Hans Bader

Law Professors: I’m Shocked to Find Gambling In This Casino!

by Hans Bader on May 4, 2012 · 1 comment

in Economy, Employment, Labor, Legal, Personal Liberty, Regulation

Just as a character in Casablanca claimed to be shocked to find gambling in a casino, race-conscious employers typically deny that they considered race in hiring.  It’s legally risky to admit discriminating.  It can also devalue the credentials of the beneficiary of the discrimination.  Admitting you hired a colleague based on her race would also be viewed as rude, insulting, and stigmatizing.  But for some reason, commentators are taking at face value claims by a couple members of law school hiring committees that law professor Elizabeth Warren’s purported Native American ancestry played no role in their decision to hire her.

(After denying that she ever claimed to be Native American in professional circles, Warren has now admitted doing so, supposedly just to “make friends.”  She admits that her only basis for claiming to be Native American is a great-great-great grandmother, which would make her 1/32 Native American.  That is ridiculous.  I have reviewed thousands of college applications and admissions decisions, and never saw a candidate get a plus in admissions based on being less than 1/16 Native American, especially one with Warren’s lack of cultural ties to any tribe.  Moreover, the press routinely characterizes people with far more non-white ancestry than Warren’s as white.  Warren did not “tell the truth,” says the University of Virginia’s Larry Sabato  “It’s pretty obvious she was using (the minority listing) for career advancement.”  Cornell’s William Jacobson says that Warren’s claims just “don’t add up,” in multiple ways.)

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Education Department Pushes Racial Quotas in School Discipline

by Hans Bader on May 4, 2012 · 3 comments

in Legal, Nanny State, Personal Liberty, Politics as Usual, Sanctimony, Zeitgeist

At Point of Law, Ted Frank of the Manhattan Institute criticizes the Obama Administration’s demand for de facto racial quotas in school discipline:

Seventy percent of African-American children are born to single mothers. Moreover, children growing up in the African-American community face the peer pressure of gangsta culture: success in school results in ostracism for “acting white.”  With such dysfunction in the African-American community one would expect African-American children to have more disciplinary problems than average. And indeed they do: “black students were three and a half times as likely to be suspended or expelled than their white peers”. These problems are certainly difficult: how do you change the culture?

Unfortunately, the Obama administration is proposing counterproductive policies that would reduce personal responsibility.

According to the Obama administration, the disparity in discipline is a “civil rights” issue of “equity.” The Department of Education is threatening “disparate impact” inquiries on school districts that discipline blacks more than whites or Asians. School districts could only comply by failing to discipline poorly-behaving African-American students; disciplining well-behaving whites to get the numbers up will just result in lawsuits. The consequences would be disastrous. Poorly-behaving African-Americans are most likely to be attending majority-minority schools. The ultimate effect is a wealth transfer from well-behaved African-American students trying to learn to thugs interfering with that process, only adding to the dysfunction in public schools and the African-American community.

Racial quotas in school discipline will indeed “result in lawsuits,” as white and Asian students sue over being disciplined for conduct that triggered no discipline when committed by a black peer (unless the school manages to conceal from the public the fact that it is applying a de facto quota).  In People Who Care v. Rockford Board of Education, 111 F.3d 528, 534 (1997), the United States Court of Appeals for the Seventh Circuit declared that racial quotas and racial-balance requirements in school discipline are unconstitutional, and also stated that it is unconstitutional to use racial preferences to offset “disparate impact” (that is, statistical disparities not caused by the school’s racism).  Moreover, the Supreme Court ruled that the federal statute banning racial discrimination in schools, Title VI, does not even prohibit unintentional “discrimination” such as “disparate impact,” in its Alexander v. Sandoval decision.

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How Elites Milk Racial Preferences for Their Own Gain

by Hans Bader on May 1, 2012 · 6 comments

in Labor, Legal, Personal Liberty

One of the pitfalls of race-based affirmative action is that many disadvantaged people are less able to take advantage of it than the legal and economic elite.

