Article 2 Courts: Illustrations from the Securities Exchange Commission

A recent post described the common, but little known, Article II courts and how they offend the most basic principles of due process of law and judical independence which most familiar with the rule of law would have imagined enshrined in the Constitution. Now the Wall Street Journal has published an article Fairness of SEC Judges Is in Spotlight (Nov. 22, 2015)Subscription possibly required. Link to non-gated version much appreciated. offering some striking quotes and statistics illustrating this point.

Massive Resistance in Maine

Yesterday the State of Maine passed an initiative that purports to reform the campaign finance system for state elections and enhance public financing for elections, to rapturous applause from the expected quarters. The only problem is that nobody—including its supporters—sincerely believes this initiative to be Constitutional.

The Economist vs. The Armchair Economist

Some random googling brought to one’s attention a controversy from 2011 involving same-sex marriage, one’s favorite blogger, the most inconsistent—for good or ill—magazine in the world, and the most infuriatingly inconsistent—for good and ill—writer for that magazine. Somehow one had missed the entire kerfuffle at the time. But it is never too late to weigh in on it, perhaps throw in a few personal observations on the value of personal observations, and score the melee!

How Many Innocents Has Mapp v. Ohio Convicted?

The Supreme Court decision in Mapp v. Ohio (1961) extended the Exclusionary Rule which bars the admission of evidence obtained in violation of the Constitution to state courts, where most criminal defendants are tried. Its more honest defenders admit that this will sometimes lead demonstrably guilty defendants to be acquitted. What is less widely appreciated is that it also leads innocent defendants to be convicted.

Sex with Strangers and Federal Rule of Evidence 412

This blog stands accused of dwelling on tawdry subject matters in order to draw the clicks of the prurient masses. Perhaps so, even if, as of yet, this appears to have been a spectacularly unsuccessful strategy. But if this be prurience, let’s make the most of it. In this spirit, please consider the following hypothetical, not drawn from any particular case but an amalgamation of many.

How U.S. Natural Gas and Electric Markets Were Liberated

Since the 1930s U.S. wholesale markets for natural gas and electricty, today totaling over $400 billion annually, are subject to comprehensive regulations that set every price. These laws and regulations remain in effect. Yet, today, electic and gas prices are largely set by free markets, just like those of other commodities. How can this be?

In (Limited) Defense of Professional Cartels

Past posts have decried professional cartels, like those of the legal and medical professions, and obliquely praised economists for not having much of one. Here, however, it is argued that—while they are still clearly bad and ought to be abolished—they are not quite as bad as one might naively imagine.

Article 2 Courts

The Judicial Branch of the United States government is established in Article 3 of the Constitution. But most non-lawyers would be quite surprised to learn that most federal judges are not part of the Judiciary at all.

What Type of Irrational Are Ohioans?

In a few weeks, Ohio will vote on not one, but two, constitutional amendments on marijuana legalization. The first, sponsored by a group of private citizens, would legalize recreational and medical marijuana. The second, sponsored by the state legislature, would constitutionally bar the first. The reason these amendments are brought to the attention of the gentle reader is not to comment on the drug war—the views of the author on which are predictable and better stated by others—but rather a few curious features.

Did Thomas Jefferson Rape Sally Hemings?

Hemings was Jefferson’s slave and as such could not decline his advances. In countless cases, slave owners used this power to force themselves on unwilling, nubile slaves. But is that what happened in this case?

Health Care Is Like Other Services

Note: Please see the opening note there. It applies here too.

One frequently hears the argument that there can be no markets in health care. Those who so argue strenuously deny that they are Communists (or some other form of collectivist) and disclaim any intent to generally abolish the capitalist mode of production. It is just that health care is so very different from all other goods and services that—for just this little special case covering 18% of the U.S. economy—we need to adopt a collectivist approach.

To draw this distinction two differences are invoked: one with a grain of truth but far from justifying collectivism; the other, entirely spurious.

