Law and Economics Commons^™

Keep It Light, Chairman White: Sec Rulemaking Under The Crowdfund Act, Andrew A. Schwartz

Publications

Title III of the JOBS Act, known as the CROWDFUND Act, authorizes the “crowdfunding” of securities, defined as raising capital online from many investors, each of whom contributes only a small amount. The Act was signed into law in April 2012, and will go into effect once the Securities and Exchange Commission (“SEC”) promulgates rules and regulations to govern the new marketplace for crowdfunded securities. This Essay offers friendly advice to the SEC as to how to exercise its rulemaking authority in a manner that will enable the Act to achieve its goals of creating an ultralow-cost method for raising …

A Structuralist Approach To The Two State Action Doctrines, Justin Deystone

Publications

By all accounts, the constitutional and antitrust state-action doctrines are strangers. Courts and scholars see the constitutional state-action doctrine as about the applicability of constitutional rights in private disputes, and the antitrust state-action doctrine as a judicial negotiation between the scope of the Sherman Act and the demands of federalism. In this conventional view, the only thing the doctrines share in common is that they are both an awful mess. This Article challenges the conventional wisdom and argues that the two state-action doctrines are fundamentally connected, and when viewed in a certain light, not even that messy. It is not …

The Irs Tea Party Controversy And Administrative Discretion, Lily Kahng

Faculty Articles

The IRS Tea Party controversy erupted when the Treasury Inspector General issued a report finding that IRS employees in the Cincinnati office had targeted certain organizations’ applications for tax exempt status for heightened scrutiny, in particular singling out groups with “Tea Party” or “Patriot” in their names. A media firestorm ensued, with fevered speculation about a hidden political agenda extending all the way to the White House. A complete picture of the controversy has yet to emerge, but as of the writing of this Essay, it appears that the worst suspicions about political bias are unfounded. Nonetheless, the IRS has …

Teaching Business Associations Law In The Evolving New Market Economy, Joan Macleod Heminway

Journal of Business & Technology Law

No abstract provided.

The Extraordinary Deterrence Of Private Antitrust Enforcement: A Reply To Werden, Robert H. Lande, Joshua P. Davis

All Faculty Scholarship

Our article, "Comparative Deterrence from Private Enforcement and Criminal Enforcement of the U.S. Antitrust Laws," 2011 B.Y.U. L. Rev. 315, documented an extraordinary but usually overlooked fact: private antitrust enforcement deters a significant amount of anticompetitive conduct. Indeed, the article showed that private enforcement "probably" deters even more anticompetitive conduct than the almost universally admired anti-cartel enforcement program of the United States Department of Justice.

In a recent issue of Antitrust Bulletin, Gregory J. Werden, Scott D. Hammond, and Belinda A. Barnett challenged our analysis. They asserted that our comparison “is more misleading than informative.” It is unsurprising that they …

The Culture Of Financial Institutions: The Institution Of Political Economy, David A. Westbrook

Contributions to Books

Published as Chapter 1 in Integrity, Risk and Accountability in Capital Markets: Regulating Culture, Justin O'Brien & George Gilligan, eds.

The 19th century legal historian Henry Maine famously defined progress, and by extension, liberal modernity, as the substitution of relations based on status (especially family and title), to relations based on contract, especially trade and employment. The article suggests that Maine's assertion, however comforting as a political matter, simply does not hold with regard to the credit relations central to contemporary society. Credit transactions, even retail transactions, are based on trust and interlocking webs of obligation across agents (until recently …

Neofeudalism, Paraethnography And The Custodial Regulation Of Financial Institutions, David A. Westbrook

Journal Articles

No abstract provided.

Dinner Parties During "Lost Decades": On The Difficulties Of Rethinking Financial Markets, Fostering Elite Consensus, And Renewing Political Economy, David A. Westbrook

Journal Articles

Two groups of problems that ought to be understood in relation to one another: economic trends in the North Atlantic societies, and the capacity to collectively thinking, discussing, and even decide on what to do about our economy. Part One argues that economic policy and economic life are not only intertwined, but compromise one another. Part Two uses the World Economics Association's recent virtual conference, Rethinking Financial Markets to discuss some possibilities for fostering collective thought. Part Three briefly discusses the nature of the economy at the present time, i.e., the tasks confronting contemporary economic policy elites.

The Moral Significance Of Economic Life, Andrzej Rapaczynski

Faculty Scholarship

Much of the modern perception of the role of economic production in human life – whether on the Left or on the Right of the political spectrum – views it as an inferior, instrumental activity oriented toward self-preservation, self-interest, or profit, and thus as essentially distinct from the truly human action concerned with moral values, justice, and various forms of self-fulfillment. This widely shared worldview is rooted, on the one hand, in the Aristotelian tradition that sees labor as a badge of slavery, and freedom as lying in the domain of politics and pure (not technical) knowledge, and, on the …

In The Shadow Of The Dsu: Addressing Specific Trade Concerns In The Wto Sps And Tbt Committees, Henrik Horn, Petros C. Mavroidis, Erik Wijkström

Faculty Scholarship

The paper argues that focusing only on disputes formally raised in the WTO Dispute Settlement system underestimates the extent of trade conflict resolution within the WTO. Both the SPS and TBT Committees address a significant number of ‘specific trade concerns’ (STCs) that in the overwhelming majority of cases do not become formal disputes. The STCs address differences between Members concerning the conformity of national measures in the SPS and TBT areas with these agreements. It appears as if Committee work on STCs significantly helps defuse potential trade frictions concerning national policies in the covered areas.

