Category: Law

Which of these claims is false?

The Democratic-controlled House just voted to abolish the “Cadillac tax” on employer-supplied health plans.

The Independent Payments Advisory Board no longer exists, having been abolished with support from both parties.

In the public option for Democratic-controlled Washington State, reimbursement rates were set at up to 160 percent of Medicare levels.

Single-payer health care will save America a great amount of money.

What is the America-China trade war all about?

That is the subject of my latest Bloomberg column, and here are the closing bits:

So that means the trade war is really all about Huawei and Taiwan. If the U.S. persists in trying to eliminate Huawei as a major company, by cutting off its American-supplied inputs and intimidating foreign customers and suppliers for Huawei equipment, it will be difficult for the Chinese to accept. In this case, the reluctance to make a deal will be on the Chinese side, and the structure and relative power of the various American interest groups are not essential to understanding the outcome.

The question, then, is whether the U.S. national security establishment, and in turn Congress (which has been heavily influenced on this question), will accept a compromise on Huawei. Maybe that means no Huawei communications technologies for the U.S. and its closest intelligence-sharing allies, but otherwise no war against the company. That is the first critical question to watch in the unfolding of this trade war. The answer is not yet known, though it seems Trump is willing to deal.

The second major question, equally important but less commented upon, is Taiwan. China has long professed a desire to reunite Taiwan with the mainland, using force if necessary. If you belong to the U.S. national security establishment, and you think a confrontation with China is necessary sooner or later, if only because of Taiwan, you would prefer sooner, before China gains in relative strength. And that militates in favor of the trade war continuing and possibly even escalating, as the U.S. continues to push against China and there is simply no bargain to be had.

It is far from clear what a U.S.-China deal over the status of Taiwan could look like. How much Americans actually care about Taiwan is debatable, but the U.S. is unlikely to abandon a commitment that would weaken its value as an ally around the world. And unlike with Huawei, it is difficult to see what a de-escalation of this issue might look like.

So: If the Huawei and Taiwan questions can be resolved, then the trade war should be eminently manageable. Now, does that make you optimistic or pessimistic?

There is much more at the link.

India’s Tallest Building Cut Down To Size

The FT writes about the bust in India’s construction sector:

It was meant to be the tallest building in India, with luxury flats, a swimming pool and cinema where billionaires and Bollywood stars could enjoy a life of perfect splendour looking down over the Mumbai skyline.

But the Palais Royale complex now sits unfinished alongside other partially built structures tangled in the megacity’s traffic-choked downtown streets, an apt symbol of a crisis that threatens a key part of India’s financial system.

Part of the problem is cyclic, a shadow banking system that overextended credit and is now having to deleverage. India’s construction sector, however, is also plagued by systematic issues including the fact that major construction projects are invariably sued and thus become entangled with India’s notoriously slow legal system. Drawing on a Brookings India working paper by Gandhi, Tandel, Tabarrok and Ravi the FT notes:

But progress was soon slowed by legal challenges over allegedly unauthorised features, sparking a series of delays….However grand the planned building, Palais Royale’s woes fit a familiar pattern: 30 per cent of real estate projects and half of all built-up space in Mumbai is under litigation, according to a 2019 Brookings India report, with projects taking an average of eight and a half years to complete.

The health care public option in Washington state

This excellent Sarah Kliff NYT article is from a few weeks ago, but I missed it the first time around.  Here is the clincher:

“The whole debate was about the rate mechanism,” said Mr. Frockt, the state senator. “With the original bill, with Medicare rates [for the state’s public option], there was strong opposition from all quarters. The insurers, the hospitals, the doctors, everybody.”

Mr. Frockt and his colleagues ultimately raised the fees for the public option up to 160 percent of Medicare rates.

“I don’t think the bill would have passed at Medicare rates,” Mr. Frockt said. “I think having the Medicare-plus rates was crucial to getting the final few votes.”

Nonetheless the piece is interesting throughout, and illustrates some basic dilemmas with health care reform and public options in particular, especially when a sector is controlled by powerful lobbies.

Does Taiwan have the weirdest politics in the world?

