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Free Cabs, Free Tuition, and the Power of Deregulation

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Yesterday’s NY Times featured an article about a NY cabbie who offers free rides and apparently cleans up on the generous tips. This reminded me of an experiment conducted by NYU Law a couple years back. A cohort of students were admitted for zero tuition with the hope that they would give more generously as alumni (taking advantage of the federal government’s tax deduction subsidy.) This left me wondering: when does this strategy of giving away a product or service ultimately prodcue greater revenue? And relatedly, are there other situations where deregulating behavior – i.e., eliminating a requirement that people behave in some way – might lead to more “good” behavior (defined in the same way as regulators might) on the part of these people.

When does giving away a product produce greater revenue? In the case of the cabbie, I think that people are tipping him beyond the normal fare for a few reasons. First, passengers probably love the choice to pay what they want. They also appreciate the trust he puts in them by allowing them to define the fee. Finally, they probably enjoy the novelty of a free cab ride. My guess is that giving away a product works particularly well where there is a one-on-one relationship between provider and consumer. But perhaps most importantly, the cost of a cab is generally known (most locals probably have an idea of what a meter fare would have been), and that cost is often BELOW actual market value. I can think of many situations – rush hour, rain, etc – in which most cabs could double their fares and still stay full.

The law school give-away offers students one more benefit (beyond choice, trust, and novelty): time. Students have limited income and NYU’s program offered students a chance to pay NYU after the six-figure incomes kicked in. But I wonder if the law school experiment is paying off? I think people over-tip the cabbie because they appreciate what he is doing for them, personally. And in the law school context, we’re not talking about dropping $20 unnecessarily; it takes serious commitment to get an alum to donate $100K (plus interest). Of course, it helps that Uncle Samuel will subsidize that gift.

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EPIC Wins Big Freedom of Information Victory

epic1c.jpgDavid Sobel and Marcia Hofmann of the Electronic Privacy Information Center (EPIC) just scored a major victory for freedom of information law. After the New York Times broke the story about the warrantless NSA surveillance program, EPIC filed Freedom of Information Act (FOIA) requests for documents pertaining to the program. Under FOIA, federal agencies are required to provide documents to anybody who requests them. 5 U.S.C. § 522(a). The purpose of FOIA is “to ensure an informed citizenry, vital to the functioning of a democratic society, needed to check against corruption and to hold governors accountable to the governed.” NLRB v. Robbins Tire & Rubber Co., 437 U.S. 352, 361 (1976).

The government contended that it could wait indefinitely before producing documents despite the fact that it was required to process the request “as soon as practicable.” Apparently, the government believed that “as soon as practicable” meant “all deliberate speed.”

Not so, the district court held:

When expedition is appropriate, an agency is obligated to process the request “as soon as practicable.” Here, there is no dispute that EPIC’s FOIA requests are entitled to expedited processing; all four of the DOJ components who received EPIC’s requests have so conceded. Rather, the primary dispute between the parties in this matter is the meaning of the statutory language “as soon as practicable.” . . . .

DOJ argues that the “as soon as practicable” language in the expedited processing provisions should be interpreted to impose no concrete deadline. . . . Under DOJ’s view of the expedited processing provisions of FOIA, the government would have carte blanche to determine the time line for processing expedited requests, with the courts playing no role whatsoever in the process. When pressed at the preliminary injunction hearing as to what delay would be excessive enough such that a court could properly invoke its authority to compel production, counsel for DOJ was unable or unwilling to give an answer. . . .

As EPIC suggests, DOJ’s reading of the statute would give the agency unchecked power to drag its feet and “pay lip service” to a requester’s “statutory and regulatory entitlement to expedition.” . . . .

However, “[m]erely raising national security concerns cannot justify unlimited delay.” Congress has already weighed the value of prompt disclosure against the risk of mistake by an agency and determined that twenty days is a reasonable time period, absent exceptional circumstances, for an agency to properly process standard FOIA requests. Here, DOJ has not yet made any specific showing that it will not be able to process the documents within the time period sought by EPIC. Vague suggestions that inadvertent release of exempted documents might occur are insufficient to outweigh the very tangible benefits that FOIA seeks to further—government openness and accountability.

