The Situationist

Archive for the ‘Public Policy’ Category

The Situation of Human Trafficking – Abstract

Posted by The Situationist Staff on June 12, 2009

Human TraffickingJonathan Todres has recently posted a fascinating article, titled “Law, Otherness, and Human Trafficking” (49 Santa Clara Law Review 605-672 (2009) on SSRN. Here’s the abstract.

* * *

Despite concerted efforts to combat human trafficking, the trade in persons persists and, in fact, continues to grow. This article suggests that a central reason for the limited success in preventing human trafficking is the dominant conception of the problem, which forms the basis for law developed to combat human trafficking. Specifically, the author argues that “otherness” is a root cause of both inaction and the selective nature of responses to the abusive practice of human trafficking. Othering operates across multiple dimensions, including race, gender, ethnicity, class, caste, culture, and geography, to reinforce a conception of a virtuous “Self” and a devalued “Other.” This article exposes how this Self/Other dichotomy shapes the phenomenon of human trafficking, driving demand for trafficked persons, influencing perceptions of the problem, and constraining legal initiatives to end the abuse. By examining human trafficking through an otherness-aware framework, this article aims to elucidate a deeper understanding of human trafficking and offer a prescription for reducing the adverse effects of otherness on both efforts to combat human trafficking and the individuals that now suffer such abuses.

* * *

You can download the article for free here.  For a sample of related Situationist posts, see “The Situational Effect of Groups,” The Situational Benefits of Outsiders,” Racism Meets Groupism and Teamism,” ‘Us’ and ‘Them,’” “Team-Interested Decision Making,” “Some (Interior) Situational Sources War – Part I,” and “March Madness.”

Posted in Abstracts, Distribution, Ideology, Morality, Public Policy, System Legitimacy | Tagged: , , , , , , , , , , , , | Leave a Comment »

The Situation of Handguns on Urban Streets-Abstract

Posted by The Situationist Staff on June 6, 2009

a warm gunDavid Kairys has recently posted his fascinating essay, “Why Are Handguns So Accessible on Urban Streets?” (forthcoming in Against the Wall: Poor, Young, Black, and Male (Elijah Anderson, ed., Penn Press, 2008) on SSRN.  Here’s the abstract.

* * *

This short essay explains why it is easier for young black men in many poor, urban areas to obtain a handgun than an up-to-date school textbook or a regular job. A chapter of Against the Wall: Poor, Young, Black and Male, edited by Elijah Anderson with other chapters by Cornel West, William Julius Wilson, and Douglas Massey, the analysis focuses on handgun marketing and distribution and addresses the social and political context that yields easy availability of handguns. Under federal law and the laws of most states, any person so inclined can buy huge quantities of cheap, easily concealed handguns and sell them to others indiscriminately, often without violating any law and usually without having to worry much about getting arrested, prosecuted, or convicted. Nor are the identities of owners of handguns, or the persons to whom they transfer ownership, registered or maintained by government, unless state law so provides-and most do not. Convicted felons are not allowed to buy or possess handguns, but the marketing system up to that point is largely legal. The person who sells a handgun to a person with a felony conviction has no meaningful or enforceable responsibility. Though the handgun debate is commonly cast in terms of “illegal guns,” the central problem resides in what continues to be legal. Large cities facing declining job opportunities, losses in population and tax revenues, and rising levels of deprivation are being forced to accommodate virtually unregulated handgun markets. The cultural and political identification with guns and the unregulated handgun markets have continuing broad support almost exclusively in rural areas and have been imposed on urban and minority communities. The chapter examines proposed handgun regulations and the political and cultural opposition to them.

* * *

To read a sample of related Situationist posts, see “Innovative Policy: Zoning for Health,” and “Innovative Policy: Zoning for Health.”

Posted in Abstracts, Law, Life, Marketing, Public Policy | Tagged: , , , , | Leave a Comment »

Is The Fear of Being Afraid Leading to Violation of Federal Banking Law?

Posted by The Situationist Staff on April 7, 2009

obama-bush1In his first inaugural address, President Franklin Delano Roosevelt said “the only thing we have to fear is fear itself.”  The comment was made in the context of the worst economic crisis of the 20th Century, and perhaps of all time in the United States: the Great Depression, where unemployment rose to 25% and where, until the New Deal, there were minimal safety nets for those impacted by the crisis.

According to William Black, a law professor at the University of Missouri Kansas City, a former bank regulator, and author of The Best Way to Rob a Bank is to Own One, President Bush and now President Obama, along with their respective Treasury secretaries, Henry Paulson and Tim Geithner, have embraced that sentiment to justify the lending of tax dollars to distressed banks.  The gist of their concern, according to Black, is that persons with bank deposits will remove their money from banks if they fear the banks no longer have their deposits — a phenomenon that led to the Panic of 1907 and that FDIC insurance (which guarantees bank accounts up to $100,000) is supposed to prevent.

In an interview with PBS’ Charlie Rose, Black contends that the Bush/Obama lending violates federal banking law, specifically the Prompt Corrective Action Law, and that the federal government has worked with banks on trying to prevent the public from realizing that.  Here is a transcript of the interview, as excerpted on Daily Kos:

* * *

WILLIAM K. BLACK: Well, certainly in the financial sphere, I am. I think, first, the policies are substantively bad. Second, I think they completely lack integrity. Third, they violate the rule of law. This is being done just like Secretary Paulson did it. In violation of the law. We adopted a law after the Savings and Loan crisis, called the Prompt Corrective Action Law. And it requires them to close these institutions. And they’re refusing to obey the law.

BILL MOYERS: In other words, they could have closed these banks without nationalizing them?

WILLIAM K. BLACK: Well, you do a receivership. No one — Ronald Reagan did receiverships. Nobody called it nationalization.

BILL MOYERS: And that’s a law?

WILLIAM K. BLACK: That’s the law.

BILL MOYERS: So, Paulson could have done this? Geithner could do this?

WILLIAM K. BLACK: Not could. Was mandated—

BILL MOYERS: By the law.

WILLIAM K. BLACK: By the law.

SNIP

WILLIAM K. BLACK: In the Savings and Loan debacle, we developed excellent ways for dealing with the frauds, and for dealing with the failed institutions. And for 15 years after the Savings and Loan crisis, didn’t matter which party was in power, the U.S. Treasury Secretary would fly over to Tokyo and tell the Japanese, “You ought to do things the way we did in the Savings and Loan crisis, because it worked really well. Instead you’re covering up the bank losses, because you know, you say you need confidence. And so, we have to lie to the people to create confidence. And it doesn’t work. You will cause your recession to continue and continue.” And the Japanese call it the lost decade. That was the result. So, now we get in trouble, and what do we do? We adopt the Japanese approach of lying about the assets. And you know what? It’s working just as well as it did in Japan.

BILL MOYERS: Yeah. Are you saying that Timothy Geithner, the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong?

WILLIAM K. BLACK: Absolutely.

BILL MOYERS: You are.

WILLIAM K. BLACK: Absolutely, because they are scared to death. All right? They’re scared to death of a collapse. They’re afraid that if they admit the truth, that many of the large banks are insolvent. They think Americans are a bunch of cowards, and that we’ll run screaming to the exits. And we won’t rely on deposit insurance. And, by the way, you can rely on deposit insurance. And it’s foolishness. All right? Now, it may be worse than that. You can impute more cynical motives. But I think they are sincerely just panicked about, “We just can’t let the big banks fail.” That’s wrong.

***

For additional analysis, click here.  For critical analysis of Black’s arguments, click here.  See also The 2009 PLMS Conference: The Free Market Mindset.

Posted in Law, Politics, Public Policy, Social Psychology | Tagged: , | 1 Comment »

Jeffrey Sachs on the Situation of Global Poverty

Posted by The Situationist Staff on March 24, 2009

j-sachsLast September, Dr. Jeffrey Sachs, an economist and director of the Earth Institute at Columbia University, spoke to a packed hall at Harvard Law School in an address entitled “Representing the Voiceless: The Poor, The Excluded, and the Future.”   We cited an article summarizing his remarkable presentation and also posted an unofficial transcript of it (Part I, Part II, Part III, Part IV, and Part V).

Today we excerpt portions of his op-ed on CNN.com concerning the upcoming G-20 Summit and how he believes the issue of global poverty should be addressed.

* * *

The G-20 meeting in London, England, on April 2 will be watched by the entire world with urgency and with a yearning for hope, vision and programmatic clarity.

* * *

The world’s 3 billion poor, especially the 1 billion poorest of the poor, are suffering powerful and destabilizing blows from the crisis, and these will get worse and threaten global security unless there is specific attention and action.

The G-20 cannot limit its focus to regulating the financial sector, reforming the International Monetary Fund and the World Bank, avoiding protectionism and reciting the measures that individual countries are taking. This would leave the world gasping for direction and hope.

The G-20 must offer a vision that is big enough to quell global fears and action bold enough to protect the desperately poor while guiding the cooperative decision-making of the world’s economic authorities.

