Eugene Volokh's Blog, page 2681
October 31, 2011
Why What Everybody Thinks About Loopholes Must Be Wrong
A lawyer tells a client who is on the verge of declaring bankruptcy, to move to a state with generous exemptions: to convert most of his remaining assets into a house (exempt), designated pensions (exempt as well) and similar special assets, which the law deems to be the equivalent of the shirt on your back, which no creditor is entitled to take away from you. In this way, the debtor gets to keep most of what he owns and to thumb his nose at his creditors.
Another lawyer tells his client who is a visiting the US on a tourist visa but would very much like to make his home here, that he should try to qualify for political asylum. "But I'm not being persecuted back home," the puzzled client says. "True," says the lawyer, "but don't you in fact live in a brutal dictatorship and wouldn't you have to fear persecution if you ever did speak out against the government, and if you haven't done so already, perhaps you should do so now … and thereby qualify for asylum?"
Although lawyers give this kind of advice routinely, they usually feel ambivalent about it. On the one hand they are pleased and proud to help someone out; on the other they feel themselves to be taking advantage of a loophole and loopholes are in bad odor. But that's only true because everybody has an entirely misguided idea of why laws have loopholes.
The misguided idea which has been around forever and has been considered self-evident from the days of the Romans, at least, is that we have loopholes because it is very hard to get laws right, and what lawyers routinely do is take advantage of the impossibility of getting the laws just right, that is, of writing them in such a way that the law's language exactly reflects its underlying purpose. I'll call this the mismatch theory of loopholes.
A bit of reflection of the kind we routinely engage in when we question our students socratically—which usually involves getting them to draw out the implications of something they already know—should be enough to show that the mismatch theory is almost surely wrong.
Here are three counterexamples to the mismatch theory.
The First Counterexample: Evading God. Perhaps the most immediately compelling counterexample to the mismatch theory is the way the devout treat religious commandments. They circumvent them with a brazenness that would put the most aggressively loophole-exploiting lawyer to shame. Indeed Jesuitic and Talmudic reasoning are famous for the ways in which they seem to offer legalistic-looking shortcuts for complying with divine commandments with a minimum of inconvenience and sacrifice.
To circumvent the prohibition against dueling, the Jesuits recommend contriving to create a situation of self-defense: let your opponent know that you will be taking a stroll to a certain location at a certain hour. When you then encounter him there at the appointed time and you see him take position for the planned fight, your participation in the duel has become nothing more than self-defense.
Talmudic scholars recommend that to circumvent God's prohibition on operating a business or even performing such a minimal task as turning on a light on Shabbat, Jews hire a gentile (the "Shabbes goy") to perform that task for them.
Many religions prohibit lending money at interest. When they do, its followers usually feel free to circumvent the prohibition by a variety of devices, the most devious and simple of these being the sale of some valuable object by the debtor to the creditor, with an advance agreement that it be repurchased by him for a fixed higher price at some later date. The literature setting out and elaborating on such recommendations is no small part of a theological library.
The mismatch theory cannot make sense of these religious ruses. If the mismatch theory is right, what devout believers are doing involves nothing less than taking advantage of God's failure to give a sufficiently airtight statement of his commandments. But that is clearly not what the devout see themselves as doing. Now, you might say that the mismatch theory never claimed to explain anything other than the law. But therein lies its problem. If one sees a phenomenon that resembles something that goes on in the law to a T, then it seems plausible to think that it is the same sort of phenomenon and that any explanation for that phenomenon within the law should also apply outside of law. And that is quite clearly not true of the mismatch theory.
The Second Counterexample: Evading Tyranny. Loophole exploitation also flourishes in another unexpected realm—dictatorial regimes. Subverting the ruler's orders by seemingly obeying them but actually undermining them in subtle ways, though often in plain sight, is one the oldest forms of successful risk-minimizing resistance.
