Rewriting the Constitution: An Economic Analysis of the Constitutional Amendment Process

In this Article, the authors develop an economic theory of the constitutional amendment process under Article V, focusing particularly on the roles that Congress and interest groups play in that process. The authors construct a model to predict when an interest group will seek an amendment rather than a statute to further its interests, highlighting how interest group maintenance costs and anticipated opposition affect that choice. They then discuss the efficiency goals of constitutionalism—precommitment and reduction of agency costs—and argue that the structure of the amendment process under Article V prevents realization of these goals. The authors contrast the Bill of Rights amendments, which established precommitments and reduced the agency costs of government, with the latter seventeen amendments, which expanded the federal government and increased agency costs. They attribute the change in the nature of the amendments to the interest-group domination of the political process and Congress\u27 control over the constitutional amendment agenda. The authors conclude that the Founders\u27 intent to put the Constitution beyond the reach of factions backfired: although factions cannot control the content of the Constitution, neither can the majority. In fact, Article V prevents the majority from precommiting itself and hinders its ability to control the agency costs of government, as evidenced by the history of the failed amendments. Although the authors conclude that Article V thwarts the efficiency goals of constitutionalism, they predict that little can be done to remedy this flaw

21-cm signatures of residual HI inside cosmic HII regions during reionization

We investigate the impact of sinks of ionizing radiation on the reionization-era 21-cm signal, focusing on 1-point statistics. We consider sinks in both the intergalactic medium and inside galaxies. At a fixed filling factor of HII regions, sinks will have two main effects on the 21-cm morphology: (i) as inhomogeneous absorbers of ionizing photons they result in smaller and more widespread cosmic HII patches; and (ii) as reservoirs of neutral gas they contribute a non-zero 21-cm signal in otherwise ionized regions. Both effects damp the contrast between neutral and ionized patches during reionization, making detection of the epoch of reionization with 21-cm interferometry more challenging. Here we systematically investigate these effects using the latest semi-numerical simulations. We find that sinks dramatically suppress the peak in the redshift evolution of the variance, corresponding to the midpoint of reionization. As previously predicted, skewness changes sign at midpoint, but the fluctuations in the residual HI suppress a late-time rise. Furthermore, large levels of residual HI dramatically alter the evolution of the variance, skewness and power spectrum from that seen at lower levels. In general, the evolution of the large-scale modes provides a better, cleaner, higher signal-to-noise probe of reionization.Comment: Minor edits to agree with MNRAS published versio

Constitutional Federalism, Individual Liberty, and the Securities Litigation Uniform Standards Act of 1998

Part I provides background on the historical development of constitutional federalism, the Supreme Court’s decisions in this area, and the apparent demise of constitutional limits on federal power. Part II then reviews the Court’s revival of constitutional federalism over the last decade. Part III focuses on the Court’s decisions applying the principles of constitutional federalism to state courts. Part IV provides background to Congress’s enactment of the Uniform Act and explains why it adopted the form of preemption that it did

Who Cares?

Jim Cox and Randall Thomas have identified an interesting phenomenon in their contribution to this symposium: institutional investors seem to be systematically “leaving money on the table” in securities fraud class actions. For someone who approaches legal questions from an economic perspective, the initial response to this claim is disbelief. As the joke goes, economists do not bend over to pick up twenty-dollar bills on the street. The economist knows that the twenty dollars must be an illusion. In a world of rational actors, someone else already would have picked up that twenty-dollar bill, so the effort spent bending over would be a waste. But Cox and Thomas provide persuasive evidence that the overwhelming majority of institutional investors cannot be bothered to file claims that would allow them to recover their share of the settlement in securities class actions. Should we care that institutional investors do not care? Cox and Thomas also make a persuasive case that institutional managers who fail to file claims in settled securities class actions are violating their fiduciary duties. Filing a claim is a purely ministerial task. Even if the settlement is modest, the return from filing the claim is likely to far exceed the costs. The question of compensation versus deterrence is not a purely academic one. Post-Enron, Congress is considering a variety of bills that would roll back the limitations imposed by the Private Securities Litigation Reform Act and expand the ability of investors to recover their losses through securities class actions. Legislators would do well to assess any such reform proposals against the standard of deterrence. Reforms geared toward enhancing compensation should be left on the table

Insider Trading Law and the Ambiguous Quest for Edge

A review of Sheelah Kolhatkar, Black Edge

Revisiting “Truth in Securities” Revisited: Abolishing IPOs and Harnessing Private Markets in the Public Good

This article\u27s focus is the idea that the transition between private- and public company status could be less bumpy if we unify the public–private dividing line under the Securities Act and Exchange Act. Part II of this article outlines the current public–private dividing lines under the Securities Act and the Exchange Act. This part also explores Facebook’s recent transition from private to public status under that framework, as well as Congress’s recent intervention in the field with the JOBS Act. Part III explores the problems of making the transition from private to public, focusing on IPOs and their role in capital allocation. This part uses Facebook’s IPO as both an illustration and as a cautionary tale. Part IV sketches an alternative to the current regulatory framework based on the two-tier-market proposal summarized above. Part V concludes

Justice Lewis F. Powell, Jr., and the Counterrevolution in the Federal Securities Laws

The confirmation of Lewis F. Powell, Jr., to the Supreme Court coincided with a dramatic shift in the Court\u27s approach to securities law. This Article documents Powell\u27s influence in changing the Court\u27s direction in securities law. Powell\u27s influence was the product of his extensive experience with the securities laws as a corporate lawyer, which gave him much greater familiarity with that body of law than his fellow Justices had. That experience also made him skeptical of civil liability, particularly class and derivative actions. Powell\u27s skepticism led him to interpret the securities law in a consistently narrow fashion to reduce liability exposure and increase predictability. Powell also rebuffed the Securities and Exchange Commission\u27s efforts to expand its reach, most notably in insider trading and takeover regulation. Powell\u27s experience and interest brought a halt to the continuing expansion of the federal securities law