What Is the Point of the SEC ECPA-Reform Power Grab?

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Last week, the Senate Judiciary Committee had a hearing on Electronic Communication Privacy Act reform, the main goal of which is to provide protection for content served on a third party’s server. Because reform is looking more inevitable in Congress (the House version of the bill has more sponsors than any other), government agencies used the hearing as an opportunity to present their wish list for the bill. That includes asking for an expansion of the status quo for civil agencies, with witnesses from SEC, DOJ, and FTC testifying (DOJ also made some other requests that I hope to return to).

Effectively, the civil agencies want to create some kind of court order that will provide them access to stored content. A number of the agencies’ witnesses — especially SEC’s Andrew Ceresney — claimed that a warrant is the same as an order, which culminated in Sheldon Whitehouse arguing (after 45:30) that an order requiring court review is actually less intrusive than a warrant because the latter is conducted ex parte.

It took until CDT policy counsel (and former ACLU lawyer) Chris Calabrese to explain why that’s not true (after 2:08):

We have conflated two really different and very different things in this committee today. One is a court, some kind of court based on a subpoena and one is a probable cause warrant. These are not the same thing. A subpoena gives you access to all information that is relevant. As pursuant, relevant to a civil investigation, a civil infraction. So if you make a mistake on your taxes, that’s a potential civil infraction. Nothing that has been put forward by the SEC would do anything but be a dramatic expansion of their authority to get at ordinary people’s in-boxes. Not just the subjects of investigation, but ordinary folks who may be witnesses. Those people would have the–everything in their in-boxes that was relevant to an investigation, so a dramatic amount of information, as opposed to probable cause of evidence of a crime. That’s a really troubling privacy invasion.

I’m utterly sympathetic with Calabrese’s (and the EFF’s) argument that the bid for some kind of civil investigative order is a power grab designed to bypass probable cause.

But I wonder whether there isn’t another kind of power grab going on as well — a bid to force banks to be investigated in a certain kind of fashion.

It was really hard, to begin with, to have former and (presumably) future Debevoise & Plimpton white collar defense attorney Andrew Ceresney to talk about how seriously SEC takes it job of  “the swift and vigorous pursuit of those who have broken the securities laws through the use of all lawful tools available to us,” as he said in his testimony and during the hearing. There’s just been no evidence of it.

Moreover, as Ceresney admitted, SEC hasn’t tried to obtain email records via an order since the US v. Warshak decision required a warrant in the 6th Circuit, even though SEC believes its approach — getting an order but also providing notice to the target — isn’t governed by Warshak. As SEC Chair Mary Jo White (another revolving door Debevoise & Plimpton white collar defense attorney) said earlier this year,

“We’ve not, to date, to my know­ledge, pro­ceeded to sub­poena the ISPs,” White said. “But that is something that we think is a crit­ic­al au­thor­ity to be able to main­tain, done in the right way and with suf­fi­cient so­li­cit­ous­ness.”

For five years, the SEC hasn’t even tried to use this authority, all while insisting they needed it — even while promising they would remain “solicitous,” if there were any worries about that.

Claims that the SEC needed such authority might be more convincing if SEC was actually pursuing crooks, but there’s little evidence of that.

Which is why I’m interested in this passage, from a letter White sent to Pat Leahy in April 2013 and appended to Ceresney’s testimony, explaining why SEC can’t have DOJ obtain orders for this material.

DOJ only has authority to seek search warrants to advance its own investigations, not SEC investigations. Thus, the Commission cannot request that the DOJ apply for a search warrant on the SEC’s behalf. Second, many SEC investigations of potential civil securities law violations do not involve a parallel criminal investigation, and thus there is no practical potential avenue for obtaining a search warrant in those cases. The large category of cases handled by the SEC without criminal involvement, however, have real investor impact, and are vital to our ability to protect- and, where feasible, make whole – harmed investors.

The only times when SEC would need their fancy new order is if the subject of an investigation refuses to turn information voluntarily, and the threat that they could obtain an order anyway is, according to Ceresney, they key reason SEC wants to maintain this authority (though he didn’t argue the apparent absence of authority has been responsible for SEC’s indolence over the last 5 years). But that act, refusing to cooperate, would get companies more closely into criminal action and — especially under DOJ’s purportedly new policy of demanding that companies offer up their criminal employees — into real risk of forgoing any leniency for cooperation. But White is saying (or was, in 2013, when it was clear Eric Holder’s DOJ wasn’t going to prosecute) that SEC can’t ask DOJ to subpoena something because that would entail a potentially criminal investigation.