The G-20 must push forward based on real policy coordination. The world does not have a system of effective cooperation. The United States, for example, does not engage in comprehensive and deep coordination with other countries. The poor countries, with half the world’s population, and the poorest countries, with roughly one-fifth of the world’s population, have not been brought into the equation.

The G-20 package for stimulus should include:

First, fulfillment by all countries of stimulus measures already announced and a commitment to undertake new joint stimulus measures, especially priority public outlays on infrastructure, the social safety net and sustainable energy, as may be needed during the coming years.

Second, establishment of a high-level G-20 coordination group, backed especially by China, the European Union, Japan and the United States, to work full-time on coordinating monetary, fiscal and financial policies for stimulus and long-term recovery. Such cooperative macroeconomic programming does not now exist.

Third, increased currency support extended from the world’s five major central banks (the U.S. Federal Reserve, the European Central Bank, the Bank of England, the Bank of Japan and the People’s Bank of China) for emerging market economies facing the loss of loans from international banks (e.g. Eastern Europe). The Fed’s currency swap lines to Brazil, Mexico, Korea and Singapore last fall played an important stabilizing role. The other central banks can and should do more, as can the Fed vis-à-vis other countries.

Fourth, a G-20 commitment to gradual and orderly currency readjustments to help rebalance the world’s financial and trade flows. The Asian currencies should gradually appreciate against the euro, which in turn should appreciate gradually against the dollar. Squabbling about bilateral rates between the dollar and Chinese renmenbi should be put to rest.

G-20 actions for the poor should include:

First, establishment of an urgent special food security program, which would make grants to low-income, food-deficit countries (including Africa, Haiti, Afghanistan and elsewhere) to ensure that impoverished farmers can get the basic input they need (such as fertilizer and high-yield seeds) to grow more food.

United Nations Secretary-General Ban Ki-Moon and Spain’s Prime Minister Jose Luis Rodriguez Zapatero have joined to propose this new program and have mobilized backing from about a dozen countries.

The United States’ contribution should be at least $200 million per year over five years ($1 billion total), matching Spain, the largest donor country, and sending a powerful message of solidarity from the United States to the world. The hunger crisis is now afflicting 1 billion people and contributing to the deaths of millions of children each year.

Second, full funding of the Global Fund to Fight AIDS, Tuberculosis and Malaria, which is facing a critical and potentially devastating cash shortfall during 2009-11.

An incremental U.S. contribution of $350 million in 2009 would close the most urgent cash-flow gap and put the United States in the clear lead of protecting the Global Fund and championing the fight against the three pandemic diseases.

Third, special urgent long-term financing of clean energy investments in the poor countries, especially solar, geothermal, wind and hydro, as a direct stimulus to the supplier countries (including the United States), a development boost for the recipient countries (notably in Africa and Central Asia) and a major spur to climate control and success in negotiations this year.

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To read the rest of the piece, click here.

Posted in Law, Politics, Public Policy | Tagged: , , | 1 Comment »

The Free Market Mindset – Conference

Posted by The Situationist Staff on February 15, 2009

2009-conference-invitation-medium-draft

“I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as they were best capable of protecting their own shareholders and their equity in the firms. . . . I found a flaw . . . in the model that I perceived is the critical functioning structure that defines how the world works.”

~Alan Greenspan

* * *

The market collapse has brought not only financial crisis but a crisis of faith in what Ronald Reagan famously called “the magic of the market place.” If the current state of the U.S. economy makes clear that former Federal Reserve Chairman Alan Greenspan’s faith in free markets was misplaced, the question remains: what was it about free markets that proved — and still continues to prove — so alluring to economists, scholars, and policy-makers alike?

THE FREE MARKET MINDSET: History, Psychology, and Consequences, the March 7 conference to take place at Harvard Law School, brings together leading scholars in law, economics, social psychology, and social cognition to present and discuss their research regarding the historical origins, psychological antecedents, and policy consequences of the free market mindset. Their work illustrates that the magic of the marketplace is partially an illusion based on faulty assumptions and outmoded approaches.

Confirmed participants include:

  • Anne Alstott (Manley O. Hudson Professor of Law  at Havard Law School),
  • James Cavallero (Executive Director of the Human Rights Program at Harvard Law School),
  • Christine Desan (Professor of Law, Harvard Law School),
  • Jon Hanson (Alfred Smart Professor of Law, Harvard Law School),
  • Bernard E. Harcourt (Julius Kreeger Professor of Law and professor of political science, University of Chicago),
  • Sheena Iyengar (Professor, Management Division, Columbia Business School),
  • Douglas Kysar (Professor of Law, Yale University),
  • Gillian Lester is the Sidley Austin Professor of Law at Havard Law School
  • Stephen Marglin (Walter S. Barker Chair in the Department of Economics, Harvard University),
  • Jaime Napier (Ph.D student, Social Psychology, New York University),
  • Ben Sachs (Assistant Professor of Law, Harvard Law School),
  • Juliet Schor (Professor of Sociology, Boston College),
  • Barry Schwartz (Dorwin Cartwright Professor of Social Theory and Social Action, Swarthmore College),

THE FREE MARKET MINDSET: History, Psychology, and Consequences promises to be an invigorating and illuminating discussion about the unexamined premises behind the policies that led to our current crises and about how we can avoid making the same kinds of mistakes in the future.

This event is free and open to the public.  To register or learn more details, go to the conference website, here.

Posted in Choice Myth, Deep Capture, Events, History, Ideology, Law, Legal Theory, Public Policy, Social Psychology | Tagged: , , | 1 Comment »

Economist Stephen Marglin Thinking about Thinking Like an Economist

Posted by The Situationist Staff on January 27, 2009

Dismal Science MarglinHarvard economist Stephen Marglin is one of the confirmed presenters at the Third Annual Project on Law and Mind Sciences Conference (titled “The Free-Market Mindset:  History, Psychology, and Consequences” and scheduled for March 7, 2009).  Marglin’s recent work, as summarized on his website, focuses

“on the foundational assumptions of economics and how these assumptions make community invisible to economists. This work, reflected in his latest book, The Dismal Science: How Thinking Like an Economist Undermines Community (Harvard University Press, 2008), attempts to counter the aid and comfort these assumptions give to those who would construct a world in the image of economics, a world ultimately without community.”

Here are two videos in which Professor Marglin summarizes some of his work.

From ForaTV:

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From YouTube:

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To learn more about the PLMS conference or to register, click here.  To read some related Situationist posts, see “Smart People Thinking about People Thinking about People Thinking” and “Jeffrey Sachs on Our Situation – Part I, Part II, Part III, Part IV, and Part V.”

Posted in Events, Ideology, Legal Theory, Public Policy, Video | Tagged: , | 1 Comment »

Implicit Associations – Podcast

Posted by The Situationist Staff on January 22, 2009

Undecided Voter

From the Science Podcast: Robert Frederick interviews Bertram Gawronski on how automatic mental associations predict future choices.

“Bertram Gawronski and colleagues report that they could predict the decision of 70% of those who indicated they were undecided about a controversial political issue. The prediction was based on testing people’s automatic mental associations, or how quickly people responded to and correctly categorized images and words. The results indicate that decision makers often already have made up their mind at an unconscious level, even when they consciously report they are still undecided.”

Open the file here or link to Science Podcast page here.

Posted in Abstracts, Choice Myth, Implicit Associations, Podcasts, Politics, Public Policy | Tagged: , , , | Leave a Comment »

Take the Policy IAT

Posted by The Situationist Staff on January 17, 2009

If you haven’t already (or even if you have), we invite to take, the “Policy IAT.”  We urge  individuals of all political and ideological orientations to participate in the on-line test designed to examine whether and to what extent people have implicit preferences for certain types of policy options.  Please encourage your friends (and, to those of you who are bloggers, your readers) to participate as well.

To learn more or to take the Policy IAT (a roughly 15-minute task), click here.

Posted in Ideology, Implicit Associations, Public Policy | Tagged: , , | Leave a Comment »

Behavioral Economics and Policy

Posted by The Situationist Staff on January 5, 2009

Last month, Rick Montgomery wrote an interesting article, “Behavioral Economics Is Moving from Theory to Policy,” for the Kansas City Star.  Here are some excerpts.

* * *

As the economy sinks and investors buckle over, the behavior buffs are rising up.

From the lesser-appointed corners of academia, psychologists, sociologists and a youthful breed of economists scoff at the revered mathematical models that have driven economic thought and snared Nobel Prizes.

These preachers of “behavioral economics,” including some on President-elect Barack Obama’s economic team, argue that humans cannot be relied upon to obey the efficient, orderly tenets espoused by free-market thinkers.

Chief among the old-school rules is the assumption that we act rationally with money.

“That’s absurd, counterfactual . . . and now they’ve created a catastrophe,” said William Black, who teaches economics and law at the University of Missouri-Kansas City.

Until now, policymakers showed slight regard for the growing field of study into how mortal gaffes and greed intersect with financial decision-making in ways that can punish us all.

Now some close to Obama suggest government’s role is to “nudge” Americans into behaving in economically smarter ways.

“We need a bit more ‘Psych 101’ in addition to ‘Econ 101’ in the design of public policies,” blogged Peter Orszag, the next chief of the Office of Management and Budget, who just turned 40.

