Transnational Law Blog

Posner v. Macroeconomists

This week brings a heated debate between Judge Posner and some prominent economists including Brad DeLong of UC Berkeley. The debate comes at the heart of my recent discussion with a lawyer who is also a faithful follower of Paul Krugman blog. I argued that certain opinions made by Paul Krugman are so political that readers should distinguish them from his academic accomplishment. Otherwise, the misjudgment may bring about misinformed opinion. Judge Posner took it one step further by questioning the ethical responsibility of academic economists in influencing public opinion through their academic tools. Here is a quoted entry from the Faculty Lounge by professor Kim Krawiec:

In his August 18 blog post for The Atlantic, Honesty about the Stimulus, Posner criticizes the August 6 talk by Christina Romer, chair of the President's Council of Economic Advisers, entitled "So, Is It Working? An Assessment of the American Recovery and Reinvestment Act at the Five-Month Mark."  She is referring, of course, to the economic stimulus package, and her answer is “absolutely.”

Posner, however, does “not think her analysis is responsible,” and is “concerned with the fact that academic economists, when they become either public officials or public intellectuals (like Paul Krugman), leave behind their academic scruples.”  Posner picks through Romer’s arguments in some detail, so you should read his post (and her report, linked above) in its entirety to fully understand the substance of the dispute.  Posner concludes by questioning the ethical responsibility of economists who write for the media or join the government:

This raises the question of the ethical responsibility of academic economists, such as Romer (and Krugman, and Lawrence Summers, and many others), who write for the media or join the government, either to adhere to academic standards in their nonacademic work or to make clear to the public that they are on holiday from those standards and that what they say in their public-intellectual or governmental careers should not be thought identical to their academic views.

Mark Thoma (here) and Brad DeLong (here) are not pleased, and quickly enter the fray in defense of Romer. In Unidentified Pretend Economist, Thoma asserts that Posner is wrong on many points:

Yet, nowhere does he say “I don’t know what I am talking about because I am a judge, not a macroeconomist.” Instead, in his role as a public intellectual, he acts like he is an expert in the field. Ethics indeed.

DeLong launches a more extended critique.  In Richard A. Posner's Ethical Lapses, he argues that Posner writes dishonestly about the stimulus package, and that Posner’s piece contained at least seven major ethical lapses.  According to DeLong:

In my view, anyone holding themself out as a public intellectual has one duty: to be smart. Being smart involves (a) checking your arithmetic, (b) building up your intellectual tools, (c) using Google, (d) reading works until you understand them, and (e) not writing things where you have absolutely no clue about what you are talking about.

Does Richard Posner think that he is behaving ethically here? In my view, he has failed to satisfactporily [sic] perform any item of that checklist.

On August 19, Posner responded to DeLong, again on the Atlantic blog, in Christina Romer Defended by an Angry Academic Colleague, dismissing the bulk of DeLong’s claims and arguing that the piece reinforced his distrust of macroeconomists' analysis of the economic crisis.  That’s all for now, but you know where to get the blow-by-blow if (when?) Judge Posner starts arguing with someone else.  

Do You Really Own That E-Book?

"Control At A Distance" is a very interesting article over at Balkinization about Amazon.com using the internet to delete copies of George Orwell's books 1984 and Animal Farm from various people's Kindles after learning that the publisher did not want to grant the rights to Kindle. Jack Balkin cleverly points out that "the irony of deleting a book about Big Brother watching you was lost on both the publisher and Amazon.com." He also makes the following commentary:

"For centuries, we have understood, or rather believed, that owning books came with certain rights, including the right to keep what we purchase and to use it, mark it up, and sell it in any way we like. We were free to purchase books and keep them in our homes, without telling anybody what we were reading, or indeed, what page we had last looked at. Amazon's Kindle system upends all of these expectations. Amazon knows what books you have on your Kindle, and, in theory, it can even know the book you are currently reading, and even the last page you've read on each of the books you own. It can delete books, add books, or modify books, all without your permission. It can change features of the Kindle at will. In upending our assumptions about our freedoms to read books in private and use them as we see fit, Amazon threatens many of the basic freedoms to read we have come to expect in a physical world. If we want to preserve these freedoms, we will have to reform copyright law and privacy law to control the new intermediaries who can control us at a distance."

