Tuesday, May 5, 2009

A hole in the head

Ross Douthat doesn't have any idea what he's talking about when he claims that prominent moderate Republicans are really "liberals."

He's flat wrong when he suggests that the Republican party doesn't need socially moderate Northeastern Republicans, like the recently departed Arlen Specter.

And those moderate Republicans voted for "$800 billion in deficit spending" not because they are secretly fiscally liberal, but because they understand that deficit spending is the economically sound government action in minimizing the impact and duration of a financial crisis.

The Republicans have an important role in the recovery, though. While an expansion of the government's balance sheet was a necessary and unavoidable action, a corresponding expansion of the regulatory state could slow the recovery considerably. The bank and auto bailouts were necessary, if extreme actions, but the fact that government had to intervene to save them doesn't mean government knows how best to run them.

The Democrats have a message that excessive financial risk-taking caused the crisis; big-shot CEOs make juicy targets for blame, even though a full accounting has to place responsibility on investors ravenous for financial products with high returns, small-fry mortgage brokers who were flat-out crooks and borrowers who took loans they knew they could never pay back.

We need risk to recover, and the Republicans have to stand against an expansion of federal bureaucracy that will waste tax dollars and kill good businesses.

That should be the message of the new Republican party; conservative orthodoxy on gay marriage and abortion is now a minority position in the United States, and the Republicans can no longer depend on that to win elections for them. Further, the Republican South is no longer solid. Virginia is a swing state. Florida is a swing state. Republicans will have to fight for safe seats in their strongest regions soon, and Douthat's idea that they can just cede the coasts is totally wrong, unless they want to be consigned to permanent minority status.

Thursday, April 16, 2009

Sticking Cheese Up Your Nose is First Amendment Speech

NYTreports that felony charges have been filed against Domino's Pizza employees who made a disturbing YouTube video that shows them sticking cheese up their noses and putting it on a sandwich.

The video has been seen so widely that it has damaged the Domino's brand; nationwide polling went from positive to negative over this video, which the Times said a million people have accessed.

The local authorities charged the employees with "delivering prohibited foods," according to the Times, and the art attached to the article are the employee's mug shots, credited to the police department.

The video itself shouldn't be enough to charge these people, because it doesn't prove that the food was actually served to any customers.

If the defendants are lucky, the video has a time and date stamp that can be checked against the store's records and prove that nobody ordered sandwiches like the ones portrayed in the video on the date the video was made. But if similar sandwiches were ordered, that wouldn't prove that the sandwiches delivered were the sandwiches shown in the video.

The video itself is pure speech, and while it is grounds for investigation of food going out from that Domino's franchise, it's not grounds for a felony charge, unless police have other evidence.

Political pressure probably forced local authorities to do something, but even if the tainted sandwiches were delivered, it will be extremely difficult to prove. Look for the charges to get dismissed pretty swiftly.

On a related note, cheap food prepared by low-paid workers is likely to be the subject of gross pranks. If the worst thing someone has ever put in your food is snot, you're probably pretty lucky. I live in New York City, and I suspect the act of eating that sandwich would expose someone to fewer germs than an average New York subway commute, especially since the sandwich would have been heated after the pranks portrayed in the video, which would kill bacteria.

Friday, April 10, 2009

"Observe and Report"

A lot of people are upset about the implications of a scene in the new film "Observe and Report," in which a drunken woman played by Anna Faris appears to be unconscious during a scene in which Seth Rogen is having sex with her.

You can see part of the scene in this trailer:

The trailer is probably all the people who are upset about this have seen. To view this as a date rape ignores everything that is going on in "Observe and Report." This is a film about someone who has a grandiose self-perception leading a life that is squalid and pathetic. It's an ugly movie about an ugly person. Jody Hill, the director, compares it to "Taxi Driver" and "The King of Comedy," films in which disturbed protagonists with delusions of grandeur commit sickening acts.

The sexual relationship portrayed isn't Harry and Sally meeting cute; it's a funhouse-mirror distortion of the traditional rom-com coupling. The Anna Faris character is a self-centered, boozy idiot. The Seth Rogen character is a violent, creepy bipolar psycho on a power trip. Obviously, when they get together, it is not going to be the Platonic idea of romantic love. "Observe and Report" isn't that kind of movie.