In the early 1980's Poles wanting to protest the government's suppression of the dissident trade union Solidarnosz did so by taking a walk on the city's main promenade timed to coincide exactly with the official news broadcast. They did so, moreover, wearing their hats backwards. This was a non-trivial way of signaling to each other just how widespread opposition to the government had become and the government was at a loss about how to suppress it. Should they start to punish people for wearing their hats backwards?
In a similar vein, there is a story about the former East Germany. In 1988 a group of East German high school students tried to find a way of protesting against East German militarism without incurring the usual penalties associated with such gestures. After a careful search through East Germany's official army newspaper they found an embarrassingly bad poem titled "Love Song to My Kalashnikov Machine Gun" and posted it on the school's bulletin board, adding the coy caption "A poem which has impressed us deeply and given us much food for thought."
These episodes make no sense under the mismatch theory. Since a dictatorship is not bound by the rule of law, why should it be possible to evade its laws in this way? And yet it is.
The Third Counterexample: Evading the Guilty Conscience. Like everyone else, when I want to deceive someone, I find it much easier to mislead than to lie. I have of course done both, but given the choice, I prefer indirection to outright mendacity. It's not that I fear legal liability and think that this is a good way to avoid it, I just feel better when I lie circuitously rather than outright. The reason this humdrum fact about deception seems worth contemplating is that it poses a further challenge for the mismatch theory of loopholes. When I mislead, rather than lie, I am engaged in a legalistic-looking stratagem, but there is no law that I am anxiously trying to circumvent. There is no legislature that somehow drafted the rule against deception in an underinclusive way, allowing me to take advantage of the gap between the letter and the spirit of the rule.
Well, if the mismatch theory of loopholes isn't right, how does one account for them? For some hint at an answer, the reader must await tomorrow's blog post. For the more complete answer, he may want to look at Why the Law Is So Perverse, a book of mine just published by the University of Chicago Press.
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Poisoned Halloween Candy an Urban Myth
From today's Los Angeles Times:
Every year, parents and police departments worry about tricks in their kids' Halloween treats: razor blades in apples, poison in candy bars.
But incidents of candy poisoning are very, very rare — if they exist at all.
"There have never been any substantiated cases of strangers tampering with Halloween candy," said Susan Whiteside, in an email to Booster Shots Friday. Whiteside is a spokesperson for the National Confectioners Assn., which provides an FAQ on Halloween candy safety and coordinates with law enforcement to track reports of tainted treats.
Now if we could only do something about those zombies I'd heard about.
October 30, 2011
Should Obesity Be Considered in Child Custody Disputes?
The WSJ reports that concerns about childhood obesity are beginning to play a role in child custody disputes:
Family-law practitioners and legal experts say mothers and fathers in custody lawsuits are increasingly hurling accusations at each other about the nutrition and obesity of their children, largely in attempts to persuade judges that their kids are getting less-than-optimal care in the hands of ex– and soon-to-be-ex-spouses. . . .
Family-law practitioners and legal experts say mothers and fathers in custody lawsuits are increasingly hurling accusations at each other about the nutrition and obesity of their children, largely in attempts to persuade judges that their kids are getting less-than-optimal care in the hands of ex– and soon-to-be-ex-spouses. . . .
The issue is surfacing more often partly because obesity numbers have risen and the public is becoming more aware of the health dangers related to being overweight, according to lawyers surveyed by TotalAttorneys.com, an attorney-referral service. According to the Centers for Disease Control and Prevention, approximately 17%, or about 12.5 million, of the nation's children and teens are obese. Since 1980, according to CDC statistics, obesity rates have nearly tripled.
