Asst
Patterns in static

Some fluff, some info





navigational aids:
 





topics covered:

28 April 04. What you can do to alleviate poverty

Here is an article from the NY Times about the recent WTO ruling about cotton subsidies. Since linking to the NYT is always spotty, here's a big fair-use chunk of it. Or here is an article from the Economist. Or, for the especially lazy among you, here's a summary:

The WTO's goal is `free trade', meaning the removal of restrictions on the market that prevent the free flow of goods. This usually means tariffs or blockades at the borders. This also includes anti-dumping rules, which make it illegal for a government to pay one of its exporters to send goods overseas, because this would also prevent the market from arriving at the natural price for the goods, at the cost of the industries of the importing country which don't have their own subsidies propping them up.

So what about when a country subsidizes an industry not for the sake of exports, but just hands them lots of money all the time? This too will have a distortionary effect on the world market, and although it is not a trade barrier blocking a free market, it makes it impossible for producers in other countries to compete, preventing a fair market.

Hard question; there was a decade-long agreement in the WTO to just not talk about it. That agreement expired on 1 January of this year, and Brazil immediately litigated the issue, suing the U.S.A. for cotton subsidies and the EU for sugar subsidies (see this Economist article on sugar). Brazil won with the U.S.A. (EU is pending), and the official ruling of the WTO is that the cotton subsidies must stop: they hurt farmers in poor countries all around the world. Our government, for its part, will fight this as far as possible. At the extreme, the U.S.A. may even drop out of the WTO entirely---and when it does so, it will point to the liberal agitators who wanted a better deal for the world's poor and say that it is doing the agitators a favor.

Doing something We'll divide Americans into two classes: people who have no idea about cotton subsidies and their effects on world poverty, and cotton farmers. The cotton farmers are out in full force, hoping to ensure that the U.S.A. defies the WTO and keeps the subsidies coming. The rest of us, who don't grow cotton and think poverty sucks, need to do our part to counter them.

That's right, it's time to write your congressperson. Forget switching to the hippie phone company or picketing the World Bank: this is the easiest, and potentially most effective thing you can do to help alleviate world poverty today.

Here are links to help you look up your Senator and Representative.

A few tips: handwritten letters get much more consideration than printed letters, which get much more consideration than emails, and emails that show distinctness get much more consideration than those with signs of cut-and-pasting. But in the mean time, here are some sample letters, which I hope you will, at the least, cut and paste to your congressman.

If your congressperson is a liberal
I am writing you with regards to the recent WTO ruling that the U.S. must curb its cotton subsidies. I believe that we should make every effort to comply with this ruling.

Personally, I am worried that we do not do enough to help the poor nations of the world. By cutting cotton subsidies, we do just that---and save billions of dollars in the process. The World Bank found that if the wealthier nations cut their agricultural subsidies, then 144 million people could be lifted out of poverty. Cutting the budget and helping the poor at the same time is a win-win situation if ever there was one.

The U.S.A. has lost face in the world since the invasion of Iraq, and needs to improve its image. This is a wonderful (and cheap) way to do so, showing that we have an interest in the world that goes beyond its oil, and that we have respect for international organizations even when they don't entirely agree with us.

The alternative, maintaining subsidies in the face of a WTO ruling that we should not, would leave parts of the world poorer and make them hate the U.S.A. still more. I would not feel more secure in a world like that.

So please, curb the cotton subsidies, as the WTO has mandated that you do. Doing so would help the U.S.A. and the impoverished of the world in equal measure.

If your congressperson is a conservative
I am writing you with regards to the recent WTO ruling that the U.S. must curb its cotton subsidies. I believe that we should make every effort to comply with this ruling.

Our budget deficit is larger than ever, and I know you are looking for more waste to trim. Now you have a international ruling that you must cut billions of dollars in handouts from our budget---what more could you ask?

I know that special interests are coming to you telling you that every cotton farmer in America will go out of business if these subsidies are eliminated, but I don't believe them, and I don't think you should either. Our farmers are still the best-educated, best-equipped farmers in the world, working on some of the best soil in the world. They will compete and prosper in a free market.

I am not asking you to hurt cotton farmers. I am asking you to return them to the same position that the rest of us are in: earning our money by good work instead of good lobbying. In the long run, this will benefit us all, as fiscal sanity and bravery in the face of special interests always will.


[link][no comments]

Comment!
Yes, the comment box is tiny; write in a real text editor then just cut and paste here.
If you are a human, type the letter h in the first box.
h for human:
Name:
E-Mail:
Homepage:
 
 


08 June 04. Pensions

The social security tax First, I have to mention that the social security tax is the most regressive tax in the U.S.A. today. `But', you say, `people are contributing to their own pensions that they'll eventually take out later.' This is, of course, a myth, supported by annual mailings from the Social Security administration. Every dollar the government takes in goes into one big pot, and every dollar taken out for this year's budget, whether for pensions or bombs, is taken out of the same big pot.

The populace has been duped into thinking that social security is a more moral and just tax, because it is somehow a separate fiscal entity which supports itself and nothing else. In your accountant's dreams it does. It's a tax just like the income tax, only it starts taxing at the first dollar you earn, taxes only labor, gives you no deductions, and the wealthy are 100% exempt.

[Here is a cute paper by Ed McCaffery about cognitive errors applied to tax policy. You can question his lab methods, but I have no doubt that this would generalize with no problem to the population at large.]

Eliminating the Social Security tax and raising the income (or any other) tax accordingly would undoubtedly make the U.S.A. a less polarized place and provide a much easier life for the struggling among us. Too bad it'll never happen.

Immigration and pensions Now that I've talked about how horrific pension taxes are, let me tell you about the latest buzz: portable pensions.

There are two simultaneous issues which wealthy nations (the U.S.A., the EU) face relative to the poorer nations (Mexico, the Ukraine): the wealthier nations aren't having kids at a replacement rate, and they attract lots of immigrants.

So we want some sort of incentive to get people to flow back to the poorer nations, which is where portable pensions come in. The idea is that if you choose to move to Mexico, your imaginary social security account goes with you. This is a good thing for circular migrants, and for the large number of illegal immigrants to the U.S.A. who pay social security taxes and never get anything back. Conversely, if people choose not to use the portability, they can stay in the country they've migrated to and not think about it.

At the same time, this is a strong incentive for old people to get out of the country. A dollar in Mexico buys about eight times what it does in the U.S.A.---and it's sunny. A regular retirement paradise.

There are people who support this idea because they think the alternative is that the dark skinned people will take over the country and never leave. Dubya's platform supports them. But just because *uckheads agree with an idea doesn't make it automatically wrong.

I take a more multicultural approach to assessing the value of the proposal: circular migration is a good thing. As more people commute across a border, the border eventually becomes irrelevant. If somebody comes to the U.S.A., gets a great education, and then chooses to go home to disseminate knowledge, then that's frigging optimal. Of course, if the person is forced out coercively, then this is significantly less than optimal, and is even sort of evil. Portable pensions, conversely, are actually a lessening of government restrictions---nothing but creating more options for people to decide among.

So the portable pension idea is a nice way to induce more circular migration, which would bring more capital (=the pensions) to the net-out-migration countries, and either augment their human capital or at least alleviate any brain drain. Plus our old folks will have more options for living on a limited income.

