Hebborn: An Example of Why Libel Laws Are Bad

Eric Hebborn's career gives us an example of why strict libel laws are bad. Wikipedia says:

In 1978 a curator at the National Gallery of Artin Washington DC , Konrad Oberhuber, was examining a pair of drawings he had purchased for the museum from Colnaghi a seemingly reputable old-master dealer in London, one by Savelli Sperandio and the other by Francesco del Cossa. Oberhuber noticed that two drawings had been executed on the same kind of paper.

Oberhuber was taken aback by the similarities of the paper used in the two pieces and decided to alert his colleagues in the art world. Upon finding another fake "Cossa" at the Morgan Library, this one having passed through the hands of at least three experts, Oberhuber contacted Colnaghi, the source of all three fakes. Colnaghi, in turn, informed the worried curators that all three had been acquired from Hebborn.[1]

Colnaghi waited a full eighteen months before revealing the deception to the media, and, even then never mentioned Hebborn's name, for fear of a libel suit. Alice Beckett states that she was told '...no one talks about him...The trouble is he's too good'[4]. Thus Hebborn continued to create his forgeries, changing his style slightly to avoid any further unmasking, and manufactured at least 500 more drawings between 1978 and 1988.[2]

The Volstead Act and Prohibition

The Volstead Act (the National Prohibition Act, Oct. 28, 1919, ch. 85, 41 Stat. 305) was the federal statute implementing Prohibition (the constitutional amendment did not go into specifics; a law was needed for that). Surprisingly, it isn't available on the Web. Since Prohibition was repealed, the Volstead Act has been taken out of the US Code, so it can't be found there. There are various abridged versions on the Web, though. I quote from the best one below. Peter Hitchens said that Prohibition did not make possession of liquor illegal, and such seems to be the case, at least possession in one's home.

SEC. 33. After February 1, 1920, the possession of liquors by any person not legally permitted under this title to possess liquor shall be prima facie evidence that such liquor is kept for the purpose of being sold, bartered, exchanged, given away, furnished, or otherwise disposed of in violation of the Provisions of this title. . . . But it shall not be unlawful to possess liquors in one's private dwelling while the same is occupied and used by him as his dwelling only and such liquor need not be reported, provided such liquors are for use only for the personal consumption of the owner thereof and his family residing in such dwelling and of his bona fide guests when entertained by him therein; and the burden, of proof shall be upon the possessor in any action concerning the same to prove that such liquor was law fully acquired, possessed, and used.

This shows why it is important to have the full text of a law. Earlier in the Act it says that possession is illegal except in circumstances explained elsewhere in the Act.

Shrinkwrap Contracts

Mark Lemley has a 2006 Minnesota Law Review paper, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=917926 on shrinkwrap contracts that gives updates on what courts have been doing since Easterbrook's opinion.

Oregon Threatening People Who Post State Laws

David Post at VC writes:

The State of Oregon, bless its heart, has begun sending out cease-and-desist letters to websites like Justia and Public.Resource.Org, demanding that the sites take down copies of the Oregon Revised Statutes posted there on the grounds that the posting infringes the State's copyright in the statutes.

Hard to believe, but apparently true. [See Cory Doctorow's posting on Boing Boing, and the story from TechDirt, along with accompanying documents.

The copyright claim is (like a lot of copyright claims these days) probably about 98% horse manure. They're not asserting copyright in the text of the laws themselves, but in the "arrangement and subject matter compilation," the numbering of statutory sections, and the various "tables, indices, and annotations" contained in the documents. Lots of that stuff is simply not copyrightable -- and even as to the stuff in which there might be copyright protection, what makes the State of Oregon so sure that it, and not the various individuals who authored particular sections, owns the copyright to those contributions?

Copyright and Putting Up Old Books on the Net

Here is a good 2006 post from the Baylyblog about copyright and the digitization of old books that are out of copyright, e.g. Shakespeare.

ABA Threatens GMU with Loss of Accreditation

Gail Heriot has a shocking WSJ op-ed telling how the American Bar Association forced George Mason Law School to admit unqualified applicants in order to retain its accreditation--- and thus its access to federal funds. Racial discrimination of this kind has been declared illegal by the Supreme Court, so the ABA is acting illegally. Is there a suit to bring?

