Dodd-Frank Is Driving the Wrong Kind of Innovation

topicsregulation

As the federal government responded to the 2008 mortgage crisis by piling new regulations on the financial system, a new study reports, lower-skilled finance employees were replaced by workers with degrees in science, technology, engineering, and mathematics (STEM).

Christos Makridis and Alberto Rossi, researchers with George Mason University’s Mercatus Center, found evidence that “financial services firms may have sought to ‘escape’ regulatory exposure by hiring STEM workers who could automate more tasks and pursue activities outside the scope of existing regulation.” The influx of STEM workers and ensuing automation following the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act may have “productivity-enhancing effects,” they note. But “this has come at the expense of low- and middle-skilled workers in the sector.”

The tradeoff has not necessarily helped consumers. “It’s just raising the costs,” Makridis says.

According to the paper, the financial services sector saw a 50 percent increase in federal regulation from 2008 to 2017. For every 10 percent increase in regulation, STEM employment increased by 5.3 percent. Makridis and Rossi also reported that “a 10 percent rise in regulatory restrictions is associated with an 8.69 percent rise in employment among compliance officer occupations (even after controlling for STEM workers).”

The study found that increases in federal regulation caused average wages to increase as financial firms hired fewer people and paid them higher salaries, which implies that lower-skilled workers were squeezed out of the job market. Whether or not the banking system is more secure, a lot of former workers in the industry probably aren’t.

from Latest – Reason.com https://ift.tt/3r4yinn
via IFTTT

Brickbat: Slam Dunk

slammed_1161x653

In Florida, officials at Miami-Dade County Public Schools say they are investigating a substitute teacher caught on video body-slamming a student at Barbara Goleman Senior High School. The student reportedly asked to go to the restroom. Because of coronavirus restrictions, the school is limiting the number of students going to the restroom at one time. One student had already left the classroom, so the teacher, who wasn’t named by local media, told the student he’d have to wait. After waiting about a half hour for the other student to return, the student who’d asked to go to the restroom got up to leave. The teacher tried to block him, and the two got into a scuffle that ended with the teacher throwing the student to the ground.

from Latest – Reason.com https://ift.tt/3h29ZC3
via IFTTT

Brickbat: Slam Dunk

slammed_1161x653

In Florida, officials at Miami-Dade County Public Schools say they are investigating a substitute teacher caught on video body-slamming a student at Barbara Goleman Senior High School. The student reportedly asked to go to the restroom. Because of coronavirus restrictions, the school is limiting the number of students going to the restroom at one time. One student had already left the classroom, so the teacher, who wasn’t named by local media, told the student he’d have to wait. After waiting about a half hour for the other student to return, the student who’d asked to go to the restroom got up to leave. The teacher tried to block him, and the two got into a scuffle that ended with the teacher throwing the student to the ground.

from Latest – Reason.com https://ift.tt/3h29ZC3
via IFTTT

Can Private Employers Mandate COVID Vaccines?

The EEOC released guidance stating that private employers can generally mandate that employees get the COVID-19 vaccine. There are two likely types of exemptions. First, there may be some disability-related justifications that would exempt a person from a vaccine-mandate. Second, there may be some religious-related justifications that would exempt a person from the vaccine-mandate. EEOC offers this FAQ:

K.6. If an employer requires vaccinations when they are available, how should it respond to an employee who indicates that he or she is unable to receive a COVID-19 vaccination because of a sincerely held religious practice or belief? (12/16/20)

Once an employer is on notice that an employee’s sincerely held religious belief, practice, or observance prevents the employee from receiving the vaccination, the employer must provide a reasonable accommodation for the religious belief, practice, or observance unless it would pose an undue hardship under Title VII of the Civil Rights Act.  Courts have defined “undue hardship” under Title VII as having more than a de minimis cost or burden on the employer. EEOC guidance explains that because the definition of religion is broad and protects beliefs, practices, and observances with which the employer may be unfamiliar, the employer should ordinarily assume that an employee’s request for religious accommodation is based on a sincerely held religious belief.  If, however, an employee requests a religious accommodation, and an employer has an objective basis for questioning either the religious nature or the sincerity of a particular belief, practice, or observance, the employer would be justified in requesting additional supporting information.

