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Eric Rasmusen
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What is the alternative to hiring a PhD as a law professor? Usually it's to hire someone who is equally lacking in practice experience but who clerked for a judge or two. Or, you might hire someone who has practice experience but wasn't doing very well: "Those who can't do, teach." Perhaps what law schools should do is actively recruit successful practitioners. This would require faculty and dean spending serious time persuading partners in big or boutique firms to be satisfied with the millions they've already made and to shift their ambition towards teaching and above-the-fray writing, and that changing to become a law professor is better than changing to become a judge.
This seems suicidal on the part of Twitter. These social media companies make their profits from network externalities. Here, it seems, there is opportunity for entry by a new twitter. The software cost must be trivial, and usually conservatives only want to talk to conservatives anyway, so this is like twitter giving away half its market. Or, if the new entrant is conservatives plus liberals and Twitter is just liberals, Twitter dwindles to zero market share because the biggest network wins.
There's no reason to be courteous to someone who betrays his country. I think justices like Stevens did that, and if some liberal thinks Scalia betrayed the Constitution to push his own agenda, I won't blame the liberal for saying Scalia doesn't deserve a respectful funeral. The same goes for funeral eulogies. It's disgusting when a jerk gets praised at his funeral. Better to bury him quietly and without comment which if honest will require condemnation.
True, there is a double standard and there would be a lot of flack if one said something derogatory about Thurgood Marshall at his death, but there shouldn't be, nor should there here, except as vigorous political dissent. If somebody believes that Scalia violated his oath of office and put politics ahead of law, he should say that loudly, and condemn the dead man as a scoundrel. Other people, like myself, would disagree that Scalia was a scoundrel, but virtually our only hold on political justices is to convey to them that history will vilify them. When the next liberal justice dies, I hope conservatives will express their wish that he had been impeached instead for betraying the Constitution. Let's not pretend that someone is to be respected when he is a corrupt advocate for his own political views rather than a fair judge. And if someone wants to argue that Scalia was a bad judge--- let's go at it.
I would add another reason why government unions are bad: the government isn't maximizing profit, so there is no reason to think it would try to keep wages low and working conditions poor. It has some incentive, because voters who pay taxes don't like higher taxes, but that is equally balanced by the voters who work for the government like higher wages. Plus, of course, if there is still exist private employers, the government can't get away with paying substandard wages--- the government employees will simply leave. I wonder if anyone will ever propose that Congressmen unionize? But I guess their threat to go on strike doesn't strike enough fear into their employers.
It isn't a "duty" to avoid taxes, but only in the technical legal sense. Director and CEO are supposed to act for the good of the shareholders. That generally means they are supposed to maximize profits, though I, and I think most others, think that the director can sacrifice profits if the shareholders prefer something else (e.g., closing on Sundays). What the Freedman court holds is sound: that tax decisions fall under the business judgement rule. That means the directors can make stupid decisions, as long as it's not on purpose, to help themselves, or by being exceptionally lazy. In Freedman, their decision seems stupid, but innocent. Question: If the CEO and chief counsel have contracts that allow them to be fired without severance pay "for cause", and they advised on this decision (I don't remember those details), can the Board fire them for cause?
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A list of 5 books would be more useful than a list of 25. It is also important to consider what books one is likely to actually force oneself to read over the summer. I saw Genealogy of Morals on a couple of these lists. I wonder why that's the Nietzsche to recommend. Isn't it one of the least philosophical of his books-- more sociolory or psychology? And Zarathustra is more fun to read. BL COMMENT: Your impression of the Genealogy is mistaken; indeed, there's a book advertised in the right hand column of this blog that would clarify this! Zarathustra is, indeed, "fun," but an awful place to begin since its form--as a parody of the New Testament--raises a host of interpretive difficulties. I had an earlier discussion of the topic vis-à-vis Nietzsche here: http://brianleiternietzsche.blogspot.com/2004/12/where-should-beginner-start-with.html
Notice how this rejection of science has considerable policy importance, unlike the rejection of evolution. People are dying in Africa because Europeans think GMO food is dangerous.
The idea really was silly. "Let's start a new law school.But we need to find a market niche, some angle no other law school has thought to exploit. Hmmmm.... I know! Let's hire left-wing faculty!"
