Archives For marriage

University of Pennsylvania law professor Tobias Wolff says that if you’re gay, you should support expansive collective bargaining rights for labor unions. Writing at the Huffington Post, he recently identified the promotion of labor unions as “one of the most important priorities for our community at this moment,” and he urged gay people “to contribute our voices, our efforts and our resources to the existential struggle that the labor movement is currently waging against the Republican forces seeking to cripple the right of workers to collectively bargain and roll back workplace protections.”

According to Professor Wolff, there are “three basic reasons” why gay people should “be putting feet on the streets and money on the table to support labor.”

He first contends that “labor rights is an LGBT issue” because “LGBT Americans come from the same economic and demographic origins as all Americans.” Presumably he means that since lots of Americans benefit from unions’ expansive collective bargaining rights, and since there’s no reason to believe gay people will be underrepresented among those beneficiaries, solidarity with organized labor should be a priority for gays.

Next, he notes that “labor unions have been showing up for years on the issue of LGBT equality.” As an example, he points to the website of the public employee union AFSCME, which “reiterates AFSCME’s commitment to LGBT equality and offers a clearinghouse of online resources and a link to a sign-up sheet for the AFSCME Pride network.” In light of these sorts of affirmations, he says, support for expansive labor union rights is simply a matter of “reciprocal obligation.”

Finally, he contends that gay people should jump on the pro-labor bandwagon in order to win political favor. “[T]his urgent fight over the future of labor and workers’ rights is where the energy in American politics is today,” he asserts. Although the gays do like to keep up with the latest trends (and how!), Wolff’s argument ultimately appeals to more than just a desire to stay trendy: “We need to be visibly showing up and contributing our efforts, so that our allies in labor, in state legislatures, and in political parties and organizing committees around the country will know that we were there when it mattered.”

I must respectfully disagree with Prof. Wolff.  Support for the rights of organized labor unions should not be, as he says, “one of the highest priorities of the LGBT community today — fully on a par with the effort to secure … relationship rights.”

Is it not self-evident that the elimination of state-sponsored discrimination — bans on gay adoptions, the Defense of Marriage Act’s denial of 1,100 federal benefits to legally wed same-sex couples, denials by states of various rights afforded to married couples, Don’t Ask, Don’t Tell (which is still in effect), etc. — are way more important to gay people than the right of public sector unions to engage in collective bargaining over pensions and termination provisions?  That the matters are not “fully on a par”?  Not to Prof. Wolff, apparently.

The three reasons he articulates for equating labor union rights with relationship rights are far from convincing.  The first — the fact that “LGBT Americans come from the same economic and demographic origins as all Americans” — proves too much.  If gay people are really representative of all Americans, then some gays — say, public school teachers — benefit from expansive rights for public sector unions, and other gays — say, business executives in high tax brackets — are harmed by them.  To be fair, Wolff does suggest that gay people may be disproportionately impacted by reduced employment benefits because they lack various legal protections affored to others, but doesn’t that suggest that the real problem, the place where gays should focus their energies, is the lack of equal protection?  Moreover, one could make a strong argument that gay people, who have fewer dependents on average than straight people, have less need for lucrative employee benefits.  In any event, Wolff’s initial argument is hardly compelling.

Neither is his second argument.  Surely the fact that a group expresses support for gay equality and offers gay people various resources does not create a “reciprocal obligation” on the part of gay people to support all that group stands for.  Does Wolff think gay people have an obligation:

  • to support Goldman Sachs, Bank of America, and Citigroup in their opposition to derivatives regulation? 
  • to support Monsanto’s efforts to avoid regulation of genetically modified organisms and rBST? 
  • to support Aetna’s opposition to various mandates under Obamacare? 
  • to encourage additional financial support for AIG? 
  • to endorse a BP plan to limit liability for oil spills? 
  • to call their congressmen to echo requests by Chevron and Shell to increase offshore oil drilling? 
  • to join Bristol Myers Squibb and GlaxoSmithKline in their efforts to prevent the illegal production of patented AIDS drugs in Africa? 
  • to support AT&T’s proposed merger with T-Mobile? 
  • to back a plan by Waste Management, Inc. to streamline the permitting process for landfills?  