Well yeah, that’s the point.

Then add in the presumption here. One problem with prosecuting corporations is they hide their crimes behind attorney-client and trade secret privileges. I presume that’s partly what Sally Yates meant in her new “policy” memo, noting that investigations require a “painstaking review of corporate documents … which may be difficult to collect because of legal restrictions.” SEC’s policy would be designed for maximal privilege claims, because it would involve the subject in the process.

 

If the legislation were so structured, an individual would have the ability to raise with a court any privilege, relevancy, or other concerns before the communications are provided by an ISP, while civil law enforcement would still maintain a limited avenue to access existing electronic communications in appropriate circumstances from ISPs.

 

Other criminals don’t get this treatment. Perhaps the problems posed by financial crime — as well as the necessity for broader relevancy based evidence requests — are unique, though I’m not sure I buy that.

But that does seem to be a presumption behind this SEC power grab: retention of the special treatment financial criminals get that has thus far resulted in their impunity.

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Real Football Is Here Again, Rock The Wheelhouse!

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Okay, rough start for the season in the Pac-12 South. The Devils sucked, and Texas A & M handed them their asses. Really ugly. And some random B1G team, okay, the Mighty Fighting Journalists, whipped, even worse, the Trees of Stanford.

Oh, yes, and there was a “Gronking To Remember” Thursday night. That line came courtesy of Scribe, and it is just about perfect.

So, let’s Gronk & Roll lug nuts!

STUDENT ATHLETES: Man, this pains me to say so, but I must. Urban Meyer and the Ohio State Buckeyes look like one of the most impressive college football teams in history. Doesn’t hurt that they have three quarterbacks that would be capable of leading them to an NCAA National Championship. For all the talk about Saban and Alabama over the last few years, OSU and Meyer are on a plane well above any of that. The rest of college football is currently an afterthought. But watch out for Josh Rosen and the UCLA Bruins. The Sun Devils got their asses handed to them by the Aggies, but I think the Devils will be back. No longer is it only the Quackers at Oregon and that stupid horse at USC in the way though, Rosen and the Bruins are for real.

PROS AND JOES: Forget the Joes, Montana is not walking through that door. But Tom Brady is still here. They talk about the golden age of football, and there is actually some currency to that from my memories as a kid. Say what you will though, the era of Tom Brady and Aaron Rodgers is pretty darn good. After a great regular season, I truly hope they meet in Super Bowl 50. What could be better than that?

Ahem, I hear the Stillers are squawking after their Gronking. Seriously Pittsburghians don’t do that. The Steelers lost fair and square, just like the whiny ass Colts and SeaSqwuaks last year.

Go figure, the Pats remain ruthlessly on top. The only way it could be more apparent is if Tom Brady personally drove his cleats into Roger Goodell’s supine flaccid chest on the way past the goal line in Super Bowl 50. So, here’s to that scene.

A “reader” of this blog sent me a message last night saying that Peyton is nuthin but a “Noodle Arm”.

I could blather on, but why? We don’t know squat about anything this early in the season. But, we will find out! Starting now.

So, here is to yet another football season here in the Wheelhouse! So, let us rock and roll people. Get down to it!

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Can (Should?) DHS Stave Off CISA?

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Yesterday, DHS Secretary Jeh Johnson announced some shifts in the leadership of the National Cybersecurity and Communications Integration Center. The changes don’t amount to much — basically a change in reporting for Dr. Andy Ozment, who is already Assistant Secretary of the Office of Cybersecurity and Communications (though it’s worth noting that Ozment is one of the too-rare people high level in government cybersecurity positions with a technical background). Now, Ozment will report directly to Johnson.

But I am interested in the way DHS is making news, and when.

Last week, Al Franken released the response from DHS he got to some inquiries, notably about how the Cyber Information Sharing Act would affect efforts already underway to share data. Most reporting on it focused on privacy — that’s what Franken himself emphasized — but the letter itself provided far more detail on the information sharing already taking place through NCCIC.

The letter described five different means of sharing information currently in place.

  • In-person information sharing on the National Cybersecurity and Communications Integration Center (NCCIC) watch floor;
  • Bilateral sharing of cyber threat indicators, including via the Cyber Information Sharing and Collaboration Program (CISCP) and through automated sharing and receipt of cyber threat indicators;
  • As-needed information sharing via standing groups;
  • Broad dissemination of alerts and bulletins;
  • Strategic engagement and collaboration.