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The ABA, Affirmative Blackmail, and Being on Admissions

This week’s events (the promulgation of new rules by the ABA on diversity admissions, publication of David Bernstein‘s op-ed, Affirmative Blackmail, and the ensuing blogospheric discussions) have prompted me to post on a topic that I have been ruminating about for some time: admissions. At the Glom last year, I blogged a series of advice posts (here, here, here and here) from information gleaned after my first year on admissions committee. This is my second year on that committee, and I have to admit that the shiny has worn off a bit for me. I wanted to be on the admissions committee because I wanted to find out why we had classes with low percentages of minority students. Surely there must be some subconscious, yet insidious discrimination creating this result. I was going to ferret out this bias and squash it like a bug. What I found was a problem that I couldn’t fix. The problem is math. Prof. Bernstein and Thom Lambert point out that the ABA’s new rules show that the ABA has a conscious disregard for the rule of law. I would add that the rules also show a conscious disregard for math. For schools like Marquette, in the middle of the rankings, with a small faculty, administration and budget, cold, hard numbers are our problem when it comes to increasing diversity. Putting aside debates as to whether affirmative action is good, bad, constitutional, unconstitutional or whatever, the most affirmative action-minded admissions committee has to make very difficult choices in an environment of scarcity. Scarcity of applicants; scarcity of dollars.

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Professor for sale

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Teaching salaries these days are so bad, it seems like you have to sell the shirt off your back just to make ends meet. Or perhaps rent the shirt off your back. And where would you do this? On eBay — where else?

French professor Corry Cropper at BYU is doing just that. From Cropper’s eBay ad:

Want to get your message to the coveted 18-25 year old market? Coaches aren’t the only ones with a marketable presence on campus. I am a well-liked professor at a major university in Provo, Utah and have been here for nearly 10 years.

This semester I am teaching two courses of French literature that meet two days a week. I have a total of 46 students but am seen by many more during the day as I walk between classes and around campus. If you win the auction, I will wear your T-shirt with logo to campus on the days I teach (during class, office hours, lunch, etc.).

If you win the auction, it is your responsibility to mail me the T-shirt in time for classes Feb. 21 & 23, 2006. I cannot wear anything that is offensive in any way and cannot advertise for alcohol or cigarette companies. I reserve the right to refuse to wear the shirt if it is inappropriate but will not charge you if I don’t wear it. If you have questions about the appropriateness of the T-shirt, please email me before bidding.

Wow – it’s that easy, and a cool $40 is in the bank. (I smell a new revenue stream for law professors everywhere!) However, I have to wonder how this development will be viewed by feminist scholars, race scholars, or property-and-personhood scholars like Margaret Radin. It’s all fun and games when you’re auctioning off the right to put a logo on a white male, but the dynamic differs drastically when we begin discussing women or members of racial minorities. For majority-group members, deliberately chosing to blur the line between personhood and property may be viewed as a fun and harmless diversion. For historically disadvantaged groups, however, the stakes are very different. The line between personhood and property is a hard-won right for many groups — members of such groups may have been treated as chattel property in the relatively recent past. This history means that any step towards reconceptualizing these people (again) as property could have negative effects in both perception and reality. (Thus, the classic bachelor auction is easy; the newer bachelorette auction is fraught with tricky fault lines.)

For that reason — uncertainty of effects on historically disadvantaged groups — I think that the sale of professors’ sartorial space (on eBay or elsewhere) is probably a bad idea.

4

The Future of the Blawging Market

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A recent Gallup report (download now when while it is free, or get the summary here) has found that blog traffic has finally leveled off. From the synopsis: “[B]log readership hasn’t increased over the past year or so, even though Americans are spending more time online.”

What does this mean for blawgs? As we demonstrated here at the Co-Op through our law professor blawging census series, the supply of blawgs increased over 55% last year (that is, 55% alone from June through November) and has continued to grow since then. But that supply doesn’t tell us much about the size of the blawg audience (as a subset of the blog audience). An anecdotal look at the 12-month traffic at established sites like the Conglomerate, Prawfs, Is That Legal, and Prof. Bainbridge suggests that traffic has either leveled off or has declined from highs in the early fall, while the VC and Balkin continue to grow. Of course, both growth and decline in absolute traffic numbers doesn’t tell us if the universe of blawg readers is growing — we may be simply slicing the market up differently, or encouraging a fixed set of readers to spend more of their time looking at different blawgs.