Here, EEOC is relying on TWA v. Hardison (1977). Justice White’s majority opinion found that religious exemptions that create “more than a de minimis cost” are an “undue hardship,” and need not be granted. But this precedent may not be long for the world. In Patterson v. Walgreens, Justices Alito, Thomas, and Gorsuch signaled they wish to revisit Hardison. And I am aware of at least one petition that squarely presents this question: Dalberiste v. GLE Associates Inc. The case was initially distributed for conference on 10/9, and has been rescheduled three more times. Perhaps a Justice is preparing another dissent from denial. Or there is some chicanery behind the scenes over whether to grant this term. If Justice Barrett is willing to give a courtesy fourth, the Court could decide the issue this year.

If the Court overrules Hardison, Justice Gorsuch would vote to reverse a precedent authored by his former boss. I am not aware of a Justice who has expressly voted to nullify a precedent his former employer wrote. The closest example I can think of is Dames & Moore v. Regan, in which Justice Rehnquist watered down Justice Jackson’s Youngstown framework. Perhaps Gorsuch and Kavanaugh will one day reverse a Kennedy precedent. Or ACB could overrule a Scalia precedent. I don’t think there are any Goldberg or Marshall precedents on the chopping block for Breyer or Kagan.

from Latest – Reason.com https://ift.tt/37qS5G7
via IFTTT

Can Private Employers Mandate COVID Vaccines?

The EEOC released guidance stating that private employers can generally mandate that employees get the COVID-19 vaccine. There are two likely types of exemptions. First, there may be some disability-related justifications that would exempt a person from a vaccine-mandate. Second, there may be some religious-related justifications that would exempt a person from the vaccine-mandate. EEOC offers this FAQ:

K.6. If an employer requires vaccinations when they are available, how should it respond to an employee who indicates that he or she is unable to receive a COVID-19 vaccination because of a sincerely held religious practice or belief? (12/16/20)

Once an employer is on notice that an employee’s sincerely held religious belief, practice, or observance prevents the employee from receiving the vaccination, the employer must provide a reasonable accommodation for the religious belief, practice, or observance unless it would pose an undue hardship under Title VII of the Civil Rights Act.  Courts have defined “undue hardship” under Title VII as having more than a de minimis cost or burden on the employer. EEOC guidance explains that because the definition of religion is broad and protects beliefs, practices, and observances with which the employer may be unfamiliar, the employer should ordinarily assume that an employee’s request for religious accommodation is based on a sincerely held religious belief.  If, however, an employee requests a religious accommodation, and an employer has an objective basis for questioning either the religious nature or the sincerity of a particular belief, practice, or observance, the employer would be justified in requesting additional supporting information.

Here, EEOC is relying on TWA v. Hardison (1977). Justice White’s majority opinion found that religious exemptions that create “more than a de minimis cost” are an “undue hardship,” and need not be granted. But this precedent may not be long for the world. In Patterson v. Walgreens, Justices Alito, Thomas, and Gorsuch signaled they wish to revisit Hardison. And I am aware of at least one petition that squarely presents this question: Dalberiste v. GLE Associates Inc. The case was initially distributed for conference on 10/9, and has been rescheduled three more times. Perhaps a Justice is preparing another dissent from denial. Or there is some chicanery behind the scenes over whether to grant this term. If Justice Barrett is willing to give a courtesy fourth, the Court could decide the issue this year.

If the Court overrules Hardison, Justice Gorsuch would vote to reverse a precedent authored by his former boss. I am not aware of a Justice who has expressly voted to nullify a precedent his former employer wrote. The closest example I can think of is Dames & Moore v. Regan, in which Justice Rehnquist watered down Justice Jackson’s Youngstown framework. Perhaps Gorsuch and Kavanaugh will one day reverse a Kennedy precedent. Or ACB could overrule a Scalia precedent. I don’t think there are any Goldberg or Marshall precedents on the chopping block for Breyer or Kagan.

from Latest – Reason.com https://ift.tt/37qS5G7
via IFTTT

Continuing Education During COVID-19

agerf107008

There’s no doubt that the COVID-19 pandemic has disrupted childhood education. In many countries, kids have physically returned to school. In others, schools were never closed. Yet in the United States, many public schools have been closed since March, yielding disastrous results for millions of kids. While scientific data say it’s safe to bring them back, incentives in the school systems are such that many kids continue to be locked up at home rather than receiving a proper education.