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Solving the Student Debt Problem
Government subsidized loans have helped fuel a massive student loan bubble. Student loan debt now tops $1 trillion. President Obama has proposed a modest reform to ease the burden on some, but it will not do much. In a NY Post op-ed, Glenn "Instapundit" Reynolds has a more interesting reform idea:
I think we should return to the days when student loans were dischargeable in bankruptcy, starting five years after graduation. This will allow graduates who are unable to pay to get out from under what is otherwise a potential lifetime of debt-slavery. If you buy a house to flip, and wind up losing your shirt, we let you go bankrupt, take a credit-rating hit, and scrub the debt away. Why should graduates be forbidden from doing the same? The five-year delay means that you can't use immediate post-graduation poverty as an excuse (as some medical students used to do), but still provides an out.
But the real incentive-alignment part is this: Put the institutions who issued the degrees on the hook for the money they received. Making them eat the entire loan balance would probably bankrupt a lot of colleges (though that should tell us something about the problem right there), but sticking them with even a small fraction — say, 10% or 15% — would be enough to inspire a much greater degree of concern for how much debt students take on while in school, and for how likely they are to find gainful employment after graduation.
Prof. Leo Katz, Guest-Blogging
I'm delighted to report that Prof. Leo Katz (Penn) will be guest-blogging this coming week about his new book, Why the Law Is So Perverse. The book is about many things — all-or-nothing verdicts, loopholes, noncriminal immoralities, and prohibitions on certain seemingly win-win deals — all of which are connected to, of all things, voting paradoxes (such as Condorcet's paradox and Arrow's Theorem). It's a fascinating project from a very interesting criminal law, tort law, and jurisprudence scholar; I very much look forward to Prof. Katz's visit, and you should, too.
The Eurozone Deal
With euphoria over last week's eurozone deal rapidly fading away, here are four sober takes on what it means — and what it doesn't. First, The Economist's widely cited leader this week (and here is a link to the Economist's collected articles on the crisis):
YOU can understand the self-congratulation. In the early hours of October 27th, after marathon talks, the leaders of the euro zone agreed on a "comprehensive package" to dispel the crisis that has been plaguing the euro zone for almost two years. They boosted a fund designed to shore up the euro zone's troubled sovereign borrowers, drafted a plan to restore Europe's banks, radically cut Greece's burden of debt, and set out some ways to put the governance of the euro on a proper footing. After a summer overshadowed by the threat of financial collapse, they had shown the markets who was boss.
Yet in the light of day, the holes in the rescue plan are plain to see. The scheme is confused and unconvincing. Confused, because its financial engineering is too clever by half and vulnerable to unintended consequences. Unconvincing, because too many details are missing and the scheme at its core is not up to the job of safeguarding the euro. This is the euro zone's third comprehensive package this year. It is unlikely to be its last.
At the Weekly Standard, senior editor and Financial Times columnist Christopher Caldwell assesses the long-run, the social and political economy implied by the deal. This means particular attention to the implications of asking the BRICs to invest in a fund that has run out of domestic money, as well as the questions that the demography of Europe raises from the standpoint of long-run bondholders (emphasis added):
Years ago, China might have fallen for the trick that Europe intends to pull, basically trying to get money for Greece and Italy by waving around the triple-A credit rating of Germany and other countries that have stocked the EFSF. But today it is likely that China will insist on guarantees that it be paid before European taxpayers in any default scenario. In an interview with the Financial Times the day after the agreement, Li Daokui, a member of the central bank monetary policy committee, gave evidence of a real canniness. "The last thing China wants," he said, "is to throw away the country's wealth and be seen as just a source of dumb money." Li indicated that the Chinese might ask European leaders to refrain from criticizing Chinese economic policy as part of the deal.
Perhaps Europe has reached the point where its only route out of bankruptcy is this kind of vassalage. To escape a debt crisis, an economy needs to be capable of growing. It is far from clear that Europe can do that. It has two problems. One is technological. Much of Europe lacks the technological wherewithal to claim an ever-increasing share of the world economy. Spain, for instance, during its long, construction-based boom, developed a good deal of national expertise in . . . what? Pouring concrete?