Insurance Is Bad

Note: This and one or more follow-up posts contain nothing that the smart and well-informed regular readerAfter all, these readers had the wisdom and good taste to visit here. will not already know. But a surprising number of people without florid mental deficiencies and with a number of certificates indicating that they at least spent a substantial number of years in educational institutions seem to unaware of these facts or at least have them readily slip their mind in certain settings. Rather than explaining these facts over and over again, these posts will do so once and for all; in the future, one can then just refer such to these pages. The regular reader is invited to just skip these posts or just read them for the snark and jokes, as per usual practice mostly in the footnotes. Mostly.Incidentally, mostly also appears to be the author’s six-year old daughter’s new favorite word. Last night she asked her father for help closing some buttons on her, or rather the author’s borrowed, shirt. You see I am not really an expert on buttoning. So you think I am an expert on buttoning? Yeah. Mostly.

Insurance is a bad deal; the expected dollar value of getting insurance is always negative. In other words, on average everybody will always be better off not getting insurance.

This is not because insurance companies are run by Evil White Men who probably are Any Rand fans and beat their wifes. It would be true if all insurance companies were non-profits staffed, from the claims adjuster to the CEO, exclusively by angels who refused any salary beyond the minimum wage and performed their often-demanding jobs with perfect skill. Nor is it because, speaking candidly, of some neoliberal sophistry. It is not even because of economics. It is because of simple accounting:

Insurance companies do not have magic money-printing presses in their basements.If they did, why go through all the hassle of running an insurance company, rather than just the presses? Hence, their inflow of cash—the premiums—must on average over the long run at least match the outflow of cash—payouts to policy holders and operating costs, like employee salaries. As the operating costs are larger than 0, it follows that, on average, the amount the insurance company receives in premiums from each policy holder must exceed the amount it pays out to this policy holder.

Why Appliances Are Getting Steadily Worse

It is a commonly heard impression that most appliances just aren’t as good as they used to be. Even high-end washers don’t wash, showers don’t clean, driers don’t dry, refrigerators don’t cool, and toilets don’t flush as well as the average model did thirty years ago. That this is not just a case of the nostalgic fallacy can readily be confirmed by anyone with access to older, but still functional appliances.

Less well-known is the cause of this decline. The technology to make effective appliances has not be lost. No rare or no longer extant raw material is needed for their construction. Nor has the Great Appliance Maker Cartel finally gotten its act together and started to foist off ever shoddier products at ever higher prices.

Judicial Minimalism Maximises Judges’ Power

Prof. McGinnisMcGinnis is probably the best law professor blogger not permanently ensconced at the Volokh Conspiracy. He is always either right or interesting and usually both. over at the Law and Liberty blog makes a non-original, but far too often overlooked point. Resisting the temptation to quote the whole thing, here are a few paragraphs:

At the beginning of this term of the Supreme Court, Cass Sunstein has praised judicial minimalism. Professor Sunstein argues that the justices should decide cases as narrowly as possible: Minimalists … insist on small steps and narrow, unambitious rulings. They want to resolve the specific problem at hand, but without pronouncing broadly on liberty or equality, or on the system of checks and balances.

So described, minimalism is the antithesis of a principled jurisprudence. First, minimalism does not offer a method for discerning the Constitution’s meaning. One does not need to be an originalist who believes that the meaning of the Constitution is fixed at the time it was enacted to recognize that an interpretive theory has to give account of how it is following the meaning of the Constitution. It is that meaning which should govern the case, and the relevant principles may be either broad or narrow depending on the meaning. …

Second, minimalism is incompatible with the rule of law. Deciding cases based on their peculiar facts gives little guidance to citizens as to what their rights and obligations are. Indeed, the reductio ad absurdum of minimalism is to decide the case of A v. B for A or B without giving any reasons at all: that approach surely resolves the case by making as little law as possible! More generally, insofar as a case emphasizes particular facts for the sake of a narrow ruling, its holding provides little help for those trying to figure out what the Court will do in the next case.