A school’s main role is to educate children. They can feed low-income children and supply day care for working parents, but these benefits are secondary to providing a quality education to all enrolled children.

The fact that children and their taxpayer parents are consumers in this scenario should guide the decisions made by superintendents and school boards. But that hasn’t been the case since the start of this pandemic.

For many kids, the last academic year’s schooling ended in March rather than in June. Where I live in Arlington County, Virginia, some parents feel as though the students who bothered to show up online weren’t really taught new material. A teacher told me in June that absenteeism was extremely high, which isn’t surprising given that kids knew there would be no consequences.

Making matters worse, after the summer break, our Arlington schools were hardly more prepared for virtual learning than they were following March’s school closings.

Yet for many kids, better preparation wouldn’t make a real difference. How do you realistically educate kindergarteners and elementary school students virtually? In Arlington, it took months for the superintendent to allow teachers to teach from their classroom, depriving them of the educational tools we taxpayers have paid for and forcing them to improvise, often poorly. How do you provide adequate online instruction for students with disabilities? What about students whose native language isn’t English? Even under the best of circumstances, the education is lacking.

When schools closed in March, there were many unknowns. But the latest research supports the fact that this instructional dysfunction is unnecessary. Experts now know that locking children at home doesn’t keep people safe from COVID-19’s infectiousness or mortality, and sending them to school doesn’t carry much risk either. Studies that looked at the reopening of German schools found that “neither the summer closures nor the closures in the fall have had any significant containing effect on the spread of SARS-CoV-2 among children or any spill-over effect on older generations.” The investigators also didn’t “find any evidence that the return to school at full capacity after the summer holidays increased infections among children or adults.”

The largest study to be published on the issue so far, using data from the United Kingdom, finds no increase in severe coronavirus-related outcomes for adults living with children who go to school. It demonstrated a small increase in infections, which didn’t result in any noticeable bad outcomes.

Since our school closed, many parents, including some from the 800 members of the nonpartisan Arlington Parents for Education coalition (where I’m also a member), emailed school officials to alert them to these studies. But instead, these bureaucrats decided to essentially trap students in their homes, often without adult supervision. Failing grades, collapsing math skills, increased educational gaps, and mental health issues are the results. And for all the pandering in Arlington County about equity, the most affected students were precisely those lower-income and disabled children.

Some educators would like to go back, but their voices are drowned out by the voices who claim that going back is unsafe. The media shares some of the blame for these fears. A new study by Dartmouth economist Bruce Sacerdote and two other researchers looked at news stories about COVID-19 and found that the coverage of school reopenings was “overwhelmingly negative, while the scientific literature tells a more optimistic story,” about how “schools have not become the super-spreaders many feared.”

But that’s not the whole story. The superintendent and the school board members have little incentive to change their performance since they won’t be held accountable for this fiasco—not even when faced with a roughly 2,500 drop in projected versus actual Pre-K-12 enrollment in Arlington Public Schools since March. Unlike private employees who would fear for their jobs were they responsible for the loss of paying consumers, these bureaucrats have little to fear.

The pandemic has exposed many problems with American society. Let’s use this opportunity to address some of the chronic ones we’re seeing in government-supplied K-12 schooling.

COPYRIGHT 2020 CREATORS.COM

from Latest – Reason.com https://ift.tt/3mreMy3
via IFTTT

Continuing Education During COVID-19

agerf107008

There’s no doubt that the COVID-19 pandemic has disrupted childhood education. In many countries, kids have physically returned to school. In others, schools were never closed. Yet in the United States, many public schools have been closed since March, yielding disastrous results for millions of kids. While scientific data say it’s safe to bring them back, incentives in the school systems are such that many kids continue to be locked up at home rather than receiving a proper education.

A school’s main role is to educate children. They can feed low-income children and supply day care for working parents, but these benefits are secondary to providing a quality education to all enrolled children.

The fact that children and their taxpayer parents are consumers in this scenario should guide the decisions made by superintendents and school boards. But that hasn’t been the case since the start of this pandemic.