Some traditional economists might ask, “And how do you intend to calculate the effects of herd mentality, blind faith or self-destructive foolishness when dealing with a mortgage broker?”

They might cite the gospel that free markets, like celestial bodies in orbit, move in rational and self-correcting ways. Knowing that, who would ever fall for the gravity-defying performance reports of fund manager Bernard Madoff, who claimed double-digit returns year after year after year?

Human beings, that’s who — now shorn of $50 billion.

In October, behavioral scholars were triumphant when the very oracle of the slide-rule set, Alan Greenspan, delivered in Congress what some called a requiem for decades’ worth of economic teaching.

“Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity — myself, especially — are in a state of shocked disbelief,” the former Federal Reserve chairman conceded.

Why so shocked?

As many see it, a star of Economics 101 known as the “rational actor” abandoned the stage and left markets a mess.

* * *

Across America, collegiate quarrels have been building ever since economists began calling themselves scientists.

Channeling Isaac Newton, those 20th-century purveyors of empirical truths felt they needed formulas to forecast outcomes and solve economic riddles.

Oh, please, murmured many psychologists, sociologists and political scientists. To them, economists were trying to elevate themselves above the murkier, “softer” sciences.

The creation in 1969 of the Nobel Prize in Economic Science put monetary thinkers in the league of the great laureates of medicine and physics.

The second recipient of the prize was Paul A. Samuelson. His 1947 book, Foundations of Economic Analysis, was among the first to pitch sophisticated mathematics as the key to understanding and addressing problems.

Samuelson is 93 now. And what irritates him about the debate over behavioral economics is its either-or tone.

Most of the time, free markets do follow rational, predictable rhythms, Samuelson told The Star. But history has shown that bubbles can build and “the slide-rule guys can’t smooth out those bubbles.”

“A hopelessly addicted centrist (favoring) limited, sensible regulation,” Samuelson blamed “eight terrible years of deregulation” that saw some of Wall Street’s brightest financial engineers tiptoe from the rational realm to the reckless one.

* * *

You can read the entire article here.  For a list of related Situationist posts, click here.

To read some longer law review articles detailing the history of the “competition” between economics, economic behavioralism, and situationism, check out “Legal Academic Backlash: The Response of Legal Theorists to Situationist Insights” (Emory Law Journal, Vol. 57, No. 5, 2008) available on SSRN, “The Situational Character: A Critical Realist Perspective on the Human Animal” (Georgetown Law Review, Vol. 93, 2004) available on SSRN,” and “Taking Behavioralism Seriously: The Problem of Market Manipulation” (New York University Law Review, Vol. 74, 1999) available on SSRN.

Posted in Behavioral Economics, Ideology, Legal Theory, Public Policy | Tagged: , , , , | 2 Comments »

The Situation of Genocide

Posted by The Situationist Staff on December 5, 2008

nazi-imageCourtney Yager of CNN has an interesting piece on the work of Harvard University psychiatrist Robert Lifton, who has studied the psychology of genocides and found that situational factors can lead any human to partake in genocides.  Yager discusses the work of other social scientists who have come to similar conclusions.  We excerpt the story below.

* * *

Adolf Hitler, Pol Pot, Slobodan Milosevic. They are household names, infamous for masterminding genocide. But who were the foot soldiers who did the dirty work?

In many cases they were equally notorious in their communities because they were the friends, neighbors and co-workers of those they raped, slaughtered and buried alive.

* * *

Researchers say most perpetrators of genocide were not destined for murder and had never killed before.

“You don’t have to be mentally ill or even innately evil or criminal. You can be ordinary, no better or worse than you or me, and commit killing or genocide,” said Harvard psychiatrist Robert Lifton, who has studied Nazi doctors.

“The truth is that we all have the possibility for genocidal behavior.”

Experts have reached a troubling conclusion: It was actually very easy for the architects of genocide to find more than enough ordinary people to do the killing.

Genocide is often the result of a “perfect storm.” A country reeling from political and economic turmoil, a fanatical leader promising to make things better and a vulnerable population targeted for blame — all combine in a blueprint for mass murder.

* * *

For the rest of the story, click here.  For other Situationist posts related to genocide, click here.

Posted in History, Life, Public Policy | Tagged: , , , | Leave a Comment »

The Situation of Policy Research and Policy Outcomes

Posted by The Situationist Staff on November 26, 2008

Yesterday, Adam Liptak published a nice article , “From One Footnote, a Debate Over the Tangles of Law, Science and Money,” in the New York Times.  In it he explores the dubious role of Exxon on the legal scholarship regarding punitive damages.

* * *

Two years after Exxon was hit with a $5 billion punitive damages award for the Exxon Valdez disaster, Prof. William R. Freudenburg’s phone rang. The call propelled him, the professor said the other day, into “an ethical quagmire of the bottomless pit variety.”

The caller was an Exxon engineer who wanted to pay the professor to conduct a study taking a dim view of punitive damages. The Exxon Valdez case would eventually reach the Supreme Court, the engineer said, and the study would be useful in convincing the court that punitive damages make little sense, especially if it was published in a prestigious academic journal.

Professor Freudenburg, who now teaches sociology at the University of California, Santa Barbara, took Exxon’s money and conducted preliminary research. Exxon stopped supporting the study when the early findings did not point in a direction helpful to the company. But Exxon did help pay for several studies critical of punitive damages that appeared in places like The Yale Law Journal and The Columbia Law Review.

As the engineer predicted, the case did reach the Supreme Court. In a 5-to-3 decision in June, the court said the appropriate punishment for dumping 11 million gallons of crude oil into Prince William Sound in Alaska in 1989 was no more than about $500 million, a tenth of what the jury had awarded.

But the court also addressed the aggressive effort to reshape the academic debate over punitive damages. “Because this research was funded in part by Exxon,” Justice David H. Souter wrote in a footnote that has rocked the legal academy, “we decline to rely on it.”

* * *

Science and the law have always had a tricky relationship, but it gets especially tangled in the appeals courts.

Whatever may be said about questionable scientific evidence submitted at trial, often accompanied by dueling expert witnesses, it is at least subject to the scrutiny of the adversary system, including cross-examination. Studies merely cited in footnotes to appellate briefs may represent the worst of both worlds — suspect science and untested evidence — which helps explain why Justice Souter was skeptical of them. But focusing on financing rather than quality is only a partial solution.

People who conduct empirical legal research say their work should be considered on the merits. Others accuse Justice Souter of being disingenuous, noting that the court largely adopted the approach advocated by the Exxon studies, disclaimer or no. Still others say the court mishandled the studies it cited with approval.

But Terry N. Gardner, the engineer who called Professor Freudenburg and coordinated the Exxon project, expressed satisfaction. “My feeling was that they seemed to have an obligation to say that,” Mr. Gardner said of the footnote. “Yet the arguments the justices used in part reflected the conclusions of the studies.”

* * *

“The opinion reads like a bad joke,” said Jeffrey J. Rachlinski, a law professor at Cornell. “They say they know of no study showing punitive damages are orderly in any way, and yet they cite” a study by Theodore Eisenberg, a prominent empirical legal studies scholar at Cornell, “showing punitive damages are pretty orderly.”

Professor Eisenberg struggled to stay respectful about the court’s approach to his work, saying he had been flattered to be cited at all. He finally settled on this phrase: “I believe the court went seriously astray” in concluding that his work supported a reduced award.

* * *

Before Exxon cut off his financing, Professor Freudenburg said, one of his tentative conclusions had been that corporate transparency encourages responsible corporate behavior. That did not go over well with Exxon’s legal department.

* * *

The Supreme Court’s decision in the Exxon case, Professor Freudenburg said, had caused him to come to a reluctant conclusion. “The legal system and the scientific method,” he said, “co-exist in a way that is really hard on truth.”

* * *

To read the entire article, click here.  For other Situationist posts examining the influence of corporations on science and policy theory, see “Without the Filter,” The Situation of University Research,” “The company “had no control or influence over the research” . . . .,” ” Deep Capture – Part VII,” “Industry-Funded Research,” and “Industry-Funded Research – Part II.”

Posted in Deep Capture, Law, Legal Theory, Public Policy | Tagged: , , | Leave a Comment »

What does an Obama victory mean?

Posted by Al Sahlstrom on November 22, 2008

change-we-can-believe-inAfter eight years under the same president, our country is on the verge of some major changes.  This is an exciting time.  The election of a new president encourages us to take a collective look in the mirror and it throws the spotlight on the distinctive characteristics of the person we’ve elected.  Whom we choose as president says a great deal about us – who we are, what we want, and how we have changed in the past eight years.

It is beyond doubt that Barack Obama’s intelligence, his policy positions, and his remarkable temperament will play a crucial role in the next chapter of world history. At the same time, both the full meaning of this election and its likely impact on the next four years are more difficult to ascertain than we might like to admit.