Sharing The Risks And Rewards Of Economic Migration, Anu Bradford

Faculty Scholarship

International cooperation on economic migration has been difficult to achieve. The interests of emigration countries ("source countries") and immigration countries ("destination countries') seem impossible to align. These countries disagree on who should migrate: source countries resist migration that leads to a brain drain, while destination countries welcome these very migrants given that they are likely to be the most productive citizens and the least likely to become fiscal burdens on the destination country. In addition, destination countries resist migration that leads to domestic unemployment through labor replacement. As a result, international economic migration remains restricted at a substantial cost to …

Economics And Politics: Perspectives On The Goals And Future Of Antitrust, Jonathan Baker

Scholarly Articles in Law Reviews & Journals

This article examines the roles of economics and politics in U.S. antitrust from several perspectives. It explains why the modern debate over the economic welfare standard that enforcers and courts should pursue is unsatisfying. It connects economics and politics by describing antitrust’s economic goals as the product of a mid-20th century political understanding about the nature of economic regulation that has continued in force to this day. To protect that understanding, it explains, antitrust rules should now be implemented using a qualified consumer welfare standard. The article also identifies contemporary political tensions that threaten to create regulatory gridlock, or even …

The Ambition And Transformative Potential Of Progressive Property, Ezra Rosser

Scholarly Articles in Law Reviews & Journals

The emerging progressive property school celebrates and finds its meaning in the social nature of property. Rejecting the idea that exclusion lies at the core of property law, progressive property scholars call for a reconsideration of the relationships owners and nonowners have with property and with each other. Despite these ambitions, progressive property scholarship has so far largely confined itself to questions of exclusion and access. This Essay argues that such an emphasis glosses over race-related acquisition and distribution problems that pervade American history and property law. The modest structural changes supported by progressive property scholars fail to account for …

A Tale Of Three Hoaxes: When Literature Offends The Law, Molly Guptill Manning

Articles & Chapters

No abstract provided.

Independent Directors And Shared Board Control In Venture Finance, Brian J. Broughman

Articles by Maurer Faculty

In most VC-backed firms neither the entrepreneurs nor the VC investors control the board. Instead control is typically shared with a mutually appointed independent director holding the tie-breaking seat. Contract theory, which treats control as an indivisible right held by one party, does not have a good explanation for this practice. Using a bargaining game similar to final offer arbitration, I show that an independent director as tie-breaker can reduce holdup by moderating each party’s ex post threat position, potentially expanding the range of firms which receive external financing. This project contributes to the literature on incomplete contracting and holdup, …

Conditional Spending After Nfib V. Sebelius: The Example Of Federal Education Law, Eloise Pasachoff

Georgetown Law Faculty Publications and Other Works

In NFIB v. Sebelius, the Supreme Court’s recent case addressing the constitutionality of the Affordable Care Act, the Court concluded that the expansion of Medicaid in that Act was unconstitutionally coercive and therefore exceeded the scope of Congress’s authority under the Spending Clause. This was the first time that the Court treated coercion as an issue of more than mere theoretical possibility under the Spending Clause. In the wake of the Court’s decision, commentators have expressed either the concern or the hope that NFIB’s coercion analysis may lead to the undoing of much of the federal regulatory state, …

Distinguishing Probability Weighting From Risk Misperceptions In Field Data, Levon Barseghyan, Francesca Molinari, Ted O'Donoghue, Joshua C. Teitelbaum

Georgetown Law Faculty Publications and Other Works

The paper outlines a strategy for distinguishing rank-dependent probability weighting from systematic risk misperceptions in field data. Our strategy relies on singling out a field environment with two key properties: (i) the objects of choice are money lotteries with more than two outcomes and (ii) the ranking of outcomes differs across lotteries. We first present an abstract model of risky choice that elucidates the identification problem and our strategy. The model has numerous applications, including insurance choices and gambling. We then consider the application of insurance deductible choices and illustrate our strategy using simulated data.

Overview And Operation Of U.S. Financial Sanctions, Including The Example Of Iran, Barry E. Carter, Ryan Farha

Georgetown Law Faculty Publications and Other Works

Financial sanctions are increasingly being used in the mix of international economic sanctions being employed by the United Nations, regional entities, and individual countries, including the United States. These financial sanctions have become more focused and effective as the tools and techniques have improved significantly for tracing and identifying the financial transactions of terrorists, weapons proliferators, human rights violators, drug cartels, and others. These sanctions can not only freeze financial assets and prohibit or limit financial transactions, but they also impede trade by making it difficult to pay for the export or import of goods and services.

In spite of …

Guiding Section 5: Comments On The Commissioners, Steven C. Salop

Georgetown Law Faculty Publications and Other Works

FTC Commissioners Joshua Wright and Maureen Ohlhausen have proposed that the Commission adopt Guidelines for the application of Section 5 to Unfair Methods of Competition. This short note comments on the role of Section 5 distinct from the Sherman Act. It suggests that Section 5 be used to attack and deter certain conduct that falls into gaps of the Sherman Act. This includes exclusionary unilateral conduct that likely leads to the achievement, enhancement, or maintenance of market power (as opposed to monopoly power). It also includes unilateral conduct such as invitations to collude and other practices that facilitate conscious …

Lies Without Liars? Janus Capital And Conservative Securities Jurisprudence, Donald C. Langevoort

Georgetown Law Faculty Publications and Other Works

The Supreme Court’s recent Janus Capital case offers a reading of the word “make” in Rule 10b-5 that speaks to ultimate legal authority over the communication in question. This creates the real possibility that we can have lies without liars, an entirely perplexing result in terms of any purposive meaning of the rule. In so holding, Justice Thomas joined a seemingly short list of judges who suggest that legal formalism is a particularly good weapon with which to fight securities fraud. This paper exploresJanus through the lens of conservative textualism, which takes us through a much longer intellectual history …