Harvard Law Professor Elizabeth Warren, a well-paid academic, claimed Native American status based on supposedly being 1/32 Cherokee. But the “white” plaintiff who unsuccessfully challenged the University of Washington Law School’s affirmative action policy, Katuria Smith, had much more Native American ancestry than Warren — she was 1/8 Native American.  (A federal appeals court upheld the University of Washington’s affirmative action policy, rejecting Smith’s class-action lawsuit, despite the fact that its law school admitted it used racial preferences in admissions to favor black, Hispanic, and Native American applicants, giving a very large preference to black and Native American applicants. I was one of Smith’s lawyers in that case.)

Katuria Smith came from a very poor family, and it never occurred to her that merely calling herself Native American would help in admissions. But Elizabeth Warren, a prosperous lawyer/law professor, surely knew better, listing herself publicly and privately as Native American to game the system, before getting a job at Harvard (after getting a job there, she mysteriously stopped claiming to be Native American.  Later, she “denied ever claiming she was Native American for professional purposes.”).  Harvard Law School repeatedly and publicly described Warren as “Native American,” both while I was at Harvard, and afterwards, to address charges that it lacked racial diversity.

My faculty advisor (and later co-counsel), Harvard Law Professor Charles Fried, who was then on Harvard’s appointments committee, “claims that Warren’s Native American ancestry never came up in the hiring process, and that he only became aware of it later.” His recollection must be faulty. Fried was practically under siege at the time, and was keenly conscious of Harvard’s need to diversify the faculty based on race and sex to appease not just left-wing students, faculty, and journalists, but also to avoid serious potential legal consequences from the Massachusetts Commission Against Discrimination (MCAD), the notoriously anti-employer civil-rights agency that has jurisdiction over discrimination claims against Massachusetts employers like Harvard University.

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Student Loans Drive Up Tuition, Create Demographic Time Bomb and Higher-Education Bubble

by Hans Bader on April 30, 2012 · 0 comments

in Deregulate to Stimulate, Economy, Employment, Legal

Professor Glenn Harlan Reynolds writes in the New York Post about how student loan programs have contributed to skyrocketing debt and rising defaults:

The student-debt problem is that too many students are borrowing too much money to finance educations that won’t earn them enough to repay the loans. This leads to misery. A recent Wall Street Journal story noted that many students are postponing marriage, children and home-buying because of the difficulty — in some cases, the impossibility — of keeping up student-loan payments. This is bad for them and the economy, because they won’t be available to soak up the excess houses built during the housing bubble, which also was fueled by cheap government loans. If they postpone having kids, fewer taxpayers will exist to fund Social Security and other programs in a few decades.

If these younger people had gone into debt flipping houses in 2005, they’d be able to declare bankruptcy and get a fresh start — but the law doesn’t allow that. Student-loan debt is treated like child support, meaning that it’s almost impossible to get out of. People who paid six-figure sums to universities that happily pocketed the money in exchange for gender-studies degrees that would never produce a job are now debt slaves, like the coal miners in Tennessee Ernie Ford’s “Sixteen Tons.” Although 37 million adults owe student loans, only 39 percent are actually paying down balances. Some 5.4 million have at least one loan past due; loans totaling $270 billion are at least 30 days delinquent. These numbers are likely to climb in coming months and years as US job-creation remains stagnant.

. . . another Obama policy is adding to the woes. Back when Democrats ran Congress, the president engineered a federal takeover of student-loan processing. Now the Chronicle of Higher Education reports that this is producing huge paperwork screwups that have thrown thousands of borrowers into default, more than doubling the number of defaulters since December.

In the Boston Globe, Jeff Jacoby notes that tuition has risen in response to rising financial aid: “government outlays intended to hold down the price of a college degree have ballooned, in inflation-adjusted dollars, from $29.6 billion in 1985 to $139.7 billion in 2010, an increase of 372 percent since Ronald Reagan’s day.” “Year in, year out, Washington bestows tuition aid on students and their families. Year in, year out, the cost of tuition surges, galloping well ahead of inflation. And year in, year out politicians vie to outdo each other in promising still more public subsidies that will keep higher education within reach of all. Does it never occur to them that there might be a cause-and-effect relationship between the skyrocketing aid and the skyrocketing price of a college education? That all those grants and loans and tax credits aren’t containing the fire, but fanning it?”

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Diversity Training Doesn’t Work, But It Persists Anyway, Due to Compulsion

by Hans Bader on April 27, 2012 · 4 comments

in Labor, Legal, Regulation

Diversity training doesn’t work, according to an article in Psychology Today. In it, Peter Bregman notes, “Diversity training doesn’t extinguish prejudice. It promotes it.”

