Category: Law

Yummy yum yum at Krispy Kreme doughnuts

Since I live in a county dedicated to the rule of law, I was not surprised to read this:

You know Krispy Kreme doughnuts are bad for your arteries. But the
delectable sugar-bombs are apparently lousy for sewer pipes as well,
according to Fairfax County.

In a lawsuit filed this month against the company, the county says
that doughnut grease and other waste from a plant in Lorton have
clogged up the county's sewage system, causing $2 million in damage.
The county is seeking to recoup the cost of the repairs and another $17
million in civil penalties.

The problems began in 2004, shortly after the plant opened, when the
county's public works inspectors began noticing "deposits of doughnut
grease and slime emanating from Krispy Kreme's doughnut production
plant," according to the suit, which was first reported by the
Examiner.

The muck got so bad that a nearby pumping station began reeking of
doughnuts, and a camera inserted into one of the pipes "got stuck in
the grease, preventing inspection of the remainder of the line,"
according to the suit.

One of these days, maybe when the economic crisis is over, I will spend a week blogging Fairfax County rather than the nation at large.

Sonia Sotomayor and economics

Google yields this:

President Obama is apparently going to nominate Sonia Sotomayor to the Supreme Court. But, you rightly say, what is the Sports Economics angle in this story? Judge Sotomayor was the
judge who issued an injunction that said MLB teams could not impose a
collective bargaining agreement nor use replacement players
to start the 1995 season, effectively ending the 1994-95 MLB strike.

James Kwak offers some general comments.  He describes her as a "moderate" on economic issues.  And here is another source on copyright:

A lot of freelancers know the centrist Sotomayor best from NY Times Company v. Tasini,
in which a large group of freelance writers sued the Times for putting
their articles into LexisNexis without further permission or
compensation.  Sotomayor, a district judge at the time, ruled in favor of the Times
based on her interpretation of the Copyright Act of 1975. The decision
was reversed on appeal and the reversal was upheld by the Supremes — a win for the contractors, but not from Sotomayor.

Addendum: Here is a good summary article.

Measuring Criminal Spillovers: Evidence from Three Strikes

California’s Attorney General was pleased to announce that “An unintended but positive consequence of ‘Three-Strikes’ has been the impact on parolees leaving the state….The growth in the number of parolees leaving California is staggering.” Law enforcement officers in other states were presumably less pleased. A displaced criminal is a benefit to California but a cost to other states. If such criminal spillovers are important, law enforcement will over-invest in policies that encourage displacement. We test whether California’s three-strikes law led to significant criminal spillovers.

That's the abstract from my latest paper, Measuring Criminal Spillovers: Evidence from Three Strikes (with Eric Helland). In an earlier paper, Helland and found–by comparing statistical doppelgangers some subject to the law some not–that three strikes does deter (whether it deters eneough to be good public policy in less clear).  In this paper, however, we found that three strikes does not cause appreciable exit of criminals from California (or appreciable reduction in entry), i.e deterrence does not occur on the relocation margin.  During the time that California's AG spoke, everyone was leaving CA not just criminals.  One conclusion of our research is that a federalist approach to crime remains viable. 

Mauritania fact of the day

Women in Mauritania who press charges for sexual assault face the risk
of jail time because of poorly defined laws and stigma that criminalise
victims rather than offenders, according to a local UN-funded
non-profit.

Here is the storyThe twittering of RachelStrohm is actually the best "Africa blog" I've seen, ever.  (I very much like Chris Blattman but I would describe his blogging as broader than that.)  Her blog blog is here.  Her Google profile is here.

“Administration plans to strengthen antitrust rules”

That's the headline and Greg Mankiw comments.  My point is a simple one: if this administration is so pro-science, should they not attempt to move major antitrust trials away from the jury system?

Some commentators are suggesting that the demonstrated political clout of the banking lobby suggests a growing need for antitrust enforcement.  Yet the pre-crash banking system was not a prime candidate for legal strictures on the grounds of competition policy.  Citigroup arguably is too big in absolute terms, and had too many contacts in high places, but antitrust policy, and the underlying theory and legal precedents, puts far more emphasis on relative market share.  In fact the unfolding of the crisis is an object lesson in how antitrust policy doesn't target the real competitive abuses much at all.  Furthermore the sin of Citigroup has been to lose money and become insolvent (or nearly so), not successful monopolization.  Those are close to being exact opposites.

Chavez and the Power of the State

Between 2002 and 2004 millions of Venezuelans signed petitions calling for a vote to remove Hugo Chavez from office.  Signatories were not anonymous and during the petition campaign Chavez supporters hinted darkly that there would be retaliation.  Chavez was in fact forced into a recall election, but unfortunately he won (not one of democracy's better moments).  After the election, the list of signatories was distributed to government agencies in an easy-to-use database.  The database included the names and addresses of all registered voters and whether they had signed an anti-Chavez petition.  Technology thus provided Chavez supporters the information they needed to retaliate.