I was rather curious about the agencies with which NCCIC currently shares data.

  • US Northern Command
  • US Cyber Command
  • National Security Agency
  • Secret Service
  • Immigration and Customers Enforcement
  • Department of the Treasury
  • FBI
  • Department of Energy

This is a different list than the agencies that would automatically receive data under CISA — Commerce (which appears to serve a carrot-and-stick force in such issues) and the Office of Director of National Intelligence would not be on the list.

DHS also claimed to be “beginning to share ‘machine-readable’ cyber threat indicators and notes it will be expanding how many partners it will do so later this year.

Finally, as I noted earlier, DHS said it would take 6 months to implement the information sharing portal envisioned by CISA in place.

All of which is to say that DHS made a bid with this letter to Franken to say (as I interpreted), “we’re sharing data right now, but if CISA passes, not only will Americans get less protection, but it will stall cybersharing for 6 months.”

And now DHS is increasing the profile of its cyber staff.

I’d say all that was just bureaucratic wrangling — and it is that.

Except I think there is an opportunity, given the recess, the increasing calls for more substantive cyber legislation, and the inevitable roadblock once the Senate returns (particularly if, as is happening thus far, Ted Cruz is doing reasonably well or even poorly in the GOP Clown Show and has the incentive to cause headaches for Mitch McConnell in hopes of electoral gain) to present this as information sharing that is already advanced well beyond what CISA would do, and in a way that accomplishes what it is supposed to without the big downsides of CISA. That’s still an outside chance. But increasingly possible and — given how dumb CISA is — probably a better solution.

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Black Lives Matter

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I was at the Netroot Nations candidates session listening to Martin O’Malley with other writers from Emptywheel in a cavernous hall with terrible acoustics and wildly over-amped speakers. We had already heard the moderator tell his story; his high pitched voice was hard on my ears, and the racketing speakers compounded the misery. Suddenly a group of young women entered singing, moved to the front of the hall, and started chanting slogans: Say her Name, and more. I have ear issues, and loud rackety noises make me anxious and irritable. I grumbled about the noise, turned off my hearing aids, then gave up and went to the men’s room for a bit of relief. When I emerged from my sound sanctuary, Bernie Sanders was shouting over the action, the noise was too much and I left.

I can recall three contemporary thoughts: 1. Enough, already, you’ve made your point. 2. Why are you shouting at your friends, people who agree with you. 3 No politicking by Bernie Sanders for me.

After lunch, I retreated to the central hall, and listened to This Week in Blackness. The host interviewed O’Malley and several of the BLM activists. O’Malley was properly apologetic for his use of the phrase “all lives matter”, said he had met privately with the activists, and answered several tough questions, including what he thought he had done wrong as Mayor of Baltimore or as Governor of Maryland. The activists were straightforward and unapologetic, clear and forceful. They all said the action was not directed at the candidates in a personal way. It was a demand that candidates and the people attending NN15 connect directly to real-life issues important to a huge group of activists. They didn’t want just airy planks for some platform, or an explanation of how some group’s standard proposals met their demands. They wanted everyone in the room to understand their specific personal concerns. One of the women said something like: all those candidates have great plans, but I’m afraid I will not be alive to benefit from those plans. I am afraid, she said. I am fearful, she said.

“And I am afraid”, writes Ta-Nehisi Coates in Between the World and Me. He says he always felt fear, and that his parents, his aunts, his uncles, all were afraid. He shows us how that fear drove the parenting of his extended family. He describes his boyhood in a neighborhood of Baltimore. Those of us sleeping, locked into what Coates defines as the Dream of being White, call that part of town “tough” to separate us from that fear. We see his days at Howard, brief intervals of feeling safe, and fear drenching him when he leaves campus. Then he tells us about the horrifying death of his brilliant friend Prince Jones at the hands of a Black police officer.

He describes that fear through the facts of lives, in language better suited to my hearing than the chants of the women of Black Lives Matter, but it goes to the same place in my heart that their explanation does. She, each of them, is right. This isn’t about those politicians, and it isn’t about me or my physical hearing issues. It’s about a group of my fellow citizens who live a life so different from mine that I cannot reconcile it with my own. I understand racism, what Dreamers call structural racism to distance ourselves from it. The Black Lives Matter women led me to Coates’ marvelous book, where I can begin to grasp the fear and its crushing implications. Understanding cannot come from my own writing or thinking, but only from listening to others, exactly as the women of Black Lives Matter demanded.