I just want to add that any reforms will have to have an eye to transnational reform as electronic copies of anything obviously transcend national boundaries. What that will look like exactly is rather fuzzy. I doubt treaties like TRIPS or normal international trade organizations will be able to truly regulate/enforce electronic IP rights. This kind of property will have to protect itself; technology will be designed to protect technology similar to how it is now. There could even be an aspect of marketing, like introducing e-book readers that promise to protect your e-books from intrusive powers like Amazon.com.  

Recommended Reading: The Faculty Lounge

I have been highly benefited from The Faculty Lounge Blog recently and thought that I should share this blog with TLB readers. At the Faculty Lounge, bloggers are mostly law professors who post commentaries and analysis of legal issues and other on-going debates that are either academic-like or accassionally with a more casual tone as they probably often do while chit-chatting at the school's faculty lounge. One of my favorite Hastings professors, Calvin Massey, also blogs here, although with less frequentcy. There are a wide range of subjects covered at this forum ranging from the creditability of US News rankings, Obama' options for the Superiour Court vacancy, book reviews, legal art to faculty tactics in grading final exams. The blog is an informative forum where one could also gain insights as to what concerns our law professors and how they think through issues that often relevant to our understanding of the law. I found this blog a compensation for the missing gap of knowledge that mainstream media is often lacking. I hope you will enjoy it as well.

Federal and California State Tax: One Step Forward, Two Steps Back

 

If you would like to find out the tax aspects of Obama's stimulus package which seizes about 36% of the stimulus, as well as how the State of California mends its budget crisis through various tax increases, there was a recent discussion on federal and state tax issues given by professor Heather Field and professor Darien Shanske, two respected tax professors at UC Hastings. The discussion was recorded in mp3 format and is now posted here.[mp3]

Other than the applicable nature of the subject discussed, the discussion offered some insights of how CA tax increases will negate many parts of our federal tax credits and how our state’s constitutional setting makes it difficult to avoid similar budget crisis in the future.

In the first section, professor Field opened  by explaining the need for a stimulus package and why the tax system plays an important role in stimulating economic activities. Professor Field then discussed the various implementations of the tax aspect which include non-repayment credit for first time homebuyers, educational tax credit for students, and sales tax reduction for new vehicle. The lecture ended with a thought provoking discussion as to weather the stimulus will work as well as the short term and long term nature of these tax provisions. It is appeared that President Obama is seeking to keep some of these tax provisions permanent despite growing concern over our budget deficit. Here, professor Field nicely instigated the debate over the role of our tax system as a tool for income redistribution.

I thoroughly enjoy the professor's subjective approach toward controversial issues such as the role of our tax system and whether Obama’s tax cuts will sufficiently motivate economic activities in the short run. Field posited the question as to why the tax credits only applies for a “limited window,” and what would be the consequence of extending these provisions permanently.

Other than issues related to fairness and wealth distribution, economists have been concerned over inflation and potential negative impact on monetary system through tax instrument. We are injecting a huge amount of capital inflow to the economy, in the long run, it will take some painful interest hike to restrain these capital surplus, tame down inflation and pay off the budget deficit. Furthermore, at some point, consumers may stop responding to tax cuts as an effort to stimulate economic activities. Behavioral economics tells us that consumer behaviors are often altered by short term and long term expectations of the consumer’s future income.

The discussion quickly moved on to Darien Shanke discussion on California budget crisis and how California state has used tax system to mitigate budget problem in the time of overall global crisis. If California were an independent state, it would have been the tenth largest economy in the world. Here, professor Shanske introduced the not-so-obvious paradox: if California hasn’t overspent, why does a State which arguably has  the highest income and sale tax in the country constantly finds ways to bail itself out of budget crisis over the past couple decades?

The key problems rest in property tax and the fact that California doesn’t have a standard sale tax system. At ¼ of the country’s average property tax, the State imposes the lowest property tax rate in the nation. Because income tax is less sufficient and stable than property tax, our State budget has always been much more vulnerable in the time of crisis as it is now. For these reasons, our state is now seeing itself going through massive lay offs (10.5% unemployment rates in February), budget cuts on education, double fee on car registration and general income tax increases.