If you have ever wondered why colleges and universities seem to march in lockstep on controversial issues like affirmative action, here is one reason: Overly politicized accrediting agencies often demand it.... In 2003, the ABA summoned the university's president and law school dean to appear before it personally, threatening to revoke the institution's accreditation. GMU responded by further lowering minority admissions standards. It also increased spending on outreach, appointed an assistant dean to serve as minority coordinator, and established an outside "Minority Recruitment Council." As a result, 17.3% of its entering students were minority members in 2003 and 19% in 2004. Not good enough. "Of the 99 minority students in 2003," the ABA complained, "only 23 were African American; of 111 minority students in 2004, the number of African Americans held at 23." It didn't seem to matter that 63 African Americans had been offered admission, or that many students admitted with lower academic credentials would end up incurring heavy debt but never graduate and pass the bar.

Pattakos Free Speech Scandal at Northwestern Law School. Yet another example (from 2007) of a law school punishing unorthodox speech. Or, perhaps, for not giving patronage to minorities in this case. It's curious how law schools, with their worship of the abstract concept of Free Speech, so commonly suppress it.

There is a useful thread of emails posted. From Student Bar Association President Peter Pattakos, who was intimidated into resigning:

I have only resigned my title because the administration and the SBA Executive Board have forced my hand. The SBA Executive Board and school administration asked me to step down as SBA President with only a month left in my tenure, largely because I have expressed beliefs that are unpopular with some members of our community. Some think that my expression of these beliefs makes me unfit to perform the duties of my office. I disagree with those who have asked me to step down, and initially refused; offering instead to accept a dramatically reduced role in the SBA's decision making process in recognition of the impact of my expression of these beliefs. The administration and Executive Board did not accept my offer. I was told that if I did not step down the administration would have stripped me of any official duty that it could strip me of - they would cease meeting with me as SBA President, and would have prohibited me from representing the school at graduation, law board meetings, admitted student weekend, and other events where the SBA President traditionally plays a role. In addition, the administration would have released a letter to the public explaining these restrictions - and describing my words (discussed below) as "derogatory remarks." Cliff Zimmerman [faculty administrator] showed me two different versions of this letter; the version to be released if I stepped down being significantly kinder in its wording. The administration reached its conclusion to take this course of action without once bringing me, the Executive Board, administration members, and complaining parties into the same room. Finally, the Executive Board would have conducted a plebiscite on whether I was fit to hold what would have been left of the office of SBA President - the title. Given the costs of going through with this process, it should be clear that I have only "stepped down" from my position in the most technical sense.

To provide some background: There was a breakfast last Thursday with Chief Justice Roberts to which a number of academic and student-government leaders were invited. The administration asked me to recommend a list of 10-15 "academic and community leaders" to attend this breakfast. The administration had the final word on the invitees; this should be obvious given the nature of the event, the addition of 10 students to my initial recommendations, and the fact that my recommendations had to be cleared with the administration. I was never told that the intent was to invite the leaders of every student organization. The students at that breakfast were an undeniably diverse cross-section of the Northwestern Law community. These students were invited not as racial representatives, but because of their leadership on the law journals, in student government, and in student organizations with leadership positions open to members of any ethnicity. Nonetheless, the leader of one of the ethnicity-oriented student groups - a person I have always considered a friend - shouted me down in the Atrium for overlooking the leaders of these groups. He told me that I took the opportunity of a lifetime away from him. I should have walked away. I had been up the better part of the previous evening and early morning answering student complaints about the invitation list, and had continued to field such complaints throughout the day. During what can only be described loosely as a conversation, I stated my belief that our community would be better off if all student organizations were organized around ideas, and not ethnicity. It is this off-hand remark that is the primary justification for my being forced from office.

I've omitted the rest of his email, which consists of musings about free speech and grovelling humbly for having dared to question the orthodox position.

The postscript is useful, though:

* The complete list of students that I recommended for the breakfast: The SBA Executive Board and 1L Rep, Law Review board members, 2 Editors-in- Chief of academic journals, Federalist Society President, Fed Soc Board Member who has been exceptionally active on SBA Committees and in SFPIF, ACS President, STMS President. After two students responded that they could not attend, and in response to concerns that only two 1Ls were included in a group of 28, I recommended two 1Ls active on SBA and in student organizations. Of my 18 recommendations, at least 6 were of diverse ethnic background. The administration approved ALL of these recommendations in addition to inviting at least 10 students without my recommendation.