Sometimes I think that I’ve spent my life unlearning the stories I was taught, and replacing them with something less untrue. But. I refuse to be the old people who forced my generation to impose the Dream of Whiteness on the bodies of the people of Viet Nam. I will not be the old lawyers and judges who called my women colleagues Honey and Sweetie until they passed out of our lives.

And I will try not to be a pseudo-intellectual toad like David Brooks, using a grade-school description of the American Dream of Exceptionalism in his repulsive and deliberate misreading of Coates’ Dream of Whiteness. Neither of those Dreams is worth one more slug of misery for any of my fellow humans.

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Beware the FISCR Fast-Track

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As promised, today ACLU asked the Second Circuit to enjoin the NSA’s collection of their phone records under the renewed phone dragnet.

Accordingly, Plaintiffs respectfully ask that the Court now grant the preliminary relief it refrained from granting in its earlier decision. Specifically, Plaintiffs ask that the Court issue a preliminary injunction (i) barring the government, during the pendency of this suit, from collecting Plaintiffs’ call records under the NSA’s call-records program; (ii) requiring the government, during the pendency of this suit, to quarantine all of Plaintiffs’ call records already collected under the program; and (iii) prohibiting the government, during the pendency of this suit, from querying metadata obtained through the program using any phone number or other identifier associated with them.

The filing offers the Second Circuit to provide an alternative interpretation of the events of early June, one that actually incorporated their earlier opinion as binding. It even flips the ratification argument FISC has long clung to to argue that by not altering the program while taking explicit notice of the Second Circuit decision, Congress had to have been ratifying the Second Circuit’s ruling that bulk collection under Section 215 was unlawful.

In the present context, as in most others, the most reliable indicator of congressional intent is the text of the law. Here, that text admits no ambiguity. It makes clear that Congress intended to leave the government’s surveillance authority with respect to call records unaltered for the 180 days after the passage of the Act.

The FISC seems to have reasoned that Congress must have intended to authorize bulk collection during the transitional period because it did not expressly prohibit it. See id. at 10–11 (“Congress could have prohibited bulk data collection . . . .”). But the FISC has it backwards. In our democracy, the government has only the powers the people have granted it; the question is not what surveillance Congress has proscribed, but what surveillance it has permitted. Moreover, here Congress was legislating in the shadow of this Court’s May 7 opinion, which indicated that this Court—the only appellate court to have construed the statute—would continue to construe the statute to disallow bulk collection unless Congress amended it to expressly authorize such collection. See, e.g., Clapper, 785 F.3d at 818 (stating that the Court would read the statute to authorize bulk collection only if Congress authorized it in “unmistakable language”); id. at 819 (stating that the government’s proposed construction of the statute would require “a clearer signal” from Congress); id. at 821 (indicating that, if Congress wanted to authorize bulk collection under the statute, it would have to do so “unambiguously”); see also id. at 826–27 (Sack, J., concurring).

This Court’s May 7 opinion was cited hundreds of times in the legislative debate that preceded the passage of the Act; it was summarized at length in the committee report; and one senator even read large parts of the opinion into the legislative record. See 161 Cong. Rec. S3331-02 (daily ed. May 31, 2015) (statement of Sen. Rand Paul); H. Rep. No. 114-109, at 8–10 (2015); June 2 Application at 9 n.2 (“Congress was aware of the Second Circuit’s opinion . . . .”). Against this background, it would be bizarre to understand Congress’s “failure” to expressly prohibit bulk collection as an implicit endorsement of it. Indeed, if it has any bearing at all, the doctrine of legislative ratification favors Plaintiffs.

The argument is not entirely convincing, but it has the advantage of being less ridiculous than FISC’s claim that Congress ratified a court ruling that 1) Congress didn’t know about and that 2) FISC had never written up into an opinion.

Ultimately, though, this seems to be an invitation to the Second Circuit to weigh in on FISC’s surly refusal to pay attention to a Circuit Court ruling.

The FISC specifically rejected the reasoning of this Court’s May 7 ruling, writing that it rested “[t]o a considerable extent . . . on mischaracterizations of how [the call-records program] works and on understandings that, if they had once been correct, have been superseded” by the USA Freedom Act. Id. at 16. On the issue of the constitutionality of the call-records program, the FISC judge reaffirmed earlier FISC opinions holding that the issue was controlled by Smith v. Maryland, 442 U.S. 735 (1979), and that the call-records program was, therefore, consistent with the Fourth Amendment.

Of course, we’re faced with a jurisdictional conflict, one discussed at length in a hearing immediately after the Second Circuit ruling.