For many kids, the last academic year’s schooling ended in March rather than in June. Where I live in Arlington County, Virginia, some parents feel as though the students who bothered to show up online weren’t really taught new material. A teacher told me in June that absenteeism was extremely high, which isn’t surprising given that kids knew there would be no consequences.

Making matters worse, after the summer break, our Arlington schools were hardly more prepared for virtual learning than they were following March’s school closings.

Yet for many kids, better preparation wouldn’t make a real difference. How do you realistically educate kindergarteners and elementary school students virtually? In Arlington, it took months for the superintendent to allow teachers to teach from their classroom, depriving them of the educational tools we taxpayers have paid for and forcing them to improvise, often poorly. How do you provide adequate online instruction for students with disabilities? What about students whose native language isn’t English? Even under the best of circumstances, the education is lacking.

When schools closed in March, there were many unknowns. But the latest research supports the fact that this instructional dysfunction is unnecessary. Experts now know that locking children at home doesn’t keep people safe from COVID-19’s infectiousness or mortality, and sending them to school doesn’t carry much risk either. Studies that looked at the reopening of German schools found that “neither the summer closures nor the closures in the fall have had any significant containing effect on the spread of SARS-CoV-2 among children or any spill-over effect on older generations.” The investigators also didn’t “find any evidence that the return to school at full capacity after the summer holidays increased infections among children or adults.”

The largest study to be published on the issue so far, using data from the United Kingdom, finds no increase in severe coronavirus-related outcomes for adults living with children who go to school. It demonstrated a small increase in infections, which didn’t result in any noticeable bad outcomes.

Since our school closed, many parents, including some from the 800 members of the nonpartisan Arlington Parents for Education coalition (where I’m also a member), emailed school officials to alert them to these studies. But instead, these bureaucrats decided to essentially trap students in their homes, often without adult supervision. Failing grades, collapsing math skills, increased educational gaps, and mental health issues are the results. And for all the pandering in Arlington County about equity, the most affected students were precisely those lower-income and disabled children.

Some educators would like to go back, but their voices are drowned out by the voices who claim that going back is unsafe. The media shares some of the blame for these fears. A new study by Dartmouth economist Bruce Sacerdote and two other researchers looked at news stories about COVID-19 and found that the coverage of school reopenings was “overwhelmingly negative, while the scientific literature tells a more optimistic story,” about how “schools have not become the super-spreaders many feared.”

But that’s not the whole story. The superintendent and the school board members have little incentive to change their performance since they won’t be held accountable for this fiasco—not even when faced with a roughly 2,500 drop in projected versus actual Pre-K-12 enrollment in Arlington Public Schools since March. Unlike private employees who would fear for their jobs were they responsible for the loss of paying consumers, these bureaucrats have little to fear.

The pandemic has exposed many problems with American society. Let’s use this opportunity to address some of the chronic ones we’re seeing in government-supplied K-12 schooling.

COPYRIGHT 2020 CREATORS.COM

from Latest – Reason.com https://ift.tt/3mreMy3
via IFTTT

Trump Can’t Live Full-Time at Mar-A-Lago Because of 1993 Covenant

In 1993 Donald Trump reached a “use agreement” with Palm Beach Florida that restricted the use of Mar-A-Lago. This document appears to be a covenant. Article II, titled “Club use,” imposes restrictions on the use of the guest suites on the property:

The use of guest suites shall be limited to a maximum of three (3) non-consecutive seven (7) day periods by any one member during the year.

Generally, Article II empowers Trump. Here, it restricts him. In other words, a member can only live in a guest suit for three, non-consecutive one-week periods. The intent here is to prevent Mar-A-Lago from being used as a permanent home. Or, to put it in Property lingo, Orangeacre shall not be used for residential purposes. (Blackacre just didn’t seem to fit here). And, the document was signed by President Donald J. Trump. (President of the Mar-A-Lago Club, Inc., that is).

President Trump has announced that he plans to live in Mar-A-Lago after he leaves the White House (on or about January 20, 2021).

Now, neighbors have complained, and seek the enforcement of the covenant:

Neighbors of Mar-a-Lago sent a letter to the Town of Palm Beach and the U.S. Secret Service on Tuesday complaining that Mr. Trump has violated the 1993 agreement he made with the town that allowed him to convert the property to a moneymaking club.