Finally, getting back to the fuc*heads, this is a way to convince them that their country is not being invaded. That means that with portable pensions come more porous borders, which is also a good thing.

Anyway, so that's my thinking. I haven't spent enough time pontificating to see the evil dark side of portable pensions. On the analytic side, I've retrofitted my immigration model for (name of international development group) to test whether portable pensions will do what we want them to. (Name of international development group) has me so supremely outclassed, by the way: I provide the model and they provide the data to run it with, and they came up with the most beautiful data set you have ever seen, ever. My model isn't worthy. So I'll be working, trance-like, for the next several dozen hours to make my model classier. Will try to remember to eat, sleep, and inhale at regular intervals.


[link][no comments]

Comment!
Yes, the comment box is tiny; write in a real text editor then just cut and paste here.
If you are a human, type the letter h in the first box.
h for human:
Name:
E-Mail:
Homepage:
 
 


08 October 04. Ethical tacos

Mr. JE of New Orleans, Louisiana, asked me about this article, which is a libertarian commentary on a boycott of Taco Bell. The story is one we've heard a hundred times before: workers are mistreated, in this case the Immokalee Indians of South Florida who harvest the tomatoes, then liberal college students hear about it and a boycott is organized, causing a couple of college campuses to close their Taco Bells and many a chalupa to not get sold.

The libertarian response is predictable: the boycott is interfering with the market, which only hurts the people whom it is intended to help. "It is an attack on capitalism and an attempt to impose moral connotations to simple purchasing actions of consumption goods. [...] Prices are not set by arbitrary moral standards, but rather by available levels of supply and demand in the market."

But the people who are boycotting Taco Bell are the market. The first piece of confusion in the libertarian view is the belief that there are millions of perfectly atomic consumers within the market, who don't interact, and then there are these Jesuits and labor unions who come to them, from outside the market, and stick a screwdriver in the works. But the students who boycott are as much on the demand side of the market as the guys who still buy their tacos from TB, and it is an error to suddenly exclude somebody from a model of the market because they care about ethics. The above article acknowledges this: "Boycotting Taco Bell lowers the demand for tacos" and in the same paragraph denies it: "Staging a boycott against Taco Bell does not change the guided self interest of taco eating teenagers."

Why would a libertarian make such selective inclusions and exclusions? The root problem is in the narrow-path presumption that a person's utility function may only include a limited set of elements. Taste, convenience, price: OK. Ethics, affect, peer influences: forbidden. Academic economic models facilitate this, since price is much easier to model than ethics, and it's generally true that ethics really don't enter into most people's utility functions as strongly as price.

But ethics do matter, for everyone. I believe that every one of us could think of one product out there that they would never buy, whose production is somehow repulsive: maybe Metallica CDs, snuff videos, copies of the Communist Manifesto, or Krupps coffee makers. I'm a fanatic vegetarian, so I've got my list. It would be silly to put these considerations outside of the market mechanism: my utility from a Taco Bell taco stems directly from the fact that many franchises use animal fat in their rice (according to this source. Last time I saw an official ingredients list, it listed chicken stock in the rice, but that's apparently changed). To the extent that I'm a part of the market, the demand curve is directly affected by my ethical beliefs.

An interesting feature of ethics is that the vast majority of people don't care, but for those that do it's a deal-breaker. This is hard to model for the economists, and hard to deal with for the companies: do you alienate a thousand people for the sake of saving a penny on a million units? Part of the equation is the contagion problem, that if a person is sufficiently alienated then they will not only stop consuming, but they'll complain about you to all of their friends, which could hurt sales still further. The cost/benefit analysis would be different for every case: it's surely true that a company would have to shut down if it tried to satisfy all the ethical qualms of all of its consumers, but it's also surely true that a company which ignores the ethics of all of its consumers shoots itself in the foot.

Affect also matters. The clearest proof of this is that companies like Taco Bell spend billions of dollars a year on it. The narrow-path economists insist that advertising exists only to inform the consumer of new products or perhaps demonstrate the company's stability, but people who actually work in advertising would laugh at this: most advertising is about making the product emotionally appealing, by implying that attractive and desirable people use the product, or otherwise making you feel warm and fuzzy when you see their logo. If you can get people to have an emotional attachment to your product, then you can charge more for the same product---that is, emotional attachment is the best investment a perfectly rational producer can make.

The academic economists downplay affect for the same reasons they downplay ethics: hard to model, and price generally matters more. Many will argue that it's reasonable to ignore it in the design of an academic model, since many of the features of emotional attachment can be explained using other things like a desire for consistency or shared preferences between producer and consumer. But regardless of whether it should be included in a good model, it is certainly a real-world issue on which real-world companies spend billions of dollars.

Ethics and affect are tied. My affect toward Taco Bell is based upon all my information, including both the advertisements and my knowledge of how their proverbial sausage is made. The aforementioned libertarian article is happy to acknowledge half of this, by the way, pointing out that much of Taco Bell's demand comes from that frigging dog that says `Yo quiero Taco Bell'. [Better would have been `Quiero el taco bello', meaning `I want the beautiful taco'. But, alas, Taco Bell is named for its founder, Mr. Bell.] I can not explain why our libertarian friends say that demand can be shifted by something as squishy as a talking dog but not from the squishy issues of ethics.

Consumers are irrational. We can make up general rules about how they'll behave (like how demand falls with price, though we can't even prove that), but in the end they'll buy what they darn well please to. The role of the companies on the supply side of the market is to work out what those irrational desires are, regardless of where they came from, and cater to them. And the role of the think tank, by the way, is not to wish away those irrationalities or define those people it considers to be irrational as somehow outside of the market, but to discuss how society can best facilitate suppliers meeting those arbitrary demands. This is a hard question when the strong desires of a few (for fair-pay tomatoes) directly clash with the weak desires of the many (for cheap tomatoes), but the article I'm critiquing ignores it, and I must acknowledge that I really can't offer a generalized solution.

For Taco Bell's owners, paying its workers more should be part of the advertising budget. If behaving within the bounds of the consumer's ethical beliefs helps to improve consumers' visceral affect, then it makes as much sense as spending millions on affect-improving advertising, no matter how irrational or arbitrary those ethical rules may be.

In this context, the boycott absolutely makes sense for the laborers, although it is potentially risky. Consumers with certain ethical beliefs will want to maximize the cost to Taco Bell for ignoring those beliefs, which means not buying tacos and convincing as many people as possible to not buy. This works entirely within the market mechanism, by moving demand. To repeat the quote from above: "Prices are not set by arbitrary moral standards, but rather by available levels of supply and demand in the market." This is true, but levels of demand are influenced by arbitrary moral standards, which then influence price. The more vehement the arbitrary moral standards, the more influence they will have on price.