The joke is that the Sethe Rogen character thinks it is. He thinks he's Prince Charming and she's Sleeping Beauty, when we see that he's really a creepy stalker and she's a trashy idiot. He thinks he's rescuing her, but she's really settling for him because she's afraid to be alone.

When they go out, and she chases pills with shots until she pukes all over herself, he refuses to allow that to alter his idealized view of her, even as the audience is encouraged to be disgusted by the pair of them. The Rogen character also craves approval from his mother, who is a trampy blonde alcoholic, so that adds an extra level of weirdness and discomfort to the whole proceeding.

The suggestion that what transpires between them is a rape doesn't seem to flow organically from the characters; it's interposed by people bringing their own context to the situation, and the people who are most upset about it probably have not seen the movies. There is certainly a grossness at the core of the situation, but in the context presented, it seems pretty clear that she is offering herself sexually, and that he probably would not intentionally force himself on a nonconsenting partner (which would be inconsistent with his approval-seeking and his heroic self-image).

Rather, she's already been the victim of a sex crime; she was assaulted by a flasher in the mall parking lot. As a result, she feels vulnerable, and she concludes that she must protect herself from further victimization by initiating a relationship with the mall security chief, a man she has previously had no interest in. In that context, she's consuming the drugs and alcohol because she has decided to participate in a sex act with the Rogen character, and she doesn't want to do it sober.

The New York Magazine Vulture blog presumes that, because she's severely intoxicated, whatever happens is, therefore, rape. But the Rogen character's designs on the Faris character are completely unambiguous. She isn't getting ambushed while she's unable to resist; she's getting wasted in anticipation of the sex. She may not be enthusiastic about this guy, but that doesn't mean she isn't consenting.

The punchline gag encapsulates the relationship; she is consenting unambiguously, but it nonetheless resembles rape. This is the director's comment on the events leading up to the sex act; the ugliest moment is presented in the ugliest light. We are encouraged to view the characters as uncharitably as possible. It's not apologia, but condemnation.

To construe it otherwise misses the entire point of the film. Unlike typical comedies which encourage the audience to identify with the characters, "Observe and Report" maintains a cold distance. The audience is never supposed to like the Rogen character or share his worldview; his triumphs are revolting rather than cathartic, and his humiliation is mocked rather than shared. The central irony of the movie is the disparity between how the character sees himself and how the audience is encouraged to view him.

Monday, April 6, 2009

The Commercial Virtues of Art

There's an article in the Times today about how Pixar's new movie "Up" isn't generating the commercial buzz Disney wants. Marketers are upset that the protagonist, an old man who chases a dream of exploring South America, is not marketable. There's no female lead who can sell princess gowns. There's no stuffed doll. There's no Burger-King cup.

The fact that "Up" looks like it's going to be a fantastic, original movie doesn't matter much. Further, the article states, the annoying concern of Pixar's talent for making good movies instead of selling toys is making people doubt the value of Disney's expensive acquisition of Pixar, which positioned Pixar creative guru John Lasseter over the entire Disney animation apparatus.

Prior to the Pixar acquisition, Disney was floundering. It had fallen from "Lion King" highs to critical failures and box office mediocrities like "Home on the Range" and Dreamworks-esque disposables like "Chicken Little," which earned a metacritic rating of 48. Since Pixar's John Lasseter took over the Disney animation studio, the company has released "Meet the Robinsons"which earned a metacritic rating of 61 and "Bolt"which got a meta-rating of 67.

A significant improvement in film quality is a big deal for Disney. Better movies make for more beloved properties with more audience goodwill and better sequel potential that live longer on DVD. The 2004 Dreamworks film "Shark Tale" is the quintessential disposable animation product. Big celebrity voices, including Will Smith, Jack Black, Robert DeNiro and Angelina Jolie. it included rapid-fire pop culture gags that were instantly dated. Forgettable characters. It earned a solid box office, and then the thing dropped off the map. It was a weird antique by the time it came out on DVD, like the summer pop hit that's embarrassing by October. At Amazon, the DVD is now discounted to $7.49 and is ranked 1,176 in movies. Pixar's older "A Bug's Life," with almost no stars (top billing to Phyllis Diller and Dave Foley)is outselling the sharks even though it is still priced at a steep $19.99.

The clear lesson is that movies people love are going to have a better shelf-life. Disney has been raiding its own catalog for home video revenue periodically for years; DVD re-releases of "Snow White," "Sleeping Beauty" and "Pinocchio" are still padding the company's bottom line.