That is the topic of my Bloomberg column earlier in the week, here is one excerpt:

Chiang Kai-shek, the first leader of the island, was part of a generation of Asian visionary leaders which is perhaps without parallel. It includes Lee Kuan Yew of Singapore, Park Chung-Hee in South Korea, Mao Zedong and Deng Xiaoping in China, and Ho Chi Minh in Vietnam. Whether you admire these figures or not, theirs  was an unparalleled time for nation building and at a much swifter pace than in European history.

And there is no successful polity that has so many apparently insoluble problems:

Taiwan is also inextricably linked to the economy of the mainland. By one estimate, over 10% of the Taiwanese population lives or works in mainland China, including many of the most ambitious Taiwanese, and China is by far the number one counterparty for trade and investment. Taiwanese real wages stagnated from 2000-2016, in large part because it was more profitable for Taiwanese investors to send their capital to the mainland. The Taiwanese birth rate has plummeted to 1.2 per woman, possibly the lowest in the world.

The Chinese also wish to take them over, by the way.  Finally, I close with some remarks on the forthcoming election.

There is no great stagnation in policing nature through the use of AI-regulated cat flaps

A cat flap that automatically bars entry to a pet if it tries to enter with prey in its jaws has been built as a DIY project by an Amazon employee.

Ben Hamm used machine-learning software to train a system to recognise when his cat Metric was approaching with a rodent or bird in its mouth.

When it detected such an attack, he said, a computer attached to the flap’s lock triggered a 15-minute shut-out.

Mr Hamm unveiled his invention at an event in Seattle last month.

Here is the full story, via Michelle Dawson.

The collected schizophrenias

There’s a line that reads, ‘Rarely did I experience such a radical and visceral imbalance of power as I did as a psychiatric inpatient amid clinicians who knew me only as an illness in human form.’ What was that like? 

When you’re in an inpatient situation in a psychiatric hospital, you lack autonomy in a way that I have experienced in few other situations. You’re not allowed to have a lot of things, especially things that are of comfort. You’re not allowed to have them because they’re dangerous, sure — like shoelaces — but you’re also not allowed to have them because they don’t want you to be distracted by them, such as phones or laptops or iPads. So you’re made to follow their schedule.

You’re also not allowed to know how long this deprivation is going to last.

That’s part of the reason the patients are so eager to talk to the doctor every day, because the doctor is the only person who can who can sign off on you getting out. But sometimes the whole day passes and you have not gotten to talk to the doctor. In the meantime, you’re expected to behave in certain ways that are seen as appropriate — like a group activity like colouring, or like making paper snowmen. You can’t be pouty about it. Otherwise that’s a check against you, and will get you further away from being checked out. So you have to be smiley about it, even though you’re a 36-year-old adult and you’re expected to make glitter snowmen.

That is from Esmé Weijun Wang, with more points of interest at the link, via Lama and also Michelle Dawson.

Economists study busing

This paper dates from 2012, but it is one of the best looks at what we know about busing, based on rigorous analysis of data, combined with natural experiments:

We study the impact of the end of race-based busing in Charlotte-Mecklenburg schools (“CMS”) on academic achievement, educational attainment, and young adult crime. In 2001, CMS was prohibited from using race in assigning students to schools. School boundaries were redrawn dramatically to reflect the surrounding neighborhoods, and half of its students received a new assignment. Using addresses measured prior to the policy change, we compare students in the same neighborhood that lived on opposite sides of a newly drawn boundary. We find that both white and minority students score lower on high school exams when they are assigned to schools with more minority students. We also find decreases in high school graduation and four-year college attendance for whites, and large increases in crime for minority males. The impacts on achievement and attainment are smaller in younger cohorts, while the impact on crime remains large and persistent for at least nine years after the re-zoning. We show that compensatory resource allocation policies in CMS likely played an important role in mitigating the impact of segregation on achievement and attainment, but had no impact on crime. We conclude that the end of busing widened racial inequality, despite efforts by CMS to mitigate the impact of increases in segregation.

That is from Stephen B. Billings, David J. Deming, and Jonah E. Rockoff.

The real privacy violators

Agents with the Federal Bureau of Investigation and Immigration and Customs Enforcement have turned state driver’s license databases into a facial-recognition gold mine, scanning through millions of Americans’ photos without their knowledge or consent, newly released documents show.