As a Democrat, it’s tempting to interpret an Obama victory as a clear-cut endorsement, both of Obama specifically and the Democratic platform generally.  After all, Obama has practically Kennedyesque personal appeal and he’s spent the past 21 months campaigning relentlessly on the idea that he would bring progressive change to the country by ending the war in Iraq, providing health care to all Americans, and practicing a new kind of politics.

The idea of the election as a direct choice between the policies of Obama and McCain would also fit into a clean, dispositionist narrative of American politics.  But what if voters ultimately made their decisions based on other factors?  For example, Douglas Schoen of the Wall Street Journal argues that the results of this election are “not a mandate for Democratic policies” because voters acted primarily out of a desire to reject Bush and the Republicans.  What about other factors such as the economy or the personal attributes of the candidates?

Though the economy was hardly a centerpiece of Obama’s campaign, his first concrete lead appeared shortly after the advent of the current financial crisis.  How do we read the tea leaves?  Does the important role of the economy in Obama’s victory hint that his policies couldn’t gain acceptance under normal circumstances, or did the crisis simply prove that that the American people trust Obama’s judgment?  What about age, race, or any of the other factors that might have influenced the election?  Does Obama’s charisma strengthen or weaken the rationale for electing him?  What are the implications for an Obama presidency if the election represented something other than a direct up or down referendum on the president-elect’s policies?

In the context of dispositionist Enlightenment values, elections present the highest, purest forum for individuals to exercise rational choice.  By choosing between various candidates and platforms, we communicate our preferences to the government, in turn providing our rulers with a mandate for the choices they make.  It’s clear that voting is important and that our choice of a given candidate expresses a preference, but it’s not clear how much of that preference derives from stable views or strictly rational evaluation of qualifications and policy positions.  Voters’ perceptions of issues are susceptible to the influence of emotion and identity appeals.  Changes in situational factors such as political climate, economic stability, and “October surprises” affect support for candidates without necessarily altering their positions or qualifications.  And it’s widely understood that politicians don’t reliably follow through on their campaign promises (for example, even before this election, the bailout made both candidates’ existing proposals unfeasible).  What, then, is the nature of the connection between a vote based on proposals from the campaign season and the mandate for the action a new president actually takes?

Even to the extent that we vote based on conscious policy decisions, it is easy to overestimate the degree to which a president’s innate qualities and preferences determine how events unfold during his or her time in office.  Our dispositionist assumptions emphasize a view of the chief executive primarily as an independent decision-making actor – the president as “the decider.”

But even the deepest convictions and policy positions of a president-elect are not determinative of what the country experiences in the following four years. No initial mandate can render a president immune to political forces.  Preexisting conditions (such as our current economic and military challenges) can complicate or preclude efforts to enact new policy.  And every president faces historic changes in global and domestic circumstances that come to define his or her term in office.  Good judgment is crucial when meeting such challenges, but ultimately the president’s choices represent only one of many factors shaping the course of events.

Barack Obama’s election has inspired millions and ignited hope around the globe.  Given the historic shift in power we’re experiencing, it’s tempting to jump to conclusions about what we’ve proven by electing Obama and what the world will look like with him as president of the United States.  But in the end, we support candidates for many different reasons and the results of this presidential election don’t unambiguously define the country.  Likewise, President Obama may go on to accomplish many things, but it’s unwise to assume – for better or for worse – that the fate of our country lies in his hands.  The full meaning of Obama’s presidential victory will take time to emerge.  For now, the best first step we can take into the Yes We Can era would be to remember the limitations we all have as individuals and not rely on President Obama to single-handedly change the world.

Posted in Ideology, Politics, Public Policy, Uncategorized | Tagged: , , | 2 Comments »

Jeffrey Sachs on Our Situation – Part V

Posted by The Situationist Staff on October 20, 2008

This is Part V of a loose, unofficial transcript of Dr. Jeffrey Sachs‘s remarkable lecture “Representing the Voiceless: The Poor, The Excluded, and the Future.”  He delivered this lecture on September 11, 2008 at Harvard Law School. You can link to Part I here, Part II here, Part III here, and Part IV here.

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Now what are some of the things that we’ll need to solve these problems?  I, of course, don’t have any full list, but let me mention a few things that I think are important to add to the mix.

First, we absolutely have to find ways to reinforce the role of science in society.  And that’s because of the fact that the nature of our problems, the interconnected challenges of the physical environment and human economic activity and survival require a deep understanding of underlying physical mechanisms.  We need to get science deeply embedded in our public policy processes in ways that it’s not right now.  Congress is scientifically ignorant.  The White House, I won’t even go there, but a travesty and a danger for the world.  George Bush, in my mind is the worst president in American history.  Because I don’t have the visceral feeling for James Buchanan, by the way.  He may be the rival, but other than that, and a large part of it is how Bush scoped up precisely the anti-science that we need right now for survival.

My favorite international institution in this regard is the Inter-governmental Panel on climate change.  The IPPC, which won the Nobel Peace Prize with Al Gore last year, and the reason I like it so much is that it is a constructed model of how to create a public understanding about scientific consensus on a complex topic.  That’s not easy to do.  There’s lots of reasons why the general public has almost no sense of what real science is about.  Of course, general public hears almost no science.  It’s not trained to understand these issues, does not get Science magazine once a week to read – though should.  I recommend it to all of you.  Because even the first half is quite wonderful for non-scientists.  Just to give you a general update about the world of science.  And it’s very important for you to have that.  Because that’s what our world needs to understand right now.

But, more than that, there are obviously deliberately obfuscatory forces the corporate world and the religious world and others that take shots at all of this.  And so the public’s utterly confused even when the scientific community has a rich knowledge and understanding of very complex challenges.  So the IPPC is a process that was designed to bring in a serious methodical – some would say plodding, but still it works – methodical way for scientific knowledge and consensus to the broad public.  And it’s having it’s effect on slowly, grudgingly dragging the world into a recognition about climate change risk.  Because it has a certain authority to the way it has been carefully constructed to be open, transparent, honest, pure review base to deliver that sense of consensus.  We need that on many, many fronts.  We don’t have that kind of process right now.  Congressional oversight doesn’t work.  The administration and the mechanisms of our departments are independent of science.  And so we need to invent new ways to bridge the divide.

Second, we face massive financing problems for global pubic goods and for addressing the needs of the poor.  They’re not massive relative to our wealth or our income.  I’ve estimated that they require between 2-3% of the world’s annual income to address the inter-connective problems of extreme poverty, climate change, energy systems, water, food supply, bio-diversity conservation.  It’s not a lot of money to actually consolidate the future and end extreme poverty and head off the risks on anthropogenic climate change and other massive challenges to our future well-being.  Small.  But it’s vastly larger than what we actually put into any of these things right now.

Our budget on energy research, just to give you an idea, has been running at about 3 billion dollars a year.  We went to war in Iraq because of oil, and have spent about a trillion dollars so far.  It’s just not smart, this imbalance between what we’re investing in real solutions and what we’re ready to invest in bombing and killing people for illusory solutions.  But that’s the kind of trade-off that we’re making.  We’re spending almost 2 billion dollars a day on the military in this country, and for whatever reason both candidates are basically saying “yeah, we’ve got to do that, probably even more.”  Which I think is a huge mistake.  That means that the three billion we spent total on sustainable energy systems each year comes to 1½ days of Pentagon spending.  That can’t be the right allocation for our security.  It just can’t be right.

So I think we need new ways to finance these public goods.  Some, of course, does have to go through our political process each year or Congressional appropriations, but we also need global financing to address global challenges like climate change.  And one of the things I want to work on much in the future is an allocation of some fraction of a global carbon tax or selling carbon permits to mobilizing global financing for public goods.

So we right now are emitting about globally about 30 billion tons of carbon dioxide each year.  I’m sorry, it’s about 36 billion tons of which 30 billion is from energy and about 6 billion is from deforestation, and the number is rising because of the growing world economy of course.  But if we devoted $10 per ton to addressing these problems, and the that would be maybe one cent per kilowatt hour implication for electricity, then when you do the arithmetic you see that would be global financing of another 300 billion dollars a years.  Which actually would be enough to address some pretty basic questions of energy transformation as well as poverty reduction.  So creating a mechanism of global financing I think is an important part of solving the global public goods problems.

Third is public education.  Well, it started here in Massachusetts, and I kind of believe you’re going to have to step up to this much more, and we’re all going to have to step up to this.  But we actually will not solve these problems with an American public that is as poorly informed as it is right now.  I don’t have an answer to that.

We’re competing against a very confused, difficult, overloaded environment of sound bites.  But the truth is we’re not having a discussion worthy of our survival in this country.  The newspapers won’t be the ones to do it.  We’re going to have to figure out other ways to do it.  I don’t have an answer to that.  I just want to raise the problem that’s it’s got to be part of our solution, and it’s got to be public education, not only here but internationally obviously, where the issues are at least as urgent.