Professor Shanske then questioned how did end up here? Why can’t we simply increase property tax to balance the budget?  California is the only State in the country that requires 2/3 majority to pass the budget. Shanske reasoned that having super majority requirement is not too "insane", but if the State were to make it very difficult to change the budget and tax structure, it should have had a good initial arrangement. Here, our State legislators happened to choose the worse possible arrangement by adopting a highly unstable tax system, and making it very strenuous to change it. Given the State's distressing institutional constrains, professor Shanske left his audience empty of any probable solution. He is not to blame.

The lectures are immensely informative and thought provoking. Nevertheless, they do not require any tax background from its listeners to appreciate the on going changes and debates in the federal and state tax system. "The Tax Aspect of the Stimulus Package"[mp3] is a highly recommended tune.

I Want a Certificate in Space Law, Too!

As I am coming out of finals, graduating from law school, and staring the Bar exam dead in the eye, I am fascinated by this article on Res Communis about the first law student to graduate with a specialty in space law. It should come as no surprise that I'm planning a career in transnational law but I take my hat off to anyone that is planning a career in space law-- that is just too international and out-of-this-world cool! I'll admit it, I'm jealous!

The University of Mississippi Law School is the only ABA-accredited law school in the nation with a program specializing in space law. This spring law student Michael Dodge will be the first law student in the history of U.S. jurisprudence to graduate with this unique distinction. Requirements to earn the certificate include courses on U.S. space and aviation law, international space and aviation law, and remote sensing; as well as participation in the publication of the Journal of Space Law and independent research.

Law Dean Samuel M. Davis said, "We are particularly proud to be offering these space law certificates for the first time, since ours is the only program of its kind in the U.S. and only one of two in North America."

According to the article, Dodge said his interest in space law stems from a fascination with space exploration that began when he was a young child, so when he started law school, his interest in space was based mostly on science and history.

"Once I came to the law school, I read that there was an attorney here that specialized in space law," he said. "After that, I became curious as to why space needed regulation, and how legal regimes could be constructed to govern such an expanse. After meeting Professor (Joanne) Gabrynowicz, my curiosity only grew, and ever since, I have been dedicated to researching legal issues associated with humankind’s utilization of space."

While most major law schools are just recently overhauling their programs to focus on transnational law (or what they call "international" law), Ole Miss is taking the lead on what I'm sure will prove to be a very important field of law in the very near future.

Yo Ho Ho and a Bottle of Rum

An article at IntLawGrrls entitled, The Jolly Roger Still Flies, reminds us that piracy is still a very lucrative business-- I don't mean piracy in the intellectual property sense of the word-- I mean REAL pirates! Here is a piece of the article:

...[T]oday’s pirates seem to have gone largely unmentioned in the mainstream press, despite their having taken some 3200 sailors hostage over the last 10 years, which they’ve ransomed for millions of dollars (paid by the shipowners). In fact, total worldwide losses due to commercial vessel piracy are estimated at USD 13-16 billion per year. Just a little over a week ago, for example, Somalian farmers cum pirates took control of a French luxury liner, the Ponant, in the Gulf of Aden. The passengers had been dropped off and the ship was taken after it pulled out of port, as are many ships in this Gulf, where they’d apparently have to be racing along at 200 nautical miles/hour to escape capture. The 22-member crew was hostaged for a reported $2 million, but the French military operation managed to net 6 of 13 pirates and some of the booty. The legal questions now are: where will these 6 pirates be tried and how should such cases be handled in the future? International maritime law does not provide a complete answer: a state seizing a ship from pirates is authorized to prosecute the pirates (indeed, the law of nations upon which the ATCA was built required states to prosecute alleged pirates and put them to death if convicted)...

Click here for the entire post, which gives an overview of some law pertaining to pirates.

UPDATE (4/15/08): Apparently, pirates are a popular topic of discussion currently. The FP Passport blog has an integrated satellite map that shows reported incidents of pirate attacks and hijackings off the coast of Somalia between January and November of 2007 as well as incidents in 2005 and 2006. See it here.