What T.B.'s managers will do about the increasing effect its labor policy has on demand is hard to guess. It may acknowledge that a penny a taco, shifting everybody's demand down a touch, is worth the benefit from restoring lost demand among boycotters and their expanding network. It may also find other means; such as buying tomatoes from some other group of laborers who aren't as organized; or maybe just ignoring the whole thing and reducing tomato purchases, losing money for the workers (which is the libertarian prediction; see below). The boycott has both costs and benefits to the workers, and I certainly don't have the numbers in both columns calculated---but then neither does our libertarian friend. Meanwhile, I have no reason to think the Coalition of Immokalee Workers is run by idiots, and I expect they are aware that sometimes the squeaky wheel gets the grease and sometimes the squeaky wheel gets the shaft. They are aware that Taco Bell's decision will be based entirely on costs and benefits, not the board of director's heart strings---and so they are doing exactly the right thing to convert their ethical complaints into the largest possible shift in demand, which Taco Bell's managers (being rational market actors) will respond to.

A final note: I feel that I should specifically respond to a few points in the article, though they don't generalize very far and won't be of interest except as a rebuttal.

A more effective method of raising the wages of Immokalee migrant workers would be to stage the exact opposite activist campaign. If college students were to buy more tacos and ask for extra tomatoes on those tacos the demand curve would be moved in the appropriate direction, raising migrant workers wages. But this realization seems farsighted from the anti-capitalists.

The Jesuit Volunteer Corps seems to be burning the migrant workers match at both ends. We've seen how the boycott would have a lessening effect on the migrant workers' wage rates, what we have yet to mention is that the JVC regularly encourages college students to gain the cultural experience of being a migrant worker. While lowering the demand for their goods and services, JVC kids travel to south Florida and work along side the migrant workers, in effect challenging them for the very jobs they are trying to spread a message of value for. This action raises the supply of labor and reaffirms the low pay scale.

In this case, I think that it is the author who is being short-sighted [or in economist-speak, is looking at a partial equilibrium model where he should be looking for the general equilibrium]. The goal is to maximize the benefit that Taco Bell gets from paying tomato-pickers more. The obvious way to do this is to provide less labor and demand more tomatoes, as suggested. However, one person's request for extra tomatoes has a small effect, but one person's refusal to buy---and encouragement to lots of friends not to buy---creates a much larger effect. The board of directors is asking, `what is the benefit to paying more for tomatoes?' and it seems obvious that the benefit the board sees is larger in the case of a public boycott that affects the demand decisions of a larger group than the private actions of a smaller set of people.

The Jesuit labor thing is similarly a long-term issue. If we have a person who marginally expands the supply of labor for a summer, and then spends the next decade encouraging others to care more about labor and shifts demand by self and others accordingly, then the long-term marginal shift may dwarf the short-term. Clearly the JVC thinks so.

[link][a comment]

on Monday, October 18th, jamia said

i haven't eaten taco bell since my freshman year of college when i joined the boycott. i also joined because i am opposed to their often racist advertising campaigns. i can't decide if the caricatures on the taco bell commercials enrage me more than the dairy queen moo-latte does... even though the boycott isn't making a huge impact,i can feel as if i'm sticking it to the taco bell bosses and prevent diarrheah in the process!

Comment!
Yes, the comment box is tiny; write in a real text editor then just cut and paste here.
If you are a human, type the letter h in the first box.
h for human:
Name:
E-Mail:
Homepage:
 
 


02 June 06. Policy recommendations for the World Bank

[PDF version]

If you know me personally, you know that I had a number of contracts at the Bank. Some went well, but most were for a rather shifty individual who was somewhat dishonest, both academically and more generally. The contract stipulated pay for eight days, and I cut bait and left after maybe four months of mostly full-time work trying to fit models to his hypotheses--and he still withheld payment.

There you have it, right in front, and you can read the rest of this article knowing my bias. Though, I'd worked out most of the below over a year ago, and you can tell by this header that I'm self-conscious enough not to base any of the below on one personal data point.

The World Bank is huge, and that is not necessarily wrong. If we somehow broke it into ten separate organizations, those organizations would have constant turf squabbles and fights over funding, constantly need each others' assistance and/or replicate each others' work, and would probably wind up setting up some sort of interorganization council that doesn't differ too much from the Bank's top management. There are umpteen thousands of people working in development, and that's an organizational problem no matter what.

Now, there are two eminently sensible ways to divide expertise: you can go by geographic region, because Central Asia is a very different place from Sub-Saharan Africa, or you can go by topic, because poverty reduction is a very different issue from gender issues. The Bank does both: the management chart is a grid, with departments like Central Asia-poverty and Africa-gender (except everything is an acronym, so it'd be ECA PREM). That is, everybody has two bosses, thus giving everybody something to complain about at the water cooler.

The next problem is that new projects come and go at a pretty rapid pace, and always involve subject that are a bit far afield from the expertise of the managers. The solution: hire contractors. Lots and lots of contractors. The Bank doesn't have a dam-building division--they contract. Nor do they have a dam-evaluating division; that's contracted too. Nor do they have sufficient expertise in virtually any of the subjects that your typical Bank report is about.

So when you sit at the coffee shop in the Bank's spacious atrium--and a whole lot of Washington is like this--you find a small core of individuals who are there for life and a constant flux of two-year RAs and contractors. Also, you'll see that only two of the five coffees they serve will be Fair Trade certified.

Now, if you work in a technical field, you know that finding people who are both technically apt and good managers is supremely difficult. Further, even if they were the best of the best twenty years ago, maybe their COBOL skillz aren't so impressive now. I would contend that in the pool that the Bank has to draw from, there are simply not enough people who are experts in country plus subject plus general management to fill all the posts. They have to compromise.

And the compromise the Bank chooses, time and time again, is to go for the people who can best manage the stream of contractors. Subject knowledge can be hired; familiarity with the Bank and its protocols can't. To add to this, managers are rotated every few years, so if somebody really buckles down and learns everything there is to know about labor in Europe, it's down the drain when they're moved to managing technology dissemination in China.

Now, management skill generally goes with political skill, and much of the work of a Bank manager consists of not pissing off politicians. So this is one more reason to bias toward managerial knowledge over subject knowledge. It is also why most Bank reports don't actually say anything of substance.

I suppose the arrangement of hiring subject knowledge could work, but the Bank culture kills it. The Bank's employees are trained to think like business managers. Impoverished countries are referred to as "clients", and I have heard at least one manager give a speech explaining in no uncertain detail about how the Bank must be run like a business. There are clear management goals; growing GDP by 7% per year in an given country is always a popular one--and even if it is achieved via inequality-expanding means, all boats will eventually rise with the tide.

However, the Bank's questions are only partly business on the ground. A huge percentage of the Bank's product is reports, about the business climate, about how [trend of the month] can reduce poverty, about the environmental effects of dams. So the contractors the Bank will hire are a mix of the usual survey-takers and other such laborers, and academic types.

As demonstrated by me and my shifty boss (really, I had some nice ones too!), academics and hard-nosed managers don't mix. Academics want to write something that is correct to the last detail; managers want something that gets the point across. Academics want to hold off judgment until the data is in; managers want to write the introduction to the report before hiring the academics. Academics need time; managers need output by Friday. Further, experienced academics are not cheap. They have day jobs, and if you need original research, that distracts from the navel-gazing they'd rather be doing.

I asked one well-known academic, “what do you think of the World Bank?” and he snapped back, “Did they pay you?” Then there's the graduate student who confided to me that she didn't tell her adviser that she's working at the Bank; due to so many bad past experiences, her department has a policy of not allowing students to work there. After I gave up on the project at the head of this column, shifty manager attempted to contract two experienced individuals working in my field, and both refused. I'll stop with the anecdotes there.