One of the things we’re doing at Columbia, which I like in the last year and this year is that we’ve created a global classroom where we have 15 campuses on-line, once a week for an hours so that we have an international discussion that includes New York, Keota, Ecuador , Sussex, England, Paris, Mycale, Ethiopia, Abadan, Nigeria, Delhi, Beijing, Kuala Lumpur, Singapore, universities in all those places, and I do believe that somehow we should be able to use technology more effectively t]o spread knowledge, information, understanding, and I wouldn’t mind if you did that between now and November 4 also.  Because we’re just sitting here like sitting ducks, or paralyzed moose, or whatever it is.  And we shouldn’t, we really shouldn’t be sitting here just paralyzed.  So that’s a third area.

Fourth is leadership by all key intellectual sectors including the law.  I would like to see the law school and the legal community step up to these problems more than they have.  We have, for example, international treaty obligations which as I understand it from the Constitution makes those obligations part of our national law.  In climate change, for example.  But international law is such a weak reed in our system that it barely gets any traction at all.  Why is that?

How many of you are going to specialize in international law so that treaties which are going to be vital for international action have a force of law and operational side to them?  Or human rights law, where all signatories to the universal declaration on human rights.  We’re in the 60th anniversary.  Those rights are obviously not observed or operationalized for billions of people on the planet.  And that document is viewed not as an instrument of international law which I believe it should be but as something that Eleanor Roosevelt did nicely 60 years ago.

That can’t actually be the way we’re going to solve problems if we don’t take these issues the legal dimensions of these issues with extreme seriousness.  Seems to me international law should have the same gravity as domestic law.  And the idea that domestic law has real force behind it because of sovereignty and international law does not, I think is actually an exaggerated difference between the two cases, because both of them are sustained by a self-fulfilling belief in their importance.  Nothing more.  Domestic law can be as useless as international law if you don’t believe in it.  And international law can be as consequent as domestic law if you do believe in it.  And so I do think there is a major challenge here that is unfulfilled by legal scholarship, but also obviously, not just the law.  I don’t mean to be picking on you.

My own profession is absolutely, completely 100% captivated in the stock market as the central issue of economic analysis and is really wasting a lot of time and human resources on that and taking issues of poverty or environmental sustainability  as fringe issues that you might take one course and possibly on the side in one’s economics training.  And so I think that there’s also been an abnegation of responsibility and failure of prioritization there as well.

As I mentioned, a fifth point we need to bring ethics explicitly back into our discussion, in a very formal, self-conscious educated, reflective way.  Not just so you stay ethical and stay out of trouble, but the ethics of a global society which needs to exist but doesn’t exist right now.  We’re so interconnected, we can’t go on simply just hating each other or ignoring each other or ready to bomb each other, or making the existence of others the existential challenge of our time.  And so we need to face up to the kind of ethics that can support the things that will keep us safe, which I think is what ethics is really about in an important way.

And finally, and as a general matter, I think that there is an important, not quite new definition, but a new boldness from universities that’s going to be needed.  And I see Harvard taking tentative steps in that direction, but I would like to see Harvard do a lot more than it’s doing.  I think universities actually have a unique role to play in addressing these problems. And that’s not pure university chauvinism from someone who has lived within universities for 36 years.  Yes, it may be biased, but it is also a considered view of what its going to take to address the kinds of problems that I’m talking about this morning.

First, only universities have the scientific knowledge within them, across the various disciplines, to be able to have a coherent knowledge base to the complex challenges that we face.  And that’s a wonderful thing.  Governments don’t for sure.  NGO’s don’t.  The general public doesn’t.  And so if you do believe as I do that understanding the human bio-physical interactions is fundamental for our well-being, universities have necessarily a unique role to play in that.  We have that cross-disciplinary capacity that no other institution has.  I’d like to think that we are unbiased.  Relative at least, to other institutions in society.  We’re not out for the buck, that’s for sure.  This can’t be the way to go if you’re trying to get rich.  And so I think universities have a kind of credibility and a neutrality that does not come if you’re working for the U.S. State department or if you’re working for a business, or most other institutions that are part of this challenge.

Fourth, and Harvard certainly taught me this, institutions are – this institution is – probably almost uniquely here for the long term.  And so the ability of universities  to think for the long term is also very unusual, and Harvard more than anyone, any other institution on our continent, is certainly reflective of that.

And the fifth point that I think is absolutely fundamental, and it’s the reason why I’m so delighted to be here, is that I believe that universities are uniquely inter-generational in ways that are almost not occurring in any other social institutions, of any kind.  Students get younger every year I find, and that’s an absolutely great thing.  There is inherently in the life of the university a rejuvenation of topics, points of view, and capacities every single year.  So you literally, not just figuratively, and not just as a nice word from you, reflect the hopes of Harvard by your very being here.  You are the embodiment of this institution more than its faculty, I might say.  Because you’re the ones that are going to carry all of this forward.  And this intergenerational uniqueness of the universities I think is extraordinarily important.

I know working as an activist on these issues that there is no way that even people of my generation, if I could put it this way, understand it.  Certainly not John McCain’s administration.  That’s not personal, that’s the fact of his age and his upbringing, and his knowledge, and it’s not what we need for the 21st century.  It just isn’t.  But what we do need is a good intergenerational  spread of expertise and an exchange of ideas that’s constant and intense.

You people, I mean when I have need for true understanding of the information age that we’re living in, I go to my 13 year old daughter.  You guys are a little bit out of it.  Already a little bit too old.  Since I have children that range from 13 to 26 I know their relative capacities, and our 13 year old’s absolutely the best at all of this.  But the knowledge that you bring and the perspectives are absolutely vital to this.  What I find evermore thrilling in the university is the chance to share, interact, and work together to solve these problems.

Thank you very much.

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Part VI of this series will include the question and answer session that followed Professor Sach’s lecture.  To watch the 90-minute video of Professor Sachs’s remarks, click here.

Posted in Education, Law, Politics, Public Policy | Tagged: , | 1 Comment »

Jeffrey Sachs on Our Situation – Part II

Posted by The Situationist Staff on October 16, 2008

On September 11, 2008, Dr. Jeffrey Sachs spoke to a packed hall at Harvard Law School in an address entitled “Representing the Voiceless: The Poor, The Excluded, and the Future.”  To read summaries of  remarkable presentation, see “Jeff Sachs Speaks for the Voiceless at Harvard Law School” or “Jeffrey Sachs urges students to represent the voiceless.” The Situationist is posting a loose, unofficial transcript of his remarks over the next couple weeks.  You can link to Part I here.   The second part is below.

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I see three fundamental problems then that need addressing and they’re all interconnected.  The first is that in this interconnected world our tendency to pose questions as us versus them.  And as inherently conflict ridden as our first way of viewing the problem is becoming more and more dangerous.  But it’s a kind of dynamic that has a self-fulfilling prophecy about it.  I think McCain and Palin will raise by several percentage points certainly the probability that we’ll blow ourselves up in the next few years.  That’s not a small matter in my mind.  I think the way of looking at the world that John McCain has for whatever reason of history, background, honor or ignorance, is extraordinarily dangerous.  And the most dangerous statement of all that I know that has come out in recent years is his statement that the existential threat of our time is Islamic extremism.  If you define the existential threat of our time that way, and you pursue that in policy, the chances that we blow ourselves up rise immeasurably.

If we define our problems as us versus them they will become us versus them.  And we have a lot of reason to believe that we’re going to head off in that direction.  Our ignorance, our lack of understanding of the rest of the world, our lack of empathy, our inability to understand anything from another perspective, our fear, the kind of fear that obviously is threatening Obama’s campaign.  The Muslim.  The other.

This is a pervasive feature of the whole world, not just our society.  But it doesn’t matter how sophisticated and rich and all the rest, the capacity to go off in that direction is very, very high.  And in my view, John McCain exemplifies that.  And that’s a big issue.  I’m not intrinsically a partisan person.  I have actually relatively little interest in partisanship per se.  Not after a job in Washington I can tell you that for sure.  But I am worried, very much by what’s happening right now in the way we pose the global challenges.

Second, I believe that we’re seeing, and I see it every month in my work, wherever I am gravely threatening our well-being through resource depletion and destruction, environmental degradation and increasing marginalization of large parts of the world that are facing global environmental threats that have nothing to do from what came locally but end up destroying or threatening those societies.

Haiti is under water now partly because it’s a crowded, deforested environment, but to take a note from Kerry Emanuel at MIT, the great atmospheric dynamicist at MIT.  The frequency of high-intensity hurricanes in the Caribbean is on the rise because of anthropogenic global warming.   And that is not Haiti’s fault. In the places I’m working in East Africa, draught is becoming more and more frequent.

People are dying massively from this.  We don’t read the names.  We don’t read the stories.  When we do, we usually find some way to blame them for these mishaps because we define problems in ways that extricate ourselves and because, unfortunately, the journalists don’t really understand these things any better than anybody else.

But we end up with tremendous threats to large populations as a result of these global changes.  We’ve had massive typhoons that have killed hundreds of thousands of people in recent years.  More extreme tropical events in South Asia, in East Asia, in the Caribbean.  Massive draughts that carry away vast numbers of children from hunger and immuno-suppression that comes with inadequate food supply.  And I see in many parts of the word such as when I was in Malaysia in Malaysia, Borneo last month.  Truck after truck after truck after truck of big diptocarps, the great trees just being leveled, carried out, the environment de-neutered, and indigenous groups basically thrown off the land to make way for the loggers and then for the palm oil plantations that will follow after the logging.