The kids who saw "Shark Tale" in 2004 don't want to watch it again. Their parents don't want to show that movie to their younger kids. Nobody is going to tune in for that if it's run on network television. In ten years, when the kids who saw it in theaters are in college, they won't buy a re-issued DVD. They won't show that movie to their kids. It's a dead film.

"Wall-E" which was a source of anxiety because it contained too little chatter and no celebrity voices. It made many critics' ten-best lists, and it is going to be relevant for decades, which means it's going to be a continuing source of revenue for Disney. "Up" may not be as toy-ready as "Wall-E" but people are going to love it, and movies that people love continue to have value. People will buy that DVD. People will watch that on television. People will want to show it to kids who haven't been born yet.

The "Times" also published an article slobbering over the director of "Night at the Museum," and its upcoming sequel. This movie, which got a meta score of 48, is apparently beloved by almost nobody. Amazon has discounted the DVD of this 2007 summer movie to $10.99, and its sales rank is #660 in movies while Ratatouille, that year's Pixar release, is ranked 129th and is still selling for $20.

"Night" earned big box office and a sequel because it featured Ben Stiller and Owen Wilson, popular stars who earns credibility by doing interesting films in between big, broad comedies. Parents knew that the film would be inoffensive for their children, and the museum setting even promised some vague wholesomeness, though the movie was not educational. Levy, the director, thinks he made a film that made everyone laugh. What he made was an inoffensive afternoon-filler that wasn't interesting enough for anyone to hate.

I can understand why studios and investors want more "Night at the Museum" and less "Up." The value of a beloved movie is extended over a longer term, and gets discounted when you convert it into net present value. The value of a blockbuster is recouped instantly in a big opening weekend that isn't strongly dependent on whether the film is any good.

There's also risk on any film project; a star-studded adaptation of the beloved book "The Golden Compass" exploded in the faces of the producers when the movie flopped. If a big film launches successfully, studios want to be sure to capitalize on a sure-fire sequel, which is why it was necessary to return to Ben Stiller's museum.

But there's certainly a lot to say for Pixar's model, which generates consistently stellar critical responses, blockbuster box office and strong DVD sales, even if every film isn't a merch bonanza like "Finding Nemo."

Thursday, April 2, 2009

Anonymous Sources

This is a few days old, but worth bringing to the attention of anyone who might see it.

The New York Times's ombudsman has taken the paper to task for its use of anonymous sources.

This is something every news reader should be aware of; unattributed comments get used so frequently that readers may not even realize that the decision to use one carries serious ethical implications.

If you saw the last season of "The Wire," or you heard about the Times's experience with disgraced reported Jayson Blair, you know that unattributed comments can be used by unscrupulous reporters to fabricate quotes.

And a star-struck David Brooks recently provided us an example of when a speaker's identity can be a major fact withheld from readers for no good reason; not wanting to spoil a friendly chat with a request for attributable quotes, Brooks quoted Barack Obama anonymously.

Hopefully, this column will lead to change in newsrooms elsewhere, although the quality of journalism is probably not the highest concern in the newspaper business right now.

Koh and Sharia

Dahlia Lithwick at "Slate" discusses the recent blog panic over the fact that Yale Law School dean Harold Koh, who will be appointed to an administration position may have said that Sharia law could be applied by a US court in an "appropriate case."

This is a relatively noncontroversial legal idea, and the people pretending it's radical are probably being dishonest. However, it seems likely that Koh's statements about US courts interpreting Sharia law are confusing to people unfamiliar with legal practice.

Law varies from state to state, because states' legislatures and court systems are independent of one another.

The governing law of, for example, New York and New Jersey may result in different outcomes. Of course it goes without saying that the governing law of New York and Argentina might instruct different analyses or reach different results.

When a lawsuit is brought in a court, the law of the place of the suit will generally govern, and the defendants can try to object to that in a number of ways. But parties to a contract can agree that any arising disputes will be governed under a certain set of rules.

Federal and state courts in the United States routinely try litigations arising out of foreign-law contracts, and judges apply the foreign law that is applicable. US contract law is that the intent of the parties should govern, and that, accordingly, such choice-of-law clauses are generally valid.

Application of foreign law to such contract disputes is extremely commonplace and uncontroversial. Similarly, even where there is no choice-of-law clause, courts may voluntarily determine that the facts of a case fairly require the application of foreign law, and apply it. This is one check on a plaintiff's ability to choose the jurisdiction where the lawsuit occurs.