Thousands of facial-recognition requests, internal documents and emails over the past five years, obtained through public-records requests by Georgetown Law researchers and provided to The Washington Post, reveal that federal investigators have turned state departments of motor vehicles databases into the bedrock of an unprecedented surveillance infrastructure.

Police have long had access to fingerprints, DNA and other “biometric data” taken from criminal suspects. But the DMV records contain the photos of a vast majority of a state’s residents, most of whom have never been charged with a crime.

Here is the full story by Drew Harwell.

Should the citizenship question be put on the Census?

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

Unlike many of those who push for the question, I would like to boost the flow of legal immigration by a factor or two or three. Nonetheless, are we supposed to let foreigners in (which I favor), and give them a rapid path to citizenship (which I also favor), but somehow we are not allowed to ask them if they are citizens? To me this boggles the mind.

The real point is that the Democratic Party has talked itself into an untenable and indeed politically losing rhetorical stance on immigration (did you watch the debates? decriminalize illegal migration? health care benefits for illegal immigrants?), and the Census battle is another example of that.  It is no surprise that Trump wishes to keep it alive as a political issue:

Do you really wish for your view to be so closely affiliated with the attitude that citizenship is a thing to hide? I would be embarrassed if my own political strategy implied that I take a firm view — backed by strong moralizing — that we not ask individuals about their citizenship on the Census form. I would think somehow I was, if only in the longer run, making a huge political blunder to so rest the fate of my party on insisting on not asking people about their citizenship.

Not asking about citizenship seems to signify an attitude toward immigrants something like this: Get them in and across the border, their status may be mixed and their existence may be furtive, and let’s not talk too openly about what is going on, and later we will try to get all of them citizenship. Given the current disagreement between the two parties on immigration questions, that may well be the only way of getting more immigrants into the U.S., which I hold to be a desirable goal. But that is a dangerous choice of political turf, and it may not help the pro-immigration cause in the longer run.

Finally:

Countries that do let in especially high percentages of legal immigrants, such as Canada and Australia, take pretty tough stances in controlling their borders. Both of those countries ask about citizenship on their censuses. When citizens feel in control of the process, they may be more generous in terms of opening the border.

If you can’t ask about citizenship on your census, as indeed Canada and Australia do, it is a sign that your broader approach to immigration is broken.  I know this is a hard one to back out of, but if your response is to attack the motives of the Republicans, or simply reiterate the technocratic value of a more accurate Census, it is a sign of not yet being “woke” on this issue.  America desperately needs more legal immigration.

Should we ban bicycles in major urban areas?

“New Yorkers on bikes are being killed at an alarming rate,” said Marco Conner, the interim co-executive director of Transportation Alternatives, an advocacy group.

Across the city, 14 cyclists have been killed in crashes this year, four more than all of last year, according to city officials. New York’s streets have seen an increase in bicycling while also becoming more perilous, in part because of surging truck traffic fueled by the booming e-commerce industry.

The mayor himself acknowledged on Monday that the city was facing an “emergency.”

That is from the New York Times, you will find more detail, and some further points of interest, at the link.

Would urban bicycling pass an FDA test of “safe and effective”?  Furthermore, as a driver and pedestrian I observe cyclists breaking the law — most of all running red lights — at an alarming rate.  And surely we all believe in the rule of law, so why should we allow technologies that seem so closely tethered to massive law-breaking?

I do get that bicycles are driven by cool people who are fighting climate change.  Nonetheless, what if self-driving vehicles were connected to fourteen deaths in NYC alone?  How would we treat them?  Alternatively, what if Facebook owned all of those bicycles?

A long harangue about how the car and truck drivers really were at fault will fail to pass the Coasean symmetric externalities test.

Why is the United States behind on 5G?

No American company makes the devices that transmit high-speed wireless signals. Huawei is the clear leader in the field; the Swedish company Ericsson is a distant second; and the Finnish company Nokia is third.

It is almost surprising that the Defense Department allowed the report to be published at all, given the board’s remarkably blunt assessment of the nation’s lack of innovation and what it said was one of the biggest impediments to rolling out 5G in the United States: the Pentagon itself.

The board said the broadband spectrum needed to create a successful network was reserved not for commercial purposes but for the military.

To work best, 5G needs what’s called low-band spectrum, because it allows signals to travel farther than high-band spectrum. The farther the signal can travel, the less infrastructure has to be deployed.