“Per the use agreement of 1993, Mar-a-Lago is a social club, and no one may reside on the property,” wrote Reginald Stambaugh, a lawyer representing the DeMoss family, which has a property next to Mar-a-Lago.

“To avoid an embarrassing situation for everyone and to give the president time to make other living arrangements in the area, we trust you will work with his team to remind them of the use agreement parameters,” Mr. Stambaugh wrote. “Palm Beach has many lovely estates for sale, and surely he can find one which meets his needs.”

Construction has been done on the president’s residential quarters at the club, where Mr. Trump is expected to spend the Christmas holiday and which Mr. Stambaugh argued already violates the use agreement.

According to the Washington Post, the town has failed to enforce the covenant over the years. For example, Palm Beach has not imposed restrictions on how many days the President has stayed there–including over Christmas break. Also, the town has allowed the installation of a helipad for Marine One–an addition that would be prohibited by the covenant. And, the club does not seem to be limiting 50% of its members to Palm Beach residents, as the agreement requires.

Perhaps Trump could argue that the covenant cannot be enforced based on the doctrine of acquiescence? That is, Palm Beach failed to enforce the restrictions of the covenant for so long, it cannot now sue to enforce the agreement.

Go figure. We will see Article II litigation concerning President Trump even after he leaves office.

from Latest – Reason.com https://ift.tt/3mzHcWR
via IFTTT

Any Tips for Video Parties?

Any suggestions for how best to do a video party (not just a small-group video conversation)? Since it’s hard to have good video conversations with more than 6 people at once (or maybe even more than 4), the party would at least need a breakout room feature, where people can choose to join one group and then move on to others.

I was thinking of doing it by Zoom, setting the option letting people join the breakout room they choose. But are there other platforms that are better? I noticed Evite has configured one; do any of you have experience with it? Are there other tips beyond just what platform and configuration to choose? Let us all know!

from Latest – Reason.com https://ift.tt/2KyOoVy
via IFTTT

The Case for Paying College Athletes

NCAA

Earlier today, the Supreme Court decided to hear NCAA v. Alston, a case challenging the legality of NCAA rules barring most compensation for college athletes:

The Supreme Court will hear a landmark antitrust case against the NCAA that could upend the business model for college sports by allowing colleges to compensate student athletes.

The high court said Wednesday that it will hear appeals filed by the NCAA and one of its member conferences over a May decision that found the group’s limits on player compensation violate antitrust law…

A group of current and former players challenged the NCAA rules that prohibit athletes from accepting money or other forms of compensation. Following a 2019 trial, a federal judge found the restrictions anti-competitive and said the NCAA must allow colleges to offer student athletes education-related benefits, such as graduate school scholarships, study abroad opportunities or computers for educational use.

The U.S. Court of Appeals for the 9th Circuit affirmed that decision earlier this year.

Economists have long argued that the NCAA rules barring compensation for athletes are essentially a thinly veiled cartel, complete with severe punishment for defecting participants, all the way up to the “death penalty.” The main difference with other cartels is that the NCAA system has better PR, and has thereby managed to persuade many people that they are actually serving the public interest by promoting tradition and protecting the integrity of “student athletes.” That said, I don’t know enough about antitrust law to know who should prevail on the legal issues in the case. I will leave those questions to others with greater relevant expertise.

Legal issues aside, however, there is a strong policy rationale for ending restrictions on student athletes compensation. I summarized it back in 2010 and 2011, building on earlier pieces by economists David Henderson and Nobel Prize winner Gary Becker. Most of what they and I said remains relevant today. As Henderson put it:

The NCAA runs a tightly controlled cartel whose “profits” go to colleges and coaches. It’s not simply a private cartel but one backed by government force. Armen Alchian and William Allen, in their 1964 textbook, University Economics, were the first people I know to point this out. They pointed out that those colleges that decided to pay athletes would find their academic accreditation at risk. So why don’t new schools sense a profit to made and then enter and compete players away by paying them? Alchian and Allen answer: “[N]o new school could get subsidies from the state or major philanthropic foundations without recognition by the present accreditation group.” They add, “We have finally arrived at the source of the value of membership in the NCAA and related organizations: subsidized education.”