And this is happening all over the world as well, because weak people and disposessed groups never can claim their rights and never can hold on to informal or traditional or group claims compared to the weight of commercial interest the way we define things in this world.  And so I happen to be in a community of indigenous or [?] populations in Sarawak, and despite the rights that they supposedly have under the Constitution, they are nowhere to be seen, and nowhere to be enforced.  And actually we saw the longhouses just literally bulldozed to get people to leave the area so that the logging can continue.

And third, this leads to tremendous violence and instability, which Senator John McCain calls Islamic extremism.  Or we tend to ascribe to the unruliness of some other populations.  In a large swath of the world, really stretching from the dry lands of Senegal through Mali, through Niger, through Chad, Sudan, Ethiopia, Somalia, Yemen, the Arabian Peninsula, Iraq, Iran, Pakistan, Afghanistan, that whole swath of several thousand miles is a dry lands region.  In general it’s becoming dryer because of the warming of the Indian Ocean, and the consequence drying of this vast belt.  It’s leading to more hunger.  It’s leading to loss of livestock, and livelihoods.  At the same time, the population in this region is exploding.  Because the fertility rates remain very, very high.  There is very little contraception to be found.  We don’t talk about these things, neither do these countries especially with a few examples, the U.S. cuts the budget for family planning, denounces the U.N. Population Fund and all the rest.  And so we have like two blades of the scissors – falling water availability and rising populations.  And this leads to explosions like Darfur.  Or in the most extreme cases in what’s one of the driest places on the whole planet Somalia, where the entire government infrastructure collapses to the point where there is no national government anymore and hasn’t been for the last 15 years.

It would be very surprising if that didn’t provoke instability, violence, basses of terrorism and the like.  And low and behold, of course, it does.  And the U.S. response typically is to set up the African command of the U.S. military.  That’s our newest innovation.  I see American soldiers all over the place when I travel.  We call this Islamic extremism.  We view Darfur not as one of the worst crisis of water and food on the planet but only in the context of our ideological battles with Khartoum.  So we don’t understand the underpinnings of migration from the north of Darfur when the drying occurred of Nomadic populations who then came in and tried to, with the backing of the regime ethnically cleansed, the more sedentary sub-humid, but not as arid parts of southern Darfur.  But at the core this, this is water – it’s food, it’s livelihoods, with the backdrop of burgeoning populations and worsening environmental conditions.

But we label all of this as the enemy.  And every couple of months we send bombers in.  This is the approach that a country with a very high capital issue would take.  We don’t have very many troops as you know.  So we bomb.  More and more when we bomb, we kill women and children, destroy villages, can’t quite understand why people aren’t thrilled with this.  We tell lies so relentlessly, it’s absolutely impossible now to comprehend how dramatically we lie everyday.  Ah.  Anyone under a U.S. bomb is an insurgent.  That’s almost the definition in the newspapers.  And we have a cowardly press that is afraid of losing advertising revenues.  We’ve essentially lost the voice of an independent N.Y. Times, which in my view has become not quite a rag, but almost useless for understanding what’s going on.  Because they’re so conservative that they won’t question these things.  And this is where we are headed right now and that’s why I’m nervous.

So what would it take to solve these problems?

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Part III of this series picks up there.  To watch the 90-minute video of Professor Sachs’s remarks, click here.

Posted in Events, Politics, Public Policy, Uncategorized | Tagged: , , | 4 Comments »

Jeffrey Sachs on Our Situation – Part I

Posted by The Situationist Staff on October 14, 2008

On September 11, 2008, Dr. Jeffrey Sachs spoke to a packed hall at Harvard Law School in an address entitled “Representing the Voiceless: The Poor, The Excluded, and the Future.”  To read an article summarizing his remarkable presentation, see “Jeff Sachs Speaks for the Voiceless at Harvard Law School.”

The Situationist will be posting a loose, unofficial transcript of his remarks over the next couple weeks.  Here’s the first part.

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Good morning everybody.  What a pleasure to be here.  This is actually a room I know well.  I taught classes here for many years with Roberto Unger, who you know is now minister in the government of Brazil and working on problems of sustainable development.  So, good things happen in this classroom, and I expect many of you to go out and be leaders in the future, and it’s especially a privilege to speak to you at the beginning of your law school experience.

My main message to you is whatever they might do in teaching you in the next three years, don’t let anybody beat out of you the enthusiasm for seeing law as a instrument of social change, and as a mechanism for solving human problems.  That I think is the most important role that we need to play in the coming years, and I believe, as I’ll emphasize, that places like Harvard have unique responsibilities that are not being fulfilled right now, and because of that are putting us at unnecessary risk.  Or to put it another way, Wasilla is just beating the stuffing out of Cambridge right now, and we’ve got to get our act together and to speak out and start working and doing what we believe to be possible, which is the reason why we’re here.  And that is the idea of applying intellect and learning and science and knowledge and history to human betterment, and we’re facing a massive reaction in this country.  It says none of that’s possible, that none of you care, that we’re all a bunch of elitists out to denigrate the rest of the country and the rest of the world.  It’s a bunch of crap, if I can use a technical term.  But we better get our voices together, and we better start acting on our beliefs, and we better start communicating better than we are.

And the reason is, this world’s in a lot of trouble — despite and, ironically in part, because of our wealth and technical capacity.  The world is not reliably running on the rails, or running on the fiber optic cables right now.  The world is at an unusually high risk of spinning out of control.  And I think it’s our greatest challenge to try to help insure that that doesn’t happen.  And it will require special kinds of action and knowledge and commitment – a kind of mix of knowledge and the work that you’re going to learn and the skills that your going to develop in the next three years combined with an ethical commitment which won’t come from your classes necessarily; you’re going to have to find it yourselves and in other ways, although I’m sure your teachers can help to impart it if they’re doing their job properly.

But it’s going to have to come also through a lot of reflection, internally about what you want to do and how you want to use the skills that you’re developing.  My job is to worry you today.  If I weren’t worried, I would not be doing what I’m doing.  There are plenty of other things that I’d like to do more if I felt that it was really possible.  But I feel a little bit compelled to do what I’m doing right now which is trying to understand these challenges of poverty or environmental degradation or profound inter-ethnic and inter-religious conflict or a geo-politics that’s gone crazily awry or a country like ours which is seemingly absolutely incapable of serious discussion right now – under almost any circumstances.  I’d rather be doing other things.  But I’m doing these things because I think that they actually are important.

Why am I worried?  I’m worried because I think that the world is in a very dangerous, unprecedented and poorly understood situation and the two concepts that for me are extremely important in thinking about this – one I use in the subtitle of my book Commonwealth: Crowding, Economics for a Crowded Planet.

I think we’re in each other’s faces globally as never before.  We haven’t adjusted to the realities of a global inter-connected society of nearly 7 billion people now.  And with those numbers rising by nearly 80 million a year, and I know that that crowding is leading to incredible marginalization of hundreds of millions of people in an extremely dangerous way.  People you don’t see that we would not naturally think about that are pundits and editorial writers and our government officials no nothing about.

And it’s only because of my accidental luck personally to have gotten involved in very marginal communities and places in the world in marginal and an economic sense that I’ve been able to understand this because I never would have from what I learned across the parking lot in Littauer where I studied or when I was teaching because I didn’t know what I was talking about frankly.  For many, many years of teaching because I hadn’t seen these things with my own eyes.  So one part of this is crowding and that’s a term which for me means a number of things which I’ll explain, but it basically means a world that is not coming to grips with it’s interconnectedness, it’s diversity, and the pressure’s on the weakest and the most vulnerable in the planet which include more than one billion people.

The other big risk, very much interconnected with the first is related to a term that I like very much – coined by an atmospheric scientist who was a co-winner of the Nobel Prize for discovering the chemistry that underlies the threat to ozone depletion.  A scientist named Paul Crutzen who coined the phrase for our age “the anthropocene.”  That’s a geological sounding term which he means to substitute for the technical term of our geologic epoch which is called the Holocene.  That’s the post ice-age era in which civilization has developed and now 6.7 billion of us live.

And what Crutzen said out of his deep awareness and deep understanding of the science of our time, is that humankind, the Anthropos, has taken over the earth’s physical systems in ways that we barely understand, but which are a profound threat for survival even.  And he should know because it was only by accident that while looking a possible implications of supersonic transport technologies in the early 1970s, he and others started to think about how certain chemicals – the chlorofluorocarbons which were felt to be inert, safe, clever ways to get your deodorant under your arms through aerosols, would actually threaten the planet.  So it was an accidental discovery that CFC’s would actually become chemically active as they rose through the stratosphere and the chlorine atoms then would decompose the ozone level.  And it took brilliant, completely accidental sleuthing by a number of scientists to uncover this.

We happened then to have a massive satellite up in the sky that could take a picture of the ozone hole over Antarctica which became one of the most famous pictures of the second half of the 20th century.  And the combination of the science and the ability to measure it and confirm it led to a series of global agreements that for a change, actually, have more or less delivered what they promised showing that it is possible to reach global agreements on these issues.