The U.S. Military's Contemplated Use of the Blogosphere

While I was perusing the blogosphere about a week ago, I came across a post on Opinio Juris that caught my attention entitled, US Military Thought About Recruiting-- or Hiring-- Bloggers, which discusses a 2006 report for the Joint Special Operations University that suggests using bloggers to verbally attack a specific person or promote a specific message. The Opinio Juris post cited an article from the Wired Blog's Danger Room entitled, Military Report: Secretly 'Recruit or Hire Bloggers', that republished the following paragraph from the report:

Information strategists can consider clandestinely recruiting or hiring prominent bloggers or other persons of prominence... to pass the U.S. message. In this way, the U.S. can overleap the entrenched inequalities and make use of preexisting intellectual and social capital. Sometimes numbers can be effective; hiring a block of bloggers to verbally attack a specific person or promote a specific message may be worth considering. On the other hand, such operations can have a blowback effect, as witnessed by the public reaction following revelations that the U.S. military had paid journalists to publish stories in the Iraqi press under their own names. People do not like to be deceived, and the price of being exposed is lost credibility and trust.

Other than an interesting story about Big Brother, I didn't think much of the two posts until I got an email from the Washington Post asking me to check out their new national security blog called Intel Dump. The author of the Opinio Juris post, Kevin Jon Heller, made a point of saying, "I hereby pledge that, as a blogger, I have not been recruited, purchased, or 'made' by the US military (or the mafia, for that matter)." I wonder if the author of Intel Dump, Phillip Carter, can make the same claim? Carter is an attorney in NY, working for McKenna, Long, and Aldridge, and he served on active and reserve duty for nine years in the U.S. Army as a military police and civil affairs officer. I am not saying there is any connection between Carter and the military report, but he does seem like the perfect candidate to accomplish the military's objectives as outlined in the report.

Frankly, I don't have a problem with the military recruiting or hiring or simply using bloggers to disseminate their message or attack someone in the blogosphere, and I don't care if they do it openly or in secret. The military doesn't quite understand the blogosphere. The report asks more than once, "How could (to paraphrase CBS’ Klein) 'some guys in pajamas writing at home' succeed in influencing not just the careers of prominent journalists, producers and media executives, but also potentially the course of an entire election or public opinion about a war?" What is unique about the blogosphere is not the infinite amount of information but the dialogue that occurs between different blogs and between bloggers and their readers. The military report argues that if the blogger and his blog were prominent enough, then the information posted on it would influence the rest of the blogosphere.

As previously observed, blog influence can be affected by the structure of the blogosphere, in particular, the network of hyperlinks connecting one blog to another. To illustrate, imagine starting at any random blog. By following a series of links from one blog to another, one is likely to hit one of the top blogs within a few hops. Moreover, information on that top blog may have propagated out to some of the blogs that linked to it, and so on from there, perhaps even reaching the blog from whence one started. Thus, even if one is not initially aware of a particular blog, one may end up there or being exposed to information posted on it. Overall, one is more likely to encounter a well-connected blog, or information posted on it, than one that is not.

Just because a blog links to a post does not necessarily mean that the blogger agrees with it. The writer of a blog (speaking from experience) links to posts he has an opinion about and he links to it because he wants to share his opinion about it. Often times, the opinion shared is contrary to the opinion in the original post. Plus, the readers of blogs does not take what they read at face value, and they generally formulate their own opinions by comparing the different opinions of several bloggers.

The users of blogs are not stuck with the editorial agenda of their local newspaper's publisher. Unlike the paper version of the Washington Post, a reader of blogs can freely move from one source of information to the next, comparing the information and filtering out absurdities. The information can be tested by reading other blogs or by questioning the blogger. This is the real threat to any sort of hegemonic information system. Even if the military inserted clandestine bloggers to disseminate their "message", it would not automatically be accepted as truth because it would be subject to the criticism and judgment of the entire blogosphere. This is why I invite the military to join in the discussion! The more people involved, the better the discussion is going to be-- even if someone is just trying to add misinformation.