A second problem is demographic. Italians have one of the lowest birthrates known in any society since the dawn of time; what it will look like in 40 years is anybody's guess, but one fairly conservative demographic projection shows its population decreasing by 10 percent, to 54 million, at midcentury. Debt, alas, is contracted on a per-country, not a per capita basis, and this kind of population loss (especially when accompanied by rapid aging) can render debt impossible to pay down.
At the Telegraph, in London, Liam Halligan brushes aside the giddiness of the equity markets to explain why the credit markets see the deal as merely another stopgap that will last weeks at most:
Global bond markets, by character more sober and smarter than the excitable equity guys, were voting against the deal. This is alarming. For it is only by selling more bonds that the eurozone's deeply indebted governments can roll-over their enormous liabilities and keep the show on the road.
Some say Western governments shouldn't "accept" what the market says. "Who do these trading people think they are," I hear from the lips of the educated but financially-illiterate political elite. Let's be clear – if global bond markets stop lending to a number of large Western economies, we are in the realms of unpaid state wages and pensions, transport chaos and closures of schools and hospitals – sparking the prospect of serious civil unrest. Forgive my intemperate tone, but these are the dangers we face. And I'm afraid the only rational response to Thursday's announcement is that the probability of such undesirable outcomes has just been increased.
Finally, we have George Soros, with regards to the prospects of this deal stabilizing the situation. He does not bear glad tidings, and his most important warning is that from the banks' point of view, it might now be preferable — even a matter of the bank board's fiduciary duties to their shareholders — to prefer a "credit event" that would trigger the full protection on the credit default swaps that they hold as insurance on the sovereign debt (emphasis added).
"Unfortunately, the 50pc haircut is effectively less than a 20pc reduction in the overall debt [for Greece] because it only involves the private sector and excludes all the debt that is held by the ECB [European Central Bank] and the other public authorities and also the debt held by Greece because the banks, of course, will now be insolvent and the pension funds also," Mr Soros said.
"It is not at all clear that the private sector will actually deliver this voluntary cut because many of the banks are hedged by holding credit default swaps and this doesn't trigger the credit default swaps. As a private institution you could argue that it is the fiduciary responsibility of the board to look to the benefit of the bank rather than the common benefit."
"So, from the banks' point of view it is better to have a credit event where the CDS become active and protect them from the loss. That is an unsolved problem which may emerge in the next few weeks. The failure in terms of governance and the lack of understanding among the leadership how to deal with the market is really quite astounding. You have to lead markets, that is what they don't understand."
(Comments are open; please be civil and no rants. I am particularly interested in serious comments on (a) the nature of the credit default swaps in this instance — who are the counterparties, who pays, any reasons why the banks wouldn't simply hold out to trigger them; (b) the consequences of a failure of this deal in any of its three parts — Greek debt write-down, the stability fund, and the bank recapitalization — for the US economy; and (c) whether there is anything concrete and material the US could do to help stabilize the situation, and whether should it do so.)
October 29, 2011
Communism and the Jews
Co-blogger David Bernstein links to Polish Jewish scholar Stanislaw Krajewski's article on the relationship between Jews and communism in Eastern Europe. As Krajewski emphasizes, this is an extremely sensitive subject. Right-wing anti-Semites have long claimed that communism was really just a "Jewish conspiracy" intended to subjugate gentiles for the Jews' benefit.
I agree with most of Krajewski's analysis. It cannot be denied that Jews were disproportionately represented among early Eastern European communists. Several prominent early communist leaders were Jewish, most notably Leon Trotsky. At the same time, Krajewski is also right to emphasize that the vast majority of early 20th century Jews were not communists, and that most communists were not Jewish. Overrepresentation of a group in a political movement does not prove either that the movement was "dominated" by that group or that it primarily serves that group's interests. The idea that communist oppression was somehow Jewish in nature is belied by the record of communist regimes in countries like China, North Korea, and Cambodia, where the Jewish presence was and is miniscule.