But don’t expect it to stop. Government regulations often require that a school be accredited, a condition that accreditors like the American Bar Association use to force law schools to run costly diversity and sensitivity-training programs or use racial preferences in admissions (despite the dubious legality of some such diversity programs and admissions preferences). Such mandates have contributed to the growth of a vast and costly “diversity machine” in college administrations. (And as a condition of practicing law in California, I had to take continuing legal education on the topic of “elimination of bias in the legal profession.”)

Time magazine had a story on April 26, 2007, entitled “Employee Diversity Training Doesn’t Work.” Employers pay millions every year for diversity training, but often the training backfires and blows up in the face of the employer that paid for it. In Hartman v. Pena (1995), the Federal Aviation Administration got sued for sexual harassment after it subjected employees to three days of diversity training that scapegoated white males. After a federal judge refused to dismiss the lawsuit against it, the agency had to pay out a settlement to the white male employee who sued.

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Violence Against Women Act Reauthorization: Don’t Let that Pesky Constitution Stand in the Way of a Law With a Nice-Sounding Title

by Hans Bader on April 25, 2012 · 1 comment

in Legal, Personal Liberty, Politics as Usual, Sanctimony, Zeitgeist

Senators “will let legislation on domestic violence” known as the Violence Against Women Reauthorization Act “pass the upper chamber despite having concerns about its constitutionality,” reports The Hill newspaper. That includes a provision backed by Democrats “empowering American-Indian tribal authorities to prosecute” non-Indians.

Sen. Jeff Sessions (R-Ala.), a member of the Judiciary Committee, said he was “really taken back by some of the changes in laws dealing with Indian reservations,” calling it “unacceptable and very bad policy.”

A Republican aide cited a Congressional Research Service report that warned expanding the prosecutorial power of tribal authorities could violate constitutional guarantees on due process and double jeopardy.

UCLA law professor Eugene Volokh yesterday raised additional civil liberties problems with the Violence Against Women Act reauthorization, arguing that the changes made to the existing VAWA statute by Senate Democrats violate First Amendment free speech guarantees [first, second posts]. Volokh is one of the law professors most frequently cited by federal judges and America’s law reviews, and the author of two First Amendment textbooks, The First Amendment and Related Statutes (4th ed. 2011), and The Religion Clauses and Related Statutes (2005).

William Creeley of FIRE, and former ACLU Board member Wendy Kaminer, say that the Senate reauthorization bill drafted by Senator Pat Leahy (D-Vt.) would undermine due process on college campuses. Lawyer John Hinderaker raised additional civil-liberties objections to the bill’s expansion of tribal court jurisdiction. I earlier discussed some pitfalls of the bill here at this link.

Even the original 1994 version of the Violence Against Women Act had flaws. It contained a provision later struck down by the Supreme Court in United States v. Morrison (2000), and declared unconstitutional, because it exceeded Congress’s powers under the Fourteenth Amendment and the Interstate Commerce Clause. That invalid provision created a tort remedy for gender-motivated domestic violence that largely duplicated state laws (all states ban domestic violence, and take such crimes seriously). The statute’s crowd-pleasing title (no one wants to be accused of being in favor of “violence against women”) diverted attention away from its constitutional flaws. Lawyers and judges who raised valid federalism objections to this provision were ridiculed by people like Joe Biden, who falsely depicted them as ignorant. VAWA’s title continues to prevent dispassionate analysis of its provisions, and potentially opens the door to new constitutional violations being added to it.

Republican senators like Charles Grassley of Iowa have also objected to the lack of safeguards against fraud in the law and the misuse of millions of dollars in taxpayer money that should have been used to help victims of domestic violence. (Even if the Senate reauthorization does not pass the House, programs set up by the 1994 VAWA law will continue to operate.)

What the Washington Post Cited: “Severe Shortage of Skilled Factory Workers As Government Encourages Students to Pursue White Collar Jobs”

by Hans Bader on April 24, 2012 · 12 comments

in Economy, Employment, Politics as Usual, Zeitgeist

The Washington Post cited my blog post, “Severe Shortage of Skilled Factory Workers As Government Encourages Students to Pursue White-Collar Jobs,” in a thoughtful commentary by Jennifer Rubin. But it linked to the entire collection of my blog posts by mistake. The Washington Post was attempting to link to this item.