In China and even in Europe, governments have reserved low-band spectrum for 5G, making it efficient and less costly to blanket their countries with high-speed wireless connectivity. In the United States, the low-band spectrum is reserved for the military.

The difference this makes is stark. Google conducted an experiment for the board, placing 5G transmitters on 72,735 towers and rooftops. Using high-band spectrum, the transmitters covered only 11.6 percent of the United States population at a speed of 100 megabits per second and only 3.9 percent at 1 gigabit per second. If the same transmitters could use low-band spectrum, 57.4 percent of the population would be covered at 100 megabits per second and 21.2 percent at 1 gigabit per second.

In other words, the spectrum that has been allotted in the United States for commercial 5G communications makes 5G significantly slower and more expensive to roll out than just about anywhere else.

That is a commercial disincentive and puts the United States at a distinct disadvantage.

Here is more from Andrew Ross Sorkin (NYT).

*Fentanyl, Inc.*, by Ben Westhoff

The slightly misleading subtitle is How Rogue Chemists are Creating the Deadliest Wave of the Opioid Epidemic.  Why misleading?  So many substance abuse books are a mix of hysterical in tone and a disappointing “paint by numbers” in their execution, but this one really stands out for its research, journalism, and overall analysis.  To give just one example, it is also a great book on China, and how China and the Chinese chemicals industry works, backed up by extensive original investigation.

Start with this:

Americans take more opioids per capita — legitimate and illegitimate uses combined — than any other country in the world.  Canada is second, and both far outstrip Europe.  Americans take four times as many opioids as people do in the United Kingdom.

And this:

For many years, Chinese organized-crime groups known as triads have been involved in the international meth trade.  But experts familiar with triads say their influence appears to be waning in the fentanyl era.  “They’re a shadow of their former selves,” said Justin Hastings, an associate professor in international relations and comparative politics at the University of Sydney…Though ad hoc criminal organizations continue to move drugs in China, major trafficking organizations are rare there, and cartels basically nonexistent.  This leaves the market wide open for Chinese chemical companies, who benefit from an air of legitimacy.

As for marijuana and cocaine, they are used by only about one in every forty thousand individuals in China.  But the book covers the entire U.S. history as well.

Definitely recommended, this will be making my year-end “best of” list for non-fiction.  And yes I did go and buy his earlier book on West Coast rap music.

California’s regulatory code for housing is too strict

The sponsors of SB 50 seem to recognize that the state’s housing problems are at least partially man-made. Indeed, California is a leader in regulating just about everything — including insurance carriers, public utilities and housing construction. If California’s regulatory code underwent some serious spring cleaning, it could help the state at least make a dent in its housing affordability crisis.

The California Code of Regulations — the compilation of the state’s administrative rules — contains more than 21 million words. If reading it was a 40-hour-a-week job, it would take more than six months to get through it, and understanding all that legalese is another matter entirely.

Included in the code are more than 395,000 restrictive terms such as “shall,” “must” and “required,” a good gauge of how many actual requirements exist. This is by far the most regulation of any state in the country, according to a new database maintained by the Mercatus Center, a research institute at George Mason University. The average state has about 137,000 restrictive terms in its code, or roughly one-third as many as California. Alaska and Montana are among the states with as few as 60,000.

That is from James Broughel and Emily Hamilton at Mercatus, in The Los Angeles Times.

*The Narrow Corridor: States, Societies, and the Fate of Liberty*, the new Acemoglu and Robinson book

Due out in September, by Daron Acemoglu and James Robinson, here is an excerpt from the Amazon summary:

State institutions have to evolve continuously as the nature of conflicts and needs of society change, and thus society’s ability to keep state and rulers accountable must intensify in tandem with the capabilities of the state. This struggle between state and society becomes self-reinforcing, inducing both to develop a richer array of capacities just to keep moving forward along the corridor. Yet this struggle also underscores the fragile nature of liberty. It is built on a fragile balance between state and society, between economic, political, and social elites and citizens, between institutions and norms. One side of the balance gets too strong, and as has often happened in history, liberty begins to wane. Liberty depends on the vigilant mobilization of society. But it also needs state institutions to continuously reinvent themselves in order to meet new economic and social challenges that can close off the corridor to liberty.

You can pre-order here.