moreover, male operators game the overtime system more than female operators: when faced with an undesirable schedule, male operators take unpaid time off, but also work more overtime during the rest of the week, resulting in an increase over base income.

Thus, the 11% wage difference wasn’t a result of employer discrimination. One might say the wage gap was a result of “systematic sexism” in family roles but if so is the sexism hurting women, who earn less, or men, who spend less time with their families? If all partners were unisex wouldn’t it still make sense for one partner to be more work-flexible than the other due to increasing returns?

One positive lesson is that employers who can increase schedule controllability might be able to make workers better off and lower wages making employers better off. It’s not clear, however, if such bills are left on the sidewalk but it’s not impossible.

It’s interesting that similar results were found for the gender wage gap among Uber drivers–men made more but not because of employer discrimination, which isn’t even possible in this context, but because on average there are small differences in how men and women drive, men drive a bit faster for example.

Photo Credit: FCPS.

The FTC train wreck continues

Seeing a pile of resumes already, several leaders of law firm antitrust practices are predicting many more government attorneys heading for private practice in the coming months as a new-look Federal Trade Commission forms under the leadership of chairperson Lina Khan.

“I’m getting a lot more resumes across my desk from the FTC,” said the co-chair of one antitrust practice in an Am Law 100 firm who declined to be named so that he could discuss an agency that he frequently interacts with. “There’s a lot more people coming out, and they’re going to get snapped up fast.”

While some staff turnover in the wake of an administration change is routine, law firm leaders said the number of agency lawyers seeking out career options outside the FTC appears to be high now and they are anticipating more later in the year. They attribute that, at least in part, to agency lawyers who have different views compared with Khan’s ideas of what constitutes antitrust behavior and how to bring cases…

“I think there’s a real disquiet there now—even in what I would say is a pretty liberal agency,” the antitrust co-chair said. “Eyebrows are up over some of the most recent moves, which to some career attorneys at the agency might see as a little heavy-handed. I won’t be surprised if more folks decide maybe now’s the time to test the [private practice] market.”

Those are the (largely Democratic) lawyers — just imagine how the economists must feel!  Here is the full article, with further detail, brutal throughout.  It is at least comforting to see that if you try to destroy America’s greatest companies, there is some pushback in the system.

Towards a COVAX Exchange

Israel had vaccine that was about to expire before it could be administered. South Korea needed vaccine immediately to stop a surge. They arranged a deal.

South Korea said it will receive 700,000 doses of Pfizer-BioNTech’s coronavirus vaccine from Israel on loan this week, in an attempt to speed up immunisation following a surge in infections around the capital Seoul.

…Under the vaccine swap arrangement announced by both governments on Tuesday, South Korea will give Israel back the same number of shots, already on order from Pfizer, in September and October.
South Korea has quickly distributed the COVID-19 vaccines it has, but has struggled to obtain enough doses in a timely manner as global supplies are tight, particularly in Asia.

“This is a win-win deal,”  [Israeli Prime Minister Naftali Bennett] said in an earlier statement.

One of the weaknesses of the COVAX facility for distributing vaccines is that distribution is primarily based on population with all countries guaranteed that “no country will receive enough doses to vaccinate more than 20% of its population until all countries in the financing group have been offered this amount.” That’s equitable, but it has dynamic challenges: different countries may have different needs and capabilities at different points in time. A country may be given vaccines, for example, when it may not yet be ready to administer them — and that can potentially lead to waste. The Israel-South Korea deal, for example, only narrowly averted 700,000 Pfizer doses from being tossed.  Countries may also have different preferences for vaccines, as different vaccines may fit better with their healthcare systems. A fixed distribution schedule doesn’t adapt to the unique circumstances of time and place, as Hayek might have said.

It’s not surprising that COVAX chose a fixed distribution rule as many people wouldn’t trust a centralized authority to decide who gets what vaccines when. But what about guaranteeing each country a right to vaccine but allowing them to trade? Trade wouldn’t be vaccines for dollars which could introduce ethical and agency issues but vaccine at time 1 for vaccine at time 2 as in the Israel-South Korea exchange or across other factors such as vaccine type. My colleagues on the Kremer team, most notably Eric Budish, Scott Duke Kominers and Canice Prendergast, have been helping think through the design of just such a system. Prendergast designed the now-famous distribution system for Feeding America, Budish helped to design Wharton’s Course Match system and Kominers has worked on mechanisms for allocating convalescent plasma, vaccines and many other goods.

A suitably designed exchange can increase efficiency while maintaining equity. The Israel-South Korea deal reminds us that this is a priority. Greater efficiency in this context means fewer vaccine doses wasted, and more lives saved.

Guardianship — the most undercovered issue of our time?

I am glad to see Amanda Morris at the NYT pick up the ball:

But advocates for people with disabilities say guardianships have been used too broadly, including in cases of individuals with psychiatric disorders and developmental or intellectual disabilities who, the advocates say, do not require such intense or continuous oversight.

“I should have never been under guardianship, because I was always independent,” said Mr. King, 38. “Don’t judge me before you get to know me. Everyone needs help sometimes.”

Once a guardianship has been imposed, it can be difficult to undo. Mr. King’s parents, who say they reluctantly sought a guardianship for him in 2003 after being urged to do so by social services workers, attempted to have a judge rescind it in 2007. They say they faced barriers for years, including opposition from a court-appointed lawyer for Mr. King in the case.

“Judges are used to putting people in guardianships; they’re not used to letting them out,” said Jonathan Martinis, a lawyer the family eventually hired. The guardianship was finally revoked in 2016.