Here is an excerpt from it:

The government has encouraged people who once would have become skilled and valuable factory workers to instead go to college and work in white-collar jobs, contributing to a severe shortage of the skilled workers needed by manufacturers. The Washington Post reports today on this problem:

Unemployment hovers above 9 percent. . . . It is a platitude that this industrial hub, like the country itself, needs more manufacturing work.  But as the 2012 presidential candidates roam      the state offering ways to “bring the jobs back,” many manufacturers say that, in fact, the jobs are already here. What’s missing are the skilled workers needed to fill them. A metal-parts factory here has been searching since the fall for a machinist, an assembly team leader and a die-setter. Another plant is offering referral bonuses for a welder. And a company that makes molds for automakers has been trying for seven months to fill four spots on the second shift. “Our guys have been working 60 to 70 hours a week, and they’re dead. They’re gone,” said Corey Carolla, vice president of operations at Mach Mold, a 40-man shop in Benton Harbor, Mich. “We need more people. The trouble is finding them.”

 In recent years, government officials have depicted white-collar jobs for college graduates as the way to go.  President Obama has advocated sending every high-school graduate to college or some form of higher education, while denigrating training for blue-collar industrial jobs.  He has sought to increase spending on colleges, while slashing spending on more useful vocational education that could lead to work in manufacturing.  [See this July 10 New York Times story]. . . As The Washington Post notes, as senior skilled factory workers are retiring, no one is taking their place, since “many of the younger workers who might have taken their place have avoided the manufacturing sector because of the . . . stigma of factory work.” . . .

Meanwhile, 12.8 million people are unemployed, many of them people with economically-useless college degrees . . . Growing government subsidies have encouraged colleges to raise tuition at a rapid rate, and to dumb down their courses to attract marginal students . . . Federal financial aid programs have helped cause skyrocketing tuition increases. Meanwhile, college students learn less and less with each passing year. “Thirty-six percent” of college students learned little in four years of college, and students now spend “50% less time studying compared with students a few decades ago, the research shows.”

Gag Rule for Hedge Funds Challenged in Supreme Court on First Amendment Grounds in Bulldog Investors v. Galvin

by Hans Bader on April 24, 2012 · 0 comments

in Deregulate to Stimulate, Economy, Features, Legal

Post image for Gag Rule for Hedge Funds Challenged in Supreme Court on First Amendment Grounds in <i>Bulldog Investors v. Galvin</i>

Usually, you can advertise and discuss a product, even if not everyone is allowed to buy it. Thanks to the First Amendment, you can advertise a prescription drug even though most people don’t have a prescription for it, as the Supreme Court ruled in 1976. You can advertise liquor and guns, even if minors can’t buy them, and gambling. The First Amendment has been held by the courts to protect advertising of all these things. But Massachusetts securities regulators think you shouldn’t be allowed to advertise your hedge fund on a website, if it is accessible to Massachusetts residents, even though hedge funds are perfectly legal.

Massachusetts fined Bulldog Investors, an out-of-state hedge fund, $25,000 because it had a website promoting the hedge fund, and emailed information about the hedge fund to a Massachusetts resident, even though neither he nor the hedge fund intended to enter into a securities transaction, and Massachusetts admits the hedge fund was not trying to sell him anything. Massachusetts argues in essence that the hedge fund needs to shut up to avoid “conditioning the market” for its product, an investment that only “sophisticated” investors with lots of money are legally allowed to buy. Massachusetts’ ban is based on the paternalistic desire to keep people in the dark about hedge funds for their own good. (The practical effect of such bans is that even journalists like Deirdre Brennan of FINalternatives have had difficulty reporting on hedge funds and accessing basic information about them, since hedge fund managers are scared to even talk to journalists.)