At some point, I suppose, this bubble will have to burst. (Although I find it encouraging that we here at the Co-Op are beginning to tap the non-US market.) When traffic flattens or declines, I predict (again) a merger wave between sites perceiving potential intellectual, creative and social synergies. Will a handful of super blawgs end up dominating the marketplace? Time will tell.

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Republican Speed-Dating?

I heard a story on Marketplace Morning Report this morning about Occidental College’s new speed dating program. It seems that 93% of alumni that marry within the faith – that is, marry fellow alums – give to the college. Thus, the speed dating program provides the Oxy development office two great opportunities: a chance to reconnect with disconnectd alums and the potential to create two-person donation machines.

Of course, college fundraisers aren’t the only ones trying to battle intermarriage. Institutional Judaism (for some people that means their local synagogue, for others mom and dad) has been fighting to keep marriages within the faith for years. Recently, the Reform Jewish movement has begun to re-emphasize that while interfaith couples are welcome, synagogues should work to convert the non-Jewish partner. The theory, presumably, is that single faith couples are more likely to share Judaism with the children, and to promote it with greater intensity.

So what about political intermarriage? It seems to me that this cuts both ways. On one hand, politics is evangelical: a Democrat wants to find ways to convert non-Dems to the party. In that sense, intermarriage offers opportunities. If a Republican marries a Democrat, that Democrat may be successful at changing – or at least tempering – his mate’s political proclivities. Of course, that’s a doubled edged sword: the Republican may transform the Democrat. In the end, I expect the Replicrat Kids will probably be miniature John Breauxs or Lincoln Chafees. So what is a party to do? I suspect the answer is to follow in the footsteps of Occidental: Speed Dating.

When a Republican meets another Republican at a GOP dating event, it produces tremendous good will for the party. Disconnected conservatives may start to see the GOP as a fun gang to be involved with. This might produce more donations as well as more labor at election time. And when romantic stars do align, the newly produced couple will be far more reliable donors, at least if college fundraising is any indicator. In the end, the party will probably be better off encouraging their members to marry within the faith. That pure Republican couple will probably vote Republican with even greater intensity than they did alone (if Cass Sunstein’s research on voting patterns among single-party judicial panels is any indicator) and the big pile of donations can then be used to convert those Dems.

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The Futures Market and the Enron Trial

The Business Law blog has a short post today on the futures market and the Enron trial. (Shorter: the market thinks the defendants are in deep trouble.) The post, a mere two paragraphs, is worth reading, not least because it notes that Skilling’s lawyers have protested that it is “crass to ‘trade on human life.'”

This quote reminds me of a statement in a brief by the State of Mississippi about (my former) professor Kip Viscusi’s use of cost-benefit analysis in estimating health costs saved by early smoking-related deaths: such calculations were said to be “utterly repugnant to a civilized society.”

Appeals to such moral heuristics are pretty common, but it sure was suprising to see them deployed by the defense team!

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Gay Marriage in New Jersey

Courtesy of Howard is this article from Newsday describing the case pending in New Jersey which challenges that state’s restriction of marriage to opposite-sex couples. In the interest of full disclosure, I favor allowing gay couples to marry, but I would prefer that decision be made by state legislatures. I am not yet convinced that the Equal Protection Clause of the federal Constitution requires state recognition of gay marriages, though I understand the parallels to Loving v. Virginia.

