Category: Law
How different are Trump judges?
Donald J. Trump’s presidency broke the mold in many ways, including how to think about judicial appointments. Unlike other recent presidents, Trump was open about how “his” judges could be depended on to rule in particular ways on key issues important to voters he was courting (e.g., on issues such as guns, religion, and abortion). Other factors such as age and personal loyalty to Trump seemed important criteria. With selection criteria such as these, one might expect that Trump would select from a smaller pool of candidates than other presidents. Given the smaller pool and deviation from traditional norms of picking “good” judges, we were curious about how the Trump judges performed on a basic set of measures of judging. One prediction is that Trumpian constraints on judicial selection produced a different set of judges. Specifically, one that would underperform compared to sets of judges appointed by other presidents. Using data on active federal appeals court judges from January 1, 2020 to June 30, 2023, we examine data on judges across three different measures: opinion production, influence (measured by citations), and independence or what we refer to as “maverick” behavior. Contrary to the prediction of underperformance, Trump judges outperform other judges, with the very top rankings of judges predominantly filled by Trump judges.
That new paper is by Stephen J. Choi and Mitu Gulati, who seem to be academic “normies” (NYU and UVA, respectively), not MAGAland crazies.
Via the excellent Kevin Lewis.
There are not 13,099 Illegal Immigrant Murderers Roaming Free on American Streets
Migrants incarcerated for homicide are considered “non-detained” by ICE when they are in state or federal prisons. When ICE uses the term “non-detained,” they mean not currently detained by ICE. In other words, the migrant murderers included in the letter are overwhelmingly in prison serving their sentences. After they serve their sentences, the government transfers them onto ICE’s docket for removal from the United States.
And that is only part of the mistake in the numbers you may have heard. Here is more from Alex Nowrasteh:
The third untrue claim is that these 13,099 migrants convicted of homicide committed their crimes recently. Those migrant criminal convictions go back over 40 years or more. Confusion over the period covered by a dataset afflicts the interpretation of other criminal datasets too. If there really were 13,099 migrants convicted for domestic homicides in 2023, then they would have accounted for about 99 percent of all homicide convictions in the U.S. last year despite being about 4 percent of the population. That is obviously not the case because no group of people is criminally overrepresented by a factor of 25 above their share of the population. Even when the 13,099 homicide convictions of migrants are spread out over the entire Biden administration, migrants would have accounted for about one-third of all homicide convictions from 2021 through 2023. That’s obviously not true. The problem comes from erroneously increasing the numerator (the number of homicide convictions) for a single year and decreasing the denominator (the total number of homicide convictions in just one year) rather than spreading out the convictions and the total number of all murders over a 40-plus year period.
As a side observation:
Here is the whole essay. Tweetstorm here. Via Naveen.
Newsom vetoes AI bill
California Gov. Gavin Newsom has vetoed a controversial artificial-intelligence safety bill that pitted some of the biggest tech companies against prominent scientists who developed the technology.
The Democrat decided to reject the measure because it applies only to the biggest and most expensive AI models and leaves others unregulated, according to a person with knowledge of his thinking. Smaller models could prove just as problematic, and Newsom would prefer a regulatory framework that encompasses them all, the person added.
Had Newsom signed the bill into law, it would have laid the groundwork for how AI is regulated across the U.S., as California is home to the top companies in the industry. Proposals to regulate AI nationally have made little progress in Washington.
The governor is hoping to work with AI researchers and other experts on new legislation next year that could tackle in a more comprehensive way the same concerns of the bill he vetoed—about AI acting in ways its designers didn’t intend and causing economic or societal damage, the person with knowledge of his thinking said.
Here is more from the WSJ.
*Emancipation*
The author is Peter Kolchin, and the subtitle is The Abolition and Aftermath of American Slavery and Russian Serfdom. Here is one interesting excerpt of many:
Despite the surge in schools and teachers after 1880, Russian peasant children were considerably less likely to receive schooling than were African American children, especially if they were girls. As the statement about not needing literacy in order to make cabbage soup indicated, the subordination of females that characterized Russian society in general was as evident in peasant education as in any other sphere of life. Statistics on school attendance by sex indicates that, in contrast to former slaves in the Southern United States, for whom serfs in Russia rarely sent their daughters to school during the 1860s and 1870s, regarding it as a waste of time that would fill their heads with needless knowledge and make them less fit for their feminine duties. The evidence is consistent and overwhelming. Among African Americans in the Southern United States, girls were at least as likely as boys to attend school: the Freedmen’s Bureau Consolidated Monthly School Report for June 1867, for example, listed 45,855 male and 52,981 female pupils in the schools that it monitored throughout the South; in almost every state, female pupils outnumbered male pupils and there were slightly more males than females. The decennial census returns showed a similar pattern between 1870 and 1910: school enrollment rates in the United States for Black children aged five to nineteen (the great majority of whom lived in the South) were fairly evenly balanced between the sexes, with female rates slightly higher than male in four of the five census years. (The male rate was slightly higher than the female in 1880.)