It should also be noted that the report doesn't really state whether the military plans to hire bloggers to disseminate their message in the USA or in other countries. However, after a closer read, it appears the military is considering using bloggers in other countries.

Just as during World War II, the military recruited the top Hollywood directors and studios to produce films about the war (in effect conducting domestic influence campaigns in the name of maintaining the national morale and support for the war effort), waging the war against terrorism and its underlying causes, as spelled out in the National Security Strategy, may require recruiting the prominent among the digirati (probably those native to the target region) to help in any Web-based campaign. The importance of credibility and reputation to blog influence must be taken into account when considering using a blog as a vehicle for information operations. This is especially critical given the apparent poor image and reputation of the U.S. government in countries we want to influence.

But what is said by a blogger in one country, can quickly become the subject matter of a blog in another country. The media has been relying on bloggers in Tibet to get information about the unrest there, and a blogger secretly working for the US government could potentially provide false data that would then be disseminated throughout the blogosphere here in the US. However, I still believe the blogosphere and the average blog reader would be able to deal with that kind of information and weigh its legitimacy by comparing it to other sources of information.

The study also had a very interesting analysis of the blogosphere and bloggers, which is worth a read. I particularly liked the section summarizing who most bloggers are:

Nearly 75 percent of Americans use the Internet regularly, and those who use it most regularly tend to be young, male, have some degree of college education and generally are in or from the middle to upper-middle income brackets. These are the people who tend to be the most politically active, as well. Blog creators follow this trend, being generally young, affluent, educated males with broadband access and at least six years’ experience online.

Wow! That pretty much sums me up!

No Holiday After Fidel

Foreign Policy Passport Blog has a good list of articles discussing Fidel Castro's stepping down in a post called After Fidel.  An interesting post at the Disinformation Blog (a Myspace blog) entitled, Farewell Fidel! But We Forgot Our Detainees at Guantanamo Bay, reminds us that the ever controversial Cuba is also home to the infamous Navy base.  The post features an excerpt from Martin Cohen's new travel book No Holiday: 80 Places You Don't Want To Visit, which I've taken the liberty of republishing below:

NO HOLIDAY 32: Guantánamo Bay, Cuba

The most famous of all the Cuban bays

How to get there

For years and years you used to be able to just wander in and out of the US Navy Camp on the South Eastern tip of Cuba. But that all changed after the Revolution. Nowadays Americans are not even allowed to visit any part of the island—at the risk of a $10,000 fine. Those who really want to see Cuba have to employ a "roundabout route" (like maybe fly to Pakistan and join the Taliban). But for non-Americans, the easiest way to see Camp Delta is still to go to Havana and then down to Guantánamo Town, notable for its French-style architecture. There, for a couple of US dollars, they can hire a driver for the day, and be driven up a steep rough road to the Loma Malones observation point. This is a little rock shelter under a canopy, complete with a tourist-standard public telescope.

What to see

And from the little observation refuge, it should be possible to see far below, set amongst one of the wildest and least hospitable landscapes of Cuba, a kind of Wild West fort, complete with wooden stockades and watchtowers flying the Stars and Stripes. If you're lucky, through the telescope you may also see US soldiers frog-marching prisoners, clad in their famous orangey-red jump-suits, from their cells to the interrogation rooms.

The land surrounding the bay is dry and baked by the sun, and there is a fringe of cacti to the northwest, a relic of Fidel Castro's attempts, in the early 1960s, to discourage Cubans from fleeing to capitalism. The inhabitants of the base call this the Cactus Curtain, a sly reference to the more famous Iron one. Their idea was that on one side there were people living in perpetual fear and misery, whilst on the other was a world of freedom: singing, drinking and laughter in the bright sunshine. (Only it is not clear if they appreciated then which side of the curtain they were living on.)

One American student at the lookout, who had sneaked into the country by her own roundabout route, gives the flavor. "It looks so boring," she complains, "just like Los Alamos."

Boring, yes. But "Guantánamo has become an icon of lawlessness... dangerous to us all," as Amnesty International said in a statement marking the third year of Guantánomo's new role as a concentration camp and torture center. For that reason alone, it is well worth stopping off, if you're in Cuba, for a look.