At the same time, I am not entirely convinced by Krajewski's claim that Jewish communists "became communists because of general social trends" rather than because of any distinctively Jewish factors. Obviously, such general trends played a role. But the overrepresentation of Jews in the movement was also caused by at least two specifically Jewish factors. First, communism disproportionately appealed to intellectuals generally. They liked its utopian nature and its seeming logical rigor. While the vast majority of Jews are not professional intellectuals, Jews are disproportionately represented in that group. Any movement that appeals to intellectuals will also tend to have a relatively high proportion of Jewish members.
Second, Jews' status as an oppressed minority in early 20th century Eastern Europe also played a major role. The government of the Russian Empire (which ruled over most of Eastern Europe's Jews until World War I) was highly anti-Semitic and oppressed Jews in innumerable ways. It also encouraged anti-Jewish violence, such as pogroms. Krajewski briefly mentions employment discrimination against early 20th century Jews; but that was only one small part of the prevailing anit-Semitism.
Because of this persecution, Jews were more likely to be attracted to radical anti-regime movements than most other groups. A movement that seeks to overthrow the government that oppresses you and promises ethnic and racial equality has obvious appeal to persecuted minorities. Obviously, the communists were far from the only opposition movement in early 20th century Russia that was attractive to Jews. Many of the others also had disproportionate Jewish representation. For example, the Constitutional Democratic Party, which sought to transform Russia into a Western-style liberal democracy, had a number of Jewish leaders, including the majority of Jews elected to the Russian parliament. Before 1917, there were many more Jewish Kadets than Jewish Bolsheviks in Russia.
The fact that many Jewish communists joined the movement in part because of anti-Semitism does not excuse them. There were far more constructive ways to oppose anti-Semitism than by joining a brutal totalitarian party. It does, however, help explain their actions, even if it does not justify them.
Although Jews were disproportionately represented among early communists, they were also (as Krajewski points out) disproportionately represented among the victims of communist regimes once the latter seized power. Unfortunately, Krajewski neglected to mention that in the 1970s and 80s, Jews were also disproportionately represented among the anti-communist dissidents in the USSR and Eastern Europe. Several of them played key roles in the eventual overthrow of communist rule (e.g. — Adam Michnik, one of the leaders of the Solidarity movement in Poland). Ironically, Jews were disproportionately represented among anti-communist dissidents for much the same reasons as an earlier generation had been disproportionately represented among communists: the dissident movement appealed to intellectuals, and it opposed highly anti-Semitic regimes.
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The Ethics of Law Professor Amicus Briefs
Co-blogger Orin Kerr links to Richard Fallon's interesting article on the ethics of law professor amicus briefs.
Fallon argues that lawprofs are far too quick to sign amicus briefs that fit their ideological proclivities even if they aren't really expert in the underlying legal issues and sometimes even if they don't agree with the particular legal argument advanced by the brief. He further contends that legal scholars should only agree to sign briefs if they 1) have personal knowledge of the major factual claims and legal authorities the brief relies on, 2) agree with the brief's reasoning (not just its bottom-line conclusions), and 3) the brief makes at least some reasonable effort to confront key opposing arguments and evidence.
I certainly agree that Fallon has identified a real problem. For what it's worth, I have long refused to sign amicus briefs except in cases where I am an expert on the relevant subject and I endorse the brief's reasoning as well as its conclusion. This is less stringent than Fallon's standard of personal familiarity with all the major authorities relied on by the brief. But it does have real bite. For example, I have refused to sign several amicus briefs in Second Amendment cases because, despite my sympathy for the individual rights theory of the Amendment, I feel I'm not expert enough on the subject to opine on it to a court. In another major Supreme Court case that did touch on areas where I am an expert, I refused to sign a brief because, even though I agree with its bottom-line conclusion, one of its principal arguments relied on a theory of the Spending Clause that I had criticized in my scholarship.
