Tuesday, September 12, 2017
Lots of gems, as one might expect. On his approach to judging and some of his critics:
“I pay very little attention to legal rules, statutes, constitutional provisions,” Judge Posner said. “A case is just a dispute. The first thing you do is ask yourself — forget about the law — what is a sensible resolution of this dispute?”
The next thing, he said, was to see if a recent Supreme Court precedent or some other legal obstacle stood in the way of ruling in favor of that sensible resolution. “And the answer is that’s actually rarely the case,” he said. “When you have a Supreme Court case or something similar, they’re often extremely easy to get around.”
I asked him about his critics, and he said they fell into two camps....
He said he had less sympathy for the second camp. “There are others who are just, you know, reactionary beasts,” he said. “They’re reactionary beasts because they want to manipulate the statutes and the Constitution in their own way.”
And on his immediate reason for retiring:
He had become concerned with the plight of litigants who represented themselves in civil cases, often filing handwritten appeals. Their grievances were real, he said, but the legal system was treating them impatiently, dismissing their cases over technical matters.
“These were almost always people of poor education and often of quite low level of intelligence,” he said. “I gradually began to realize that this wasn’t right, what we were doing.”
In the Seventh Circuit, Judge Posner said, staff lawyers rather than judges assessed appeals from such litigants, and the court generally rubber-stamped the lawyers’ recommendations.
Judge Posner offered to help. “I wanted to review all the staff attorney memos before they went to the panel of judges,” he said. “I’d sit down with the staff attorney, go over his memo. I’d make whatever editorial suggestions — or editorial commands — that I thought necessary. It would be good education for staff attorneys, and it would be very good” for the litigants without lawyers.
“I had the approval of the director of the staff attorney program,” Judge Posner said, “but the judges, my colleagues, all 11 of them, turned it down and refused to give me any significant role. I was very frustrated by that.”
His new book, he said, would have added to the tension: “If I were still on the court, it would be particularly awkward because, implicitly or explicitly, I’m criticizing the other judges.”
Judge Posner said he hoped to work with groups concerned with prisoners’ rights, with a law school clinic and with law firms, to bring attention and aid to people too poor to afford lawyers.
Saturday, September 9, 2017
New American Foundation fires a prominent researcher who criticized one of its largest donors (Michael Simkovic)
The powerful Washington D.C. think tank New America Foundation, which has ties to the technology, finance, and aerospace industries, recently fired a researcher within days after the researcher praised the European Union for fining Google for antitrust violations. Google and its CEO are among the largest donors to New America Foundation, as well as other think tanks. The head of New America Foundation claims the firing was for a lack of collegiality, but declined to discuss specifics.
The firing echoes similar incidents at other think tanks, including the American Enterprise Institute and Brookings Institute, where researchers have been fired shortly after offending other important donors or political patrons.
As the Economist magazine explains:
[Think tanks suffer from] a fundamental flaw. Unlike other institutions designed to promote free inquiry, such as universities or some publications, think-tanks do not enjoy large endowments, researcher tenure or subscription revenue to insulate thinkers from paymasters. And thinking costs a lot.
The New America Foundation has played a prominent role in efforts to privatize student loans by making the terms of federal student loans less attractive and making the loans less widely available.
Wednesday, September 6, 2017
The University of Chicago Law School invites applications for the Earl B. Dickerson Fellowship, with an appointment at the rank of Instructor, for a twelve-month term to begin on July 1 or August 1, 2018. The Dickerson Fellowship is named after the first African-American graduate of the Law School, from the class of 1920. The Law School seeks candidates who demonstrate the promise of distinguished legal scholarship and law teaching and ideally have relevant practice experience that will qualify them to act as teachers and mentors of students. Among other considerations, we value candidates with diverse backgrounds and perspectives who will enrich and improve the student experience and the Law School's culture. The Dickerson Fellow will teach one or more courses per year and will be expected to publish high-quality scholarship and contribute to the intellectual life of the Law School. A J.D. is required. Candidates must apply online at the University of Chicago Academic Career Opportunities website, http://tinyurl.com/y94upx29, and upload a current curriculum vitae, law school transcript, and reference contact information. Applications will be considered until the position is filled or until June 30, 2018, whichever comes first.