I doubt he would call on gay people to take any of these stances.  But each of the listed companies — Goldman, B of A, Citigroup, Monsanto, Aetna, AIG, BP, Chevron, Shell, Bristol Myers, GSK, AT&T, and Waste Management — is included on the Human Rights Campaign’s list of the “top businesses that support equality for lesbian, gay, bisexual and transgender employees.”  If an expression of support for gay rights and the provision of benefits to gays were enough to create a “reciprocal obligation” to provide support, gay people would have to spend all their time pushing causes!

This brings us to Wolff’s last, undoubtedly most important, argument: that gay people should support organized labor now so that organized labor feels compelled return the favor when the gays have an issue to push.

Here, I depart from Prof. Wolff — and from the herd of independent minds comprising the leadership of the gay community — on a most fundamental level.  At this point in American history, I believe the best way for gay people to make equality gains is via a bottom-up, not a top-down, approach.  Gays should stop running to the government for additional protections from private actors (though they should vigorously oppose state-sponsored discrimination), and should instead concentrate on changing the hearts and minds of their friends and neighbors. 

And guess how you do that?  By being yourself.  By going through your workaday life, being your “best self” and expressing your own beliefs and convictions — religious, political, or otherwise — because they’re yours, not because someone dictated that you must, by virtue of your sexual orientation, hold them.

So, if you’re a gay person and you think collective bargaining by public sector unions is bankrupting state and local governments while fattening the civil service class, go gripe about it to your Republican neighbor over a beer.  In doing so, you’ll be promoting the sort of social change that will ensure real equality for gay people in the future.


(HT: Freakonomics)

And other lessons in the (applied) economics of marriage (HT: Mankiw).

E-marriage at the AALS

Larry Ribstein —  3 January 2011

I’ll be speaking at the AALS on a “hot topic” devoted to this interesting subject, Yosemite C, ballroom level at the Hilton, 4-5:45 January 7.  Here’s a brief excerpt from a longer description  of the program:

The panel explores the likelihood that technology, modern-day mobility, and patterns in affiliation will produce increasing numbers of marriage formalizations that do not strictly conform to a requirement of physical presence by all parties in the granting jurisdiction.  * * * Among the issues the panel will explore are 1) the practical value to a couple of an official marriage ceremony in a state that will deny recognition to the marriage, 2) the potential for backlash in the instance of gay marriage, 3) the legal and long-term cultural acceptability of limiting relief from the physical presence requirement to couples either chosen by state statutory law (active duty military, prisoners, the moribund) or clerk discretion, 4) prudent forms that state legislation might take, 5) the incentives for states to pass legislation modernizing marriage procedure for a mobile society, and 6) the risks that states will withhold recognition to marriages on the basis of the procedure, despite being willing to recognize the substance, of a marriage authorized by another state.

Other panelists are Joanna Grossman (Hofstra), Mae Kuykendall and Adam Candeub  (MSU), Monu Bedi  (Stetson), Aviva Abramovsky   (Syracuse) and June Carbone  (UMKC).  Here’s a website on the project, and the Candeub and Kuykendall article that started it all.  I blogged on the subject here and here.  

My interest stems from my writings on jurisdictional competition generally and on marriage in particular. See my articles Calling a Truce in the Marriage Wars (with Buckley) and A Standard Form Approach to Same-Sex Marriage, and Chapter 8 of my book with O’Hara, The Law Market.

Although I’m big on jurisdictional competition for marriage, and I like the creativity that has gone into this proposal, I have some skepticism about what might be accomplished by e-marriage, which I’ll share at the AALS.

And while we’re talking about e-marriage, how about e-abortion:

[T]elemedicine abortions. . . allow women to go to a branch clinic to consult via Internet videoconferencing with a physician located miles away. Then, with the push of a remote control, the doctor can open a drawer in the clinic that contains RU-486, known as the abortion pill.

Currently, telemedicine abortions are available only in Iowa, where more than 2,000 women have used the practice since 2008 through the state’s Planned Parenthood affiliate. Previously, the organization provided abortions at half a dozen clinics, concentrated in the state’s larger cities. Because of the telemedicine program, women in the first nine weeks of pregnancy can obtain abortion pills at most of the organization’s 19 centers, which are scattered across the state.