The end result from all of this: the Bank generally runs on the young and inexperienced. If you just got your Master's, they've got work for you to do. If you can't necessarily do original research, but you know how to run Microsoft Excel, then you have what it takes to write the flagship publication, the World Development Report. If you skim through the thing, you'll notice that (1) it is primarily a very long lit review, and (2) none of the original data work goes further than a bivariate graph. Most of those bivariate graphs (e.g., pp 2.14 and 2.20) are Excel charts based on a manually-enterable number of data points. That is, it's the sort of report that you expect from a team of Master's students.

Of course, that report has its value, and if you want a survey of global poverty in 2005, you should definitely click the link above. But does the following statement inspire confidence in you?: "Resources to eradicate world poverty are allocated based upon the best research by the most eager graduates of the last few years."

In short, the Bank's structure consists of a core of managers, many of whom learned their economics in the '70s, and a constant stream of generally inexperienced subject-knowledge labor. The result is well-managed and well put-together graduate-level work, upon which life-changing policies are decided.

Policy recommendations
You know I'm an academic, so it's no surprise that my basis for critique and reform is the Bank's reporting output. Ask someone who works more on the operations side, and you'll get a whole `nother list of reasons. But that said, here are my policy recommendations. Executive summary: the Bank should focus more on hiring talent in the subjects in which it works, and retaining those people.

The Bank is clearly over-managed, in the sense that there are just too darn many layers of management and the corresponding politics and unproductive inoffensiveness is stifling. It is also overmanaged in the sense that it is run like a business with a series of financial goals for its clients, rather than an organization whose goal is to understand poverty and eradicate it.

Coauthoring is efficient. The latest Journal of Political Economy has seven articles, five of which were coauthored. To produce a good report about environmental issues in India, you can hire a full-time India-environment specialist, or you can hire a full time India specialist and a full time environment specialist. The team stands a good chance of producing a better paper and finishing in fewer person-hours than the lone author. Thus, the grid is redundant: a team of the best and the brightest for each country and for each topic, plus a nice coffee stand where then can all interact, may be sufficient, and can run with a fraction of the managerial overhead.

What do the best minds in academia want? [And let me make very clear that I am decidedly not referring to myself.] First, they want to feel that their work will actually go somewhere. Everybody understands that things go slowly and nobody's recommendations are magically implemented a week later. But it is disheartening to know that your careful and interesting work will be reduced to the politically least offensive denominator. For a report to be interesting to one's academic peers, it has to say something.

For Bank contractors, much of the pay is in the form of carrot-dangling about how maybe one day you'll have a real job at the Bank and at the least you'll have a recognized name on the resume, both of which are premia that only a recent graduate could love. The incentives to advance for the full-time employees are primarily about being able to control more money. The World Bank has no advancement path of any sort for a person who has experience and knowledge regarding poverty and economics.

Since there is no means of retaining those who are interested and capable regarding the intellectual challenge of fighting poverty, such people are guaranteed that the Bank will be an unpleasant place for them, and if they want a community of people thinking about poverty, they are better off elsewhere. The Bank could be the focal point where the smartest people in the world meet to tackle the world's hardest problem, but instead it is a house of bureaucracy, hiring lowest-bidder contractors to provide management solutions to the government officials who are its clients.



[link][4 comments]

on Friday, June 2nd, Andy said

As someone with *just* an MA, I protest your snide remarks about Master's students! At the very least, I am capable of some mild multivariate analysis. If you qualify your post to refer specifically to KSG/SAIS/SIPA type degrees, I will be mollified.

Also, the World Bank does have a highly-regarded research team. I know that they are just a small part of the overall bank population, but do a great job in terms of producing, disseminating, and analyzing data. But I agree, no interesting research comes out of the operational side.

on Friday, June 2nd, the author said

Andy, by "if you just got your Master's...", I meant it in the temporal sense, not the 'merely' sense: "If you just got your Master's two weeks ago and are still hung over from the graduation party...". Apologies for the ambiguity.

The Bank's research dept (DECRG) is as well-regarded as any academic department. But from what I know of their work, they focus heavily on trade and traditional macroeconomics (especially in the DECRG GP). If you need an India specialist and an environmental specialist, you won't find either of `em in the Research group (I believe). Where there are more micro-oriented specialists, for example the health people, there are maybe two in a given field to support the Bank's entire operations on health economics. That's pretty far from a separate public health operations research group.

on Sunday, June 4th, Ms. ALS of San Diego said

Yowza. Still no pay from Boss Sketchypants? The problem of management of which you speak is a general plague upon all operations; the bureaucrats at academic departments are the ones who were willing to forgo their original research in order to shake hands, shuffle papers, and attend committee meetings. The managers at dept. stores are the ones whose outside options so sucked, they stayed in their mediocre positions, pallid environments, etc, so that they could boss the college graduates looking for temporary employment. In short, managers are usually incompetent at the tasks performed by those beneath them...

Did you at least get more birthday presents with TWO bosses??

on Monday, June 12th, Ms. ALS of San Diego said

hey, who did the new pic? you look like you're going to pop out of my screen and sing, "Take Me On".

Comment!
Yes, the comment box is tiny; write in a real text editor then just cut and paste here.
If you are a human, type the letter h in the first box.
h for human:
Name:
E-Mail:
Homepage:
 
 


16 February 07. How strict constructionism can be judicial activism

[PDF version]

Today's episode is a guest blog by Mr. BK of Baltimore, MD

This is a note on the term `judicial activism', which is misused in subtle ways among pundits and politicians.

The key to how it is misused is the ambiguity of the terms liberal and conservative. I count five (5) distinct uses of these terms.

The first three are familiar to everybody. There's the liberal/conservative scale regarding change in general, where the L team is forward-looking and the C team seeks stability. There's the social scale, where liberals believe people should be left to do what they want, and conservatives seek a social order reminiscent of Norman Rockwell paintings. There's the economic scale, where liberals believe some social services are necessary, and conservatives seek smaller government.

These three scales are only tenuously related. It is easy to find futurist social conservatives, social liberals for smaller government (aka libertarians), and any other combination of the above. But, with only the words liberal and conservative used for all three axes, there's a strong--and clearly false--implication that one who is liberal on one axis is liberal on the others.

That said, let us move on to judges. Judges are often described as constructionists or activists, as if there is a single axis along which we measure judges. But as with liberal/conservative, it confounds a couple of concepts and just creates confusion. So, let's make some definitions.

Constructionism
There are two components to a law: the statute in the Constitution or as passed by Congress, and the interpretation of the statute by courts who had to contend with the law. One school of thought, strict constructionism, contends that one should focus as much as possible only on the statute as written, rather than subsequent interpretation. Congress wrote what it darn well intended the law to be, so why should later judges and pundits modify that intent?

The constructionist view bears much in common with the neoclassical economist's viewpoint, that people are very rational and very capable of forseeing the future. To the extent that this is correct, the constructionist claim (that Congress wrote what it intended the future to look like) works.

