Archive | New Class

NY appellate court rules 5-0 against Bloomberg soda ban

The First Department of the Appellate Division of the New York Supreme Court has ruled 5-0 against NYC Mayor Michael Bloomberg’s soda ban, in the case of  In re New York Statewide Coalition of Hispanic Chambers of Commerce, et al. v. The New York City Department of Health and Mental Hygiene, et al. (The Hispanic Chambers opinion begins on page 22, following two other opinions released the same day.)

In New York State, the trial courts of general jurisdiction are the Supreme Court. The intermediate courts of appeal are the Appellate Division, which are divided into four geographic Departments, similar to the U.S. Circuit Courts of Appeal. The highest court is the Court of Appeals. Thus, Mayor Bloomberg has the option of trying to bring the case to the Court of Appeals.

The Appellate Division’s decision is quite straightforward: “[T]he Board [of Health] did not bring any scientific or health expertise to bear in creating the Portion Cap Rule. Indeed, the rule was drafted, written and proposed by the Office of the Mayor and submitted to the Board, which enacted it without substantive changes.” If the Board’s ban on the sale of sodas larger than 16 ounces were actually a health rule (similar, for example, to a ban on the sale of infected meat), there would not be so many exemptions for certain types of vendors.

The Appellate Division applied the four-part separation of powers test from Boreali v Axelrod, 71 NY2d 1 (1989). The Appellate Division summarized the four Boreali factors:

First, Boreali found the PHC [Public Health Council] had engaged in the balancing of competing concerns of public health and economic costs, “acting solely on [its] own ideas of sound public policy”. Second, the PHC did not engage in the “interstitial” rule making typical of administrative

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Nearing the end of the search for the non-existent limiting principles

With the Supreme Court probably voting on the constitutionality of Obamacare (a term the President proudly embraces) on Friday, the health control law’s academic friends are diligently attempting to do what the entire United States Department of Justice could not do after two years of litigation: articulate plausible limiting principles for the individual mandate. Over at Balkinization, Neil Siegel offers Five Limiting Principles. They are:

1. The Necessary and Proper Clause. “Unlike other purchase mandates, including every hypothetical at oral argument on Tuesday, the minimum coverage provision prevents the unraveling of a market that Congress has clear authority to regulate.” This is no limitation at all. Under modern doctrine, Congress has the authority to regulate almost every market. If Congress enacts regulations that are extremely harmful to that market, such as imposing price controls (a/k/a “community rating”) or requiring sellers to sell products at far below cost to some customers (e.g., “guaranteed issue”) then the market will probably “unravel” (that is, the companies will lose so much money that they go out of business). So to prevent the companies from being destroyed, Congress forces other consumers to buy products from those companies at vastly excessive prices (e.g., $5,000 for an individual policy for a health 35-year-old whose actuarial expenditures for health care of all sorts during a year is $845).

So Siegel’s argument is really an anti-limiting principle: if Congress imposes ruinous price controls on  a market, to help favored consumers, then Congress can try to save the market’s producers by mandating that disfavored consumers buy overpriced products from those producers.

2. The Commerce Clause. “The minimum coverage provision addresses economic problems, not merely social problems that do not involve markets.” This is true, and is, as Siegel points out, a distinction from Lopez (carrying guns) and Morrison (gender-related [...]

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Coasean-Style Praise for the ‘Coherence’ of Institutions – Hayekian Praise, Too!

One further comment, while I’m thinking of Chris Caldwell.  He is, after all, a reminder that there are journalists who are much smarter, intellectual, and certainly better read than most academics, including me.  We had lunch recently, while he was working on his euro-zone essay.  I was then ordering books for my spring law and economics class, and he saw the copy of that elegant collection of essays by Ronald Coase, The Firm, the Market, and the Law.

It was a telling detail that Christopher remarked on how much he admired Coase’s essays on the reasons why there are firms and institutions.  Not “The Problem of Social Cost,” but the essays seeking to set out the conditions under which the endless succession of market transactions cannot do what an institution, hierarchically organized and top down in its authority and ordering, is able to do.

Like Christopher, I find that the fundamental intellectual problem of democracies today is less the value and legitimacy of the market and the price mechanism, but instead the problem of ‘coherent institutions’ in the sense that Coase sought to draw out in his essays on the industrial firm.  I realize that this sounds strange, given that I quite share the view of many that the current administration’s policies are deeply anti-market.  The anti-market behaviors, however, have not done much to undermine the sense of its legitimacy or its relationship to fundamental freedom of choice (the individual mandate notwithstanding).  Whether I am right or wrong about that, I persist in thinking that the more fundamental problem is  instead how one achieves coherence in a complicated democracy for certain matters for which one needs institutions that can achieves the long term stability and settlement in order to engage in long run and strategic behavior.

At this particular [...]

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Obama Endorses India for Permanent Security Council Seat, and a Note on Disaggregation of the State and the Globalized New Class

News services report that President Obama, speaking to the Indian Parliament, has endorsed India receiving a permanent seat on the UN Security Council. The AP story adds that this was the biggest applause line in the speech, fully consonant with the rise of Indian nationalism within India, and its rapidly increasing sense of importance in the broader world. What of this nationalism? And the rise of national pride of place among the newly rising great powers, not just India?

I continue to find mystifying the Western academic international law world’s infatuation with the ideals of the diminishing importance of states and membership in states. Particularly when that mostly seems to refer not to a universal aspiration, but only to the inability of the leading Western-states-in-decline to persuade themselves to exercise the coherence that makes states socially useful – and that largely through the cultural and class predilections of the elite political classes of those societies. When are we going to see proper analytic attention to the Globalized New Class as a phenomenon? In any event, the rising new powers understand that states are about coherence, and that the constant struggle of most states, most of the time, is to remain coherent and prevent “disaggregation” of the state into internal groups of power and “public choice” struggles for primacy and the resources of politics to economic ends.

Disaggregation is attractive to many Western intellectuals, I’d suggest, however, because our species-being, so to speak, has gradually come to be purely contractual free agency. We gave up on any kind of “fiduciary professional” model of the intellectual when we discovered that we could leverage our knowledge skills, at least until China and India caught up, across a needy global economy. It required freeing ourselves from the strictures of local communities; but the [...]

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