Supporters say the program provides a vital service to women in the state’s rural reaches, where abortions can be virtually impossible to obtain. They say the process is identical to an in-person appointment.

As per usual, Justin Wolfers is there to clean up misconceptions about the data and explain what is really going on.  As it turns out, claims that recessions have killed marriage have been grossly exaggerated.  Here’s a picture Justin shows to demonstrate the point (the gray bars are recessions).

Also interesting on the economics of marriage, here is Justin’s NY Times Op-Ed explaining trends in the marriage rate and the “hedonic model” of marriage proposed by Wolfers and Betsey Stevenson, i.e. marriage based on complementarities rather than the “opposites attract” model of specialization:

It used to be that a typical marriage involved specialized roles for the husband and wife. Usually he was in the marketplace, and she was in the home, and this arrangement led to maximum productivity.

But today, when families have easy access to prepared foods, inexpensive off-the-rack clothing and labor-saving technology from the washing machine to the robot vacuum cleaner, there’s much less benefit from either spouse specializing in homemaking. Women, now better educated and with greater control over their fertility, are in the marketplace, too, and married couples have more money, more leisure time and longer lives to spend together. Modern marriages are based not on the economic benefits of playing specialized roles but on shared passions.

This new model of “hedonic marriage” has had an effect on who marries, and when — as research I have conducted with my better half, the economist Betsey Stevenson, has documented. In the old days, opposites attracted; an aspiring executive groom would pair up with a less-educated bride. And they would wed before the stork visited and before the couple made the costly investment of putting the husband through business school.

Great stuff.

Love, marriage and firms

Larry Ribstein —  17 September 2010

I’ve been working on the relationship between family law and business associations. My current paper, discussed here, shows why business association standard forms may be inappropriate for domestic relationships.

Another question regarding the relationship between families and firms concerns the extent to which the family is a substitute for the firm as a business organization structures. Conventional wisdom is that families help supply the trust that may be lacking elsewhere in a culture or economy. I noted in my Rise of the Uncorporation:

As Kerim Bey told James Bond in From Russia with Love, “All of my key employees are my sons. Blood is the best security in this business.” Before the development of modern technologies for controlling agency costs, all business was as dangerous as Bey’s spy business and the family was the only feasible way to bind agents. The Roman societas were more like Mafia families than modern partnerships. Partnerships evolved from families to firms in response to the globalization of trade and development of more sophisticated contracts and business technology.

This suggests that whether families serve as firms depends on the local business technology. But might it also depend on local family technology? This is the insight in Mehotra, Morck, Shim and Wiwattanakantang’s recently posted Must Love Kill the Family Firm. Here’s the abstract:

Family firms depend on a succession of capable heirs to stay afloat. If talent and IQ are inherited, this problem is mitigated. If, however, progeny talent and IQ display mean reversion (or worse), family firms are eventually doomed. This is the essence of the critique of family firms in Burkart, Panunzi and Shleifer (2003). Since family firms persist, solutions to this succession problem must exist. We submit that marriage can transfuse outside talent and reinvigorate family firms. This implies that changes to the institution of marriage, notably, a decline in arranged marriages in favor of marriages for “love” bode ill for the survival of family firms. Consistent with this, the predominance of family firms correlates strongly across countries with plausible proxies for arranged marriage norms. Interestingly, family firm dominance interacted with arranged marriage norms also correlates with lower GDP per capita, suggesting that cultural inertia may also impede convergence to more efficient economic organization.

In other words, arranged marriages, and proxies such as the Japanese practice of adopting adult heirs, help families run firms, and are themselves products of other factors in the culture.

The authors conclude that “[h]ow arranged marriages affect corporate governance, corporate strategies, corporate organization, and other central questions about the organization of economic activity remains largely unexplored . . .”

TOTM Welcomes Eric Helland

Josh Wright —  24 August 2010

TOTM is very pleased to announce the addition of yet another permanent blogger to our roster.  Eric Helland is an economist at Claremont-McKenna College and publishes extensively in law and economics.  Among other accomplishments, Eric has served as a Senior Staff Economist on the President’s Council of Economic Advisers.  Eric’s publication record is extensive, and his recent research has focused on class action litigation, the relationship between litigation and regulation, tort reform, medical malpractice, consumer protection, contingency fees, environmental law and economics, corporate law, the impact of Daubert, criminal sanctions and deterrence, and inference in event studies.  His work has been published (repeatedly) in the Journal of Law and Economics, Journal of Legal Studies, Journal of Corporate Finance, Journal of Law, Economics and Organization, Economic Inquiry, Journal of Economic Perspectives, the Supreme Court Economic Review and Public Choice.