I find this example pregnant with all sorts of important meaning.  First, the ability of humankind to fundamentally disrupt the biosphere.  That’s pretty good of us.  That’s not so easy to do.  Second, the fact that massive, major things can happen without any awareness and it’s only an accidental scientific discovery.  Whether it was the chain of effect of DDT through the food cycle but Rachel Carson made famous in Silent Spring, or the far more important effects of CFC’s on the ozone level.  But these were things that were not understood.  There was no search for their effect, they were only accidentally discovered.  And, third, the fact of the matter that what we’re doing ecologically, is at such a massive and growing scale, and so multi-dimentional, so multi-faceted, so far beyond our measuring systems, our technical knowledge right now, so unprecedented in extent, and of course, not exactly the burning issues of our “drill baby drill” campaign right now, that we’re not exactly on top of this.

When you put these two facts together – a crowded world experiencing still massive technical change, and massive increases of natural resource use and an environment already under pervasive threat only poorly understood, and politically almost not in anybody’s focus.  And with most of the world including most of this country are not even aware of it.  I say we’ve got a massive problem, and I think it’s going to be intra-connected set of challenges that will be your generations leading challenges.  Not the ones we talk about every day.  But these are going to be the challenges that will become the centerpiece of the global reality whether they ever become the centerpiece of our politics or not.

I see three fundamental problems then that need addressing and they’re all interconnected . . . .

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Part II of this series will pick up there.  To watch the 90-minute video of Professor Sachs’s remarks, click here.

Posted in Events, Law, Politics, Public Policy | Tagged: , | 6 Comments »

The Illusion of Wall Street Reform

Posted by The Situationist Staff on October 6, 2008

The following op-ed was co-authored by Situationist contribtor Jon Hanson and a Situationist fellow. In crisis, beware illusion of reform” was published in the Providence Journal.

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IN CASE you missed it, global financial markets have been rocked by a series of unsettling events. The collapse of Lehman Brothers and the $700 billion government bailout package are only the latest in a string of shocks — a string that, if investors’ worst fears are realized, represents the beginning of a much more dramatic unraveling of the global financial fabric.

Seven years ago, American markets were in similar turmoil. Such companies as Enron were using “aggressive accounting,” “special-purpose entities” and other balance-sheet tricks to hide risks and represent themselves as healthier than they were.

The accounting scandals of the early 2000s and the reform that followed have much to teach us about our approach to the current crisis. Then, as now, the problem stemmed from convoluted financial instruments that few people could disentangle. Then, as now, corporate behemoths that had seemed invincible came crumbling down (Enron was the biggest bankruptcy in history until WorldCom, which was the biggest bankruptcy in history until Lehman Brothers).

Then, as now, virtually everyone agreed that a big part of the solution was to be found in some sort of additional regulation. Today, Barack Obama calls for “regulatory reform,” while John McCain (a long-term proponent of deregulation) has called for “comprehensive regulations that will apply the rules and enforce them to the full.”

It was that sort of regulatory impulse that, in Enron’s aftermath, gave us the Public Company Accounting Oversight Board and the Sarbanes-Oxley Act of 2002 (“SOX”), which President Bush called the most far-reaching overhaul of America’s business practices since the Great Depression.

Sure sounded promising. The latest bailouts and scandals will no doubt lead to similar reforms, some of which are already in the works. An important question, then, is what those reforms should be — a topic that will occupy many scholars, policymakers and commentators in the upcoming months.

Unfortunately, there is a good chance that those reforms will not have much long-term effect. The real risk is that we get the illusion of reform, not meaningful, substantive and lasting reform. Calls for change come loudly when a crisis rears its head. Inevitably, however, the fervor fades, as workaday duties, dentist appointments, American Idol and the pennant races distract the public and, in turn, policymakers.

While the rest of us turn to other matters, the regulated entities themselves will maintain a steady focus on one question: existing regulations and how to weaken them.

In the aftermath of Enron and WorldCom, corporations, to maintain their legitimacy, initially expressed outrage and wholeheartedly supported new regulations. Members of the Business Roundtable were “appalled, angered and, finally, alarmed” about the problem. President Bush was right, in their view, to berate the bad-apple business executives and to call for more rigorous regulatory standards for all. “We must and will be at the forefront of supporting these reforms,” the Roundtable concluded.

Riding the wave of that consensus, lawmakers took a series of steps, patted themselves on the back, and moved onto other matters, and we all assumed the problem was solved. With that, what had been implicit resistance turned to explicit pressure from the business community to minimize and undo the “reform.”

Consequently, the post-Enron reforms never lived up to the post-Enron rhetoric, and the regulatory teeth that Sarbanes-Oxley initially flashed have been blunted by pro-business revisions. Some provisions never made it into SOX, such as a requirement that lawyers report to the Securities and Exchange Commission if a company’s board failed to respond to warnings about misconduct.

Other provisions exist only on paper, such as Section 404’s “assessment of internal controls,” the compliance date for which has been repeatedly delayed (for nonaccelerated filers) and now stands at Dec. 15, 2009. The Committee on Capital Markets Regulation, with the blessing of Treasury Secretary Henry Paulson and in the name of “U.S. competitiveness,” has promoted several reforms that make it harder for companies to be sued and more difficult for the SEC and others to regulate.

The committee’s members include heavy hitters from the world of business and finance, including Thomas A. Russo, the vice chairman and chief legal officer of Lehman Brothers.

If history is any guide, the same sort of dynamic will unfold this time around. The reforms that we see will be largely procedural, not substantive — check this, sign that, certify here, jump a hoop there — and they will not fundamentally change the situation that produced this crisis. The reform will look sweeping, because it will be broad-based and ballyhooed as “tough.” Soon enough, the business elite will complain that, indeed, it is too tough. We will learn that small-business owners and entrepreneurs, not to mention Fortune 500 firms, are being tangled and tripped up in overregulation and needless compliance costs.

The mantra of “markets good, regulation bad” and the primacy of shareholders will return. Erstwhile concerns about third parties — such as the taxpayers who are bailing out companies — will gradually be eclipsed by claims that those very groups are the most harmed by the new regime. After all, these burdensome regulations go too far and “hurt American competitiveness,” “drive business, jobs and tax revenues overseas,” “increase costs for consumers,” and so forth.

Such is the “law of unintended consequences,” which apparently applies to only regulations and regulators, never markets.

The reform, which might look promising initially, will be rolled back, whittled away and watered down (corporate lobbyists are already positioning themselves to grab a piece of the $700 billion bailout).

That’s the thing about illusions: What appears to exist doesn’t. To address the financial crisis, regulatory reform is certainly needed. But no less important will be mechanisms for girding those regulations against the influence of the regulated. Beware the illusion of reform.

* * *

For a related Situationist post, see “The Situation of Illusion.”

Posted in Deep Capture, Illusions, Law, Politics, Public Policy | Tagged: , , , , | 5 Comments »

Bracelet-Based Policy Making

Posted by The Situationist Staff on September 29, 2008

Ever wonder why so much time is spent comparing jewelry and telling personal anecdotes in presidential debates (see short video above), even as many of the larger policy questions remain largely unexplored?  There are, of course, many reasons (some of which have been noted in previous Situationist posts), but Friday’s wrist-off reminded us of one key contributor: “the identifiable victim effect” —  greater sympathy is felt for identifiable victims than for statistical victims.

George Loewenstein, Deborah Small, and Jeff Strnad have an excellent 2005 paper, “Statistical, Identifiable and Iconic Victims and Perpetrators” (available for free downloading on SSRN), discussing that effect and its role in policymaking. Their introduction includes this paragraph.

In this paper we focus on yet another reason for why taxation and government spending can go awry: human psychology, and specifically the lack of proportionality between human sympathy and the wants and needs of those toward whom the sympathy, or lack thereof, is directed. As Adam Smith observed in the Theory of Moral Sentiments, we often feel little sympathy toward people who are highly deserving of it. He illustrates the point vividly with the hypothetical case of a European man who gets more upset over losing his little finger than over a calamity that wipes out the entire population of China. However, the disproportionality can also go in the opposite direction. As Smith also points out, “we sometimes feel for another, a passion of which he himself seems to be altogether incapable,” as illustrated by the dismay of the mother of a sick child which, as he puts it, “feels only the uneasiness of the present instant, which can never be great” . . . . Smith adds dryly that “we sympathize even with the dead, who themselves experience nothing”. . . . Our main focus is on one specific source of arbitrariness in human sympathy: the disproportionate sympathy and attention to identifiable as compared with statistical victims.

Here is the abstract.