The University of Chicago is an Affirmative Action/Equal Opportunity/Disabled/Veterans Employer and does not discriminate on the basis of race, color, religion, sex, sexual orientation, gender identity, national or ethnic origin, age, status as an individual with a disability, protected veteran status, genetic information, or other protected classes under the law. For additional information please see the University's Notice of Nondiscrimination at http://www.uchicago.edu/about/non_discrimination_statement/.
Job seekers in need of a reasonable accommodation to complete the application process should call 773-702-0287 or email ACOppAdministrator@uchicago.edu with their request.
Monday, September 4, 2017
Friday, September 1, 2017
We are looking forward to seeing more of him around the Law School!
For the story of his appointment by President Reagan and confirmation in 1981, see pages 1614-1615 of this article. President Reagan, who probably would be expelled for insufficient "conservativism" (whatever that is anymore) from today's Republican Party, surely did not know the legal force of nature he had unleashed when he appointed Posner.
On Judge Posner's jurisprudential significance, readers might also find this essay relevant.
And back in 2005, Judge Posner was a guest-blogger at my philosophy blog!
Dick Posner has always embodied the intellectual ideal of academic life at the University of Chicago: always willing to engage all views, unforgiving in argument, and never confusing intellectual warfare with personal animosity. It will be nice to see more of him.
Wednesday, August 30, 2017
Before becoming a distinguished and influential federal judge, Phillips served on the law faculty at the University of North Carolina, Chapel Hill, where he was also Dean. There is a lovely memorial notice for Judge Phillips here.
(Thanks to Mitch Berman, who clerked for Judge Phillips, for the pointer.)
Monday, August 28, 2017
Here are eight lateral moves from the 2016-17 list that, judging from my in-box and what I've heard other ways, made members of the academic community stop and take notice:
*Richard R.W. Brooks (contracts, business organizations, law & economics, law & social norms) from Columbia University to New York University. Brooks only moved to Columbia from Yale a couple of years ago, but he's now joined a long list of faculty who have decamped downtown over the last dozen years from Morningside Heights: Jose Alvarez, Cynthia Estlund, Scott Hemphill, Samuel Issacharoff, Trevor Morrison (who moved to become Dean), Catherine Sharkey, and Jeremy Waldron. No faculty member has moved from NYU to Columbia in over 25 years, which is a remarkable transformation in the relative academic position of the two schools from a generation ago. (Columbia has done plenty of lateral recruitment of its own, to be sure, poaching faculty from Yale, Chicago, and Virginia, among other places. Interestingly, Columbia graduates continue to dominate NYU graduates in the job market for new lawyers, though that gap has narrowed from a generation ago.)
*Eleanor Brown (property, immigration and migration law, law & development) from George Washington University to Pennsylvania State University, University Park. A scholar of migration and the role of property rights in migrant success, she takes up a joint appointment with both the law school and the school of international affairs, both of which will now be led by Hari Osofky, recruited from the University of Minnesota to be Dean of both. It's always a good sign when a school is able to recruit established scholars from currently higher-ranked institutions.
*Erwin Chemerinsky (constitutional law, civil procedure) from the University of California, Irvine to the University of California, Berkeley (to become Dean). One of the most influential (and most-cited) public law scholars in the United States, his move to Berkeley would have made news even if he weren't also becoming Dean.
*Brett Frischmann (intellectual property, Cyberlaw) from Cardozo Law School/Yeshiva University to Villanova University. A leading scholar in these areas, Frischmann was recruited by Villanova with a new endowed University professorship. A big pick-up for Villanova.
*Herbert Hovenkamp (antitrust, intellectual property, legal history) from the University of Iowa to the University of Pennsylvania. The leading figure in antitrust in the United States, he spent roughly the last thirty years at the University of Iowa, turning down offers from Columbia and Chicago during that time. But now he's joining Penn as a Penn-Integrates-Knowledge (PIK) University Professor, with appointments in the Law School and the Wharton School. That's the second really eye-catching senior appointment for Penn recently; the year before, Penn recruited Beth Simmons, the eminent human rights scholar, from Harvard, also with a PIK University Professorship, and appointments in both the Law School and Political Science department.
Friday, August 25, 2017
Todd Henderson (Chicago): Lawyers make better CEOs in industries with high litigation risk (and worse CEOs elsewhere) (Michael Simkovic)
Professor Henderson finds that: "CEOs with legal expertise are effective at managing litigation risk by, in part, setting more risk-averse firm policies. Second, these actions enhance value only when firms operate in an environment with high litigation risk or high compliance requirements. Otherwise, these actions could actually hurt the firm."