And:

About 1.3 million people live under guardianships in America, according to a 2018 estimate from the National Council on Disability. They include older Americans who can no longer manage their affairs, but also many younger people, including some with intellectual or developmental disabilities. Studies suggest that the number of people under such arrangements has more than tripled in the past three decades.

Whatever you think our policies should be, is it not amazing how unwilling we have been to discuss these choices?  And how about this?:

Only 14 states require guardians to obtain some sort of credential for the role, with a majority requiring certification from a nonprofit organization called the Center for Guardianship Certification.

Whether you think that number should be zero, fifty, or somewhere in between, how many of you even knew that in the first place?  Or heard of the Center for Guardianship Certification?

And do read the story of Jenny Hatch toward the end of the article, this is essential journalism.  Some of these cases, while they lack all of the elements of slavery, have some of the essential elements.

1.3 million Americans.  What is the chance here that our policies are being optimized?

Alternative Dosing

Close-up medical syringe with a vaccine.

Alternative dosing is finally getting some attention. This story in Nature recounts some of the recent arguments and evidence:

Two jabs that each contained only one-quarter of the standard dose of the Moderna COVID vaccine gave rise to long-lasting protective antibodies and virus-fighting T cells, according to tests in nearly three dozen people1. The results hint at the possibility of administering fractional doses to stretch limited vaccine supplies and accelerate the global immunization effort.

Since 2016, such a dose-reduction strategy has successfully vaccinated millions of people in Africa and South America against yellow fever2. But no similar approach has been tried in response to COVID-19, despite vaccine shortages in much of the global south.

“There’s a huge status quo bias, and it’s killing people,” says Alex Tabarrok, an economist at George Mason University in Fairfax, Virginia. “Had we done this starting in January, we could have vaccinated tens, perhaps hundreds, of millions more people.”

…Sarah Cobey, an infectious-disease researcher at the University of Chicago in Illinois and a co-author of a 5 July Nature Medicine commentary supporting dose ‘fractionation’, disagrees about the need for time-consuming data collection.

“We shouldn’t wait that long,” she says. “People are dying, and we have historical precedent for making very well-reasoned guesses that we think are going to save lives.”

…According to a modelling study published by Tabarrok and other economists, such an approach would reduce infections and COVID-linked deaths more than current policies.

Addendum: The reason for doing the modeling study is precisely to take into account variants like Delta. Our modeling suggests that even with efficacy significantly lower than that suggested by Figure 1 in our paper, alternative doses of more effective vaccines would still provide significant reductions in mortality, even when new variants dominate. The benefits derive from vaccinating more quickly.

The Biden Executive Order on promoting competition

Here is the text, I won’t attempt a summary but here are some running comments:

1. The beginning of the piece suggests that concentration is rising in the American economy.  But this probably isn’t true.  See also these comments by me.

2. Industry concentration has not driven wages down by “as much as 17%” — that’s a porky!  OK, they say “advertised wages,” but come on…

3. I am happy to see the document take on occupational licensing.

4. Contra to the recommendation, we should not ban non-compete agreements outright.  Many non-compete agreements are perfectly normal institutions designed to protect corporate assets against IP theft, client lists for instance.  We should restrict non-compete agreements in some more sophisticated manner, still to be determined.

5. Lower prescription drug prices?  Maybe.  Do they estimate the elasticity of supply?  No.  Thus this discussion would fail my Econ 101 class.  We do know, however, that prescription drugs are one of the very cheapest ways our health care system saves lives, so this is not obviously a good idea.

6. Right to repair laws?  Again, maybe.  But show me the trade-off and cite a cost-benefit analysis.  If software gives more consumer surplus to consumers (again, a maybe), should we be wanting to tax it with contractual restrictions?  Should we be wanting to tax Tesla right now?

7. Portability of bank account information is a good idea.

8. “Empower family farmers…” — do you even need to know what comes next?  Aarghh!!!

9. The order “encourages” the DOJ and FTC to take various actions.  I won’t blame Biden for this, but we’ve way overstepped what executive orders should be doing, some time ago.  The net feeling the honest reader of this section receives is that our antitrust policies toward the large tech companies are not based in much of a notion of rule of law.

10. Should HHS “standardize plan options” in the NHIM to make price shopping easier?  Makes me nervous — diverse market offerings can be good.

11. Lots of tired and not typically true claims and insinuations about concentration in airline markets; see my book Big Business or read Gary Leff.  And shouldn’t airlines charge for bags?  Maybe yes, maybe no, but prices per item are not in general a bad thing.

12. We are warned that farmers and ranchers take in an ever-smaller share of the food dollar spent — thank goodness!  And there are a bunch of other selective, scattered observations about food prices (“corn seed prices have gone up as much as 30% annually…”), but nothing close to systematic or showing an actual market failure (corn prices by the way have been plummeting since 2012).

13. Broadband policy should indeed be improved, but this section reads as messy, should do more to emphasize the notion of competition and common carrier platforms, and how about a mention of StarLink?

14. There’s not really any point in marching through a discussion of the “Big Tech” section.

15. Is there a problem with bank concentration in this country?  Not where I live.  Maybe in some rural areas?

16. YIMBY > NIMBY would do more to limit market power than just about anything else, by the way.

17. Is there even a peep about this country’s biggest and worst-performing monopoly in K-12?  Of course not.  It is Amazon you have to worry about!

So overall this is not great economics.  It is good to see the Biden administration pick up on a few pro-competition issues, but much of the document is not clearly pro-competition either.  The reasoning and evidence are pretty much politicized from start to finish.