I work with patents, and patents are an excellent example of how constructionism and the hyperrational assumption can go horribly wrong. Thomas Jefferson wrote what is now 35 USC §101 (inventions patentable), and it hasn't even been looked at since 1952. So: did the 1952 Congress, or Thomas Jefferson, intend that web page designs should be patentable? Even the Psychic Hotline would have difficulty with such a question, yet a strict constructionist has a simple answer: yes, they did intend so, because they would have said so otherwise.

The alternative is to look at more recent rulings and try to conform with those. My impression is that this is the modal type of judge: they try to rule in conformance with the law, but that includes equal measures constitution/statute and recent rulings. Let us call this the developmentalist approach; some call it the activist approach. The language typically used sets constructionist = conservative and activist = liberal.

As an aside, the constructionist view toward the U.S. Constitution is often characterized as interpreting the constitution the way the Founding Fathers intended it. But this is an incorrect phrasing. Jefferson again: “No society can make a perpetual constitution, or even a perpetual law. The earth belongs always to the living generation.” [Letter to James Madison, 6 Sept 1789] The statement `I am a strict constructionist, because I interpret the law the way a set of developmentalists did in 1776' is somewhere between incoherent and ridiculous. Rather, the sane strict constitutional constructionist generally shoots for a direct reading of the words as written, outside of the context of colonial times.

Stare decisis
This is legal Latin for “to stand by things decided”. That is, if judges past have decided that the law of the land is X, then ya don't change it to Y unless there's a darn good reason.

Different judges interpret the phrase darn good reason differently. Some overturn past rulings at the drop of a legal hat; others steadfastly stand by the past rulings, and just mumble something about `it's a bad law, but it's Congress's job to change it' in rulings that they aren't happy writing.

There are two pairs of terms used to describe a judge's attitude toward stare decisis. The first is liberal/conservative and the other is constructionist/activist, and once again, both pairs of terms don't correspond to any of the above uses of these terms.

There are four possible combinations of liberal/conservative in the context of statute and stare decisis, and it's worth going over all four, because they reveal an important asymmetry.

It may happen that the law as currently interpreted differs significantly from the law as written. This is common for a law written decades ago, due to simple drift in conditions and legal understanding. The first option in this case is to be a statute liberal and a stare decisis conservative. That is, a judge could be a conservative in the sense of maintaining the status quo.

When there is a difference between the status quo and the original statute from times past, it is impossible to simultaneously be conservative with regards to both. Of course, this doesn't keep many judges from trying.

The next possibility is for a judge to be liberal with regards to both statute and stare decisis. Such a judge really is just making up the law. You won't find a judge anywhere who claims such a position, though there's endless debate as to whether some judges act like this. Therein lies the asymmetry between liberal and conservative: conservative on both scales is OK but usually impossible, but liberal on both scales is an abuse of judicial power.

The next option is to be a statute liberal and a stare decisis conservative. There are people like this in many contexts: folks who insist that the U.S.A. once had a decidedly Christian government (a claim that is itself up for dispute) and therefore the present government should be devoutly Christian as well; folks who insist that the only good music is the kind they heard in high school; folks who insist that all families must consist of a mother, father, and at least two children because that's how it had to be on the farm. Such people are radically liberal, in the sense that they oppose the status quo in favor of something different, which happens to have been the status quo at one point in the past.

Judges of this type are often called judicially conservative. Yup, a judge who rules for changing the status quo when faced with a conflict between statute and rulings is called judicially conservative, and a judge who prefers to maintain the status quo is typically called judicially liberal. It's things like this that make people learning English as a second language hate it so much.

To revert to the means of judging in times past would be a radical, jarring change from the present. (Painting credit: Raphael: {<EM>The Judgement of Solomon</EM>}, c. 1518-19)
Figure One: To revert to the means of judging in times past would be a radical, jarring change from the present. (Painting credit: Raphael: The Judgement of Solomon, c. 1518-19)

Patent law is a good example of judicial conservatism/status quo liberalism. The circuit judge who decided that software and business methods should be patentable (Judge Giles Rich) was very vehemently constructionist in citing statute and reading it as literally as possible. As such, he was massively activist, because he overturned a century's worth of stare decisis, including several rulings from the Supreme Court.

You know I am not happy with Judge Rich's ruling, but there are other cases of activist constructionists, the most salient being those who ruled in Brown v Board of Education, whom we all love to death. So even after we have acknowledged that the scales of liberal/conservative with respect to statute and liberal/conservative with respect to stare decisis are entirely different scales, and after we've pegged a judge on both, we still won't know whether their rulings are liberal/conservative with respect to the social and economic scales that people actually care about.

Gay marriage
The term activist judge has been bandied about by certain individuals, invariably as a derogatory term, but without clarifying to which of the above two sometimes contradictory definitions the speaker is referring. But the confusion is typically deliberate, and implies that any activism in the sense of interpreting laws based on judicial understanding must be of the radical form of arbitrarily revising law.

The activism question often comes up in judicial hearings as well, where judges often attempt to characterize themselves as strict constructionists, implying that this is a good thing. But it seems preeminently clear that a good judge makes an effort to balance statute and recent rulings in every situation. The Constitution just doesn't say anything about computer-generated pedopæliac images, so for a judge to claim that he considers only the constitution in deciding such an issue is to say that the judge feels at liberty to just make stuff up.

Not to accuse President Bush of simplistic thinking, but to say that any judge that does not strictly follow statute is rewriting the law is simplistic. Such a claim only works when the law as written is entirely and perfectly appropriate to all situations, even decades later--and remember that a case appears before a higher court only when there is some sort of open question, ambiguity, or controversy about the law as written. Thus, any high court judge that isn't braindead is an activist in the first sense of re-interpreting statute as written; if we insist that that means activist in the sense of inventing law, then we can only conclude that all judges are activist in the derogatory `hijacking the law' sense used by folks such as the guy linked above.

But why be abstract when we have an easy example? The term `activist judge' is the term preferred by people complaining about gay marriage. The big ruling in the gay marriage issue was Goodridge v Department of Health, which was the ruling in Massachusetts that allowed same-sex civil unions--and did so via an allegedly strict constructionist reading of the equal protection clause in the MA constitution, no less.

With regards to statute, there is clearly ambiguity because nobody ever bothered to strictly define the meaning of marriage, just as Jefferson didn't specify whether web pages should be patentable. You could ask what the word marriage meant in 1776, in which case you'd probably find gay marriage was not intended by the law--and neither was marriage between whites and nonwhites.

As for overturning stare decisis, I'm no expert on MA marriage precedent, but giving a casual look `round, I am unable to find claims that Goodridge was in contradiction of past court rulings. For so many claims that this is an activist court, you'd think somebody would find the ruling that they were supposedly contradicting. Rather, marriage law in the U.S.A. has been a slow slide toward disaggregating marriage into a series of social services (especially given the strict interpretation of the “no establishment of religion” clause in the Constitution), and Goodridge fell right into that by interpreting the civil union as such a bundle of social services.

So what we get here is that the court in Goodridge wasn't actually activist at all in either the statute or stare decisis sense. It read directly from the MA constitution using a plain English understanding of the language about equality under the law, and did not seem to disagree with past court rulings. So we conclude what many of you have probably been thinking all along: that the term `activist judge' in this context really is just a polysyllabic way of saying `socially liberal'.