Are all legal scholars ethically obliged to follow something like my rules or Fallon's more restrictive ones? I am not sure that either of us has hit upon exactly the right approach. But I do think that we should apply tighter standards to our participation in these kinds of briefs than seems to be the norm today. Otherwise, as Fallon suggests, we end up using the intellectual authority we have based on scholarship within our fields of expertise to influence courts on issues about which we actually know very little.
An alternative norm is that a law professor might sign an amicus brief on an issue outside his expertise in such a way as to indicate that he's doing so in his capacity as an ordinary citizen rather than as an academic expert. This approach is, I think, entirely ethical. Experts are not the only ones entitled to express opinions on legal issues, including in amicus briefs. But it does, of course, tend to defeat the main reason why people solicit law professors' signatures on amicus briefs in the first place. A brief joined by "Professor Joe Blow, constitutional law scholar," looks a lot more impressive than one signed by "Joe Blow, acting in his capacity as an ordinary citizen."
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Jews, Communists and Jewish Communists
Here's an interesting article by Stanislaw Krajewski, who asserts ten theses:
1. Marxism, radical leftist ideologies, and "real socialism" constitute not only a fragment of world history, and of Polish or Hungarian histories, but also a chapter in Jewish history.
2. Antisemites have grossly exaggerated the Jewish involvement in communism, distorted the facts, and interpreted them according to mythical conspiracy theories.
3. Jews were also victims of communism.
4. Jewish communists rarely cared about Jewish concerns and often virtually stopped being Jewish.
5. Some of those who had abandoned Jewishness later came back. The number of Jewish communists, and their role, was so important that other Jews must not ignore it.
6. The deepest problem is posed by the quasi-religious character of the communist involvement of some Jews.
7. There is no distinctive Jewish radicalism. There is no "Jewish Communism." Jews became communists because of general social trends.
8. It was not Judaism or Jewish traditions but the social situation that led Jews to communist involvement.
9. Participation in evil can begin with noble and selfless intentions.
10. Moral responsibility can be indirect. Re-emerging Jewish communities in Eastern Europe should face the legacy of Jewish participation in communism. However, accepting a Jewish share of moral responsibility does not make non-Jews less responsible. Objective research is needed to clarify the extent and the nature of the Jewish participation in communism. The tragic consequences of the antisemitic myth of "Jewish Communism" should impose no taboo.
I'm less familiar with the situation in Europe, but it's irked me for some time that for the most part, mainstream American Jewish sentiment not embarrassed by the disproportionate role Jews played in American Communists. Indeed, even the most hardcore Stalinists, including the Hollywood Ten, the Smith Act defendants (most of whom were not Jewish), and sometimes even the Rosenbergs, are often romanticized. It's one thing to contend (dubiously) that such individuals were treated unjustly; it's quite another to treat them as civil libertarian heroes. (As an aside, the Smith Act, the law that was used to prosecute the C.P. leadership, was passed in 1940. In 1941, the government prosecuted eighteen leaders of the Trotskyist Socialist Workers Party under the Smith Act. The Communist Part not only applauded this action, Party leaders assisted in the prosecution.)
Disclosure: My maternal grandfather's family were associated at a very low level with some Communist front groups (and my great uncle was supposedly delivered by Dr. Armand Hammer), though I have no idea if any of them were actually members of the party. In her youth, my mom campaigned for Henry Wallace for president, though she claims to have done so primarily because "that's where all the cute Jewish boys were." Nowadays, and quite unusually for someone of her background, she's a hardcore Republican.
Well, that's all right, then
The British Commonwealth has endorsed an end to the traditional preference for sons over daughters in royal succession. Said British Prime Minister David Cameron, "The idea that a younger son should become monarch instead of an elder daughter simply because he's a man … this way of thinking is at odds with the modern countries that we've all become."
So, instead of letting its ruler be determined by an accident of biology, the UK will now choose its ruler based on … a different accident of biology.
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