Category: Law
Reading John Goodman’s *Priceless*
John Goodman and I have a deal. Beginning in a week or two, I’m going to start reading his book Priceless: Curing the Healthcare Crisis, and I will write my reaction(s) to it on TIE as I do. He, of course, is free to react to my reactions by contributing to the TIE comments, posting on his blog, hollering out the window, or however he likes.
The crux of the deal is that our writings and window hollering about each other’s thoughts will be respectful, free of snark, or any implied or overt insults. No feigned shock that the other claims to be a health economist. No histrionics over those mixed up liberals or conservatives or libertarians (as applicable). No statements like, “What [Austin/John] fails to understand” or “Do you realize that …” In short, we’re just going to stick to the evidence and the ideas, not attack each other.
I look forward to the exchanges.
Yesterday was an interesting day for development economics
The government of Honduras has signed a deal with private investors for the construction of three privately run cities with their own legal and tax systems.The memorandum of agreement signed Tuesday is part of a controversial experiment meant to bring badly needed economic growth to this small Central American country.
Here is a bit more, and for the pointer I thank M.
The forward march of progress
The California state legislature just moved that dream a little closer to reality by approving a bill paving the way for driverless cars to be allowed on Golden State freeways.
The bill, authored by State Senator Alex Padilla (D-Van Nuys), was passed by the state Assembly on Wednesday and then given the overwhelming thumbs up by the state Senate the following day.
If signed by Governor Jerry Brown, Padilla’s bill would legally allow autonomous vehicles on the road and charge the state’s Department of Motor Vehicles with determining the standards for self-driving cars, rules which current do not exist under the present vehicle code.
Here is more, and for the pointer I thank Mark Thorson. By the way,
Hawaii, Florida, Arizona and Oklahoma are all also considering similar legislation.
Welsh markets in everything
There was a time when the best you could hope for from prison food might be cold porridge.
But all that is set to change when a bizarre new restaurant opens next month – inside a Welsh prison.
The Clink Cymru, at Cardiff Prison, is the brainchild of award-winning chef Alberto Crisci, who has worked at Marco Pierre White’s Mirabelle Restaurant in Mayfair, London.
All the dishes will be cooked and served by criminals but Crisci insists it is “no gimmick”.
The story is here, hat tip goes to Yana.
Charter city watch
The case also underlined the growing status of London’s High Court as the favoured destination for the super-rich of the former Soviet Union to fight their legal battles. It is estimated that more than 60 per cent of the case load of the High Court’s commercial division now comes from Russia and eastern Europe.
Here is more, and I thank Natasha for the pointer.
Facts about India
Even after accounting for the wastage, only 41 percent of the food set aside for feeding the poor reached households nationwide in 2005, according to a World Bank study commissioned by the government and released last year.
In Uttar Pradesh, where the minister of food stands charged with attempted murder, kidnapping, armed robbery and electoral fraud, the diversion was more than 80 percent in 2005, the World Bank report said.
Fully 100 percent of the food meant for the poor in Kishen’s home district was stolen during a three-year period, according to India’s Central Bureau of Investigation, the country’s leading anti-corruption agency.
Here is more. I thank several loyal MR readers for the pointer.
*The Federal Prison Guidebook*
Read about it here, buy it here. Here is one excerpt from the summary:
- Advance agreement. “When you meet with the probation officer, find out his or her “dictation date.” This is the date by which he or she must dictate the first draft of the PSR. When possible, it is extremely helpful to have the probation officer and the assistant U.S. attorney buy into what you believe is your client’s offense behavior, role in the offense, and any grounds for downward departure before the dictation date. Remember that probation officers often have a psychological investment in their original draft PSR. Since getting them to change a PSR can be difficult, put your effort into trying to get a good initial draft. That way, you won’t have to file that many objections.” §4:10.2.
Interesting throughout!
For the pointer I thank Eapen Thampy.
The rule of law? (talk about “money laundering”)
Wells Fargo Home Mortgage (WFC) has fired a Des Moines worker over a 1963 incident at a Laundromat involving a fake dime in the wake of new employment guidelines.
Richard Eggers, 68, was fired in July from his job as a customer service representative for putting a cardboard cutout of a dime in a washing machine nearly 50 years ago in Carlisle, the Des Moines Register reported Monday.
Warren County court records show Eggers was convicted of operating a coin-changing machine by false means. Eggers called it a “stupid stunt,” but questions his firing.
Big banks have been firing low-level employees like Eggers since new federal banking employment guidelines were enacted in May 2011 and new mortgage employment guidelines took hold in February, the newspaper said. The tougher standards are meant to clear out executives and mid-level bank employees guilty of transactional crimes — such as identity theft and money laundering — but are being applied across the board because of possible fines for noncompliance.
Here is more, courtesy of Tim Johnson.
Imitation Ain’t Easy
On the Syfy tv show Alphas one of the characters is able to see something once and learn it perfectly. Thus, she can learn a martial art, or how to fix a car, or how to speak a language just by imitation. This ability is rightly considered a superpower. Yet, in economic models it’s assumed that everyone has this ability.
Imitation, however, is difficult even when knowledge is freely available. In Launching I give the example of The French Laundry Cookbook which promises that with “exact recipes” and “simple methods” that “you can now re-create at home the very experience the Wine Spectator described as ‘as close to dining perfection as it gets.'” Yet despite exact recipes and simple methods we don’t see imitations of the restaurant twice named the best in the world popping up in Muncie, Indiana (trust me on that one).
Similarly, in Apple v. Samsung the jury found that Samsung copied Apple and indeed they copied Apple well enough to survive but nowhere near well enough to eliminate Apple’s monopoly power as Eli Dourado points out:
According to a recent article at Fortune, Apple sells 8.8% of mobile phones, but it has 73% of profits in the market. Samsung sells 23.5% of phones and earns 26% of profits. Everyone else is barely breaking even or losing money.
This does not look like a market in which Apple’s competitors are successfully copying it. It looks like a market in which Apple’s competitors are trying to copy Apple, and failing.
The point of patents is to incentivize innovation through a grant of monopoly. But what Apple’s success, pre-verdict, clearly shows is that in many markets, mobile computing among them, it’s a lot harder to copy innovations than you think. Apple’s real innovation is putting designers in charge and building a corporate culture in which everything is subordinated to making elegant products that people want to use. I’d like to see Samsung try to copy that, but I think the difficulty of doing so gives Apple all the monopoly it needs.
Steve Jobs was a Great Artist
http://youtu.be/CW0DUg63lqU
On the bright side the jury found that Apple’s patent on rounded rectangles was not infringed. Just to be clear, I have no objection to the jury’s findings only to the law.
Hat tip: @mmasnick
Ciudad Juarez fact of the day
In 2010, the peak, there were at least 3,115 aggravated homicides, with many months posting more than 300 deaths, according to the newspaper El Diario.
But the fever seems to have broken.
In July, there were just 48 homicides — 33 by gun, seven by beatings, six by strangulation and two by knife. Of these, 40 are considered by authorities to be related to the drug trade or criminal rivalries.
And why?:
Authorities attribute the decrease in homicides to their own efforts — patrols by the army, arrests by police, new schools to keep young men out of gangs and in the classroom.
Yet ordinary Mexicans suspect there is another, more credible reason for the decrease in extreme violence: The most-wanted drug lord in the world, Joaquin “El Chapo” Guzman, and his Sinaloa cartel have won control of the local drug trade and smuggling routes north.
The full story is here.
Sentences to ponder
…I find it remarkable that I have yet to receive a thank you note for paying my taxes. When I fill out my taxes, I notice that even receipts for $25 donations have thank you notes attached. But for the tens of thousands of dollars I give each year to help keep our wonderful Republic afloat, nothing. Can’t we do a little more as a nation to honor our taxpayers individually?
…And how about a dinner at the White House honoring the top 100 taxpayers in the country? Not the 100 richest people in the country, but the top 100 taxpayers. One might object that they would just use the opportunity to lobby for lower taxes, but if they did, they wouldn’t get invited the next year.
That is from Miles Kimball. Of course very often these individuals are criticized for not wanting to pay higher taxes.
Too Central to Fail
A lot of attention has been put on “too big to fail,” the idea that big is risky. What really matters in a complex network system, however, is not bigness per se but connection centrality. In a network the liabilities of institution A become the assets of institution B whose own liabilities become the assets of institution C. An institution with high connection centrality can spread distress throughout a large portion of the network.
Inspired by Google’s PageRank, the authors of a new paper create DebtRank, a measure of connection centrality. The vertical axis in the following diagram shows DebtRank (centrality) the horizontal axis asset shows size relative to the total network and the color indicates fragility/leverage. Institutions such as Wachovia, RBS and Barclays were relatively small but because of their centrality and fragility they imposed big risks on the system.
You can find the paper here but do check out the web page of the author group which includes much more material including these animations. Mark Buchanan over at Bloomberg also offers useful comment.
One point to note is that the authors calculated centrality using ex-post data from the Fed. Using this measure, DebtRank clearly signaled danger prior to the crisis and did so earlier than other metrics. In order to do this in real time, however, much more transparent and timely data would be necessary. The fact that centrality doesn’t correlate all that well with bigness, however, indicates that without this data the problem of monitoring risk is even more difficult than it appears.
The balanced budget multiplier?
A Spanish mayor who became a cult hero for staging robberies at supermarkets and giving stolen groceries to the poor sets off this week on a three-week march that could embarrass the government and energise anti-austerity campaigners.
Juan Manuel Sanchez Gordillo, regional lawmaker and mayor of the town of Marinaleda – population 2,645 – in the southern region of Andalusia, said food stolen last week in the robberies went to families hit hardest by Spain’s economic crisis.
Seven people have been arrested for participating in the two raids, in which labour unionists, cheered on by supporters, piled food into supermarket carts and walked out without paying while Mr Sanchez Gordillo (59) stood outside.
He has political immunity as an elected member of Andalusia’s regional parliament, but says he would be happy to renounce it and be arrested himself.
Here is more.
Crime in Europe and the U.S.
Has there been a “reversal of fortune”? Paolo Buonanno, Francesco Drago, Roberto Galbiati, and Giulio Zanella step into these treacherous waters with a new paper (pdf):
Contrary to common perceptions, today both property and violent crimes (with the exception of homicides) are more widespread in Europe than in the US, while the opposite was true thirty years ago. We label this fact as the “reversal of misfortunes”. We investigate what accounts for the reversal by studying the causal impact of demographic changes, incarceration, abortion, unemployment and immigration on crime. For this we use time series data (1970-2008) from seven European countries and the U.S. We find that the demographic structure of the population and the incarceration rate are important determinants of crime. Our results suggest that a tougher incarceration policy may be an effective way to contrast crime in Europe. Our analysis does not provide information on how incarceration policy should be made tougher nor does it provide an answer to the question whether a such a policy would also be efficient from a cost-benefit point of view. We leave this to future research.
I would stress that there are numerous controversial claims in this paper. (I also personally believe that the heavy U.S. reliance on incarceration is morally problematic.) Nonetheless we are committed to bringing you thought-provoking material and so there you go.
For the pointer I thank Noah Smith, who should not be construed as necessarily endorsing any of these results.