Keeping people in the dark for their own supposed good obviously doesn’t measure up under the Supreme Court’s First Amendment commercial-speech jurisprudence, so Massachusetts disingenuously justified the ban in court as a roundabout way of forcing hedge funds to register with government agencies and provide specified disclosures in the course of doing so (a rather ineffectual way of promoting such disclosures, judging from the fact that Bulldog blocked public access to its website, rather than registering, after Massachusetts fined it; Massachusetts relied on the conclusory assertions of a hired expert, Professor Franco, who admitted he had no empirical evidence, and could not even quantify how effective the ban is in forcing hedge funds to register). Amazingly, the Massachusetts Supreme Judicial Court bought this argument hook, line, and sinker, upholding a trial court ruling in which the judge herself admitted that “Professor Franco does not purport to quantify the effectiveness of the regulatory scheme, and the Court is not in a position to do so.” Apparently, speech restrictions do not need to achieve anything useful to pass muster in Massachusetts. They just need to be based on a dubious rationale that is invented in response to a First Amendment challenge.

As CEI explained in an amicus brief I submitted on behalf of journalists, academics, and think tanks, that pretextual rationale, invented after-the-fact in litigation, cannot survive the “intermediate scrutiny” that applies to commercial advertising restrictions, which forbids “hypothesized justifications” and post hoc rationales for a regulation that did not actually motivate the challenged regulation. See, e.g., Thompson v. Western States Medical Ctr., 535 U.S. 357, 373 (2002); United States v. Virginia, 518 U.S. 515, 533, 535-36 (1996).

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Stimulus Aided the Politically Connected at Massive Cost to Taxpayers

by Hans Bader on April 24, 2012 · 0 comments

in Economy, Stimulus to Nowhere

“Stimulus money went to precisely the states that needed it the least but were more politically connected to the Democratic Party,” notes Wynton Hall, quoting from a new book. “Heavily Democratic states with lower poverty rates, lower unemployment rates, lower bankruptcy rates, and lower foreclosure rates received most of President Barack Obama’s $825 billion Stimulus.” As the book, Debacle: Obama’s War on Jobs and Growth and What We Can Do Now to Regain Our Future, notes,

There is a perverse pattern: The states hardest hit by the recession received the least money.  States with higher bankruptcy, foreclosure, and unemployment rates got less money.  And higher-income states received more.  Obama may have claimed that he was motivated to help out those in the toughest shape, but it looks more likely that Democrats were more interested in helping their supporters.

As Hall notes, “richer states got more, not less, Stimulus money. For every additional $1,000 in a state’s per-capita income a state received an average $86 more per capita in Stimulus money. Furthermore, states with high foreclosure rates got less, not more, money. Specifically, for every percentage point increase in a state’s foreclosure rate, a state received $217 less per person. . .while Florida only received $553 per capita, the District of Columbia walked away with $3,745 per capita.”

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An America of Inequalities

by Hans Bader on April 20, 2012 · 3 comments

in Legal, Politics as Usual, Zeitgeist

Increasingly, ordinary people get prosecuted for trifles, while politically connected people get a pass for the exact same crime, or far worse behavior.

A whale-watcher is being criminally prosecuted merely for lying about whistling at a whale.  But former New Jersey Governor Jon Corzine, a big Obama booster who “stole” $1.2 billion, is not being prosecuted, despite his investment firm’s massive diversion of funds from client trust accounts, a crime that Corzine “personally” ordered.

Meanwhile, a dairy-farming family in Maryland is getting prosecuted by the federal government for “structuring” — breaking up bank deposits into deposits of less than $10,000 at a time to avoid scrutiny.  But former New York Governor Eliot Spitzer got a free pass for the very same offense, even though he (unlike the hapless dairy farmers) used the practice in order to hide criminal activity, making his actions much worse. As Walter Olson notes, “structuring” is “the federal criminal offense of splitting up bank deposits so as to keep them under a threshold such as $10,000 above which banks have to report transactions to the government. Structuring is unlawful whether or not it occurs in conjunction with any other legal offense . . . Nor is there any requirement that the person be aware that there is a law banning structuring; someone who gets wind that transactions over $10,000 are reportable, and decides ‘What’s up with that? I’ll just make $9,000 deposits’, has broken the Bank Secrecy Act.”

Increasingly, the federal government persecutes the innocent and punishes whistleblowers, while turning a blind eye to the guilty.

In the auto bailouts, non-union retirees, pension funds, and bondholders got ripped off, while the powerful UAW union, which endorsed Obama, got special, preferential treatment and a big chunk of the automakers’ stock.

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