Category Archives: Econ & Money

I have been interested for a while in the ways that financial trade associations seek to influence the law, particularly in the context of international financial markets and transactions. This week I am working on my draft of a paper called Private International Law-Making for the Financial Markets which I am going to talk about at the Law & Society Conference in Las Vegas. I have been noticing the ways in which financial trade associations (such as the Bond Market Association and the Securities Industry Association) work together and separately in commenting on proposed regulations.

Last week I saw that CMS Cameron McKenna is inviting people to respond to a survey about the UK Government's proposed Corporate Manslaughter Bill (this proposal is from before the recent election but the new Government proposes to introduce a Bill). The English rules on corporate liability for manslaughter are currently very restrictive. A company is only criminally liable for manslaughter where a “directing mind” of the company was liable for manslaughter. It is difficult to succeed in prosecuting a large company for manslaughter because even if there is one person who is the directing mind that person is likely to be far removed from the people who may be responsible for causing others' deaths.

CMS Cameron McKenna is a law firm, not a financial trade association, and the topic it is inviting comments on is not really directly an international finance topic (although the statute would, if enacted in the form proposed in March, affect the criminal liability of foreign corporations). But CMS Cameron McKenna's invitation to comment on the Government's proposals is an invitation to comment to the firm (which states on its web site that it is preparing a response to the government's consultation) rather than to the Home Office (which published the draft Bill in March). The survey document does not seem to invite responses from those who approve of the idea of increasing the risks of corporate criminal liability. For example, one question asks:

Do you believe the proposed new offence could encourage risk averse behaviour and bureaucratic systems?

Another question asks:

Will those industries which are traditionally exposed to health and safety issues struggle to attract top-level managerial talent in the face of corporate manslaughter prosecutions?

The email on CMS Cameron McKenna's list (although not the web page) suggested that the firm was preparing a response to the consultation on behalf of the CBI (Confederation of British Industry) which expressed reservations about an earlier proposal to expand corporate criminal liability, and in its response to the Queen's Speech said

If the government is going to press ahead on corporate manslaughter, it must ensure that the legislation is fair. The grossly negligent must be separated from genuinely responsible employers who do everything possible to ensure safety.

If the eventual response is published in the CBI's name I'd have no problem with this, but if it is to be published in the law firm's name I would have some problems because of the skewed nature of the survey questions and because I would think that people (in the UK) might think that a law firm would be more neutral on such questions than the CBI. But then perhaps my views about how the legal profession should behave are old-fashioned?

Almost Unnoticed, Bipartisan Budget Anxiety: There were no cameras, not a single microphone, and no evidence of a lawmaker or Bush administration official in the room …

With startling unanimity, they agreed that without some combination of big tax increases and major cuts in Medicare, Social Security and most other spending, the country will fall victim to the huge debt and soaring interest rates that collapsed Argentina's economy and caused riots in its streets a few years ago.

“The only thing the United States is able to do a little after 2040 is pay interest on massive and growing federal debt,” Walker said. “The model blows up in the mid-2040s. What does that mean? Argentina.”

…

The unity of the bespectacled presenters was impressive — and it made their conclusion all the more depressing. As Ron Haskins, a former Bush White House official and current Brookings scholar, said when introducing the thinkers: “If Heritage and Brookings agree on something, there must be something to it.”

This time around the “fiddling” is the other sort.

Lots of stacatto blogging this busy week.

Kevin Hayden has a very interesting chart with A Surprising Find in the List of Median Income By State…and some thoughts about its political significance.

On the subject of interesting charts, I also commend to you Angry Bear's discussion of the US savings rate, How Low Can It Go?”. It's not a pretty picture. Ideas about how to invest one's pennies to ride out the coming train wreck gratefully received.

My friend Brad DeLong has a warm review of Richard Parker's, John Kenneth Galbraith: His Life, His Politics, His Economics in, of all places, Foreign Affairs.

It's clear Brad likes Galbraith's work, and up to a point I do too. But in my mind the work is inescapably tarred by my one meeting with the man, and ironically it has everything to do with foreign affairs.

Continue reading →

Brad DeLong says he is cranky today.

Brad DeLong's Website: Sigh Greg Mankiw: I am cranky, and annoyed. And I am not asking for very much. All I want is:

• No more claims that we know that carving-out Social Security revenues to fund private accounts will have no damaging effect on national saving. It might work. It might not.
• No more claims that the U.S. is a small open economy. It isn't.
• No more claims that there is no reason to think that slower economic growth will carry lower asset returns with it. There are good reasons to fear this.
• No more claims that the household employment survey is as good a guide to short-term labor market trends as the establishment survey. It isn't.
• No more claims that an honest forecast of what George W. Bush's policies are sees the deficit cut in half by the end of this decade. It doesn't.

I think Brad should be cranky more often. But then I don't have to live with him.