Sharia law would just be another set of rules to apply, and no different than any foreign law. My understanding is that, in Europe where there are much larger and less-integrated Muslim populations, Sharia-governed contracts are quite common. Additionally, there is a push in Europe to make Sharia family courts available so that Muslim women can seek divorce and protection from abuse in a fair forum.

It's not inconsistent with any US law to apply a foreign set of substantive rules on the agreement of the parties. Certainly, neither Koh nor anyone else is suggesting that Sharia criminal courts be established in the US, or that non-Muslims who have not entered into Sharia-governed contracts should have Sharia foisted upon their ordinary state-law disputes.

This is a total non-issue.

Tuesday, March 31, 2009

Unfunny Three Stooges?

NYMag declares Jim Carrey, Sean Penn and Benicio Del Toro to be unfunny.

Seems like a bum rap to me.

1. Jim Carrey is the new Curly

Obviously, the comedy merits (or lack thereof) of Jim Carrey are, more or less, common knowledge. You like "Ace Ventura" and "Liar, Liar," or you don't.

Carrey is at his best when he downplays the kookiness, as he did in Peter Weir's "The Truman Show." or "Eternal Sunshine of the Spotless Mind" which was directed by Michel Gondry and written by Charlie Kaufman.

Carrey's comic persona has an element of creepiness, exploited to comic effect in Ben Stiller's underappreciated "The Cable Guy." If you liked Stiller's recent "Tropic Thunder," and you haven't seen "Cable Guy," add it to the Netflix queue.

2. Benicio Del Toro is the new Moe

Not an automatic pick for the role, but Del Toro has demonstrated comic talents before.

Benecio managed to do some terrific pratfalls as a crooked cop in Robert Rodriguez's "Sin City," including getting dunked in a toilet. He was similarly effective in Guy Ritchie's comic thriller "Snatch", in which he committed a robbery while dressed as a Hasidic Jew.

But Del Toro's best comic credential is his bizarre turn as Doctor Gonzo in Terry Gilliam's film version of Hunter S. Thompson's "Fear and Loathing in Las Vegas." Del Toro gained forty pounds to play a gun-toting, sex-crazed maniac, tweaked on a fictional drug called adrenochrome. Nothing on Del Toro's resume indicated that he could perform this role, but he subsumed himself in it and matched the chameleon-like Johnny Depp in weirdness.

3. Sean Penn is Larry

Sean Penn is known for his self-seriousness about his politics and his craft. But he was very funny as a neurotic jazz guitarist in Woody Allen's "Sweet and Lowdown."

Sunday, March 22, 2009

Populist rage set to derail economic recovery.

Maybe it wasn't a good idea to stoke a campaign against Wall Street greed, when we were depending on Wall Street greed to fuel our economic recovery. The Obama administration has been seeking private investors to help it buy toxic assets from crippled banks.

No private investors want this stuff under normal market conditions, and the government doesn't want to be responsible for figuring out the prices for the assets, nor does it want the taxpayers to take on all that risk. So, Obama's plan is to use the TARP money to provide incentives for private entities who can invest in this stuff to buy it from the banks that can't get healthy with this stuff on their balance sheets.

The incentive for these private partners is obviously profit. But AIG employees found out this week that making money while in partnership with the government is dangerous.

Of course AIG was bailed out because it would have failed otherwise. The private partners in purchasing these assets aren't failing or getting bailed out. But if they make a lot of money on this, and collect huge fees or pay large bonuses, they know that the distinction is not going to be important to financially strapped taxpayers who will be really angry to see rich guys on Wall Street collecting huge checks from a government-funded plan.

These guys don't want to get perp-walked before a Congressional committee, like $1-per year Edward Liddy did last week. They certainly aren't going to be interested in taking on risk in this deal if they fear Congress is going to pass a tax bill to confiscate any profits they might earn from it.

Obama knows the difference between the partners the administration is trying to attract for the bank rescue and the bailout recipients, but if the profits of these partners become a hot potato, nobody expects the President to expose his neck to explain to voters who are losing their homes how some of the guys collecting seven-figure checks are good guys.

Meanwhile, former New York governor Eliot Spitzer is pretending to be surprised that the bailout funds the government put out to prop up AIG and prevent it from defaulting on its agreements is being used to prop up AIG and prevent it from defaulting on its agreements.