The `` person I have always considered a friend'' who got Peter in trouble is unrepentant about doing so, and still miffed that he didn't get to have lunch with the judge. He is Latino group leader Kevin Strom:

Peter,

I'm saddened by your comments. You and I both know that is not why I was upset about the invite list. I did not say that you took an opportunity of a lifetime away from me. I said, while describing the impact of your decision, that it was not a small event, that it was the chance of a lifetime for anyone to go. I wrote down the conversation you and I had shortly after we had it, simply because I knew this might come up, and then I confirmed it with a respected 3L who was standing by during our conversation.

Here is what I have:

After Chief Justice Robert's speech to the general student body Thursday, the President of the SBA approached me during the reception. He was unaware of many of the complaints and meetings that he had sparked. He was unaware that I, and many others had spent the majority of the day with Cliff and Audra because his actions were a reflection of the administration. He asked me how I was doing. I said, "fine." He asked if I was sure, because I seemed upset. I told him that was probably not the best place and time to have this discussion. When he pushed on, I told him that I believed the way he handled the selection of "relevant student leaders" was ridiculous and unacceptable. He defended his actions saying that he chose the most relevant groups based on who would impress CJR. He said it didn't matter because "we impressed him" and the breakfast went fine. I asked how he could ignore a group like BLSA, during Black History Month, with such a huge student base, and an entire month's worth of programming. I asked him how he could ignore LLSA, another group with a month of programming that won Best Student Group of the Year last year, how we could be less relevant.

His response blew me away:

"I would dismantle all of your groups. If it were up to me there would be no LLSA, BLSA, Salsa and Apalsa, because they don't bring anything to the community, and they contribute to racial identity politics." He kept going, telling me that he doesn't get caught up in racial politics and doesn't believe in race based groups.

I responded by telling him he was doing a *'super'* job of representing the students he was elected to serve. I told him he couldn't separate his political views from his Presidential role, and those views shouldn't affect the decisions he makes on behalf of us. This is especially true when the administration makes the error of allowing one student to make unilateral decisions as to who should attend an intimate breakfast with a figure such as the Chief Justice of the U.S.

To the student body: That is what happened between Peter Pattakos and I the night the Chief Justice spoke to the student body. I was not going to publish this information to the listserv, if you've seen my personal email to the Latino Law Student Association, you know that I toned down my words and paraphrased Peter when describing what transpired. I've included that email below. Obviously the administration and SBA felt that this, along with Peter's other actions in the past month warranted removing him from the board, or at least stripping his ability to speak at any events. I'm available to answer any questions.

Sincerely,

Kevin Strom

The SBA student leadership wanted to fire Peter too, even without faculty pressure perhaps:

In light of recent events at Northwestern Law, the SBA Executive Board has asked Peter Pattakos to step down from his role as SBA President, and he has agreed to do so, effective immediately. ... Let's hope that we all learn from recent events and continue to strive to make our law school more accepting and more open.

Dean David Van Zandt and administrators Cliff Zimmerman, Audra Wilson, and Don Rebstock wrote a letter about ``Peter's decision to resign'':

Dear Students, ... Student groups are given great latitude to create programming and opportunities for their respective constituencies and the community as a whole; students are also given wide latitude and responsibility to pursue these activities with the support of, rather than intervention by, the Law School. However, when actions undermine the Law School's mission or values or cause harm, the Law School must weigh the value of student autonomy and responsibility against the necessity to counter those actions that compromise our efforts to maintain a diverse, collegial, and supportive community.

We have investigated the chain of events which led to the omission of several student group leaders from last week's Student Leadership Breakfast with Chief Justice John Roberts. While part of the problem was administrative in nature, that mistake has been overshadowed by Peter Pattakoss subsequent comments that dismissed the value of the organizations of the uninvited leaders. Having acknowledged the serious affront to the student leaders in his comments, Peters decision to resign is the right one for himself, for the SBA, and for the Law School.

The student newspaper has the Administration claiming it had not ``played any role'' in forcing Pattakos to resign:

Both Dean Zimmerman and Director Wilson denied that the Administration played any role in forcing Mr. Pattakos to resign. Dean Zimmerman said that he simply informed Mr. Pattakos that he would not be asked to speak as a representative of the school. Although historically the SBA president has spoken to the Law Board, at Diverse Admit day, at Day at Northwestern, and at Graduation, these speaking opportunities are at the discretion of the administration....

Although Director Wilson and Dean Zimmerman both admitted that the substance of Mr. Pattakos' comments warranted further discussion, neither was yet sure how.

"We need to move forward together in a constructive way," said Zimmerman. "But I am still talking with several groups, both student and administration, about how best to address this issue."

"If we can't have candid talks about race and ethnicity, our commitment to diversity is hollow," Wilson said. "But we need to have the discussion with civility and tact."

A Summertown Brothel. Who would have thought it just a half-mile from our house? An Oxford Times article says:

A BROTHEL in a quiet Oxford street was run so professionally it was "like a restaurant", a court heard today.

Mother-of-two Elaine Konopka, 39, admitted helping run the brothel in Middle Way, Summertown....

"Konopka admitted working at the address on approximately ten occasions over an 18-month period. She said she was responsible for answering phones, making appointments and greeting customers." ...

"She was not a part-time receptionist, she was a fill-in receptionist. The brothel was open from 10am to 10pm seven days a week. ...

District judge Brian Loosley looked at the brothel's menu, which had services ranging from £50-£140, while considering the sentence.

Ordering her to carry out 60 hours' unpaid community work and pay £100 costs, he said: "It is quite clear this was run almost like a restaurant, with menus and various services being offered....

Neighbours tonight said they were pleased the brothel had been closed.

One neighbour, who asked not to be named, said she thought Konopka's sentence was too lenient.

She said: "I think it is disgusting she only got 60 hours' community service.

"It is so nice not having so many strange men going in there. It was really unpleasant. It certainly attracted all sorts of men - not very nice people at all.

"Some had children's car seats in the back. You just felt upset for the wives."

The U.K. and the E.U. Peter Hitchens has a good article, "The dangerous uselessness of 'Euroscepticism'"

The EU isn't going to give up its plan to become a Superstate just because the people of Britain (or anywhere else) vote 'No' in a referendum. Why should it? Such a vote would be silly anyway. You can't be in Europe and not run by Europe any more than you can be in Wormwood Scrubs and not run by Wormwood Scrubs. When we were bamboozled into voting for Common Market entry in 1975 (I voted 'no', but only just) we accepted the Treaty of Rome, which means, and clearly states that its target is 'ever closer union.

This has become more and more unpopular since 1975, as those who are paying attention (or are personally affected) have come to realise that the supposed crackpots of 1975 -Tony Benn and Enoch Powell - were actually quite right. Just as they warned, we were being asked to give away our national independence and this was the most important issue. Those who are dismissed as 'bonkers' almost always do turn out to be right later on, and there is probably a historical study to be done about this.

The obvious conclusion from this is that we should now leave. We were sold a fraudulent prospectus nearly 33 years ago. We have since suffered quite badly as a country, economically and politically - the full cost has been detailed by Christopher Booker and Richard North in a series of books, the best of all being 'The Great Deception' - books largely ignored by many reviewers and journals. We have held back ( quite rightly) from plunging fully into the project, so that we still more or less retain our own currency and our own legal system , our own diplomatic service and our own armed forces, so there is not too much unscrambling to do. And there is a strong, reasoned case for negotiating an amicable departure. If Norway and Switzerland, both far smaller and less globally-connected than we, can negotiate individual terms with the EU, then why can't we?

...Mexico, most certainly not an EU member, has excellent trade terms with the EU. If we want to keep the much-touted rights to live and work in the EU, we no doubt can. Norwegians and Swiss nationals have them. They even have - which we should never agree to - passport-free travel to and from EU countries. To the extent that we wish to trade with the EU, we would be under pressure to agree to EU rules about what we sell. We would no doubt have to pay some sort of contribution to obtain the 'benefits' of EU membership. But we would be able to negotiate this from a position of strength much more advantageous than the one a British prime Minister now finds himself in at Euro-summits. They want our markets far more than we need theirs. We would have no need to need to accept the supremacy over our Parliament of the European Court of Justice at Luxembourg. We would not be obliged to enact EU commission directives as British Acts of Parliament. We could issue our own passports in whatever colour we preferred (I favour a stiff-backed blue booklet myself) and (as does the USA and...Thailand) we could give our own citizens (we might let them become subjects again) greater rights to enter the country than persons from Lithuania or Romania. We could halt the absorption of our independent diplomatic service into the EU's. We could make our own individual trade agreements with the USA, and wouldn't need to get caught in trade wars between Washington and Brussels, as we frequently have been in the past. We could withdraw from the European arrest warrant system, and ignore the new 'Human Rights' commission in Vienna which is shortly to be the fount of political correctness across the EU.

Law (a 2004 repeat) What is the purpose of law? To make people behave well. Under Holmes’s “Bad Man” theory in “The Path of the Law”, laws are for the men who will not do good without the threat of punishment. That, however, neglects other purposes of laws which are important if secondary. One is the “expressive” purpose– that expressing that something is wrong is satisfing to the public. Related to that is the educational purpose of law. Even the good man does not know everything, and the law teaches him. From Psalm 119:

97 MEM. O how love I thy law! it is my meditation all the day.98 Thou through thy commandments hast made me wiser than mine enemies: for they are ever with me. 99 I have more understanding than all my teachers: for thy testimonies are my meditation. ... 104 Through thy precepts I get understanding: therefore I hate every false way.

But for the law to achieve this purpose, it must be a trustworthy guide. We must trust the lawgiver to be willing to learn from the law. God’s law is trustworthy. If nothing else, it tells me what God wants, and that is important in itself. Human law is less reliable. If I see a law saying that it is illegal to perform haircuts without a license, I do not conclude that unlicensed haircuts are immoral, or even unsafe, because I think the legislature is wiser than I am. Rather, I conclude that either the legislature has been fooled, or they have been bribed by the barbers to restrict entry.

The Bible is a comfort to Christians because it is a reliable source of law. It still has many difficulties– notably, knowing what law in the Old Testament is still applicable after the Resurrection– but Christians at least have a basis for right and wrong beyond what their culture teaches them. Traditionalists are less grounded, but they at least can find grounding in the axiom that their tradition is reliable. Liberals, despite the confidence they commonly show, are more at sea. They cannot retreat to their culture, since it is a recent and ever-changing one. They are at risk trying to appeal to logical principles grounded in a few generally accepted axioms too, since they often profess a relativism which rules out logic. But that, I think, is what they commonly try to do anyway. John Stuart Mill is an example. He tried to ground morality on the rule of not hurting others, and that is common today too. But the rule turns out to be empty, since anything to which anybody objects hurts them and since it is by no means self-evident that we shouldn’t hurt other people (think of the hurt caused by winning a contest with others, or by starting a new business in competition with them).

Takings for "Public Purposes. (recycled) Kau v. City & County. A reader sent me the depressing court opinion, Kau v. City & County, No. 23674 (Haw. Sup. Ct. June 22, 2004), which reiterates the Hawaiian judicial precedent that the government can seize your property, if it pays the market price, and give it to someone else who wants it and has more political power, even if there is no public purpose involved. It is even worse than I'd thought, because the *supposed* public purpose is to reduce land prices-- that is, pure redistribution, to hurt landowners and benefit other people.

(Click here to read more.)

The case is complicated, but it looks to me like this is the essence: In 1959 Mrs. Leong leased her land for condos, the lease to end in 2014. Now, her heirs are trying to get a declaratory judgement that a Honolulu law which requires landlords to sell their land to their tenants either does not apply or is unconstitutional because it is not a taking for a public purpose. Here is what the court says.

"The purpose of this chapter is to establish the right of any person, who is a lessee under any long-term lease of land upon which is situated [] residential condominium property regime projects . . . to purchase at a fair and reasonable price the fee simple title to such land." ROH § 38- 1.1.

...

The ICA concluded that the Ordinance authorized condemnation of residential condominium land so long as no less than 50% of the condominium unit owners applied to the City for condemnation.

...

Article 2, § 38-2.1 provides that CPR condemnation applies to developments that, at the time of acquisition by the City, are developed into CPRs or "occupied by residential lessees under leases of condominium conveyance documents executed before the effective date of this chapter." The present Property meets both of these requirements. The effective date of chapter 38 is January 1, 1992 (Ord. 91-95), and the conveyance documents were executed before that date, so the Property is presently subject to condemnation.

Note here something shocking. This law only applies to leases begun *before* the law, not after. This is the opposite of what is reasonable. Article I, Sections 9 and 10 of the U.S. Constitution say,

No bill of attainder or ex post facto Law shall be passed.

...

No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility.

The Honolulu law says, in effect:

"If you leased out land before 1992, when we passed this law, we've tricked you-- in signing the lease, you've signed away your land! But we don't want to discourage future real estate development, both because it is bad for the economy and because we know real estate developers are big political contributors, so we'll say that now that you've had warning, the won't apply to any future leases."

That is one problem with this law. Another one is the Fifth Amendment (U.S. Constitution, and Hawaii has a similar clause, I think):

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

I read this to imply that it is so hideous a thought, and so obviously contrary to a citizen's rights that their property would be taken not for public but for *private* use that the writers of the Fifth Amendment didn't think to say that explicitly. If so, then we might ask, as courts do, perfunctorily, "Is there a public purpose in the Honolulu law? The Supreme Court of Hawaii does address that. I'll move slowly through this.

In enacting ROH chapter 38, the City Council determined that there was a serious shortage of fee simple residential condominium land, which resulted in artificial inflation in the value of such land on Oahu and increasing lease rents, with many owner-occupants of leasehold residential condominium units unable to afford to continue living in their homes.

So, the City Council thought the free market set lease rents too high. Could they legally have just put in a price ceiling? That's bad enough, but it would be a better solution than seizing private land, for more than one reason. First, while violating the rights of landlords, it is perhaps a lesser violation. Second, it is administratively easier. Third-- it would address the perceived problem. Only an idiot would really think that reducing the supply of leased real estate by converting some of it to real estate owned by tenants would *reduce* leases rather than increasing them. I say this advisedly-- I doubt the City Council's was that stupid, and this is just a camouflage reason. Finally, even if "many owner-occupants of leasehold residential condominium units unable to afford to continue living in their homes," the only reason rents are so high is that other people *can* afford it and think it's a price well worth paying-- if nobody wanted to pay rents that high, they wouldn't, vacancies would arise, and landlords would find their incomes collapse unless they reduced rent levels.

In order to alleviate these perceived undesirable economic and social conditions, the City Council deemed it necessary to enact ROH chapter 38 to provide a right to leasehold owners of residential condominium units to purchase at a fair and reasonable price a proportionate share of the fee simple title to the land upon which their condominium units are situated. Coon, 98 Hawaii at 249, 47 P.3d at 364.

...

In Richardson v. City and County of Honolulu, 124 F.3d 1150 (1997), the United States Court of Appeals for the Ninth Circuit held that Ordinance 91-95 (codified as ROH chapter 38) is constitutional: "[i]n summary, we hold that Ordinance 91-95 (the lease to fee ordinance) is constitutional. The Ordinance admittedly takes private property, but it does so for a sufficiently public purpose and no constitutional deprivation has as yet been established." Richardson, 124 F.3d at 1166.

The opinion quotes from Hous. Fin. and Dev. Corp. v. Castle, 79 Hawaii 64 (1995) at 85:

We therefore hold that once the legislature has spoken on the social issue involved, so long as the exercise of the eminent domain power is rationally related to the objective sought, the legislative public use declaration should be upheld unless it is palpably without reasonable foundation. The crucial inquiry is whether the legislature might reasonably . . . have believed that application of the sovereign's condemnation powers would accomplish the public use goal.

The [Hawaii] Legislature, in comprehensive findings, determined that skewed patterns of land ownership have interfered with the normal functioning of the state’s residential land market and declared that condemnation of certain concentrated private property interests would serve a public use by correcting the perceived social and economic evils of a land oligopoly. Clearly, the legislature reasonably could have believed that condemnation and resale of the fee interest in leasehold land would promote the objectives of increasing the availability of residential property, realigning the residential fee simple market, reducing land prices, and would beneficially impact the state economy and general public welfare. These are legitimate public purposes. The employment of the state’s eminent domain authority to redistribute fees simple to correct socio-economic problems attributed by the legislature to a land oligopoly is a rational means to accomplish these ends.

So it is a "public purpose" to reduce land prices. This is, of course, different from reducing rental rates, the purpose stated earlier, though the court didn't seem to notice the contradiction. A law saying that many leases are to be turned into direct ownership is going to reduce the amount of leased land, thus, raising lease rates, while making it less valuable to own land generally, which will lower land prices. Land is more valuable if you have the option of leasing it out without fear that you will lose it to someone with the force of government on his side.

But is it really a public purpose to reduce land prices? No. It is pure redistribution from one group of people to another. This is not like anti-trust laws, which see, to expand the amount of output of some good by saying that companies cannot take measures such as cartels to restrain their output. The effect of the anti-trust laws is to reduce prices, to be sure, but only because it increases output and helps the economy. Here, the amount of land is fixed--- or, if we talk about leased land, would even decline-- and the legislature is saying that to reduce the wealth of landlords and increase the wealth of tenants is a public purpose.

And the court lets them get away with this, with minimal review. Under this precedent, the courts would also allow a law for the purpose of taking money from Joe's wallet to give to Bob, under the excuse that Bob is more deserving. I know our federal income tax does that to some extent, but this allows it to be a lot more direct-- the law can say that Bob can go to the government and ask for the sheriff to help him pin down Bob while he rifles through his wallet and takes the appropriate amount.

There is still the barrier that the state must pay "just compensation"-- though since the victim is resisting, that is pretty much sufficient evidence that it is *not* just, since there is not a shred of a hold-out problem in the Hawaii cases. Maybe I'll do some academic writing on this, since it is related to Henry Smith's working paper on property rules and liability rules.

Selective Prosecution. The Taipei Times article "Ma found not guilty in corruption trial" tells of how the KMT government in Taiwan prosecuted opposition party leader Ma for keeping for personal use much of a "special allowance" as mayor of Taipei. It seems that it has been customary for years for officials to treat the allowance as income, and Ma made no secret of doing so, in which case this seems a good example of selective prosecution for political purposes.

Antitrust Thoughts. It's the mark of a good journal article that it stimulates thought. On the strong recommendation of JV, I started reading Professor William Kovacic's "THE INTELLECTUAL DNA OF MODERN U.S. COMPETITION LAW FOR DOMINANT FIRM CONDUCT: THE CHICAGO/HARVARD DOUBLE HELIX," Columbia Business Law Review, 2007. He argues that modern antitrust law should not be viewed as Chicago School plus Post-Chicago School, but as Chicago School economics plus Harvard Law pragmatism. Areeda, Turner, and Breyer had a big impact in the way they thought about how judges can actually implement antitrust law. (Click here to read more.)

This got me to thinking about antitrust generally. First, what are the main problems with market power in the economy? We're doing a good job in developed economies with mergers, price-fixing, and unfair practices. We're doing a bad job with monopoly labor unions, monopoly government providers of services, trademark monopolies, and copyright monopolies. Marginal improvements in antitrust law are of trivial importance compared with the legal monopoly given to Microsoft Windows, either looking at the output restriction or the lost entry by more efficient competitors.

Nonetheless, antitrust policy is interesting at the margins, if not important. This week the theory workshop had a neat idea about merger policy. I won't try to trace the credit for it, but it goes like this. Suppose our aim is to maximize the sum of producer and consumer surplus. Should we make our merger rule, "The merger's OK if (PS+CS) go up"? No. If we impose that as a constraint, a company will propose the merger in that category which most increases PS, not the merger that most increases PS+CS. If, instead, we had a rule of "The merger's OK if CS goes up", then the company will still only propose efficient mergers, because we don't have to require the company to make sure PS goes up too. The only problem is that sometimes companies will not have any CS-increasing mergers to propose, and we'll lose some efficient mergers in which PS+CS would rise but CS fall.

What I really need to do, though, is figure out how to categorize monopoly as a form of market failure. Market failure taxonomy is a mess. Component problems include: real externalities, asymmetric information, rentseeking, and poor thinking. Market power is *not* directly a problem, though it is a contributor.

If there is perfect information and contract enforcement, a monopoly will use perfect price discrimination and there will be no triangle losses. It is only because a monopolist doesn't know the demand curve of each consumer or can't prevent resale that he would use simple monopoly pricing and restrict output. Otherwise, the Coase Theorem works.

The monopoly position is a contributor, though, because if sellers compete, then not knowing demand curves and not being able to enforce fancy contracts doesn't matter.

One way we might look at the monopoly problem is as a form of rentseeking. The loss is not directly from monopoly, but from inefficiencies arising in the attempt to manipulate a market. Indeed, rentseeking itself is really an informational problem. If Smith knows that Jones can spend $200 on a gun and steal Smith's car, then Jones can offer Smith $1 for the car and get it without having to buy the gun. Rentseeking losses occur only when the rentseeker and victim cannot reach an agreement.

It is useful to think of two kinds of rentseeking. One is direct taking of goods-- pickpocketing, for example. The other is attempts to manipulate prices --- monopoly output restriction. But where, then, do I put attempts to change rules?

Election Fraud and Fired US Attorney John McKay

I have read people saying that election fraud has trivial importance in the United States, so the Republicans' desire for investigations and for identity to be verified for voting is unjustified. Here's clear evidence against that. Note, too, the behavior of US Attorney John McKay, who was later fired.Click here to read more

It was right to fire him for that.

But the most interesting news came out of Seattle, where on Thursday local prosecutors indicted seven workers for Acorn, a union-backed activist group that last year registered more than 540,000 low-income and minority voters nationwide and deployed more than 4,000 get-out-the- vote workers. The Acorn defendants stand accused of submitting phony forms in what Secretary of State Sam Reed says is the "worst case of voter-registration fraud in the history" of the state.

The list of "voters" registered in Washington state included former House Speaker Dennis Hastert, New York Times columnists Frank Rich and Tom Friedman, actress Katie Holmes and nonexistent people with nonsensical names such as Stormi Bays and Fruto Boy. The addresses used for the fake names were local homeless shelters. Given that the state doesn't require the showing of any identification before voting, it is entirely possible people could have illegally voted using those names.

Local officials refused to accept the registrations because they had been delivered after last year's Oct. 7 registration deadline. Initially, Acorn officials demanded the registrations be accepted and threatened to sue King County (Seattle) officials if they were tossed out. But just after four Acorn registration workers were indicted in Kansas City, Mo., on similar charges of fraud, the group reversed its position and said the registrations should be rejected. But by then, local election workers had had a reason to carefully scrutinize the forms and uncovered the fraud. Of the 1,805 names submitted by Acorn, only nine have been confirmed as valid, and another 34 are still being investigated. The rest--over 97%--were fake. ...

In Washington state, King County Prosecutor Dan Satterberg said that in lieu of charging Acorn itself as part of the registration fraud case, he had worked out an agreement by which the group will pay $25,000 to reimburse the costs of the investigation and formally agree to tighten supervision of its activities, which Mr. Satterberg said were rife with "lax oversight."...

Take Washington state, where former U.S. attorney John McKay declined to pursue allegations of voter fraud after that state's hotly contested 2004 governor's race was decided in favor of Democrat Christine Gregoire by 133 votes on a third recount. As the Seattle media widely reported, some "voters" were deceased, others were registered in storage lockers, and still others were ineligible felons. Extra ballots were "found" and declared valid 10 times during the vote count and recount. In some precincts, more votes were cast than voters showed up at the polls.

Mr. McKay insists he left "no stone unturned" in investigating allegations of fraud in the governor's race but found no evidence of a crime. But in an interview with Stefan Sharkansky of SoundPolitics.com in May, Mr. McKay admitted that he "didn't like the way the election was handled" and that it had "smelled really, really bad." His decision not to prosecute was apparently based on the threshold of evidence he insisted be met before he would even deploy FBI agents to investigate: a firsthand account of a conspiracy to alter the outcome of the election.

But Mr. McKay is incorrect in saying that he had to find a conspiracy in order to reach the federal threshold for election crimes. In Milwaukee, after the 2004 election U.S. Attorney Steve Biskupic investigated many of the same problems that were found in Seattle: felons voting, double-voting and more votes cast than voters who signed poll books. In 2005 Mr. Biskupic concluded that he had found nothing that "has shown a plot to try to tip an election," but he nonetheless prosecuted and won six convictions for felon voting and double-voting.

 

Note that the federal law apparently doesn't make it a crime to use fraud to change the result of an election---it only makes it a crime to use fraud to change the result of an election *because you want your side to win*. If you do it for money, that doesn't count. Or so the US attorneys interpret the law.