Some TOTM readers may be familiar with Eric’s guest-stint at Marginal Revolution, where he blogged about topics ranging from Hayek on gay marriage to toll roads and externalities.  We’re very pleased that Eric is joining the TOTM team and looking forward to his posts.

Welcome Eric!

In the wake of the Citizens United decision I responded to the argument that empowering corporation would distort political debate in part by noting that “[f]or-profit firms are limited in their ability to invest in politics for the simple reason that they can’t stay in business over the long run if they lose money.”

As the WSJ discussed, Target learned that when its political contribution found its way to a pro-business candidate who also happens to oppose same-sex marriage: “[H]undreds of gay-rights supporters demonstrated outside Target stores in locations nationwide, and a petition promising a boycott, signed by more than 240,000, was delivered to Target.”

The article notes:

The Target flap shows the potential downside for companies that want to get more involved in politics since a January Supreme Court ruling on campaign contributions. Brand-oriented companies, in particular, worry about getting embroiled in controversies that can tarnish their reputation. It is a rare political black eye for the trendy discounter, which has a track record of supporting gay causes, including extending partner health benefits to its employees. * * *

Despite the [Citizens United] ruling, most corporations remain reluctant to donate money to outside political organizations. People involved in politics say most companies remain risk-averse, worried about what would happen if they supported the loser.

As usual, proponents of government regulation simply forgot about markets. Incidents like this make many issues off limits for big corporations. They also may make it difficult for firms to support any candidate, since political candidates are not single issues but bundles of issues, support of any of which can backfire on the contributor. Corporations have a business to run.

Note that the WSJ pointed out that “labor unions remain larger contributors to elections than corporations.” Labor unions are much less sensitive to market reactions of the sort that hit Target. That’s why the First Amendment protection Citizens United granted to organizations may mean more to labor than to corporations.

This is just one of many reasons for rejecting the arguments seeking to deny First Amendment protection to corporate speech. For more, see my Citizens United archive.

This market/business oriented blog will only contribute a few of the zillions of words that will be written on this case. I will, of course, focus on the market aspects – that is, the market for law.

I have previously discussed same sex marriage in the context of the U.S. federal system – in a 2008 post on Prop 8, my initial article (with Buckley) on the law market for marriage, a more recent article analyzing marriage as a standard form contract, and my book with O’Hara, The Law Market, chapter 8 of which analyzes the market for marriage law. My blog post summarizes that book’s theory as it relates to marriage:

Those favoring a particular legal regime can further their interests not just by lobbying a particular legislature, but also by “shopping” for law in other jurisdictions, including by getting married in the relevant state. These other jurisdictions have an incentive to supply law to attract residents, ceremonies, legal work. Even non-supplier jurisdictions have an incentive to enforce the foreign law because the “shoppers” (including affluent and productive same sex couples) can avoid non-recognizing states. We’ve seen this competition play out, among other areas, in corporations and commercial contracts, and it is happening in Europe as well as the US.

Now of course the Law Market shouldn’t trump the constitution. The problem is that the constitution just isn’t as clear on same sex marriage as it is, say, on slavery. I would have voted against Prop 8. I don’t think much of the arguments against same sex marriage. But does the constitution compel others to accept this view?

As argued in my “standard form” article, I would leave this knotty question to the Law Market (footnotes omitted):

[T]he relevant question is whether the process is likely in the long run to disregard rights that deserve recognition. A decision invalidating laws against same sex marriage would leave many questions unanswered concerning potential differences between same sex and heterosexual relationships. Agnosticism is particularly important for family law, given the clash of normative views and the difficulty of getting reliable data. Among other things, there are questions about the optimal mix of standard forms that each state should offer, and the nature of the restrictions on who can use each form. * * * [A] choice-of-law approach lets states experiment with various approaches. Courts and legislators can observe the results, particularly as children grow up under different regimes. Evolution also permits the law to adapt incrementally to unpredictable future events and changing mores, provides feedback as to alternatives, and minimizes the cost of mistake compared to a Supreme Court decree.