Friday, March 20, 2009

Is the AIG bonus tax a Bill of Attainder?

Legal blog Above The Law wonders whether the AIG bonus tax is an unconstitutional bill of attainder.

A bill of attainder is a legislative act declaring someone a criminal. Since this confiscation is done through taxation rather than criminal punishment, the bonus tax is not technically a bill of attainder.

The claim that the bonuses are unconstitutional, I think, has to be framed as a violation of the rights to due process and equal protection under the law.

The narrative that the lawyers opposing the tax might use is that this confiscatory act was fueled by violent populist rage, targeted at specific people, and culminated in a confiscation of property from individuals who had no representation, without any trial or finding by a jury, as a punishment.

In support of such an argument, the analogy to a bill of attainder is certainly relevant; what Congress is doing here is arguably precisely what the framers intended to prevent by banning such laws. However, the Constitutional prohibition on such acts doesn't resolve this issue because the bonus tax is technically distinguishable.

The success of such an argument also hinges on whether this tax can be distinguished from taxes that have been upheld in the past (there were constitutional challenges to the income tax).

Regardless, this whole bonus crusade is destructive and idiotic. Grandstanding politicians are pounding a simple and symbolic issue, because they aren't smart enough to address the real problem.

This is wasting the time of officials who need to be working on the plan to get toxic securities off of institutional balance sheets, and its undermining the ability of Obama and the Treasury to operate at a time when they need to be able to act decisively.

The $165 million Congress is trying to claw back is dwarfed by the amount of wealth that has been destroyed while officials were jostling to get in front of television cameras to pretend to be outraged over bonuses everybody knew about weeks ago.

And when all the rage these legislators are stoking gets innocent Americans killed, I hope they can live with that

Saturday, March 14, 2009

Madoff and his victims

Joe Nocera at the New York Times agrees with me that the credulity of Madoff's victims allowed the fraud to happen, and goes so far as to call them accomplices in the threat of their own assets.

I'm not sure that their failure to diversify among managers is really a fault; diversification is supposed to protect investors against fluctuations in a single sector, not against massive fraud on the part of money managers. I feel very bad for the individual investors who lost money to Madoff.

The real accomplices, though, were the institutional investors and the funds-of-funds who funneled money to him and did not figure out what was going on, or those who did, and pulled their money out.

I'm not support the Madoff investors' demands for a bailout though. No other investors who have been punished in this securities market are getting one. I'm sure there are some tragic autoworkers someplace who worked 30 years for GM and put all their savings in company stock, and they're wiped out too. Ownership of company stock was a cultural norm of investment banks, so those guys had their savings and their jobs wiped out at the same time.

Stuff is hard all around.

Wednesday, March 11, 2009

Better late than never

In 1861, watchmaker Jonathan Dillon inscribed a secret message into Abraham Lincoln's pocket watch.

In 1906, Dillon told the New York Times that the inscription said "The first gun is fired. Slavery is dead. Thank God we have a President who at least will try."

This week, the Smithsonian cracked open the watch, and found that the watch is actually inscribed: "Jonathan Dillon April 13- 1861 Fort Sumpter was attacked by the rebels on the above date J Dillon. April 13- 1861 Washington thank God we have a government Jonth Dillon."

The Times published a correction to the 1906 article today. That will teach them to trust some guy a hundred years ago.

Here is the Times article about the watch.

Rush to Judgment

David Frum mentions, in his interesting conservative take-down of Rush Limbaugh, that Republicans dominated the college-educated vote in every presidential election since the inception of exit polling, until 2008, when Obama beat McCain by 8 points among B.A holders.

Reagan also dominated the youth vote, though the pendulum has since swung heavily the other way.

The Republican party's recent attempts to find its own Obama resulted in the unfortunate televised State of the Union response by Bobby Jindal, and RNC chair Michael Steele's awkward and widely mocked attempts to connect to "hip-hop" voters.

In the meantime, Limbaugh has been there to shout as the party floundered for real leadership. The GOP could certainly do with more Frum and less Limbaugh right now.

Madoff and the SEC

Slate's "Big Money" says Madoff's fraud exposes how bad the SEC was at doing its job. I don't know that this is true.

Sure, the SEC ignored the detailed memo submitted by dogged whistleblower Harry Markopolos, but all those submissions were anonymously submitted, because Markopolos feared retribution by Madoff. Government agencies get a lot of mail from cranks, and it doesn't seem efficient or desirable in a free society to launch federal investigations on the strength of anonymous accusations.

