Despite Biden’s attempts to “end fossil fuel” some basic economic analysis indicates his efforts are not in line with what the public wants. If you think back to your Econ 101 class, you’ll probably remember something called revealed preference.

This basic insight of economics says that people’s actions in a market place are a much better indicator of what is going on in their heads than asking them in a poll. Someone might tell you they like Biden’s attempts to kill off reliable, inexpensive energy, but when the rubber meets the road, their purchasing decisions say otherwise.

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The scene was deeply troubling. Hundreds of college students proclaimed that Hamas’ October 7, 2023, assault on Israeli civilians was a heroic and justified act of liberation. It confirmed a level of ignorance engendered by decades of decay in our colleges and universities. But equally troubling is the fact that the United States Congress immediately intervened. If there is any social institution, along with religion, that should be insulated from political meddling, it is higher education.

Not long after October 7, the presidents of three of America’s most prominent universities were called onto the Congressional carpet by the House Committee on Education and the Workforce. When asked to explain their failure to condemn Hamas’ atrocities, all three offered what has been widely panned as evasive and inadequate responses. On December 13, the House of Representatives adopted House Resolution 927, “Condemning antisemitism on University campuses and the testimony of the University Presidents.” The resolution was approved in a 303-126 vote, with 84 Democrats and 219 Republicans in favor. The resolution condemned the presidents by name and called for their resignation.

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This post discusses three important problems with the Food and Drug Administration’s (FDA) accelerated-approval process. The first is that regulatory authorities and patient groups maintain that, legally, the standards of accelerated approval are the same as standard approval. Yet from a risk perspective, the standards are quite different; by shifting risk taking from regulator to patient, physician, and payer, this creates problems. The second problem is more practical and is generally considered the most significant problem with accelerated approval. Some companies that have received accelerated approval for their products have not done confirmatory studies, as required by their agreement with FDA. This leads to distrust of these companies and their products, and threatens to undermine the accelerated-approval program. The third problem is the issue of approving medicines with marginal benefits.

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Abstract

The court below erred in finding that the lack of explicit binding language or threats from the New York Department of Financial Services in its guidance letters meant that no reasonable regulated firm would consider itself bound by those letters. The reality of banking and insurance regulation is that firms frequently feel that they risk sanction if they do not comply with nominally non-binding guidance.

Further, the use of guidance and reputation risk as tools of regulation has shown itself to enable abuses where regulators sought to enforce their policy preferences, rather than the law, under the guise of protecting the safety and soundness of regulated financial firms.

Finally, the nature and logic of reputation risk regulation, even if applied by a neutral regulator, enables a regulator-enforced “economic hecklers veto” by parties with sufficient economic power over a regulated firm.

Well, they have done it. On Dec. 18, the Federal Trade Commission (FTC) and U.S. Justice Department (DOJ) issued their final 2023 merger guidelines, as an early New Year’s gift (nicely sandwiched between Hanukkah, which ended Dec. 15, and Christmas) of the porcine sort.

The two agencies try to put lipstick on this pig by claiming that the guidelines “emphasize the dynamic and complex nature of competition,” an approach that supposedly “enables the agencies to assess the commercial realities of the United States’ modern economy when making enforcement decisions.” But no amount of verbal makeup prevents this porker from oinking, despite the valiant best efforts of the antitrust agencies’ talented and highly respected chief economists (Susan Athey and Aviv Nevo) to argue otherwise.

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Abstract

Dynamic competition defines an improvement path for antitrust law. Interested in competitive realities more than political activities, the growing body of scholarship studying dynamic competition wants to make antitrust diagnosis and analysis more accurate without sacrificing administrability. At a high level, the dynamic competition approach appears to some as a twenty-first-century equivalent of the Chicago School of antitrust. This article shows that the analogy is only partially correct. Unlike the Chicago School of antitrust law, the dynamic competition scholarship is innovation oriented, empirical, enforcement friendly, and interdisciplinary. More generally, dynamic competition is the natural evolution for all systems of antitrust law that reassess doctrine in light of the progression of economic and technical understanding of competition.

Read at SSRN.

Come Thursday (Jan 11), students will receive their 2023 GCE O-Level examination results.

The stress over performance can take on a slightly different dimension at this juncture – on the one hand, there is a greater range of education options from the academic to the practical-oriented; on the other, teenagers will have to start thinking ahead to university and even career possibilities.

As educators, we are often asked by students for advice. In particular, those keen on pursuing the more academic A-Level route seek help deciding which subjects they should take at the Higher 2 (H2) level.

Our short answer tends to be a pragmatic question: Think ahead – what would you like to study at university? Take subjects that open those doors for you.

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Abstract

Erie Railroad v. Tompkins is a cornerstone of modern American law. Erie overturned Swift v. Tyson, a case that had stood for nearly a century with minimal objection. Swift involved the negotiability of commercial paper and the holding of the case, that in disputes heard in federal courts under diversity jurisdiction, the court should use traditional common law methods to resolve the case rather than feeling bound by the authoritative pronouncements of a state court.

Correspondence between Harvard Law School’s Lon Fuller and Yale’s Arthur Corbin—arguably the two greatest Contracts Law professors of the mid-Twentieth Century—reveals widespread ridicule and dismay among commercial lawyers and scholars following Erie. Fuller quotes the great Harvard Constitutional Law scholar as saying the Supreme Court “pulled a brodie” in Erie. This article reviews Erie from the perspective of commercial law, rather than the public law commentary that has dominated discussion of the Erie doctrine since its birth, seeking to understand the depth of contempt for Erie among commercial lawyers in terms of its consequences, reasoning, and jurisprudential approach.

Read at SSRN.

The credit card you used to purchase your latte this morning and to fill your car with gas was probably issued by a bank based in Delaware, South Dakota or some state other than Colorado. Why? Because under a unanimous 1978 decision authored by liberal lion William Brennan, the Supreme Court ruled that banks holding a “national charter” would be governed by the interest rate ceilings of the state in which the bank is based instead of the state of the customer’s residence. This one decision transformed the American economy, unleashing unprecedented competition and putting Visa, Mastercard and other credit cards in the hands of millions of American families who were previously reliant on pawnbrokers, personal finance companies and store credit to make ends meet.

Yet a law set to go into effect in Colorado in July would deprive the most credit-deprived Coloradans of the same access to competitive financial services available to the more well-off and effectively destroy the rapidly growing fintech industry in the state. The consequences to Colorado’s more financially strapped households could be catastrophic. Other states are considering following suit.

Read the full piece here.