I am curious to see what the New Jersey Supreme Court does with the case, from a political perspective as well as a legal one. Assume that the court thinks the proper result is to strike down the restriction. Should the court “vote its sincere preferences,” as political scientists say, the practical effect in the short term will be a tremendous electoral advantage for the Republicans, as happened in response to the Massachusetts ruling perhaps including the re-election of the President. Surely the last thing the New Jersey Supreme Court wants to do is help Republicans. Heck, that court’s decision in the Doug Forrester case in 2002 was far more transparently partisan than any ruling in Bush v. Gore. Some political science suggests that the court will shade its interpretations so as not to antagonize the other branches, which are not accepting of gay marriage, but the evidence is far from conclusive. See, e.g., Jeffrey A Segal, Separation-of-Powers Games in the Positive Theory of Congress and Courts, 91 Am. Pol. Sci. Rev. 28 (1997); William N. Eskridge, Jr., Reneging on History? Playing the Court/Congress/President Civil Rights Game, 79 Cal. L. Rev. 613 (1991).

For this reason, however, the court is in a no-win posture. If the court mandates gay marriage, it triggers the ire and votes of Republicans as well as opening itself to criticism for being judicial legislators. If it defeats the claim, it will be accused of doing so for political reasons rather than legal ones. Vermont-style civil unions are another option, though the article reports that New Jersey already grants domestic partnership developments. If the court tries to mandate civil unions its ruling may be the least defensible of all, for it would allow the state to create two classes of couples while effectively conceding that there is no reason not to give homosexual couples all the advantages of marriage.

It’s interesting that the provision apparently at issue is the New Jersey Constitution’s provision that “all persons are by nature free and independent” — not any provision explicitly invoking the ideal of “equality.” I know nothing of the way in which this clause has been interpreted in the past, but isn’t it ironic that the persons invoking the clause want the state to recognize their dependence on their partners, and for the state to recognize a continuing obligation to care for them? Free and independent indeed.

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Should the Democrats Create a “Contract with America”?

contract1.jpgA common criticism of the Democrats is that although they are scoring some points when criticizing the Republicans, they are coming up empty in stating what they really stand for. I believe that there is some truth to this criticism. What surprises me is how ineffective the Democrats have often been in rallying around a basic theory; in articulating how specific policies will best advance their goals; and in selling their theory to Americans.

Back in 1994, the Republicans created the “Contract with America,” a document that set forth a list of concrete legislative goals. Perhaps it is time for the Democrats to produce their own Contract with America. I think that doing so would force the Democrats to articulate and rally around a set of concrete policy proposals that provide a clear alternative to the Republicans.

For example, I think that the Democrats need to come up with a plan for addressing security issues. When the Democrats criticize the Bush Administration for its surveillance measures, they need to also propose how they would address security without infringing upon civil liberties or abusing power. For example, they should propose more concrete plans for getting better international cooperation, tracking down loose nukes, and devising surveillance programs that are carried out with judicial oversight within the legal parameters of FISA.

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Record-Keeping is Burdensome for Pornographers

I think we’re all fully versed as to the costs of some regulation, such as Sarbanes-Oxley, that requires massive record-keeping and certification. However, many in the pornography industry are complaining that the DOJ has instituted record-keeping requirements so complex that it will surely drive them out of a legal business. The requirement? Keep records verifying the age of every employee that shows up on-camera for ten years. WSJ article here. Jeepers! Regulations passed last year require all online purveyors of sexually explicit videos or photographs to retain each subject’s birthdate, copy of government-issued ID, and list of aliases used in the industry.

According to the article, owners of websites are up in arms, saying that the DOJ wants to drive their legal adult entertainment sites out of business under the ruse of fighting illegal child pornography. Apparently, some would be performers don’t want to use their real names. Some owners of websites don’t want to list the address of their home business and announce to the world that they run adult entertainment websites. OK, sorry. But you can’t have it both ways.

Legitimate, legal businesses keep records. Every employer I ever had made a copy of my driver license and my social security card. The DOJ can call any legitimate business in the country and ask for proof of the age of its employees, and those employers can comply. Why? Because we have laws, such as child labor laws and tax laws where this information comes in handy. I guess the adult entertainment industry is uninterested in tax laws. How do they file W-2s if they have no actual name of performers? If you want the adult entertainment industry to be legal, then act like one. Obviously, re-sellers of materials are the ones with the larges burden, but they may be carved out of the regulations. I’ll leave the far-reaching privacy concerns to Dan, but for now, I’m unsympathetic to complaints of keeping records of employees’ identities. Try complying with SOX.