Good for you, working on an amicus brief! (whether you're right or wrong on the substance; securities law isn't something that I keep up with)
Skimming over the opinion (which looks worth reading), I was thinking, "What a mess for a court to sort out!" and "How will the court sort it out, if it isn't a partnership?" The problem with ill-defined partnerships is that both sides have done some performance, often very hard to value in dollar terms, with hard-to-measure expectations of what the ultimate benefits are going to be (and at the time of the case, the benefits may not have been received yet). I suppose that's why the law in general says that a partnership, unlike a contract, can be formed even if the parties have been vague about it. The other reason might be that trust is so important in partnerships that it would be a waste of time to be as detailed as is required in arms-length contracts; you've got fiduciary duty instead. And a third reason is that unsophisticated people often make important (to them) partnerships with each other, but their important contracts are usually with sophisticated people (e.g. bank mortgages, car credit purchases). Of course, reasons (2) and (3) don't apply in the present case, but (1) does apply and maybe that's why there's no size limit for where a written document is required. Another reason might be that we've got an Ayres-Gertner penalty default here; the law tells the sophisticated parties: if you're going to behave like babies and not have a written agreement, we're goingt o punish you by *treating you* like babies. All that said, I wonder how all the conflicts in the case settled out. The plaintiff lost on all his claims, but I would think that if he lost on contract or partnership, then he'd have some good claims left for reliance and restitution. I didn't look closely at the facts, though, except to note that the lawyer party is a perjurer and the judge didn't trust his word, so maybe performance was all by one party and losses could be left where they fell.
HHS has written proposed regulations to comply with the Hobby Lobby decision, and they are up for public comment via the web: http://www.regulations.gov/#!docketDetail;D=IRS-2014-0029 HHS is seeking to make eligibility for exemption as narrow as possible by allowing only for-profit, non-public, narrowly held corporations to even apply for it. Thus, they are maintaining that a nonprofit that is not specifically religious (i.e., a church) is ineligible, and so are publicly traded narrowly held corporations, and so are widely held corporations. I am writing a paper to submit to them as a comment on why all corporations ought to be eligible, provided that the corporation can provide evidence of sincere religious objections (which *does* knock out 99% of corporations).
From teh abstract, it looks like the study has a significant flaw, that makes it *under*-estimate the costs of the new law. The flaw is a selection effect: if they are looking only at IPO's, they are missing the companies that had the highest issuance costs, because those companies decided not to have an IPO at all.
"Thus, RULLCA creates an odd situation in which LLCs are bound by contracts that they did not execute and to which they seemingly are not parties. This result is reinforced by Section 17701.11(a) which provides "A limited liability company is bound by and may enforce the operating agreement.”" That seems quite natural, though maybe it isn't the usual law--- I don't know. Is a corporation bound by its articles of incorporation? Is it bound contractually? Not contractually, I think--- that would require other parties to the contract, and only allow contract damages, not injunctions.
Which paper of yours is that? It sounds interesting.
I'll have to read the papers, but the debate does sound strange. Shareholder primacy doesn't mean maximizing dollar profits, but even if it did, certain charitable donations and political spending do increase dollar profits. Nor can one assume that corporations only lobby for bad social policies; a strong argument can be made that businesses should be encouraged to help fight inefficient regulation and provide a countervailing power to political grandstanding that hurts not just shareholders but employees and customers. It's a solution to the problem that made Schumpeter think that capitalism's very success doomed it because it encouraged intellectuals who would kill the defenseless goose that laid the golden eggs.
' scholars _deny_ that "law is needed to explain the social origins and foundations of firms" I’m not sure what explaining and firms mean, but I’d be in that camp. It’s tricky defining firms (can a firm consist of one person with no employees?) but what everyone thinks of are groups of people cooperating in making money. Surely that started with the sole proprietorship, someone in a primitive society hiring labor and buying materials in exchange for part of the output, before money and before writing. It’s an easy step to partnership---- the pay is a share of the output rather than a fixed amount. Also, illegal firms operate outside of the law. Think of mafia gangs operating a large variety of enterprises, or the heroin manufacture, wholesale, and retail trade.
Were there supposed to be some titles of books? I'm reading Richard Hooker's Of the Laws of Ecclesiastical Polity now, which is very good, and is about much more than just whether bishops are OK. He talks a lot about the interaction between revelation and reason, and how to tell what's context dependent and what's not. I read Luther's 95 Theses for the first time last month. They're actually still very relevant. See http://www.spurgeon.org/~phil/history/95theses.htm .