So where does the law market stand with same sex marriage? According to this website, a significant majority of 29 states have actually gone to the trouble of adopting specific laws against same sex marriage. Another 12 have traditional marriage laws on the books defining marriage as one man and one woman. The states authorizing same sex marriage are limited to an enclave in the northeast (NH, VT, CT, MA) plus DC and Iowa. California ultimately put itself in the anti-same-sex-marriage position through Prop 8, which its supreme court let stand.

Now a federal judge has ruled that “Proposition 8 deprives [plaintiffs] of due process and of equal protection of the laws contrary to the Fourteenth Amendment and that its enforcement by state officials violates 42 USC § 1983.” The court reasoned:

For the reasons stated in the sections that follow, the evidence presented at trial fatally undermines the premises underlying proponents’ proffered rationales for Proposition 8. An initiative measure adopted by the voters deserves great respect. The considered views and opinions of even the most highly qualified scholars and experts seldom outweigh the determinations of the voters. When challenged, however, the voters’ determinations must find at least some support in evidence. This is especially so when those determinations enact into law classifications of persons. Conjecture, speculation and fears are not enough. Still less will the moral disapprobation of a group or class of citizens suffice, no matter how large the majority that shares that view. The evidence demonstrated beyond serious reckoning that Proposition 8 finds support only in such disapproval. As such, Proposition 8 is beyond the constitutional reach of the voters or their representatives.

In other words, a judge in a San Francisco court has ruled that plaintiffs’ experts should decide this case rather than California’s voters.

Ironically, I suspect that this issue ultimately would have played out in favor of same sex marriage. Not long ago same sex marriage was recognized nowhere. The tide is turning despite the fervent efforts of religious groups and others. Although it will take time, the law market eventually will follow attitudes evolving toward homosexuality and accept same sex marriage. State statutes will clarify rights at least within states, and state laws likely will evolve toward uniformity. Even in California, a replay of Prop 8 by ballot rather than court decision likely would come out different today.

Instead, we are likely to get a Supreme Court decision that either affirms and fuels decades of resentment and confusion about exactly which state family laws are valid, or reverses and stalls the momentum of the same sex marriage movement. I am not sure even proponents of same sex marriage should celebrate either outcome.

As his Council of Economic Advisers made clear in its recent health care report, President Obama sees two primary goals for his health care reform efforts: to slow the growth of health care costs and to expand coverage of health insurance. It’s pretty clear, though, which of these goals is steering the ship. While the President’s proposals include a few modest measures ostensibly aimed at reducing costs (digitizing medical records, collecting and disseminating data on treatment-effectiveness, etc.), the primary focus is on increasing insurance coverage. That’s unfortunate, for relentless pursuit of coverage expansion is almost certain to undermine the goal of cost containment.

To see why this is so, consider two facts the Obama administration keeps emphasizing: (1) that prices for health care services are spiraling upward faster than the rate of inflation, and (2) that health care expenditures, but not health care outcomes, inexplicably differ greatly across regions. Both of these facts are bizarre, and both suggest that an expansion of insurance coverage may actually impede efforts to slow the growth of health care costs.

In an innovative and competitive economy like ours, the normal tendency — absent a large increase in demand relative to supply, which we haven’t witnessed — is for the quality- and inflation-adjusted prices of goods and services to fall. The real prices for most health care services, by contrast, seem to spiral upward. That’s odd. So are the CEA’s observations that “utilization of specific procedures and per capita health care spending vary enormously by geographic region,” that “in many cases these variations are not associated with any substantial differences in health outcomes,” and that “[l]arge variation remains even after adjusting for differences in the age, sex, and race of enrollees across states.” Why would residents of Texas and Massachusetts spend so much more than residents of New Mexico and Maine to achieve the same health outcome?