You can buy the book here.
Nixon’s ten percent import duty
That is the topic of my latest Bloomberg column, with a big assist from Doug Irwin. Here is one excerpt:
In 1971, President Richard Nixon imposed a 10% tax on foreign goods brought into the US, and kept it in place for four months. The best that can be said about this experience, well-documented by Dartmouth economist Douglas A. Irwin in a 2012 essay, is that the US economy survived it.
That is hardly good news, but it is a partial comfort. At the time, Republican officials were demanding an end to undervalued foreign currencies, better trade treatment of US exports and more spending on defense by US allies. (Sound familiar?) After this rhetoric and policy, however, came an era of trade liberalization. The costs of protection and the incentives for freer trade simply proved too strong, and subsequent presidents of both parties oversaw tariff reductions.
In 1971, Nixon’s key demand was specific: Countries had to let their currencies float upward against the US dollar. The goal was to weaken the dollar in relative terms and thus help US exports.
And these key points:
After imposing the tariff, and much negotiation, the US did receive something concrete in return: More countries allowed their currencies to float against the dollar — notably the yen, the mark and the franc. Those moves then led to a broader collapse of the Bretton Woods fixed exchange rate system, and accelerated the arrival of floating exchange rates with the Smithsonian agreement of December 1971.
Trump has no equivalent concrete demands for US trading partners. Nixon’s demand to let the exchange rates float was something that could happen immediately and was fully transparent. And it was virtually impossible to reverse. Once it happened, the US could remove the import duty. The other demands of the time — better treatment of US exports and more burden-sharing for defense — went largely unheeded, as it is much harder to negotiate over such long-term and hard-to-define changes.
Recommended.
Crime vs. disorder
A similar pattern emerged in my recent report on crime in Washington, D.C. There, too, there are signs that disorder has risen, relative to both the pandemic and pre-pandemic, as the police have attended to it less. Unsheltered homelessness, unsanitary conditions, shoplifting, farebeating—all seem to have become more common in D.C. And those problems have come as a smaller police force has deprioritized order enforcement—if you look at table 2 of that report, you’ll see that arrests for minor crimes were down as much as 99% in 2023 relative to 2019.
I increasingly think this is a more general phenomenon. Disorder is not measured like crime—there is no system for aggregating measures of disorder across cities. But if you look for the signs, they are there. Retail theft, though hard to measure, has grown bad enough that major retailers now lock up their wares in many cities. The unsheltered homeless population has risen sharply. People seem to be controlling their dogs less. Road deaths have risen, even as vehicle miles driven declined, suggesting people are driving more irresponsibly. Public drug use in cities from San Francisco to Philadelphia has gotten bad enough to prompt crack-downs.
These are fuzzy signals, but they jive with my personal experience (for whatever that is worth). In the half-dozen cities I’ve visited in the past year, visible disorder has been a common feature.
Here is more from Charles Fain Lehman.
Why “Buy American” is not such a great idea
That is the topic of my latest Bloomberg column, here is one excerpt:
Then there is the money. European and South Korean infrastructure companies, for example, tend to be much less expensive than US firms. The Buy American Act often prevents them from bidding on US contracts. And when the federal government is spending more on contracts for US suppliers, it has less money to invest elsewhere.
And:
Under current law, as has been supported by the administrations of both Donald Trump and Joe Biden, the domestic-content requirement is slated to rise to 75% in 2029. That is likely to raise the cost of Buy American provisions even more, especially in a world where more countries are entering the market as cost-effective producers. Furthermore, the higher that percentage, the more likely it is that the US is protecting sectors that spend their money on capital goods, rather than on US labor. Job creation or job protection is likely to dwindle accordingly. In the future, use of the program may cost between $154,000 and $237,000 per job.