Monday, August 21, 2017
Vanderbilt Tax Professor Herwig Schlunk wants the federal government to tax university endowments, preferably out of existence. He writes: “In the best of all possible worlds, the federal government could and probably should . . . confiscate[e] all private university endowments . . .”
Toward that end, Schlunk recycles arguments that were discredited years ago.
Professor Schlunk is famous for asserting that law school is a bad investment. Schlunk’s bold claim—based on back of the envelope calculations and highly unscientific website surveys—was popularized by the Wall Street Journal and echoed by sympathetic media outlets. Peer reviewed research by labor economist Frank McIntyre and me—using high quality nationally representative government data and well-established econometric techniques—subsequently demonstrated that Schlunk was mistaken. (See here and here).
This post critiques Schlunk’s recent work on endowments for misuse of discount rates, overlooking the importance of educational quality, mismeasuring student earnings and higher education expenditures, selectively targeting higher education, supporting policies that undermine economic growth, and overlooking stark differences between popular votes and political power.
Misuse of discount rates
To arrive at his headline-grabbing law school result, Schlunk relied on some spectacularly unrealistic assumptions. As Frank McIntyre and I explained four years ago:
“Professor Schlunk’s analysis assumes astronomical discount rates, low earnings growth rates, and zero inflation for thirty-five years. None of these assumptions are empirically or theoretically justifiable.
Most studies [of higher education] by economists have generally used a discount rate between 2.5% and 3%. . . . Compared with the 3% discount rates applied in labor market studies by economists and suggested by the real (net-inflation) costs of financing a law degree . . . Professor Schlunk applies real discount rates of between 8% and 27%.
If Professor Schlunk had used comparable assumptions about discount rates to evaluate the value of a college degree compared to a high school diploma, he would have reached the conclusion that few should go to college. Indeed, given a 30% nominal discount rate, whether it makes financial sense to complete high school might be debatable.”
Undeterred, Professor Schlunk once again relies on unrealistically high discount rates and overlooks differences in completion rates, this time to argue that private non-profit universities provide little value when compared to leanly funded, politically vulnerable public universities. Based on this analysis, he concludes that the federal government should tax universities more heavily than it already does. Higher discount rates mean that future cash flows have a lower present value. Thus the value of a lifetime of higher earnings from higher quality education is diminished by choosing a higher discount rate.
Schlunk’s justification for using such high discount rates is that higher education “puts me in mind of income streams I confronted when advising investors in the private equity sector [where] discount rates of as high as 30% were generally applied.”
For the record, peer reviewed research generally finds that private equity returns net of fees are close to or less than those that can be found in the stock market—not remotely close to the 30 percent returns assumed by Schlunk. (In addition, discount rates are supposed to reflect the weighted average cost of capital, NOT the (higher) returns to equity). If P.E. investors were applying high discount rates to cash flow projections, this likely means that investors believed that P.E. cash flow projections were over-optimistic.
Overlooking college completion rates
In his latest critique of higher education, Schlunk also overlooks large differences in completion rates. Four-year completion rates for bachelor’s degrees are almost twice as high at private non-profit universities as at their more leanly funded public counterparts. If one accepts Schlunk’s assumptions of extremely high discount rates, even a modest delay in completion would have a dramatic impact on value.
Overlooking effects of increased educational expenditures and educational quality
Peer reviewed studies that control for differences in student characteristics consistently find that higher expenditures per student lead to significant increases in student earnings and likely contribute to higher completion rates. (For brief reviews of the literature, see The Knowledge Tax and Populist Outrage, Reckless Empirics; See also here).
Professor Schlunk overlooks these studies.
Mis-measuring student earnings and educational expenditures
Schlunk overestimates the difference in expenditures and resources at elite public and private universities, which leads him to over-estimate the earnings premiums necessary for more resource-intensive private education to be worthwhile. Schlunk assumes incorrectly that all students at elite flagship state universities pay low in-state tuition, when many students at these institutions pay much higher out-of-state or international student tuition. He overlooks the extent to which expenditures per student at elite public universities exceed in-state tuition because of state subsidies and cross-subsidies from out-of-state students. He overlooks the extent to which differences in financial aid affect net-tuition—and therefore educational resources and expenditures—at different universities.
The elite public universities that Schlunk presents as controls that he sees as similar to private universities, but without endowments, actually have larger endowments than many private universities.