One could argue, “Well, the student athletes will cash in on their skills later when they go on to become professional athletes.” Not so, as the NCAA admits in its advertising [noting that most players don’t go on to professional careers].

Becker added:

The toughest competition for basketball and football players occurs at the Division I level. These sports have both large attendances at games-sometimes, more than 100,000 persons attend college football games- and widespread television coverage…. Absent the rules enforced by the NCAA, the competition for players would stiffen, especially for the big stars…

To avoid that outcome, the NCAA sharply limits the number of athletic scholarships, and even more importantly, limits the size of the scholarships that schools can offer the best players….

It is impossible for an outsider to look at these rules without concluding that their main aim is to make the NCAA an effective cartel that severely constrains competition among schools for players. The NCAA defends these rules by claiming that their main purpose is to prevent exploitation of student-athletes, to provide a more equitable system of recruitment that enables many colleges to maintain football and basketball programs and actively search for athletes, and to insure that the athletes become students as well as athletes.

Unfortunately for the NCAA, the facts are blatantly inconsistent with these defenses….

A large fraction of the Division I players in basketball and football, the two big money sports, are recruited from poor families; many of them are African-Americans from inner cities and rural areas. Every restriction on the size of scholarships that can be given to athletes in these sports usually takes money away from poor athletes and their families, and in effect transfers these resources to richer students in the form of lower tuition and cheaper tickets for games…

 

A few of my own thoughts from those earlier posts:

[T]he NCAA cartel is not just a private arrangement. It is propped up by the federal government, which uses the threat of denying federal funding to force schools to comply with cartel rules. If this federal intervention were lifted, the cartel might well fall apart…

The traditional NCAA response to such criticism is that the players are “scholar-athletes” who get compensated with education. This is probably true for many college athletes in lesser-known sports. In Division I football and basketball however, the players are essentially full-time professionals. Most of them have little time to spend on their studies, and many have academic credentials far weaker than those of the regular students at their schools. Few people can do well academically if placed at an institution where their credentials are far below the norm and they had to work at a demanding full-time job at the same time.

I don’t believe that student athletes are morally entitled to be paid for playing. If no one wants to pay to watch them, I have no objection. The reality, however, is that there is a high demand for their services which is being artificially suppressed by government coercion. Indeed, some schools and boosters pay players under the table despite the threat of severe NCAA sanctions if they get caught.

Another particularly galling element of the NCAA cartel system is the way in which it is surrounded by a veneer of righteousness. The NCAA has managed to persuade the media and most of the public that the real bad guys are actually those schools that try to undermine the cartel and pay their players at something more closely resembling market rates. Few people seem to care that most of the athletes who get shortchanged are poor minorities who are being deprived of a key opportunity to create a nest egg for their future. As [David] Henderson points out, only a small percentage of them go on to make big bucks in the pros.

There is a conceptually simple, though politically difficult, solution to this problem. The government should withdraw its support for the NCAA cartel. Universities will gradually stop pretending that Division I football and basketball players are primarily students, and start treating them as the employees they actually are. The players will get paid for their work, and they and the universities won’t have to waste time and money forcing players to attend bogus classes in order to keep up appearances. Those who have the desire and academic credentials to do real coursework should of course be allowed to do so….

It’s also worth noting that the same universities who loudly condemn the very thought of paying players often pay huge salaries to coaches and athletic administrators. I don’t begrudge these people their riches. But it seems strange to claim that paying players any salary at all will somehow sully the academic ethos, while simultaneously contending that there’s nothing wrong with paying big bucks to Mike Krzyzewski or Jerry Tarkanian.

If the Supreme Court rules against the NCAA, perhaps things will move in the direction I advocated. It is also possible that some universities will reconsider whether it is actually desirable for academic institutions to be so heavily involved in what are essentially professional sports.

UPDATE: It’s perhaps worth noting that this is the second time in three years that the NCAA will have a major case before the Supreme Court. In 2018, the NCAA (along with the Trump administration and various professional sports leagues) was on the losing side in Murphy v. NCAA, a major victory for constitutional federalism and for sanctuary cities.

from Latest – Reason.com https://ift.tt/3gRY61A
via IFTTT