You'll like this: "A better statement of what we may regard as the theory of corporations that is prevalent in England could hardly be found than that which occurs in Sir Frederick Pollock's book on Contracts. He speaks of 'the Roman invention, adopted and largely developed in modern systems of law, of constituting the official character of the holders for the time being of the same office, or the common interest of the persons who for the time being are adventurers in the same undertaking, into an artificial person or ideal subject of legal capacities and duties.' There follows a comparison which is luminous, even though some would say that it suggests doubts touching the soundness of the theory that is being expounded. ' If it is allowable to illustrate one fiction by another, we may say that the artificial person is a fictitious substance conceived as supporting legal attributes.' It will not be news to readers of this journal that there are nowadays many who think that the personality of the corporation aggregate is in no sense and no sort artificial or fictitious, but is every whit as real and natural as is the personality of a man. This opinion, if it was at one time distinctive of a certain school of Germanists, has now been adopted by some learned Romanists, and also has found champions in France and Italy. Hereafter I may be allowed to say a little about it…. Maitland, The Corporate Sole, 16 L. Q. Rev. 335 1900
Many countries have cut back substantially on government ownership of businesses--- and not just the Communist ones. That is evidence that governments can shrink.
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How has the after-grants-and-discounts price of a low-status college education changed? Has it increased too, in real terms? That would help us figure out what's happening. I always think about the high end instead, where the difficulty of entrance into status competition means that a Yale or even a Vanderbilt can make lots of hay from our top-1% earners.
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There is probably a lot more price discrimination nowadays. If the average amount of tuition plus housing paid is half of the sticker price, then the real price of college education has merely doubled. In light of the increasing cost of skilled labor (professors) and the increased quantity of services(fancier gyms, single rooms, air conditioning, ethnic group counsellors, career service centers, grade appeals, psychological counselling) and regulation costs, maybe the surprise is that tuition is so low now. I bet Harvard, Yale, and Chicago could triple their tuition and still attract excellent students. That they do not might be explained by the diminishing return to budget size and their preference for even slightly more talented students.
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If my calculations are right, making household money income completely equal would make it $70,000 or everyone instead of unequal with a median of $52,000. http://quickfacts.census.gov/qfd/states/00000.html That might actually make income more unequal in a different sense, though. Lower-income households tend to be smaller (young, divorced, or old enough that the children have grown up or the spouse died). Thus, it could be that making household income more equal could make per capita income less equal. I wonder if anyone has thought about that? Of course, these calculations ignore any effect that equalizing income would have in reducing total income. Something else that is bothersome but hard to figure in is that equalizing income would reduce saving and investment, since rich people save far more. Indeed, my guess is that households with incomes of $70,000 invest almost nothing except (big exceptions) in housing and pension funds. This would reduce growth. Whether one person's investment has externalities for other people is a difficult question. Still, I'd like to see someone estimate the effect on investment and growth of equalizing income, ignoring the incentive effects and just assuming that people would all shift to the savings percentage of people now at the median income level.
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Look at Figure 4, a misleadingly titled table at: http://deltacostproject.org/resources/pdf/trends_in_spending-report.pdf At private universities, tuition has risen less than other income sources. Maybe that's true of public research universities too, but it's hard to tell from eyeballing the diagram. This turns the tuition issue on its head. Students are getting an increasingly greater subsidy from endowments, med schools, etc. over time. Their tuition is rising, but the cost of what the university is providing them is rising even more. Or, since accounting is tricky, it might be that the subsidy students are providing the rest of the university has been falling. Either way, if we assume that colleges are getting what they pay for, college is an increasingly good deal. This makes sense if you think about it. Colleges are increasingly competing for students by means of luxury dorms, parking lots, job placement centers, fancy gyms, psychological counsellors, and so forth.
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"The obvious solution for the law schools is to reduce the size of their faculties and/or reduce faculty salaries." Or, a top 100 law school could reduce its entry standards. It would still enroll as many students, and be able to keep staff and salaries high. If the faculty ran the schools and understood budgets, I think that is what would happen. The alternative is for them to teach fewer and bigger electives and/or accept lower salaries. The universities might like this too, since it would maintain total income and law school research output. Deans would probably prefer not to reduce student quality, since that matters most for magazine rankings. They'd prefer lower enrollment and a smaller, worse-paid, faculty. Thus, we should see some tension.
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