Both anomalies — upward spiraling health care costs and substantial regional variations in outcome-adjusted spending — can be explained by the lack of price competition in the health care industry. When most consumers buy health care, somebody else, a private or public insurer, makes the direct payment. Consumers therefore have little incentive to shop around for favorable prices. And health care providers, aware of consumers’ price insensitivity, have little incentive to compete on price and to streamline their operations in a manner that reduces their costs (and consequently their prices). Providers are also likely to over-sell high margin services, which price-insensitive consumers are likely to buy, and to coordinate with local competitors on both prices and norms of treatment — e.g., the degree to which non-essential services (tests, etc.) are routinely provided. Such coordination is easy in an environment in which there is little price competition.

To get a sense of health care consumers’ price insensitivity, consider the results of a 2005 Harris Interactive poll of 2,000 adults covered under employer-provided health plans. That poll found that “63 percent of respondents who themselves or a close family member received treatment for a serious health issue in the past two years[] did not know the cost until after the treatment was received and 10 percent revealed they never found out the cost.” The survey also found that while two-thirds of consumers spend more than eight hours researching the purchase of an automobile, fewer than four in ten spend that amount of time researching a doctor (38%) or a health insurance plan (34%). It should not be surprising, then, that the average survey participant could predict the price of a Honda Accord within $300 but was off by a whopping $8,100 when it came to estimating the price of a four-day hospital stay.

These survey results make perfect sense. If someone else is footing the bill (directly, at least) for your medical care and you aren’t rewarded for selecting a lower-priced provider or for foregoing unnecessary service, you won’t spend the time and effort required to select a cost-effective provider and you won’t decline services of marginal value. Health care providers, well-aware of insured customers’ shopping tendencies, have little incentive to compete on price and plenty of motivation to adopt input-intensive treatment norms.

Things change drastically when customers have to foot the direct bill for medical treatment. Consider, for example, the price of LASIK eye surgery, which insurance generally does not cover. When LASIK was approved by the FDA in 1999, the price for the procedure averaged about $2,100 per eye. By 2005, the average price had fallen 20 percent to $1,687. By contrast, overall annual health expenditures per person in the United States rose from $4,400 to nearly $6,300 (a 43 percent increase) from 1999 to 2004. What accounts for this difference in price trends? Most likely, the vigorous price competition resulting from the fact that LASIK consumers shop around because they must pay out-of-pocket.

The lesson for health care reformers is that if we want to stop the upward spiral of health care costs — the real source of America’s purported health care crisis — we need to find ways to motivate providers to compete on price. Expanding insurance coverage won’t help here; such expansion will instead result in even less price-comparison among consumers and will encourage providers to raise prices and over-sell unnecessary or marginally useful medical services.

A better policy would encourage a system in which consumers pay more directly for at least a portion of their health care consumption so that providers have an incentive to win customers by offering the most cost-effective services. Increasing deductibles and co-payments would help on this front. Current policy, though, discourages high deductible and high co-payment insurance policies. Right now, employer contributions to health insurance – but not individuals’ own expenditures on such insurance – are not taxed. This creates an incentive for employers to provide very generous health insurance benefits (i.e., low deductibles, low co-pays, lots of costly bells and whistles) as a tax-advantaged element of their employees’ compensation.

Legislation proposed by Sen. Tom Coburn and Rep. Paul Ryan confronts this unfortunate incentive head-on and would increase the ranks of the insured while creating strong incentives to control costs. The central feature of the Coburn/Ryan legislation is the elimination of the employer insurance deduction and the creation of a refundable tax credit for individual insurance purchases. As John Goodman explains:

Under the Coburn bill, no longer would employers be able to buy insurance with pretax dollars. These payments would be taxable to the employee, just like wages. However, every individual would get a $2,300 credit (and every family would get $5,700) to be applied dollar-for-dollar against taxes owed.

The Coburn bill does not raise taxes, nor does it lower them. Instead, it takes the existing system of tax subsidies and treats everyone alike, regardless of income or job status. All health insurance would be sold on a level playing field under the tax law, regardless of how it is purchased. The impact would be enormous. For the first time, low- and moderate-income families would get just as much tax relief as the very rich when they purchase health insurance.

The Coburn bill would also encourage all Americans to control costs. The tax credit would subsidize the core insurance that everyone should have. It would not subsidize bells and whistles (marriage counseling, acupuncture, etc.) as the current system does. Since employees and their employers will be paying for additional coverage with after-tax dollars, everyone will have an incentive to compare the value of extra health benefits to the value of other things money can buy. When patients eliminate health-care waste, they will get to keep every dollar they save.