The column draws on this NBER working paper by
The Value of De Minimis Imports
Section 321 of the 1930 Tariff Act allows up to $800 in imports per person per day to enter the US duty-free and with minimal customs requirements. Fueled by rising direct-to-consumer trade, these “de minimis” shipments have exploded yet are not recorded in Census trade data. Who benefits from this type of trade, and what are the policy implications? We analyze international shipment data, including de minimisshipments, fromthreeglobalcarriers andUS Customs and Border Protection. Lower-income zip codes are more likely to import de minimis shipments, particularly from China, suggesting that the tariff and administrative fee incidence in direct-to-consumer trade is pro-poor. Theoretically, imposing tariffs above a threshold leads to terms-of-trade gains through bunching, even in a setting with complete pass-through to linear tariffs. Empirically, bunching pins down the demand elasticity for direct shipments. Eliminating §321 would reduce aggregate welfare by $11.8-$14.3 billion and disproportionately hurt lower-income and minority consumers.
That is from a recent paper by Pablo Fajgelbaum and Amit Khandelwal.
IP and unrealized capital gains (from my email)
I was thinking about the unrealized cap gains tax after Taylor Swift’s endorsement today and I think I see a new problem distinct from those you and Alex have raised so far. Maybe someone else has pointed this out, but I figured I’d write out the logic and see what you think.
I think there is a big problem of unrealized capital gains in terms of IP.
Much IP is monetized via licenses and royalties that have long term perpetuity like payments that could go up or down based on other market conditions which would directly affect the value of the asset for more than the income growth from the asset.
An example by way of Taylor Swift:
She is expected to make 200M+ off the streaming of her music.
Her music rights would likely be considered an asset. These music rights would likely be valued as a perpetuity or cash flows/ discount rate. Perplexity reported a range of 5-10% as common in the entertainment business meaning Taylor’s current streaming rights are currently worth between 2B and 4B. (200M/.1 and 200M/.05).
If Spotify/Youtube get better at selling ads and increase their reimbursement rate by 10% then Taylor would receive 220M next year and song collection would grow to be worth between 2.2B and 4.4B for an unrealized gain of 200M to 400M.
Taylor would owe 25% tax on this gain or between 50-100M which would be greater than her additional earnings of 20M.
What makes this doubly ironic is, would the federal government force Taylor to sell the rights to her music to pay the cap gains tax?
One thing I forgot to mention is what share of patents in the medical field + copywriters have that sort of payment structure? Where they get a license for a certain future amount of payments. If the stream of payments increases what happens to the unrealized capital gains tax?
There was that baseball player that got paid with that comically large future contract. Is that an asset too?
From Stephen Jonesyoung.
Facts about Britain
- Between 2004 and 2021, before Russia’s invasion of Ukraine, the industrial price of energy tripled in nominal terms, or doubled relative to consumer prices.
- With almost identical population sizes, the UK has under 30 million homes, while France has around 37 million. 800,000 British families have second homes compared to 3.4 million French families.
- Per capita electricity generation in the UK is just two thirds of what it is in France (4,800 kilowatt-hours per year in Britain versus 7,300 kilowatt-hours per year in France) and barely over a third of what it is in the United States (12,672 kilowatt-hours per year). We are closer to developing countries like Brazil and South Africa in terms of per capita electricity output than we are to Germany, China, Japan, Sweden, or Canada.
- Britain’s last nuclear power plant was built between 1987 and 1995. Its next one, Hinkley Point C, is between four and six times more costly per megawatt of capacity than South Korean nuclear power plants, and four times as expensive as those that South Korea’s KEPCO has agreed to build in Czechia.
- Tram projects in Britain are two and a half times more expensive than French projects on a per mile basis. In the last 25 years, France has built 21 tramways in different cities, including cities with populations of just 150,000, equivalent to Lincoln or Carlisle. The UK has still not managed to build a tramway in Leeds, the largest city in Europe without mass transit, with a population of nearly 800,000.
- At £396 million, each mile of HS2 will cost more than four times more than each mile of the Naples to Bari high speed line. It will be more than eight times more expensive per mile than France’s high speed link between Tours and Bordeaux.
- Britain has not built a new reservoir since 1992. Since then, Britain’s population has grown by 10 million.
- Despite huge and rising demand, Heathrow annual flight numbers have been almost completely flat since 2000. Annual passenger numbers have risen by 10 million because planes have become larger, but this still compares poorly to the 22 million added at Amsterdam’s Schiphol and the 15 million added at Paris’s Charles de Gaulle. The right to take off and land at Heathrow once per week is worth tens of millions of pounds.
- The planning documentation for the Lower Thames Crossing, a proposed tunnel under the Thames connecting Kent and Essex, runs to 360,000 pages, and the application process alone has cost £297 million. That is more than twice as much as it cost in Norway to actually build the longest road tunnel in the world.