Now, there's a specific reason for conservative rhetoricians to confound all five axes and claim that liberal on one means liberal on the other four, which returns to the asymmetry discussed above: if a judge is liberal on both judicial axes at once, then that judge is just making up law.

This is the crux of the implicit argument in the term `activist judge'. If we start with the false premise that a judge who is liberal on one axis is also liberal on all four other axes, then we get the false conclusion that all socially liberal judges are just making up the law, and so the only good judge is a socially conservative judge.




[link][2 comments]

on Friday, February 16th, techne said

I met the judge who wrote the Goodridge decision. Shook her hand and thanked her, all choked up, for it. She said "No need to thank me, it was right there in the law."

on Sunday, February 18th, owouldntyouliketoknow said

Going further with the Jefferson quote: "Every constitution, then, and every law, naturally expires at the end of 19. years." Is that really something you're trying to endorse literally? He's not saying the interpretation is not valid, he's saying the law itself is invalid, along with all national debts contracted more than 19 years prior. Jefferson said a lot of things. I'd differentiate more carefully between "strict constructionist" and "original intent" philosophies -- I like the first very much, the second is where the silliness lies.

Comment!
Yes, the comment box is tiny; write in a real text editor then just cut and paste here.
If you are a human, type the letter h in the first box.
h for human:
Name:
E-Mail:
Homepage:
 
 


14 April 07. A tour of DC for Political Scientists

[PDF version]

I was merrily chatting with a pal who is a well-regarded Political Science associate prof at a well-regarded school, and he was complaining about how the ratio of citizens to Congressmen varied so widely from state to state. He proposed a simple solution: double the number of Representatives. He's right: this would improve things, and in the process we would surely fix the fact that Montana has a Rep and DC doesn't, even though DC has a larger population.

And my reaction, as one who has spent a fair amount of time floating around DC, was `golly, where are they gonna put them all?'

Geography matters, and not just in the broad sense that that phrase is typically used. The geography of DC reveals some details of the workings of the US government that are not apparent on paper. So, let us take a tour of DC from the polsci perspective.

Congressional
Our tour will generally go East to West, beginning with Congress, which is the center of DC, in the literal sense that it divides the four quadrants and the street numbers/letters count up from it, even though this means the NW quadrant is much bigger than the SE.

The Capitol building itself is pretty large--by law it is the tallest building in DC.1 But that's the tip of an iceberg. Capitol Hill really is a hill, which means that you can dig under it. The Capitol is flanked by several office buildings where everything actually happens, and they are all connected by underground tunnels, creating a sprawling complex covering about ten buildings, including the three Library of Congress buildings. This is convenient because vampires can run for office without having to worry about ever seeing daylight. There are even House and Senate monorails so they don't have to walk.

About an even amount of stuff happens in the flanking office buildings as the Capitol itself, yet security is lax and easy in the several office buildings. Feel free to visit your Senator's office and maybe grab a coffee at the seedy cafeteria downstairs. But if you want to enter the Capitol itself, you'd better not be squeamish about anal cavity searches. This shows the split between the iconic points of interest and the places where work gets done, which are rarely the same place. The Congress building itself is almost a giant decoy. If you want to go to a committee meeting, it'll probably be in one of the six flanking buildings. It's easy to attend any public hearing: just show up several hours early. If you're a lobbyist who has a lot of money and wants to ensure a seat, you can hire a bike messenger to show up at 6AM, and then take his/her place in line after you get some coffee.

The flanking areas are also necessary because of how public-facing Congress is. Any crackpot anywhere can visit their Congresspeople's office building. The aides I've spoken to say that true `I'm gonna break something' security risks are very rare, but people who talk a little bit too much are a daily matter. Thus, there's a sort of balance between easy public access and making sure that Congressfolk don't actually have to meet random public. For example, every office has a Congresspersons-only elevator.

By the way, South of the House office buildings, there are a few open spaces taken up by parking lots. So there actually is room to expand the House. There's lots of parking on either side of Congress both because most Congressfolk live in the suburbs, and probably as a security perimiter.

Tourist tip: the bars by the Congress are of course crawling with low-grade staffers fresh out of college (who are basically powerless, but haven't yet realized it). But pass on the Hawk and Dove and go to the Capitol Lounge. Throw on something half a step up from office attire and tell them you're there for the party upstairs. On any given night, there'll be a reception for something, and corresponding drink specials or free booze.

The National Association of Realtors(R) building in the foreground; the US Capitol in background.
Figure One: At right, the National Association of Realtors(R). At left, how the NAR hopes to stay afloat.

Judicial, by the way
Directly behind Congress, one finds the Supreme Court. It's one building. Given that the Capitol is really the Capitol complex, the Supreme Court is actually surrounded on three sides by Congress, which makes it look still smaller. So right off the bat, we see how asymmetric the three branches are. We learned in grade school that there are three branches that each balance each other, but the map reveals that they are by no means equal in power. Nobody cares about the Supreme Court, there's no easy-access public building for lobbyists to visit, and as far as I understand it, the Supreme Court is fine with that.

OK, back to Congress. Just West of the Congressional complex, you get the lobbyist offices. Nothing says industry in decline like an office with a view of the Capitol. For example, it will come as no surprise that the National Association of Realtors $\scriptstyle \small\rm\textregistered $ , the organization that is in a sort of ongoing antitrust scrutiny by the DoJ and is well on its way to obsolescence as a pre-Internet information aggregator, has a quite attractive building jaunting distance to the Capitol. Nor was I surprised when, a month or two ago, the Cable Industry opened a little storefront a block from the NAR.

Executive
Continuing West from the Capitol, we cross the National Mall, featuring many Smithsonian museums. The Smithsonian is not one museum, but a chain of them, including the National Zoo. But to the North and South of the Mall is a host of bureaucracies. To the South is the Department of Agriculture, which takes up what would be four city blocks if we built streets through it (and there are already bridges connecting the N and S halves). From which we learn that the Department of Ag got built back when agriculture was important and DC wasn't yet crowded. They ain't giving up their land now, of course. The Ag department runs a mini-university for all branches of the Federal govt, so if you want to learn a language or such, you're probably going to go to the Dept of Ag to do it; I imagine it's part of their continuing efforts to remain relevant.

The more modern departments, such as NIST, NOAA, the NSA, NASA, and the NIH are in the Maryland suburbs, which was all that was left at their founding. But note also that these are all technical bureaus, as if the scientists collectively said `excuse me, but I'd rather be doing resarch in a nice office than becoming more politically connected.' And then they complain when science funding shrinks.

Back to the Mall's surroundings, the EPA, the IRS, the executive-branch DoJ, the FAA, the DoE, the SEC, all your favorite three-letter acronyms (TLAs) are there. This is a nice place to put them, I suppose, because they are spanning the space between the Congress and White House. I don't have much to say about these buildings, though, `cause they're just kinda boring.

Many cities have a Zero Mile Marker for distance-to-city calculations. DC's is just south of the White House, which seems a bit odd given that the intuitive zero marker would be the center of the grid system (the Capitol). I suppose this was some sort of political compromise, to have two centers to DC. [Once again, we don't care about the Judicial branch.]