We can regret, in hindsight, that the SEC didn't catch Madoff sooner, but the fact that the SEC didn't launch an investigation over the anonymous Markopolos memo isn't a basis for criticizing the agency; if anonymous tips start bringing down government heat, we'll replace the possibility of an undetected fraud with the certainty of malicious and false anonymous tips damaging honest business.

And it would be unfortunate to tolerate such excess, because we don't need more oversight from the SEC to protect against people like Madoff. He operated with limited oversight because his clientele was rich and sophisticated, and should have been able to watch out for their own interests.

There are a whole lot of specialized entities that only manage money for wealthy and institutional investors, precisely because the SEC allows such funds to operate with little regulatory oversight on the premise that these investors can protect themselves from fraud.

Funds that are managing the savings of ordinary workers and families face much more stringent regulatory scrutiny because these investors are thought to be more vulnerable to fraud and less capable of understanding where their money is going.

But the fact that some sophisticated investors failed to protect themselves doesn't disprove the presumption that they were capable of doing so. Any of the fund managers who were directing capital to Madoff could have done the same analysis Markopolos did.

Increased SEC examination of lightly-regulated funds will consume public resources while destroying the abilities of these funds to develop proprietary investment strategies.

The funds chose to be hedge funds in the first place because they saw more upside to lighter regulatory involvement, even at the cost of closing off sources of capital who the regulators offer higher protections. The sophisticated investors chose to invest with the hedge funds, anticipating higher returns, even though they knew other types of funds offered more regulatory protection for investors.

After 9/11, the government created its new TSA agency to manage airport security. Now, before travelers get on an airplane, they must throw away their toothpaste, strip off their shoes and belts, and often submit to pat-downs. For this embarrassment and inconvenience, travelers get almost zero marginal safety benefit.

Putting similar inconvenient restrictions on investment would probably offer a similarly marginal benefit at the much higher cost of delaying recovery, especially since the Treasury is relying on hedge funds to buy toxic securities as part of its bank rescue.

The lesson of Madoff is greater skepticism of too-good-to-be-true returns and more diligence by investors. It may be appealing to call for a regulatory environment where this sort of thing cannot happen, but the cure would be worse than the disease.

Monday, March 9, 2009

Stem Cell Research

Congratulations to President Obama for reversing George W. Bush's absurd restrictions on federal funding for embryonic stem cell research.

William Saletan at Slate is concerned we're going to lose our souls over this stuff. He shouldn't worry too much; there's no serious moral problem with this research, because a complete genetic code is a necessary but not sufficient component of humanity. That means that embryos are not people. They're not proto people. They're human genetic material, but they are not human beings.

An embryo lacks agency. It lacks self awareness. It lacks the capacity to experience pain. Insects are more capable of suffering than a human embryo. Moreover, these embryos, leftovers from in vitro fertilization, lack the necessary circumstances to ever become human.

An embryo outside a womb contains a recipe for humanity, but, in the same way that semen expelled in a condition where procreation is impossible, or an ovum expelled from the uterus through menstruation, it this genetic material does not exist in a context where it can become a person.

Even if the embryo were inserted into a hospitable uterus, it is more likely to die than to develop. The embryos that may be used for stem cell research would never have become people.

While there is room for argument over the point in development in which a fetus becomes an entity with moral significance, it's unreasonable to place that point at the moment the sperm and the egg fuse, especially where that occurs outside the human body.

The exaltation of morally insignificant genetic material is a rhetorical position that allows people of certain ideological persuasions to oppose recreational sex, contraception, fertility treatment and abortion.

These 'pro-life' individuals are perfectly willing to forego cures for terrible and deadly diseases to avoid making a rhetorical compromise. If anyone is missing a soul, it's them.

If my soul is in danger, it's because I've eaten the flesh of animals raised in hellish conditions and slaughtered for my consumption. It's because I've purchased products manufactured in foreign factories where wages and conditions are dismal. It's because I've gone about my business while the horrific genocide in the Sudan has raged unchecked.

All this stuff is worth losing sleep over. Tiny bundles of cells in petri dishes are of absolutely no moral concern.

Predicting the "Watchmen" box office

Slate.com's "Big Money" blog is predicting a $169 million total box office take for "Watchmen" based on the opening weekend gross and the Metacritic score.