That is from the new study of British stagnation by Ben Southwood, Samuel Hughes, and Sam Bowman.
The US Has Low Prices for Most Prescription Drugs
The US has high prices for branded drugs but it has some of the lowest prices for generic drugs in the world and generic drugs are 90% of prescriptions. I’ve been saying this for years but here is the latest study:
U.S. prices for brand-name originator drugs were 422 percent of prices in comparison countries, while U.S. unbranded generics, which we found account for 90 percent of U.S. prescription volume, were on average cheaper at 67 percent of prices in comparison countries, where on average only 41 percent of prescription volume is for unbranded generics. U.S. prices for brand-name drugs remained 308 percent of prices in other countries even after adjustments to account for rebates paid by drug companies to U.S. payers and their pharmacy benefit managers.
Branded drugs are expensive but that is why we have insurance which works reasonably well, albeit far from perfectly. For example, insurance and the low price of generics is one reason that out-of-pocket costs for medical are low in the United States.
If you don’t want to pay high prices for branded drugs just use generics! As I wrote 20 years ago, in what was called a heartless and cruel post:
People talk about the high price of pharmaceuticals as if high prices lasted forever. In fact, within a year of the expiration of a pharmaceutical’s patents, prices will typically fall by more than 50 percent as generic producers enter the market. Patents nominally last for 20 years but the effective patent life is much lower because patents are typically granted years before a product has cleared FDA review. The effective patent life of the average new pharmaceutical in the 1990s averaged just 12 years [new reference for today, 13.5 years, AT]. Competition from competing but non-infringing pharmaceuticals makes the de facto patent life even shorter.
Thus, my response to the seniors and others clamoring for lower pharmaceutical prices is to be more patient. Does this sound harsh? Consider this, the people who are demanding price controls are not simply asking for lower drug prices they are asking for lower prices on the newest drugs. Lower prices for drugs introduced 15 years ago are already here. Remember, those drugs were recently considered the very best modern medicine has to offer, so it’s not like I am expecting those who can’t afford the newer medicines to go back to using leeches.
Price controls or other such plans such as reimportation may bring cheaper pharmaceuticals for a short period but we will then have a much smaller supply of new drugs forever. Only the shortsighted would buy that prescription.
Don’t fail the marshmallow test people!
People get upset when I say just use generics–shouldn’t everyone have access to the very best pharmaceuticals! Yes! But that illustrates another point–these drugs are worth the price!
Hat tip: Steve.
Scholars in support of the Moraes Brazil decision against X
Here is the link, in Portuguese, here is part of a Claude translation:
We, the undersigned, wish to express our deep concern about the ongoing attacks by Big Tech companies and their allies against Brazil’s digital sovereignty. The Brazilian judiciary’s dispute with Elon Musk is just the latest example of a broader effort to restrict the ability of sovereign nations to define a digital development agenda free from the control of mega-corporations based in the United States. At the end of August, the Brazilian Supreme Federal Court banned the X platform from Brazilian cyberspace for failing to comply with court decisions that required the suspension of accounts that instigated right-wing extremists to participate in riots and occupy the Legislative, Judicial, and Governmental palaces on January 8, 2023. Subsequently, President Lula da Silva made clear the Brazilian government’s intention to seek digital independence: to reduce the country’s dependence on foreign entities for data, AI capabilities, and digital infrastructure, as well as to promote the development of local technological ecosystems. In line with these objectives, the Brazilian state also intends to force Big Tech to pay fair taxes, comply with local laws, and be held accountable for the social externalities of their business models, which often promote violence and inequality.
These efforts have been met with attacks from the owner of X and right-wing leaders who complain about democracy and freedom of expression. But precisely because digital space lacks internationally and democratically decided regulatory agreements, large technology companies operate as rulers, deciding what should be moderated and what should be promoted on their platforms. Moreover, the X platform and other companies have begun to organize, along with their allies inside and outside the country, to undermine initiatives aimed at Brazil’s technological autonomy. More than a warning to Brazil, their actions send a worrying message to the world: that democratic countries seeking independence from Big Tech domination risk suffering disruptions to their democracies, with some Big Tech companies supporting far-right movements and parties.