The Death of Guanxi

I was recently ranting to Steve Dickinson that people who think guanxi is the key to doing business in China don't understand China's legal system and are probably functioning with the misconception that China's legal system is unreliable. He didn't state whether he agrees with me or not, he simply said guanxi is dead, and pointed me in the direction of an article he recently wrote for China International Business entitled, Debunking the Guanxi Myth. Check it out, it's worth the time, and I've taken the liberty of republishing the four basic points Dickinson argues to bust the myth of guanxi.

1. No foreigner can recreate a Chinese-style guanxi network. In China, guanxi refers to a vast network of connections arising from party, family and work connections that may go back several generations. No guanxi network relies on a single individual. The elimination of one member of the network is therefore not fatal. Foreigners almost always rely on only one or two individuals for their supposed connection. This kind of network is too fragile to be of enduring value. Foreign investors who think they have created a guanxi network in China are usually simply deluding themselves.
2. Connections with local government officials are short-term and can be abruptly terminated. Many foreign investors do not realize that government officials in China are regularly moved from office to office and from region to region. As a result, the connection with a local official is unlikely to be a long-term connection. It is quite common to negotiate a project for several years and then learn that the official in charge has been transferred to a new post. Where the project is not in compliance with the law, their replacements will often refuse to sign the documents that have already been negotiated.
3. The Chinese provider of guanxi may suddenly disappear. If the project depends on the protection of a single individual, what will happen if that person dies, is demoted, or prosecuted for corruption? This change in fortune can be a particular disaster where the foreign investor has already contributed funds, because the project can be cancelled with no refund on the investment.
4. A project based on guanxi gives too much power to the Chinese side of the deal. In many cases, the provider of guanxi will make use of the fact that the project is not in compliance with the law to ask for additional benefits. Since the foreign side has no legal recourse, the foreign side must accede to what is in effect a blackmail request or risk the collapse of the project. When the foreign investor comes to a lawyer for help, there is nothing that can be done, since the project itself is either illegal or poorly documented.

In my opinion, "guanxi" refers to the period of time in China from 1980 to 2000 as depicted by books like Mr. China, which essentially advise finding Chinese solutions to Chinese problems. The period in China when the only way to protect your interests was through political connections and bribery is rapidly giving way to a reliable legal system. It's now better to have a good contract than a seemingly powerful friend.

Tangential to this subject is a post by Dickinson's partner Dan Harris over at the China Law Blog called, Chinese Cultural Awareness Simplified: Don't Be an Asshole. Harris argues that "knowledge of Chinese culture is secondary to knowledge of business when it comes to doing a China deal" and that point is very similar to the point argued in this post that guanxi is secondary to knowing and complying with the law.

Recommended Reading: Experience Not Logic

The Experience Not Logic blog is informative and a pleasure to read.  The blog is primarily devoted to discussing legal and cultural issues concerning China.  Its name is derived from an 1881 Oliver Wendell Holmes, Jr., quote, in which he said, "The life of the law has not been logic; it has been experience."  About that quote, the blog's author, Will Lewis, wrote, "Each time I read a US court decision, Holmes' quote flashes through my mind.  In China, the rule is the same, but the experience is different. Here's to broadening the experience..."

Experience Not Logic features a variety of posts, discussing a broad range of issues from patent reform in the US to model arbitration clauses.  The posts are well-researched and Lewis writes with a hint of amused sarcasm reminiscent of Hunter S. Thompson, making his posts on fairly boring legal stuff actually readable and surprisingly fun.  Some of the opening lines from a post on corporate social responsibility are a perfect example:

Critics of capitalism have long clung to the idea that the inherent competition leads to conflict, and conflict in capitalism reinforces the unfortunate Hobbesean conclusion that man's life is "solitary, poor, nasty, brutish, and short." And then CSR, the classic liberal's wet dream, comes and spoils the party by showing the world that soaring profits can go hand in hand with doing good.

We really appreciate the fact that Mr. Lewis is a law student-- he is a 2L at the University of San Diego-- and he is publishing an excellent blog. Keep up the good work! We'll be reading!