I think their total might turn out a little low. Their calculation neglects to consider several major factors: the film's running time, the film's R rating, and the month of release.

Most of the films compared on Slate's chart were June/July releases, which tend to be very front-loaded because, during the summer's movie glut, the blockbusters come in rapid succession, often with only a week to make a mark. Theater booking and marketing is designed to really front-load those releases.

The film's three-hour running time also reduces the number of showings per screen, so there were less screenings of "Watchmen" per screen than there might have been for a shorter movie. That means there are likely to be viewers turned away from sold out shows, who will come back next weekend.

The film's R rating and its source material in a 1980's era comic book may also skew the audience older. Adult viewers are relatively less likely to pack a theater on the release weekend.

On the other hand, "300," a 2006 R-rated March release from the same director, also with mediocre reviews, roughly tripled its opening weekend take, so there may be something to Slate's model.


Fish at the NYT is upset today because he is accused of "Neoliberalism." He characterizes this as an ideology that solves everything with markets, and he points to Ronald Coase as one of its proponents.

Fish seems to want to separate ethics from efficiencies, and that makes no sense. Destroying economic value makes society poorer, and a series of destructive economic decisions collectively make society materially worse-off, increasing misery, poverty and want.

A few Marxists may continue to hold that a relatively wealthier society with high inequality is ethically preferable to a relatively poorer society with less inequality, but otherwise, most ethical frameworks do, in fact, try to preserve things that are of value, rather than destroying them.

A number of philosophers define ethical goods in terms of utility. Neoliberals don't oppose state intervention in markets; they oppose the destruction of value and inefficient mechanisms that prevent utility-maximizing outcomes.

The state is implicitly involved, for example, in the Coase hypothetical involving the factory and the stream, because there has to be a rights framework to determine how the burden will be distributed.

The dispute between the fisherman and the factory is a very direct example of a market failure requiring a legal correction. If there is no state mechanism to protect the fisherman's rights, the factory owner will pollute without regard to the damage to the fish, and the fisherman will bear the cost.

This is an economic externality, where part of the cost of economic behavior is borne by someone who is not a participant. The market will not account for this external cost, and the state must step in to correct the externality.

The notion that efficiency generates the best possible outcome merely instructs the state in how to solve the problem; i.e. by awarding damages to the fisherman, or facilitating a settlement between the factory and the fisherman, instead of allowing the fisherman's livelihood to be destroyed without affording him compensation, or shuttering the factory to preserve the stream.

I assume Fish is being accused of neoliberalism because his previous columns have suggested that academic tenure creates value-destroying situations. This characterization is incorrect; Fish seems to argue against expansive academic freedom and tenure protections as a moral bad. The neoliberal would disagree with Fish, arguing that tenure, which is an agreement mutually reached between universities and professors, is a value-maximizing arrangement in which the benefits of giving the professors broad discretion in their activities and near-immunity from termination exceed the costs.

Monday, February 16, 2009

Academic Freedom

Stanley Fish at the New York Times is arguing that university professors ought to be subjected to more stringent performance requirements, and should not be protected for reasons of academic freedom. He supports this contention by discussing the misbehavior of an a Canadian professor named Denis Rancourt.

Fish's column this week argues that there is no right to academic freedom that justifies such protections, and he cites court cases where judges have refused to find that there is a testimonial privilege for academics (similar to the privilege protecting attorney-client confidentiality, or the marital privilege). But professors like Rancourt are difficult to terminate because universities enter complicated employment agreements with academics that protect their positions.

Fish points out that there is no constitutional protection for academic behavior, and argues that professors ought not to have autonomy from the 'goals of the enterprise.'
But the degree of control a school has over its faculty is precisely the question that is answered by the existence of tenure.

Fish is right that tenure isn’t a constitutional right. But those professional norms are formalized in contractual agreements, and institutions enter those binding agreements voluntarily, at their discretion. Tenure is a special kind of employee benefit. Rancourt is difficult to dislodge from his position not because he has some kind of special Constitutional protection, but because the university has entered into a contract with him that makes him extremely difficult to fire.

Whether the needs of academic freedom require contractual protections so powerful that they make it impossible to dislodge a faculty member who goes insane is an interesting question, but even if they regret the terms of their agreement with Rancourt, they are bound nonetheless.

Universities are sophisticated negotiators, and their tenure review process provides for intense scrutiny of candidates for tenured positions. There’s no reason why their promises ought to be less binding than anyone else’s.