The Executive offices impress me as a smaller body. There are a few flanking the White House itself, which is a squat little building compared to everything around it. This means, by the way, that you can only see the White House from one or two non-Fed buildings. I am told by an ex-employee of one of the hotels that can see the White House that they had to call ahead every time they wanted to do roof maintenance, so as to ensure that nobody gets shot by snipers. The Hotel Washington has a rooftop deck which gives a pretty good view, but their prices are $$. Go during happy hour, nurse a drink or two for an hour, and enjoy the view.

The rest of the White House's environs are park-like: to the North is Lafayette park, featuring a 24-hour, decade long peace vigil by a few homeless folk, and to the South is the Ellipse and Washington Monument. It's certainly a much nicer security perimeter than the Capitol's mix of parking lots and semi-untended parks. There are of course far fewer people than there than Congress so there are naturally few office buildings, but I get the impression of much more iconic activity than actual work out of the White House area.

The White House's immediate neighbors are diverse. To its East is the Treasury, whose South face you will recognize from the $10 bill. The street just North of the Treasury (closed to auto traffic) is a popular hangout for Segway riders.

Next to Lafayette park, one will find the Federal Courthouse, which houses the US Court of Claims (where suits against the U.S. government go), the Court of Appeals for the Federal Circuit (the guys who invented software and business method patents, as well as a few other innovations), and I'm not sure who else. This should strike you as odd, because the Supreme Court is on the other side of town. The space East of the Supreme Court is nothing that couldn't be torn down via eminent domain, so a Judicial Complex would have been possible. But instead, the top of the Judicial pyramid got spread out across DC. This says something to me about how the different branches work: Congress needs to network, network, and network more, while the Court of Claims judges and the Supreme Court judges don't talk very often. The clerks at the Supreme Court have a basketball league, which meets in the basketball court in the top floor of the Supreme Court building [the highest court in the land!!! Yuk, yuk!], and the Court of Claims guys aren't even invited.

Further West
Keep going two blocks, and you hit the World Bank/IMF complex. Of the bodies that define the international law system (The UN, WTO, ICJ, one or two other TLAs), these are the only guys who are located in DC. Also, they are DC's third largest employer. The World Bank has no underground tunnels, so you've got lots of people walking around, and their buildings have no unifying architectural theme, so it just feels like you're downtown (which you are). Across the way from the World Bank's gigantic HQ building are boring old law offices and such. I'm not sure how many buildings the WB has, but I've been to the J building, and I don't think they skipped letters.

Directly in front of the WB HQ is a small triangular park, normally occupied by the usual homeless folk. But during the summer months, there are the regular protests, which are conveniently held in that park, a stone's throw from the HQ. A few security guys watch the crowd to make sure nobody takes that stone's throw thing too literally, everybody goes home, and on Monday it's back to homeless guys in the park and the Bank managers milling around trying to build consensus among themselves.

The IMF personality is a bit more like the Supreme Court: head down, looking at the numbers, caring more about getting the details right than talking to people. It has only two buildings (one of which was built just last year), which just look more closed than the World Bank's. The new building's internals were built to combat this, with lots of haphazard stairways and crossing hallways designed to maximize the odds of bumping into people while walking around. But from the outside you don't see this. The World Bank's HQ, by contrast, is one giant window, and from what had been the pre-terrorist paranoia guest entrance, you could already see the waterfall and giant central courtyard. You immediately get the sense of people walking around trying to build consensus with each other (and thus getting nothing of substance done).

Oh, and we should maybe take a quick jaunt up Mass Ave, which crosses between Union Station and the Capitol, passes what I will call “Industry in Decline and Desperately Lobbying Row”, and eventually becomes what is known by those who work there as “Think Tank Row.” Indeed, most of the think tanks that I can think of are up there, except for the Heritage Institute, which owns prime land right by the Senate side of the Capitol complex. Keep going up Mass ave (we're past the White House now) and it quickly becomes what everybody calls Embassy Row. Indeed, almost every house there is an embassy, and almost every embassy is along Mass Ave, except for a few stragglers like the Mexican embassy, which is right by the World Bank/IMF. The Vice President's house is toward the top end of Embassy Row; general consensus is that Richard “Dick” Cheney's undisclosed location is the Naval Observatory, right across the street. It's a sensible place to put his house, because nothing happens at any embassy but iconic parties and receptions (and visa paperwork), and I can't imagine anything else happening at the Vice-Presidential mansion. The location is super-annoying, by the way, because the route between the White House and the VP's house goes right through some heavily populated areas (Dupont Circle) and every time the VP wants to frigging commute, he needs an entourage of six limos, ten police motorcycles running their sirens, and four SUVs, and traffic and any hope of conversation accordingly stops. Surely it doesn't have to be that way [PDF link].

The Military-industrial complex
The Pentagon is across the river in Northern Virginia. It is immediately adjacent to Arlington National Cemetery, and I believe offices on that side of the building have a panoramic view of the many rows of graves.

NoVa is thus defense contractor central, and if you make your money blowing stuff up, or doing paperwork about blowing stuff up, then that's where your office will be.

NoVa is seriously unwalkable. It's just highway after highway, connecting a long string of parking lots. The stereotypes of military being right-wing and sort of rural and driving everywhere align just fine here, compared to Metro and pedestrian-focused DC. If you're a left-wing DC hipster who takes Metro everywhere, you just would not be able to function down here.


Figure two: Until 20 May `07, the former US Patent and Trademark Office building in Crystal City is being used as a gallery space.

There are a few NoVa exceptions, such as Crystal City and Pentagon City, which are a series of malls, hotels, defense buildings, and Metro stops all connected by walkways. That's where you can go to the TGI Friday's and be the only person there who isn't in an officer's uniform and a buzz cut.

Oh, the US Patent and Trademark Office is down there too, kind of across from National Airport, which means that a great many patent lawyers have Northern VA addresses. The complex itself is getting gigantic, in direct correspondence to the USPTO's increasing efforts to make everything patentable.

It didn't have to be that way. The NIH is in Bethedsa, Montgomery county, MD (among the best-educated counties in the USA), and its campus is eminently walkable: one side to the other in ten minutes, and a shuttle bus in case that's a problem. Both it and the Pentagon have their own Metro stop, and a transit center directly above the Metro stop, but somehow the NIH managed to not ring itself with parking lots.

You can tell what bills are before Congress by checking the advertising on the Metro. The orange/blue lines include Capitol South, so it gets the current bills before Congress. Metro center was bought out by American Chemistry a while back, and before that it was Cable. Both VA and MD commuter rail arrive at Union Station, so you can't get out without passing a gauntlet of please-don't-regulate-us ads. It was Toyota last month; this month it's Blue Cross/Shield. Most mid-to-high level bureaucrats live in well-educated Montgomery County, and so the MD-to-DC red line always has ads for computer equipment and office supplies.

The yellow line goes to VA, so the ads there are always for personnel carriers and fighter jets. Yup: the same advertising to make you feel good about picking up some Starbucks on the way in to the office is used to sell products with price tags in the tens of millions. I mean, how does the decision process go, exactly? The officers head down to TGI Friday, have a few mudslides, and just buy the first transatlantic personnel carrier that pops into their heads?