This plan, or some version of it, would go a long way toward accomplishing President Obama’s twin goals of cost containment and coverage expansion. And unlike his own plan and the leading Democratic proposals, it won’t drive the deficit (further) into the stratosphere. Unfortunately, though, Mr. Obama would have a hard time embracing this sort of approach, given his barely true attacks on Sen. McCain’s health care proposals during the presidential campaign.

This is when we could really use a flip-flopper.

I must begin this post with a clarification: I am not a Republican. Nor am I a Democrat. I really have little interest in defending one party over the other. I agree with the GOP on some matters, with the Democrats on others, and with neither party on a host of matters. In general, I don’t get worked up when academics and commentators criticize one party or the other.

I do, though, expect smart people to be fair and principled in their criticisms of either party. For that reason, I was greatly disappointed when I read this op-ed by Prof. Douglas Kmiec, who I understand is very smart.

The op-ed, entitled “The death of the GOP?,” appeared in today’s Chicago Tribune. I suspect it was written in haste because it’s, well, not very good. I’ve reproduced the entire op-ed below, along with my best guesses as to what its author was thinking. (My guesses are in italics.)


The death of the GOP?

After barely four weeks in office, President Barack Obama signs into law Tuesday a legislative achievement that eclipses entire terms of some contemporary presidents. The stimulus legislation has the real potential of creating more than 3 million jobs, most in the private sector and many rebuilding an aging public infrastructure. The new law assists those most in need of basic health care, job training, and in the near term, unemployment benefits and food.

[I’ve heard that there may be some downsides to the stimulus legislation. People talk about stuff like unprecedented deficit spending, crowding out of private investment, inefficiencies resulting from political misallocation of productive resources, the potential for wasteful rent-seeking (which is distributive rather than productive conduct), etc. In this new political dawn, though, we don’t need to think about costs. If we just focus on the immediate benefits of this legislation, it is undoubtedly “a legislative achievement that eclipses the entire terms of some contemporary presidents.” I mean, it’s really, really big. That’s gotta count for something.]

No one could blame Obama for being a bit chagrined at the GOP’s disengagement from all this, notwithstanding the president’s charm and offers of substantive compromise. [Seriously, why do we pay those people? If they were really “engaged” in this process — you know, doing their jobs — they definitely would’ve gone along with exactly what President Obama wants. I mean, he’s just so charming!] Republican Judd Gregg’s withdrawal as the nominee for the Commerce post was thus true to form. The only reason Gregg gave for withdrawing was that he didn’t want to help. “It just occurred to me that it would be very difficult . . . to serve this Cabinet, or any Cabinet, for that matter, and be part of the team . . .” Confessing that one won’t or doesn’t know how to play with others is not an adult reaction to the urgent needs of the time. [If Gregg weren’t such a baby, he surely would’ve sacrificed his principles to make our immensely popular and goodlooking President happy. That’s what adults do.] Has the GOP been reduced to the sum of its worst parts: namely, a political party with scarcely an original thought that now only remembers how to secure office largely by denigrating the values, hopes and planning of others? [I mean, honestly people. That Nancy Pelosi worked her butt off drafting the stimulus bill. How dare those meany Republicans try to dash her hopes and squander all her hard planning.]

The Republicans need to break free of an economic theory that was drafted on economist Arthur B. Laffer’s napkin. [Opposition to spending $505 billion as detailed here was entirely based on that Laffer Curve thing, right?] Supply-side theory may have sufficed at a different time, but giving the wealthy more reasons not to notice that 90 percent of the wealth is held by 1 percent of the nation takes no account of the present economic reality. Trickle-down tax relief, by definition, trickles, and when you’ve got a nation losing jobs monthly by the hundreds of thousands, trickling is not the answer. [There were, you know, only two options here: the $787 billion bill we got or lots of tax cuts for rich people. Cutting marginal tax rates across-the-board wasn’t an option.]