The tenured professor, similarly, is not beholden to the ‘goals of the enterprise,’ because he has not agreed to be. If that was what universities wanted from professors, they would negotiate different terms into their employment agreements.

The agreements presuppose that the ‘goals of the enterprise’ are suspect, and can be influenced in questionable ways by politically powerful actors. Professors accordingly negotiate for substantial autonomy and job security, and universities agree to grant it. They provide the secretary and the office space and the salary and the tenure protections as consideration in exchange for the professor’s affiliation with the university.

And there certainly is a place for academic freedom; for example, if a donor or a coalition of donors wanted to force a school’s biology department to provide equal time to creationism, tenure would protect biology professors who refused to teach junk science.

Monday, February 2, 2009

Philip K. Howard is wrong. Everybody needs lawyers.

Dahlia Lithwick at Slate has a review of a book called Life without Lawyers." The book seems to combine complaining about tort suits with advocating deregulation. Lithwick's review digresses into off-point complaining about the Bush administration's treatment of terror detainees.

Here's what I think about this guy's argument:

1) Frivolous lawsuits are very unusual

Frivolous lawsuits are terrific anecdotes for people who are intentionally trying to mislead. In fact, frivolous lawsuits are only borderline relevant to the issues surrounding personal injury torts, because they are infrequent and easily disposed of.

Lawyers who represent injured plaintiffs are paid contingent fees, which means that the lawyer doesn't get paid unless the client recovers money. This means that injury lawyers have a tremendous disincentive to represent clients in frivolous actions; when the case inevitably reaches an unfavorable resolution, the lawyer's work and expenses poured into it will be uncompensated. And in case that isn't disincentive enough, there are various sanctions that can be imposed on frivolous plaintiffs and their attorneys.

The legal system creates plenty of bizarre anecdotes, like the one about the man who sued his dry cleaner for $50 million over lost pants. The cases are generally disposed of quickly, and comprise a miniscule percentage of total tort litigation. Some unscrupulous advocates for reform try to cherry-pick a handful of the most egregious crazy lawsuits to make a point that society is overly litigious or that the legal system is sick in some way.

To assume, based on the existence of this single lawsuit, that courts are clogged with similar disputes is fallacious for the same reason it is incorrect to assume that shopping malls are full of naked dope fiends because a junkie took a nude walk in a mall once.

2) "Less law" or "less lawyers" won't really help

Howard quotes a bunch of random statistics; for example, the fact that Congress passed 70,000 pages of legislation. It appears he is insinuating that the volume of legislation has some sort of causal connection with the increase in tort litigation that Howard contends is occurring. He is lying.

Injury lawsuits and the volume of federal legislation have absolutely no relation to each other. There is a lot more to legislation than injury suits; those 70,000 pages are mostly about how to spend Federal money. Almost none of it is related to tort suit, and Congress certainly isn't rolling out lots of new torts to sue for.

Virtually all personal injury torts are based in state tort law; to imply to lay readers that Congress is spending its time inventing new ways to sue for frivolous personal injuries is a kind of intellectual fraud.

What Howard actually seems to be doing is using unusual anecdotes about tort suits and weird nostalgia for dangerous playground equipment to make a completely obsolete argument for deregulation.

The people who rolled back the regulatory restrictions on Wall Street assumed that more money could be made without burdensome laws getting in the way, and where investors and money managers were allowed to innovate with minimal government intrusion, accountability would take over. The opposite happened.

Hedge funds were allowed to run proprietary "black box" investment strategies because we assumed that the sophisticated (usually institutional) investors who were buying into them could conduct proper diligence and hold them accountable without needing the government looking over everyone's shoulder. That is how Madoff happened.

Deregulation advocates assumed that market incentives could steer participants into efficient decisions without government intervention. Instead, investors and managers took on too much leverage in pursuit of higher profits, and invested heavily and detrimentally in arcane and convoluted financial devices that nobody seems to have understood.

I'm sure Howard's book was written long before the collapse of Lehman, but, as it turns out, the roll-back of law doesn't result in a culture of accountability. It results in catastrophic failure and bailouts. Howard should be mildly embarrassed that his book contains a chapter titled "The Freedom to Take Risks."

Risk, we've learned, is not free. It will take a lot of pages of federal legislation and a lot of lawyers to untangle the mess lightly-regulated and ostensibly accountable people made.