The Brazilian case has become the main front in the evolving global conflict between digital corporations and those seeking to build a democratic and people-centered digital landscape focused on social and economic development. Technology companies not only control the digital world, but also lobby and operate against the public sector’s ability to create and maintain an independent digital agenda based on local values, needs, and aspirations. When their financial interests are at stake, they work happily with authoritarian governments. What we need is sufficient digital space for states to direct technologies by putting people and the planet ahead of private profits or unilateral state control.
All those who defend democratic values must support Brazil in its quest for digital sovereignty. We demand that Big Tech cease their attempts to sabotage Brazil’s initiatives aimed at building independent capabilities in artificial intelligence, public digital infrastructure, data governance, and cloud services. These attacks undermine not only the rights of Brazilian citizens but the broader aspirations of all democratic nations to achieve technological sovereignty. We also call on the Brazilian government to be firm in implementing its digital agenda and to denounce the pressures against it. The UN system and governments around the world should support these efforts.
Signed by Acemoglu, Zucman, Varoufakis, Cory Doctorow, Morozov, Mazzucato, Piketty, and many others. Somehow no one is talking about this petition and its embrace of censorship?
Via Pedro. And you will find some media coverage in Portuguese here.
Mexico political challenge of the day
When Mexicans arrive at voting booths next year to elect their judges for the first time, they face a unique and daunting task.
In the capital Mexico City, voters will have to choose judges for more than 150 positions, including on the Supreme Court, from a list of 1,000 candidates that most people have never heard of. For each of the 150 posts, space will be allotted for voters to write out individually the names of up to 10 preferred candidates.
Without makeshift solutions such as dividing up the judges into subdistricts, it could take 45 minutes just to fill in the ballot papers, one analyst estimated. Even with such fixes, voters will still have to choose from many dozens of unfamiliar names.
“It’s impossible,” said Jaime Olaiz-González, a constitutional theory professor at Mexico’s Universidad Panamericana. “In no country, not even the most backward, have they proposed a system like this.” The vote will be the culmination of a drive by the country’s leftwing nationalist president, Andrés Manuel López Obrador, to radically overhaul a branch of the state that has frequently angered him by blocking his plans.
Here is more from Christine Murray from the FT. Garett Jones…telephone!
The Economic Consequences of the French Wealth Tax
By Eric Pichet, here is the abstract:
Despite attempts to ‘unwind’ the Impôt de Solidarité sur la Fortune (‘Solidarity Wealth Tax,’ the French wealth tax) during the last legislature (2002-2007), ISF yields had soared by 2006, jumping from €2.5 billion in 2002 to €3.6 billion. Analysis of the economic consequences of this ISF wealth tax has raised the following conclusions: Tax collection costs remain low (around 1.6% of proceeds); Not raising the threshold in line with inflation between 1998 and 2004 created windfall revenues for the French State of €400 million in FY 2004 alone; ISF fraud mainly involving an under-assessment of property assets has stabilised over time at around 28% of total revenues, equivalent; (had the legal framework remained unchanged) to a shortfall for the State of €700 million in 2004; Capital flight since the ISF wealth tax’s creation in 1988 amounts to ca. €200 billion; The ISF causes an annual fiscal shortfall of €7 billion, or about twice what it yields; The ISF wealth tax has probably reduced GDP growth by 0.2% per annum, or around 3.5 billion (roughly the same as it yields); In an open world, the ISF wealth tax impoverishes France, shifting the tax burden from wealthy taxpayers leaving the country onto other taxpayers.
Via Fredrik. I would describe this work as a very loose estimate, nonetheless pointing in the proper direction.
Are “anchor babies” underrated?
Did you worry about the 2020 fall in U.S. fertility? Well, ponder this:
Birth rates in Canada and the USA declined sharply in March 2020 and deviated from historical trends. This decline was absent in similarly developed European countries. We argue that the selective decline was driven by incoming individuals, who would have travelled from abroad and given birth in Canada and the USA, had there been no travel restrictions during the COVID-19 pandemic. Furthermore, by leveraging data from periods before and during the COVID-19 travel restrictions, we quantified the extent of births by incoming individuals. In an interrupted time series analysis, the expected number of such births in Canada was 970 per month (95% CI: 710-1,200), which is 3.2% of all births in the country. The corresponding estimate for the USA was 6,700 per month (95% CI: 3,400-10,000), which is 2.2% of all births. A secondary difference-in-differences analysis gave similar estimates at 2.8% and 3.4% for Canada and the USA, respectively. Our study reveals the extent of births by recent international arrivals, which hitherto has been unknown and infeasible to study.
That is from a new paper by Amit N. Sawant and Mats J. Stensrud, via the excellent Kevin Lewis.