In 1980, Ronald Reagan won many Democrats and independents over to his side by paying special attention to “family, work, neighborhood, peace and freedom.” [Reagan never really talked about cutting tax rates, did he?] In the last eight years, peace gave way to military occupation with a decidedly murky objective. The freedom of Americans and others has been likewise put at risk by the provocation of hatred and suspicion in cultural circumstances we know little about. [Much the way my own outspoken opposition to same sex marriage rights puts the freedom of Americans at risk and provokes suspicion in cultural circumstances I know little about.] And now the GOP is apparently confessing little or no interest in family, work or neighborhood. How else can one explain total disinterest [failure to support = total disinterest, right?] in a stimulus bill that provides $116 billion in direct tax relief for workers, another $70 billion in tax relief for the middle class and that provides economic incentives to buy energy-efficient cars, houses by first-time home buyers and provides $2 billion for health care for the needy and the elderly? [Yes. How else could one explain the failure to support this bill? They must simply loathe families, work, and neighborhoods!]

One of the “irreconcilable differences” Gregg had with the president apparently was over how to get an accurate census count of poor and minority citizens who often take an additional Commerce Department effort to locate given their relocations in pursuit of work and opportunity. The census is an important constitutional determinant of legislative representation as well as the allocation of public money and it should not be manipulated. The GOP is right to resist statistical extrapolation that distorts reality. Yet, a justifiable concern with numerical honesty is not the same as a Machiavellian desire to leave the less fortunate out of the electoral equation because you think (probably correctly) they won’t support you if you have ignored them. [And make no mistake — Gregg’s concerns were of the Machiavellian variety, not the “justifiable concern with numerical honesty” variety. I know because, well… I just know.]

The Republican Party had a noble beginning in 1854, disavowing the pro-slavery inclinations of the 19th Century Whig Party. It would be a national loss if the party of Lincoln were to suffer the same fate for its current unwillingness to responsibly work to find common ground. [As Lincoln realized, unity (finding common ground) is far more important than principle.] So while I am reluctant to recommend that the president give another Republican a chance at joining the Obama team, there is someone who seems ideally suited by personality and preparation: Mitt Romney. Romney’s skill as a capable financial workout artist saved the 2002 Olympics from almost certain failure and successfully restructured innumerable private firms. [And since restructuring private firms is now primarily the responsibility of government, Romney’s perfect!] In the GOP presidential primary, the ultrapartisanship of Mike Huckabee and John McCain [the quintessential partisan] derisively hung the “flip-flop” label on Romney or his intelligent open-mindedness, but in the light of day, that is better understood as a badge of honor. [So Romney sacrificed a professed principle or two to get ahead politically. Big deal. We’ve all done it.]

The GOP needs to abandon its suicidal ways before it’s too late—for them and, more important, for a nation that benefits from the contest of liberal and conservative ideas and the hard work that it takes to meld them into responsible and prudent policy. [And when I say “contest,” I mean “charade of debate in which the popular, unifying President’s preferred policy emerges as the unscathed victor.”]

The Law Market

Josh Wright —  6 January 2009

The Law Market, Larry Ribstein’s new and important book with Erin O’Hara looks great and is available here from Oxford University Press.  The book description from the website sets the stage:

Today, a California resident can incorporate her shipping business in Delaware, register her ships in Panama, hire her employees from Hong Kong, place her earnings in an asset-protection trust formed in the Cayman Islands, and enter into a same-sex marriage in Massachusetts or Canada–all the while enjoying the California sunshine and potentially avoiding many facets of the state’s laws.
In this book, Erin O’Hara and Larry E. Ribstein explore a new perspective on law, viewing it as a product for which people and firms can shop, regardless of geographic borders. The authors consider the structure and operation of the market this creates, the economic, legal, and political forces influencing it, and the arguments for and against a robust market for law. Through jurisdictional competition, law markets promise to improve our laws and, by establishing certainty, streamline the operation of the legal system. But the law market also limits governments’ ability to enforce regulations and protect citizens from harmful activities. Given this tradeoff, O’Hara and Ribstein argue that simple contractual choice-of-law rules can help maximize the benefits of the law market while tempering its social costs. They extend their insights to a wide variety of legal problems, including corporate governance, securities, franchise, trust, property, marriage, living will, surrogacy, and general contract regulations. The Law Market is a wide-ranging and novel analysis for all lawyers, policymakers, legislators, and businesses who need to understand the changing role of law in an increasingly mobile world.