Footnotes

... DC.1
From 1899-1910, the law was that no building could be taller than the Capitol (280 feet). After 1910, the limit was width of street plus 20 feet, which is actually a shorter height limit in all cases. See this article.



[link][2 comments]

on Thursday, April 19th, DH said

This was hillarious and really made me miss DC. Thanks.

on Thursday, May 3rd, Zoe said

Aw, nostalgia. I submit a request for another environmental post. I just started work in the Greenhouse Section at the Oz Dep't of Industry.

Comment!
Yes, the comment box is tiny; write in a real text editor then just cut and paste here.
If you are a human, type the letter h in the first box.
h for human:
Name:
E-Mail:
Homepage:
 
 


02 July 07. The US Trade Representative: Not working for you

[PDF version]

The US Trade Representative is a self-descriptive office of the Executive Branch. I've followed them as closely as I can tolerate, which is not too closely.

Within the broad mandate of its name--to represent the US in trade negotiations--it could potentially have a number of mandates. They could be free-marketeers, and simply strive to lift all barriers. They could try to maximize well-being for US citizens, under the presumption that the Indian and Chinese Trade Representatives are taking care of their own. But there are opinions from the USTR that contradict both of these options: they are no strangers to endorsing blocks on foreign goods, even though those goods may benefit U.S. consumers. After all, the USA still has a Harmonized Tariff Schedule with 99 chapters. How do consumers benefit from the 2.5-10% import tax on station wagons (chapter 87)? Why is coffee free for import but “coffee substitutes containing coffee” are taxed (chapter 9)?

They could be a pro-business organization, but that too fails, because there are many types of business the USTR leaves on the back burner of trade; you'll see one below. The only consistent description of what the USTR does is that it advocates for those companies and industry organizations that have contributed the most cash to the current presidential administration. That is the minimally cynical interpretation that is consistent with actual USTR behavior. I've tried my hardest to accept sunnier interpretations, but none fit. The only way to read the Harmonized Tariff Schedule is to ask who paid for each line to be added or removed.

As I've commented before, the USA has limited political capital. It's certainly a lot, and a lot more than Ghana has, but most trade negotiations are tit-for-tat operations, and you only get one tit at a time. Thus, when the USTR stands firm on a rule that maximizes profit for certain U.S. firms, it puts all other firms and individuals in a worse position. We've all got to pick our fights, but the USTR's seems to pick the fight for pharma--Harmonized Tariff Schedule chapter 30, plus appendix--pretty darn often.

The USTR and intellectual property
Because I spend most of my time looking at IP, I can offer it as a case study. The USTR is not interested in strong IP laws. Sure, they have documents that say things like “The Administration will continue to pursue the aggressive enforcement of intellectual property rights...” And they have repeatedly forced foreign countries to adopt U.S. patents so that they are unable to produce generic drugs that would lower prices in those markets, which seems to be a pro-intellectual property stance.

But on the other hand, it recently set up an agreement that some countries outside the USA must weaken their laws protecting medical test results(pdf), because such IP protection hampers the foreign adoption of US drugs. So there went any thoughts that the USTR just believes in IP: they advocate strong IP only when it benefits US interests.

The above document repeatedly states provisions that countries may limit the agreement when necessary to protect the well being of their citizens, but (I've briefly alluded to this before too) the USTR habitually puts pressure on any country that uses such compulsory licensing exemptions. The USTR is doing its part to make sure that nobody in Africa bypasses U.S. patents to produce AIDS medications, even though the situation is a public health emergency by any measure. There are likely tens or hundreds of thousands of people the world over who have died thanks in part to the USTR's selective position on strong intellectual property law.

Not doing evil: the hard part

Google, Inc., a provider of information services the world over, has had trouble in China. They profess their goal of making all the world's information available everywhere, but Chinese culture as far back as Confucius has pushed for greater restraint, pointing out that unfettered speech can destroy social order. This is one of the great questions of civilization, and none of us have an answer. Further, information covers a lot of ground with different ethical implications, including kiddie porn, Faulun Gong tracts, and direct critiques of government officials. So I'm not going to touch the question of what China's leaders should be doing. But the fact remains that they are currently among the world leaders in censoring Internet traffic.

But Google is sticking to its opinion that information wants to be free, and is working hard to make sure that its services are as fully available as possible in China. Is this because they want to maximize shareholder value, or because they truly feel that censorship is evil? I dunno. Probably a little of both. But they took an interesting approach to the issue: they petitioned the US Trade Representative, claiming that China's blocking of valuable information products at the border is exactly analogous to any other country's blocking of textiles at the border. After all, information is on par with textiles in dollar terms, and is the primary industry for large swatches of California. Further, the USTR has spent many lawyer-hours on convincing China's central government to convince local police to arrest Chinese street vendors who shill dubs of Star Wars, because doing so is in clear violation of the copyright on file at the film department of the Library of Congress which is where I'm writing from, by the way. So everything is in place for the USTR to get involved.

So, what is the USTR's opinion? From the article linked above: “`If censorship regimes create barriers to trade in violation of international trade rules, the USTR would get involved,' USTR spokeswoman Gretchen Hamel said. She added though that human rights issues, such as censorship, typically falls under the purview of the State Department.”

So they don't even bother considering it. Now, the USTR's lawyers are expected to argue three impossible legal interpretations before breakfast. For example, I've read too many articles where they claim that other countries are violating a treaty originating in 1986 if their domestic courts make rulings that diverge from a certain 1994 ruling by a U.S. domestic court. Yes, the TRIPS treaty and In re Alappat. They are such fans of disingenuous interpretation of law that I find their naïve statement that they can't see censorship as a trade barrier to be disingenuous.

The USTR's primary work is helping companies in situations where some country is not allowing the company to vend its goods, and this is exactly the situation Google faces. The USTR works hard on maximizing foreign markets for U.S. media. But here, the USTR rejects a media provider's complaint of being blocked from trade out of hand. Again, there's an easy cynical interpretation--Google has not contributed enough to the Bush Administration--but a non-cynical interpretation that is in any way consistent with other USTR behavior is not forthcoming. Why are Merck, the RIAA, the MPAA, and the Intellectual Property Owner's Association (a lobbying group for IP extremists) on the USTR's IP advisory committee, but Google is not invited? [IP is Industry Trade Advisory Committee number 15.]

Trade negotiations are going to happen, and India, China, and everybody else do indeed have their representative. So the US needs the office of the US Trade Representative. But it does not have to be an opaque organization that makes important policy decisions behind closed doors. I've tried, I've tried, and I can not find systematic evidence to refute the hypothesis that the USTR's purpose is to advocate for policies that make money for the small number of firms that are large contributors to Republican candidates.

But there are alternatives. They could set a list of open priorities and stick with them, except for circumstances that are understood and explained. Final agreements are half in the USTR's control and half the control of the other side, but the USTR could publish rationales for the agendas they bring to a meeting with trade representatives from other countries. More generally, they could behave like a representative of US citizens and provide the level of transparency we expect from a government bureaucracy with heavy influence on trillions of dollars in trade.




[link][no comments]

Comment!
Yes, the comment box is tiny; write in a real text editor then just cut and paste here.
If you are a human, type the letter h in the first box.
h for human:
Name:
E-Mail:
Homepage: