|
Today would have been the 95th birthday of Milton Friedman. |
|
|
Today would have been the 95th birthday of Milton Friedman. |
Before we get to the Grand Prize winner, here's the runner up:
A 1L at University of Denver, like many new law students (including me!), started a blog last fall, Diary of a Law Student. He apparently decided to post what look like case briefs for selected cases, including this brief of Williams v. Walker-Thomas Furniture Co., 350 F2d 445 (DC Cir. 1965), an oft-cited case for the principle of unconscionability in the formation of contracts. Without stating the rule the court adopts, analyzing the reasoning of the court in any manner whatsoever, and with zero "legal" analysis beyond his own feelings and some relatively unsophisticated economic analysis, he proceeds to pooh-pooh the result in the case on the basis that it will keep poor people from access to credit because it means businesses that offer credit to the poor will pull up and go elsewhere (a more common legal interpretation is that Williams stands for the proposition that a finding of unconscionability is based on the interplay of substantive and procedural unconscionability, and that the greater the potential substantive unconscionability at the time of contract formation, the greater the duty on the party with the upper hand in the bargaining to ensure that the lesser party understands the terms and consequences of the contract. An excellent paper contrasting a traditional and law & economics analysis of Williams, see Korobkin, Russell B., A 'Traditional' and 'Behavioral' Law-and-Economics Analysis of Williams v. Walker-Thomas Furniture Company, University of Hawaii Law Review, Vol. 26, p. 441, 2004. And while the rarely invoked doctrine of unconscionability does theoretically increase costs on subrpime lenders, it most certainly has not held back the industry... in spite of it, predatory lending has flourished).
Suffice it to say I am not impressed with his legal reasoning over all. In another brief using similar personal-opinion reasoning, he disapproves of Martin v. Herzog, the case that stands for the proposition that violation of a statute is negligence per se . He dissaproves of it on the grounds that it seems too rigid and without exceptions. However, there is no mention of Tedla v. Ellman, the companion case thats states that a finding of negligence per se is rebuttable by an excuse. And I'm willing to wager a large amount that he read that case shorlty after reading Martin. And throughout he misstates issues (Martin is not about whether driving without your lights on is negligence, its about whether breaking a statute is negligence), and seems to have never been told that the "analysis" section of a brief is not for your personal thoughts on whether you like or don't like the outcome of a case, but instead how the judges apply the rule adopted to facts at hand.
But enough ragging on a fellow 1L. He was a student with a few weeks experience, and as much as I might think that he has poor legal reasoning skills, its tough to hold him to a very high standard.
But that certainly doesn't apply to everyone. The winner of the dumbest thing I have read today is this post by Alex Tabarrok, an associate professor of economics at George Mason and a purported expert on Law & Economics, despite, as a far as I can tell from his CV, no formal training in law. Of course, I may be mistaken, or he may believe that cross-registering or something along those lines is enough to be an economist with a specialization in law as opposed to a legal expert.
Tabarrok writes occasionally for Marginal Revolution, and is in my opinion generally a downside to what is often an excellent blog written on economics, culture and social policy by Tyler Cowen. Tabarrok's most recent post is titled The Credit Snobs, wherein he argues (using that term loosely) that attempts to regulate the subprime lending market is done out of paternalism and reflects an anti-poor bias.
Now, I'm not going to argue against the merits of his contention. I have my feelings about it, but I am certainly not an expert on credit. What I aim to do is show how incredibly poor the reasoning Tabarok uses to support his contention is, and why he should stop pretending he knows anything about law.
First he misquotes his purported opponent Nouriel Roubini, saying that he characterizes poor borrowers as "reckless patients" who "spent the last few years on a diet of booze, drugs and artery clogging junk food." However, if you read the actual article and read the 8th paragraph, it is clear Roubini is referring to laissez-faire capitalists and mortgage lenders when he makes those statements.
Second, he sets up a strawman argument saying that liberal anti-predatory-lending types want to stop credit access to the poor in the form of payday loan stores. As support for what the liberals are saying, he cites, of all things, a opinion piece in Reason magazine. Could someone please explain to me how a libertarian opinion piece serves as support for what paternalistic liberals are saying? Of course, Tabarrok might have gone that way because he could not otherwise find support for his strawman.... I don't really know anyone who argues that the poor should not have access to credit (rather, I think, it's really the other way around!), but that the terms of credit offered to them should not be usurious and take advantage of low education levels and unequal bargaining power.
Then he gets to unconscionability. Tabarrok again sets up a strawman, arguing that liberals don't want the poor to have access to credit, and that this is somehow embodied in some sort of conspiracy between them and the DC Circuit that came to a culmination in the Williams decision (The DC ciruit is by no means one of the more liberal courts, having produced Roberts, Scalia, Thomas, Bork, and Douglas Ginsburg... though it did produce Ruth Bader Ginsburg! But whatever). This, of course, is where he cites to the poorly reasoned brief our friend at the University of Denver wrote on Williams. Again, remind me how someone admittedly on the right/libertarian side of things speaks for the liberals?
But more problematic is this: Tabarrok passes himself off as a quasi-expert in law, particularly as it relates to economics. Yet, he lacks a) an understanding of what unconscionability is and isn't, including the reality that it is rarely succesful, b) unknowledgeable himself on unconscionability, he turns to a case brief writen by a two-month-old law student, and fails to recognize that it is nothing even close to a legally reasoned position, c) fails to check from a reputable authority whether this U of D 1L even has a half-assed clue what his is talking about and d) doesn't bother to try to reason what the opposing side might try to argue, thereby leaving holes in his argument so big you can drive a Mack truck through them. None of these things sound to me like Tabarrok knows much about the law at all.... this sort of response would garner him a D at best on a law school exam.
I know, I know... it's not a law school exam, it's a blog post. Still, this dude knows jack-squat about law (and jack-squat is a term of art, by the way!).
Anyway, he wraps this farce up with an absurd propostion: that the next thing the anti-poor credit snobs will go after is Grameen Bank. This is particularly rich, seeing as to how some of the main benefits of microcredit are to help the poor avoid shysters and predatory lenders who give usurious credit only on a consumer basis (so as to have collateral, which Grameen doesn't require).
And, he concludes with a baseless rhetorical flourish: "The democratization of credit worries the credit snobs. The credit snobs fear that capitalism isn't just for the rich."
Anyway, beyond my general belief that Tabarrok has poor reasoning skills (so, what else is new? Most people aren't so good with reasoning and logic) what do I seriously find wrong with this post?
Well, it illustrates a problem with the discipline of economics as practiced in modern times. Economists, and particularly econometricists, believe that because they deal in data and math, they have answers to everything. Including, apparently, law. This autistic approach to the discipline allows someone like Tabarrok to believe that "Hey, I don't need to engage with legal theorists, political theorists, sociologists, or anyone else. The answers are all in the data. My curve told me the free market is good, so any statement to the contrary is simply obtuse. And to hell with actually learning the law, I'll just declare myself an expert in it."
How's that for a strawman? Two can play at that game. Hehe.
But there is a kernel of truth there. This sort of poor reasoning certainly wouldn't be tolerated in the legal community. Why is it tolerated by economists?
March 21, 2007 06:46 PM | TrackBackNice posts, both the above and the comment you left on Taborrak's blog. My only remark on that comment would be to note that some courts do not require both procedural and substantive unconscionability. For example, both the Arizona (Maxwell v. Fidelity Financial Services, Inc., 907 P.2d 51 (1995)) and Washington (Adler v. Manor (2004)) Supreme Courts have said that in some circumstances, a contract provision can be so egregiously unconscionable in its substance that procedural unconscionability need not be proven. There's also a case involving Gateway that I studied in an arbitration course (that also is the main case I retain from that class), where the court said Gateway's arbitration clause was inherently unconscionable because it made fighting the company so expensive and inconvenient -- yes, even compared to a lawsuit! -- that the clause actually worked to deter consumers from seeking relief.
For the 2nd dumbest, ouch. I have to say that I'd never be brave enough to post my briefs of cases online. I'm not even sure I'm brave enough to post briefs that I've entered in moot court competitions or that I plan to submit to law journals online, though with the latter there's the benefit of getting useful critiques to do some self-editing before getting ripped in the submissions process.
For the dumbest:
First, one can be recognized as an expert in the overlapping field of law and economics without a legal degree. My undergraduate antitrust professor's degrees are all in economics, yet he's been Special Economic Advisor to the Assistant Attorney General in the DOJ's Antitrust Division, as well as a Fellow in Law & Economics at UChicago (and if there's anyplace that knows about law & econ...). I just saw him last summer at joint DOJ/ FTC hearings on Section 2 (Sherman Act) violations. Of course, Elzinga's good at developing expertise in surprising areas, given that he's a religious teetotaler who studies the beer industry. Taborrak doesn't seem to have spent enough time at UVA to be that cool ;-)
Second, citing to 1Ls is a "mistake" that judges (or their law clerks) have been known to make -- it's not wholly peculiar to benighted economists. Like love, the internet makes fools of us all.
Posted by: PG at March 22, 2007 03:07 AMAs for substantive unconscionability.... yes, it is true some jx do not require procedural. The Maxwell case involved a company attempting to take someone's house when they didn't meet usurious payments on a water heater that never worked. While I should have made it explicit, what I was trying to say is that the farther you go down the scale of substantive unconscionability, the greater the burden on the contractor to show the other party understands the K. And, yes, once you reach the point where it is so egregious, in some jx it is presumed unconscionable (though the court noted jx are split on this.... a number still require procedural, too). That, however, was not the holding in Williams.
As for Tabarrok, well... I accept that someone could be an expert in just about anything without training. But, if you want anyone else to believe it, you better back it up!
Posted by: Dave at March 22, 2007 12:30 PMActually, if I had to note the dumbest thing I've read today, it would be:
"As support for what the liberals are saying, he cites, of all things, a opinion piece in Reason magazine. Could someone please explain to me how a libertarian opinion piece serves as support for what paternalistic liberals are saying?"
Certainly, with pleasure. Given Dave's rather histrionic assertions about evidence and such, I assumed that when I clicked through to MR, and then to Reason, I wouldn't find any evidence of what paternalistic liberals were actually saying. Imagine my surprise when, upon looking at the piece itself, I found direct quotations from the Consumers Union, the Public Interest Research Group, and the Progressive Policy Institute ("[payday loans are] a product of middle-class idiocy").
Now, admittedly, it would be nice if the Reason piece had added hyperlinks to the sources of those quotations, but that's a convenience, not a lack of intellectual rigor. (I was able to find the source of two of the quotations in a few minutes using the magic of Google.) But the short answer to Dave's rather curious question is that libertarian magazines are just as capable of quoting paternalistic interest groups as any other.
Posted by: A. Rickey at March 24, 2007 11:55 AM