One issue is of course whether Sunstein is as sincere in his advice as he is undoubtedly clever. Can we expect to see forthcoming articles from Sunstein criticizing, for example, Brown v. Board of Education for indulging in general discussions of equality, rather than merely ruling that for some fact-specific reason, Linda Brown ought to have been admitted to Sumner Elementary or perhaps condemning Obergefell v. Hodges for going beyond declaring that James Obergefell was allowed to marry John Arthur?

Even setting this aside, Sunstein’s judicial minimalism reflects his broader premise (shared by such as Justice BreyerOutside the legal profession this view is also shared by the likes of Dylan Matthews and Erich Ludendorff. The principal author of the Constitution took a rather different view and is hence condemned.) that high-level government officials (like Sunstein, at times, or Breyer), be they bureaucrats or judges, are people so good and so clever that they should be permitted to decide any issue as they deem fit at the time without being troubled overly much by such constraints as laws, general principles, or consistency. For those who share this premise, Sunstein’s and Breyer’s jurisprudence must be quite attractive.

In Defense of Local Governments’ Corporate Subsidies

It is commonly observed, and commonly criticized, practice of businesses when deciding where to locate a major new facility to demand subsidies from the localities. By playing the local governments of potential sites against each other, the businesses often manage to be granted substantial special tax breaks and other favors.

This is widely seen as disgraceful. Why should big corporations be able to bully local governments into granting them special favors that others in the area do not enjoy? Does this not require additional taxes on or reduced benefits for the unfavored? There are few practical proposals on how this practice could be eliminated—how could it be without eliminating the ability of localities to set their own tax policies?—but across the political spectrum there is agreement on the perniciousness of the practice and local governments are urged from all quarters not to give in to such demands.

This reaction is understandable and indeed many of the businessmen and politicians who engage in this practice do appear to be of more unsympathetic character than average for their respective species. But this reaction is also wrong. Under current legal conditions, this sort of rent extraction is often economically efficient and just.

The Once and Future Speaker Gingrich

Over at National Review, something of intramural squabble To Replace Boehner, Why Not Newt for Speaker?, Speaker Gingrich? Not Really Constitutional, Speaker Gingrich … Unconstitutional?, Jonah, Newt, and Constitutional Presumptions, and Not McCarthy? Fine, but No Non-Members Need Apply. has broken out about the prospect of Newt Gingrich, once the speaker but now a private citizen, being chosen as the successor of John Boehner. The most remarkable part of that squabble is that it is not about the highly debatable likelihood or desirability of the prospect, but the seemingly simple question of its constitutionality.

Thinking Like a Lawyer

One of the promises made to students as they enter law school is that one day during their sojourn there, they will have an epiphany and grasp what it means to think like a lawyer. It is on that day, and no earlier, that they will cease to be mere law students, but become novice lawyers.

An Unwelcome Privilege

The existence of an effective, binding, civil justice system has two implications for you. The first of these is that, should somebody legally wrong you, you can sue them. The second is that, should you legally wrong somebody, they can sue you. This is often thought of as a cost-benefit balance. The capacity to sue is great, but being sued can be unpleasant. You take the bitter with the sweet, because on balance the latter outweighs the former.

That is incorrect. For both of these implications are benefits to you and, for most people, most of the time, the capacity to be sued is a far greater benefit than the capacity to sue.

The Current U.S. Immigration System Is the Best That Can Be Hoped For

The titular proposition, not endorsed by any politician or commentator the author is aware of,The closest parallel are some remarks unsurprisingly by Milton Friedman: Now, that Mexican immigration, over the border, is a good thing. It’s a good thing for the illegal immigrants. It’s a good thing for the United States. It’s a good thing for the citizens of the country. But, it’s only good so long as its illegal. is a peculiar one to be advanced here for reasons both personal and principled.

How to Easily and Cheaply Stop and Reverse Illegal Immigration

Exchanges may be mutually beneficial and yet never occur because of the Prisoner’s Dilemma. If one party can costlessly renege on its promises after the other party has performed, the observed equilibrium will often be universal defection without any mutually beneficial cooperation. One of the greatest benefits of laws and courts is that there mere potential of suing for breach of contract is enough to move us to the cooperative equilibrium without even requiring very many such suits.