We first review research showing (1) that people respond more strongly to identifiable than statistical victims even when identification provides absolutely no information about the victims, (2) that the identifiable victim effect is a special case of a more general tendency to react more strongly to identifiable others whether they evoke sympathy or other emotions, and (3) that identifiability influences behavior via the emotional reactions it evokes. Next, we discuss the normative status of the effect, noting that, contrary to the usual assumption that people overreact to identifiable victims, identifiability can shift people’s responses in a normatively desirable direction if people are otherwise insufficiently sympathetic toward statistical victims. Finally, we examine implications of the identifiable victim effect for public finance. We show that the identifiable victim effect can influence the popularity of different policies, for example, naturally favoring hidden taxes over those whose incidence is more easily assessed, since a hidden tax has no identifiable victims. Identifiable other effects also influence public discourse, with much of the debate about government spending and taxation being driven by vivid exemplars – iconic victims and perpetrators – rather than any rational calculation of costs and benefits.

To read previous Situationist posts discussing some of the problems posed by the way we do or do not emotionally connect with victims, see “An Apathy Epidemic” and “Too Many To Care.”

Posted in Abstracts, Behavioral Economics, Choice Myth, Education, Morality, Public Policy | Tagged: , , , , , | 2 Comments »

Retroactive Liability for our Financial Woes

Posted by The Situationist Staff on September 27, 2008

In the following editorial, “Take the Banker’s Porsche” (published in The Seattle Post Inquirer), Situationist contributor Adam Benforado makes an interesting case for a tort-like response to our financial situation.

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With our eyes focused on the staggering price tag of the impending bailout, it is easy to overlook the fact that a significant number of people profited handsomely as they took actions that led to the latest global financial crisis. Over the past five years, much more than $100 billion of bonuses were paid out to the Wall Street elite (including $39 billion just last year). Multimillion-dollar homes in East Hampton were bought; Bentleys were purchased; Gucci handbags were scooped up by the handful; Warhols were hung.

Most of those luxury items will be kept. And, over the next decades you — the medical resident in Philadelphia, waitress in Reno and musician in Nashville — will be receiving the bill.

The story of the mortgage debacle is a complex and meandering tale, but the endgame math is just that simple. The harm has happened, someone has to pay and, because of our discomfort with retroactive statutes and regulations, the burden is going to land on taxpayers in general.

It does not have to be that way and it ought not to be that way. Those who were directly involved in the decision-making and profited from the deals that ultimately resulted in the economic collapse have been unjustly enriched. To satisfy the $700 billion hole the government will soon find itself in after buying up the private sector’s bad debt, we should first look to the tainted assets of those whose hearty bellows stoked the fire.

Perhaps the most famous piece of retroactive legislation, the Comprehensive Environmental Response, Compensation and Liability Act (popularly known as Superfund), reflects exactly this sense of fairness: Although dumping hazardous waste may not have been illegal at the time it occurred, those who created the waste — and profited from it — ought to be liable for the consequences of their actions.

Under the act, the government — and, thus, the people at large — is to pay response expenses only “where a liable party does not clean up, cannot be found or cannot pay the costs of cleanup.”

Those who reaped great benefits from the subprime mortgage market have left us with a toxic mess and it is upon their shoulders that the responsibility for market decontamination should fall first.

There are at least three reasons why retroactive liability is particularly justified in this context.

First, one of the main grounds for reluctance as to retroactivity is that new laws applied to old conduct tend to catch people unfairly by surprise. However, if we look at the situation here, a lot of the market players knew that what they were doing was risky: The writing had been on the wall for years that the housing and credit bubbles could not be sustained. Those involved were gambling that they could milk a little bit more from the system before things went sour. It was greed not naiveté that kept them at the teat.

Second, the “due notice” concern is only one type of relevant fairness consideration. A competing — and arguably more fundamental — concern is that those individuals who commit harms should have to pay to make things right and those that are comparatively innocent should not. In America, it’s “You break it; you bought it.”

Third, and most important, the complaint of unfair retroactivity is really a red herring because, in truth, the implicated bankers are in no different position than taxpayers as a whole in this regard. Actions were taken in the past that resulted in grave economic damage and now someone has to pay to repair the system. The choice is not between retroactivity and nonretroactivity; the choice is between potentially liable parties.

Are there significant legal, political and practical barriers to making financial insiders responsible for the mortgage crisis before taxpayers? Yes, but those challenges do not dilute the arguments made above.

The strength of this approach is not just that it would be fairer than the alternative, but also that it would act as a powerful deterrent to those who would be tempted to engage in similarly risky strategies in the future.

As any economist will tell you, a moral hazard problem exists when government bailouts occur: The key actors are not forced to internalize the costs of their harmful behavior. Putting investment bankers back where they started — and using their seized assets to treat the problem they engendered — would be a powerful warning to those looking to exploit financial markets in the future.

Posted in Law, Public Policy | Tagged: , , , , | 2 Comments »

Jeff Sachs Speaks for the Voiceless at Harvard Law School

Posted by The Situationist Staff on September 21, 2008

From Sam Flaks’s article in the Harvard Law Record.

* * *

Dr. Jeffrey Sachs spoke to a packed hall in an address entitled “Representing the Voiceless: The Poor, The Excluded, and the Future,” on the morning of Thursday, September 11, 2008. The passionate but precise economist called for the recognition of the intermeshed dilemmas posed by an overcrowded planet and an increasingly interconnected globe. Sachs’ appearance was organized by Professor Jon Hanson, Carol Igoe, Jon Taylor ’10, and an inter-year committee of students from Section VI.

Sachs, who is one of the leading international economists of his generation, is Director of the Earth Institute at Columbia University, Special Advisor to United Nations Secretary-General Ban Ki-moon, and President and Co-Founder of Millennium Promise Alliance, a non-profit organization attempting to end global poverty. He is the author of numerous books, including, most recently, ”The End of Poverty” and ”Common Wealth”. Given that ”Time” listed Sachs as one of the world’s 100 most influential people in 2004 and 2005, it was unsurprising that a standing-room only crowd packed Austin North to hear him at 8:15 A.M.

In his address, Sachs emphasized that the world faces many grave problems. He bewailed that the general public, politicians, and the media are ignorant of the desperate straits of marginalized communities living in the world’s poorest places. Sachs confessed that he himself would have never understood the straits of deathly parched countries like Somalia without seeing them with his own eyes. The direct connection between the hurricanes and tsunamis that have killed hundred of thousands in recent years and the economic and environmental policies of Western democracies is being generally ignored. However, Sachs has made it his mission to educate others about these connections and to fight for change.

Sachs call for engagement was also starkly political. Though he criticized both John McCain and Barack Obama for not engaging the long-term geopolitical problems facing America, Sachs reserved his harshest criticism for the Republican. Sachs predicted that if McCain is elected, the probability of global crisis will rise a few percentage points. He described McCain’s worldview as epitomizing the mindset that defines America and Islam in self-fulfilling and self-defeating “us and them” terms. In response to a question from the audience, Sachs observed that extremely impoverished places can not be politically stable. America would be safer if it devoted more resources to providing renewable energy rather than military spending, he said.

Sachs urged his audience of law students to use the technical skills that they were gaining in the service of ethical goals and to combat environmental and economic disparities that are spurring ethnic conflict across the globe. Specifically, he called for lawyers to support the legal foundations of international treaties that will be necessary to deal with worldwide environmental problems. More broadly, Sachs shared his belief that that the world’s social problems could only be solved if people become more scientifically literate. He pointed out that many crucial threats facing the planet are recognized by the scientific community many years before the general public. Sachs recommended that everyone read Science to keep abreast with new developments that may have important bearing on social problems.

Student reaction to Sachs’s address was generally positive, though many students left with heavy hearts. One student confessed that the Sachs had made him feel bad about his incipient career as a corporate lawyer. Indeed, another student who had come to Harvard to with the intention of helping solve international poverty admitted to this reporter that he avoided the speech because he was too guilt stricken to attend. Nonetheless, the electric humming at the close of the event indicated that many students had been inspired by Sachs’ words and example.

* * *

In the upcoming weeks, The Situationist will post rough transcripts of portions of Sachs’s remarkable talk.

To watch the 90-minute video, click here.

Posted in Conflict, Education, Events, Geography, History, Ideology, Law, Legal Theory, Morality, Politics, Public Policy | Tagged: , , | Leave a Comment »

Colorblinded Wages – Abstract

Posted by The Situationist Staff on September 5, 2008

Joni Hersch, recently posted her intriguing paper, “Skin Color, Immigrant Wages, and Discrimination” on SSRN. Here’s the abstract.

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Immigrant workers with darker skin color have lower pay than their counterparts with lighter skin color. Whether this pay penalty is due to labor market discrimination is explored using data from the New Immigrant Survey 2003 to estimate wage equations that control for skin color, sequentially taking into account a series of individual characteristics related to labor market productivity and personal background. These characteristics include Hispanic ethnicity, race, country of birth, education, family background, occupation in source country, English language proficiency, visa status, employer characteristics, and current occupation. The analysis finds that the labor market penalty to darker skin color cannot be attributed to differences in productivity and is evidence of labor market discrimination that arises within the U.S. labor market. The largest groups of post-1965 immigrants – those from Asia and Latin America – are penalized in the U.S. labor market for their darker skin color.

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For a few related Situationist posts, see “Shades of Fairness and the Marketing of Prejudice” and “Black History is Now.”

Posted in Abstracts, Public Policy | Tagged: , , | 2 Comments »

 
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