Technology cuts both ways, however, and in a truly remarkable paper, Hsieh, Miguel, Ortega and Rodriguez match information in the petition database to another database on wages, employment and income.  What the authors find is shocking, albeit not surprising.  Before the recall election, petition signatories and non-signatories look alike.  After the election, the employment and wages of signatories drop considerably, about a 10% drop in wages relative to non-signatories.  Survey evidence conducted by the authors is consistent with retaliation by Chavez supporters especially in the form of job losses in the public sector.  The authors estimate that the retaliation was so widespread, many workers were pushed into informal employment, that the Venezuelan economy was significantly damaged.

This is original, important and actionable research.  Bravo to the authors, especially to Ortega who–as of this posting–has a job in Venezuela.

Advertising markets in everything

I wonder if this idea will last:

A new hot dog stand is being built on the West Side, and when it opens, the people behind the counter could be ex-convicts.

As CBS 2's Vince Gerasole reports, the restaurant is controversial, not because of the felons, but the two words on the outside of the building.

Felony Franks is Jim Andrews' new hot dog stand, currently under construction on a busy West Side corner, decorated with freshly painted wieners donning prison garb and a ball and chain, proclaiming "food so good it's criminal."

The full story is here and I thank John de Palma for the pointer.

One economist’s perspective on the law and economics movement

In this piece, from a CrookedTimber symposium, I stress that market-oriented economists are culturally and intellectually quite different from their counterparts in the legal side of academia:

One topic which interests me is how the “conservative” law and economics movement, as it is found in legal academia, differs from “market-oriented” economics, as it is found in the economics profession. The “right wing” economist and legal scholar will agree on many issues but you also will find fundamental variations in their temperament and political stances.

Market-oriented economists tend to be libertarian and it is rare that they have much respect for the U.S. Constitution beyond the pragmatic level. The common view is that while a constitution may be better than the alternatives, it is political incentives which really matter. James M. Buchanan’s program for a “constitutional economics” never quite took off and insofar as it did it has led to the analytic deconstruction of constitutions rather than their glorification. It isn’t hard to find libertarian economists who take “reductionist” views of constitutions and trumpet them loudly.

I also discuss my experiences teaching at GMU Law, why the law and economics movement grew so rapidly, and why the initially conservative nature of that movement is more or less over.  Read the whole thing.

Against torture prosecution

At many blogs (Sullivan, Yglesias, DeLong, among others) you will find ongoing arguments for prosecuting the torturers who ran our government for a while.  I am in agreement with the moral stance of these critics but I don't agree with their practical conclusions.  I believe that a full investigation would lead the U.S. public to, ultimately, side with torture, side with the torturers, and side against the prosecutors.  That's why we can't proceed and Obama probably understands that.  If another attack happened this would be all the more true.

On top of everything else, major Democrats in Congress are likely complicit and the Democrats as a whole hardly made this a campaign issue in 2004; in 2008 the economy was their winning issue, not torture.

One of the excellent students in my Law and Literature class wrote the following sentence in his final paper:

In some of the books, and almost all of the movies we have seen that the law goes as far as people are willing to support it.

That sad truth is another cost of the practice of torture.  The American public, now having affiliated itself with torture, will be reluctant to condemn torture for some time to come.  The "endowment effect" here seems to be strong.

An acquittal or mistrial would lose the chunk of world opinion that Obama has been winning back.  And a trial might prompt another terrorist attack, if only to force acquittal and make America look bad once again.

Pushing for prosecution would more likely endanger rule of law than preserve it, which is a sorry state of affairs.

Addendum: Here is more from Matt Yglesias.

I am puzzled by David Henderson’s request

David writes his request:

Same question I asked last time: Do you think that, say, 10 years from now, the regulations will have changed so that, instead of a No-fly list, there will be a May-fly list, so that the government will not allow people to fly unless they're on the list?

I am confused by the question.  Arguably foreigners are the biggest problem for any "No-fly" list.  There are so many of them, and they have so many unusual, overly common, or hard to transliterate names that we will never have a usable "May-fly" list of foreigners.  Just a badly designed "No-fly" list.  Given that is the case, it would be politically very difficult to apply an even tougher "May-fly" standard to U.S. citizens.

So I don't think the nature of the list will change, but perhaps I have not understood David's question.

The culture that is Swedish: a story of optimal tax enforcement

Via Geekpress.com:

Sweden's tax authorities are cracking down on unreported webcam stripper income.
They estimate that hundreds of Swedish women are dodging the law,
resulting in a tax loss of about 40m Swedish kronor (£3.3m) annually.

The
search involves tax officials examining stripper websites, hours upon
hours, for completely legitimate purposes. A slightly disheveled
project leader said 200 Swedish strippers had been investigated so far,
adding the total could be as much as 500. "They are young girls, we can
see from the photos. We think that perhaps they are not well informed
about the rules," he said.

Here is the cited link.  Here is one story.

Illegal immigration and crime

This is from only one county, but I found these numbers (check out the table) instructive:

About 2 percent of the people charged with major violent crimes in
Prince William County last year were illegal immigrants, but they were
arrested for a larger portion of secondary offenses, according to newly
released statistics and a Washington Post analysis that offer the first
comprehensive look at criminal activity since the county implemented
its controversial anti-illegal immigration measures.

The crime of prostitution has the highest percentage of illegal immigrants as arrestees, namely 21.4 percent.  If you are wondering, the new county procedure is to check the immigration status of everyone taken into custody. A few points:

1. Immigration has worked much better in northern Virginia than in many other parts of the country, most of all southern California.  The number will not be this low in many other locales.

2. I don't have a number for the percentage of illegal immigrants in Prince William County, but I believe there are many, albeit a falling number.

3. I am not convinced by the argument that illegal immigrants will try "especially hard" not to get caught, because they are illegal immigrants and do not wish to be deported.  This argument has been used to suggest that two percent is an underestimate.

4. When all is said and done, two percent is a fairly low number.

A Bayesian approach to legal gay marriage

Ezra had this good bit:

Due to D.C.'s strange system of governance, the District's laws are
subject to approval by Congress. If D.C. passes a gay marriage
ordinance, the House Committee on Oversight and Government Reform and
the subcommittee that handles District matters will have to either
reject D.C.'s decision or accept it. If they reject it, the outrage
from gay donors and activist groups will be overwhelming. If they
approve it, even on federalist grounds, the Right will argue that
Congress has literally approved gay marriage.

The interesting question is why there is so much opposition to legal gay marriage (which I favor).  You can cite various evil opponents and their evil motives, but there are many good people who aren't all that enthusiastic about the idea.

Jennifer Roback Morse offers the argument that gay marriage requires ongoing statist intervention (as does the notion of a corporation) and will drive the Mennonites from Quebec.

I have a simple hypothesis about the cross-sectional econometrics.  If you take the heterosexual couples who engage in the practice which is sometimes "associated" with male gay marriage, I predict those couples will favor legal gay marriage to an astonishingly high degree.  Their marriage is already "affiliated" with that practice, and so the notion of legally married gay men (and the practices which go along with that) does not constitute an extra and unwanted affiliation for their marriage ideal.

Now, if you are a rational heterosexual Bayesian and neither engage in that associated practice nor favor legal gay marriage, and then you learn about these cross-sectional econometrics, what should you infer about the correctness of your point of view?

If you're still not sure, reread Gulliver's Travels and get back to me.

Addendum: Comment 51 is apparently from Roissy.

The Taiwanese war against tax evasion

This passage reminded me of the Greg Mankiw student who wanted to boost spending through destruct-lotteries on dollar bills.  But this is a way to encourage tax reporting:

It seems tax evasion was a problem for the government in a country
where credit cards are not widely accepted and small business transacts
most business.  The government hit upon the idea of a sales lottery
rather than a sales tax.  Every sales receipt has a lottery number
printed on its back.  Once a month, the government publishes several
newspaper pages of winning numbers.  You can win anywhere between $5
and about $200 if you have a lucky sales receipt.

The government’s theory was everybody would demand a sales receipt
if they had a chance of winning a lottery.  You play anytime you make a
purchase; no matter how small a purchase.  The result is, as the island
has become more prosperous, most people don’t want to bother with
combing through thousands of lucky numbers in a newspaper once a month
to maybe win $5.  Charities stepped in.  Along many streets you see
clear plastic canisters promoting various charitable causes soliciting
your sales receipts.  Retired volunteers go over the numbers on
receipts collected.  It gives non profits a source of funding and gives
old people a steady way to contribute without hard physical labor.  The
Yngge Ceramics Museum I visited last Saturday collected sales receipts
instead of charging admission.  If you were without a sales receipt
(unlikely in this country) you could run across the street to 7-11 and
buy a piece of candy for pennies and come back with a sales receipt.

Here is the full story and thanks to Joel Cretan for the pointer.  Read the whole post, it makes many other interesting points about Taiwan.

Tax information for Parents of Kidnapped Children

Topic 357 – Tax Information for Parents of Kidnapped Children

You may claim a kidnapped child as your dependent if the following requirements
are met:

  1. The child must be presumed by law enforcement to have been kidnapped by
    someone who is not a member of your family or a member of the child's family,
    and
  2. The child had, for the taxable year in which the kidnapping occurred,
    the same principal place of abode as the taxpayer for more than one-half of
    the portion of such year before the date of kidnapping.
If both of these requirements are met, the child may meet the requirements
for purposes of determining:
  • The dependency exemption
  • The child tax credit, and
  • Head of household or qualifying widow(er) with dependent child filing
    status.

This tax treatment will cease to apply as of your first tax year beginning
after the calendar year in which either there is a determination that the
child is dead or the child would have reached age 18, whichever occurs first. 

For more information, refer to Publication 501, Exemptions, Standard
Deduction, and Filing Information.

I thank The Browser for the pointer.