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Henderson on Judicial Pay: Constitutional Crises Everywhere or Nowhere?

TOTM Bill Henderson has a nice post on Chief Justice Roberts’ claim that judicial pay has reached the point of creating a “constitutional crisis.” Lots of . . .

Bill Henderson has a nice post on Chief Justice Roberts’ claim that judicial pay has reached the point of creating a “constitutional crisis.” Lots of bloggers (see, e.g., my colleague Ilya Somin at VC) have made the point that they are not impressed with the data the Chief has mustered in favor the assertion that the quality of the federal bench is likely to suffer as the gap between judicial pay and pay in private practice widens (or that a shift in composition of the federal bench towards fewer lawyers from private practice is a demonstrably bad thing, much less constitutional crisis). Most of this discussion has involved pointing out weaknesses in the Chief’s empirical evidence in support of his claim and some educated guesswork about the relevant elasticities of supply for high quality judicial candidates with respect to pay.  Though I think it it is very difficult to say something meaningful about these elasticities without data.

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Josh Wright, Antitrust Superstar

TOTM The FTC announced this week perhaps its best decision since . . . well, ever. Read the full piece here.

The FTC announced this week perhaps its best decision since . . . well, ever.

Read the full piece here.

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Antitrust & Consumer Protection

“Loyal” Directors in Delaware

TOTM In November of 2006, the Delaware Supreme Court issued an opinion in Stone v. Ritter dealing with a director’s fiduciary duties in cases where the . . .

In November of 2006, the Delaware Supreme Court issued an opinion in Stone v. Ritter dealing with a director’s fiduciary duties in cases where the complaining plaintiff-shareholder is maintaing that her directors did not sufficiently monitor their corporate charge. (I refer to these “oversight” cases loosely as “asleep at the wheel” cases.) There has been some excellent blogging on the topic by Eric Chiappinelli, Gordon Smith, and  Steve Bainbridge.  Though I was in the middle of moving such that I could not blog in the middle of that wonderful Ritter blog-fest, I am now ready to stake my blogging ground on Ritter.

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Financial Regulation & Corporate Governance

Antitrust Superprecedent

TOTM Shubha Ghosh, of the Antitrust & Competition Policy Blog, is predicting that the Supreme Court will not overrule the 1911 Dr. Miles decision, which holds . . .

Shubha Ghosh, of the Antitrust & Competition Policy Blog, is predicting that the Supreme Court will not overrule the 1911 Dr. Miles decision, which holds that “vertical minimum resale price maintenance” (i.e., a manufacturer’s imposition of minimum resale price for his goods) is per se illegal.

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Antitrust & Consumer Protection

Becker and Posner on “Libertarian Paternalism”

TOTM Becker and Posner take on “libertarian paternalism” this week. The entries are both worth reading, especially for the parts where these co-bloggers disagree. Here are . . .

Becker and Posner take on “libertarian paternalism” this week. The entries are both worth reading, especially for the parts where these co-bloggers disagree. Here are my favorite passages from each.  First, Posner attempts to distinguish his previous defense of the NYC trans-fat ban from good old-fashioned paternalism…

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Revisiting Two Classics as the New Semester Begins

TOTM Last Friday was the first day of my Business Organizations class. We began with two articles that have profoundly influenced my thinking about the world . . .

Last Friday was the first day of my Business Organizations class. We began with two articles that have profoundly influenced my thinking about the world in general and the business world in particular. To inaugurate the new semester, I thought I’d take a moment and pay tribute to the insights in those articles (and solicit first day ideas from other business law profs!).

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Financial Regulation & Corporate Governance

A Few Things Economics is Good For …

TOTM Professor D’Amato is at it again. And by “it,” I mean making overblown claims that economics is useless (you might recall our last exchange where . . .

Professor D’Amato is at it again. And by “it,” I mean making overblown claims that economics is useless (you might recall our last exchange where I responded to his mistaken assertion that economics had not changed antitrust in “any noticeable way”). Here’s his latest from a comment over at Prawfs.

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Manne on Shareholder Democracy

TOTM Henry Manne is back with another article in the WSJ.  This time Manne goes toe-to-toe with the “corporate democrats.” Read the full piece here. 

Henry Manne is back with another article in the WSJ.  This time Manne goes toe-to-toe with the “corporate democrats.”

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Financial Regulation & Corporate Governance

The Hydraulic Theory of Disclosure Regulation and Other Costs of Disclosure

Scholarship Summary This article argues that mandatory securities disclosure regulation has unanticipated and ill-considered consequences. Disclosure regulation makes some forms of behavior more expensive relative to . . .

Summary

This article argues that mandatory securities disclosure regulation has unanticipated and ill-considered consequences. Disclosure regulation makes some forms of behavior more expensive relative to others. Rational actors will respond by shifting some conduct into comparatively cheaper outlets. And these alternative behaviors may actually be less beneficial than the regulated, deterred behavior. Likewise, required disclosure of corporate information to investors makes shareholder governance less costly and more likely, even where it should be deterred. In essence, disclosure regulation effectively proscribes, it does not prescribe. Thus, depending on the viability of other behaviors, forced disclosure may induce unwanted behavioral responses. The article identifies two broad concepts that encapsulate these dynamics. The first is a “hydraulic theory” of securities disclosure regulation. Under this theory, disclosure regulation triggers behavioral hydraulics which may lead to an undesirable shift in executive behavior, as well as an undesirable shift in the pool of candidates for corporate executive positions. The second is an information cost theory of securities disclosure regulation. Under this theory, mandated disclosure is both unnecessary to market efficiency and affirmatively harmful to firms’ competitive schemes of corporate governance.

 

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Financial Regulation & Corporate Governance