Sunlight Foundation’s Sean Vitka: Bob, I have like a jurisdictional question that I honestly don’t know the answer to. The Court of Appeals for the Second Circuit. They say that this is unlawful. Obviously there’s the opportunity to appeal to the Supreme Court. But, the FISA Court of Review is also an Appeals Court. Does the FISC have to listen to that opinion if it stands?

Bob Litt: Um, I’m probably not the right person to ask that. I think the answer is no. I don’t think the Second Circuit Court of Appeals has direct authority over the FISA Court. I don’t think it’s any different than a District Court in Idaho wouldn’t have to listen to the Second Circuit’s opinion. It would be something they would take into account. But I don’t think it’s binding upon them.

Vitka: Is there — Does that change at all given that the harms that the Second Circuit acknowledged are felt in that jurisdiction?

Litt: Again, I’m not an expert in appellate jurisdiction. I don’t think that’s relevant to the question of whether the Second Circuit has binding authority over a court that is not within the Second Circuit. I don’t know Patrick if you have a different view on that?

Third Way’s Mieke Eoyang: But the injunction would be, right? If they got to a point where they issued an injunction that would be binding…

Litt: It wouldn’t be binding on the FISA Court. It would be binding on the persons who received the —

Eoyong: On the program itself.

Patrick Toomey: The defendants in the case are the agency officials. And so an injunction issued by the Second Circuit would be directed at those officials.

Because FISC has its own appellate court, the FISA Court of Review (FISCR), it doesn’t have to abide by what the Second Circuit rules, especially not if FISCR issues its own ruling on the same topic.

For that reason, I reiterate my prediction that the FISC may resort to using a provision in the USA F-ReDux to eliminate the Second Circuit’s ability to weigh in here. USA F-ReDux affirmatively permitted the FISC to ask the FISCR to review its own decisions immediately, what I’ve dubbed FISCR Fast Track. It was dubbed, naively, as a way to get appropriate appellate review of the FISC’s secret decisions (yet the provision, as written, never requires any adversary, so it doesn’t address the problems inherent to the FISC). But here, there’s no reason for such secret review and an appellate court has already weighed in.

But that doesn’t mean the government can’t use it.

In other words, if the Second Court rules in a way the FISC doesn’t like (which they already have), if the FISC just wants to reiterate that this is one situation where the FISC gets to override the judgments of appellate courts (which the FISC has already done), or if the FISC just wants to set the precedent that no FISC decision will ever be reviewed by a real court, it can ask the FISCR to weigh in (and given FISC’s refusal to call in a real advocate, the FISCR would even have precedent to blow off that suggestion).

The FISC has the ability to undercut the Second Circuit. And they’ve already shown a desire to do just that.

Beware FISCR Fast Track, because it could really threaten any ability to review these kangaroo court decisions.

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Kuhn and Economics: A Summary

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In a series of posts which you can find here, I have been trying to formulate an answer to the question why has neoliberal economics not been tossed out in the wake of its total failure as demonstrated by the Great Crash. I’ve used as a lens Thomas Kuhn’s seminal essay: The Structure of Scientific Revolutions. I am totally dissatisfied with the usual progressive explanations of bad faith, whether in the form of the ubiquitous quote from Upton Sinclair: “It is difficult to get a man to understand something, when his salary depends on his not understanding it;” or direct or indirect accusations of intellectual dishonesty or corruption. The world is more complex, and we need to think more deeply, especially if we want to change things. Here is a list of the most important things I think I learned from the exercise.

1. Kuhn argues that science cannot proceed without a paradigm. That seems true in the hard sciences, but it seems inadequate as a description of the social sciences. Even so, there it remains an important insight. This series offered insights because I used the paradigm paradigm to examine a specific problem.

2. Following Mark Blyth, it seems that there are a number of schools of economics. These include neoliberals, post-Keynesians, Austrians, rational expectations theorists, and real business cycle theorists; to which we can add Modern Money Theorists, Marxians, and perhaps Piketty and his colleagues. Each of these has a paradigm through which it tries to organize the vast amount of data and theory we have accumulated over the centuries. Each has its own incommensurate ideas about what counts as data and about how to interpret the data. In other words, they each have a definition of truth, and their truth claims cannot be settled inside their paradigms, as Kuhn tells us is true about the hard sciences.

That means that the decisions about which, if any, of these schools dominates at any point in time has nothing to do with some transcendent truth, but rather with a struggle over politics.

3. This view was reinforced by a reading of Keynes’ delightful essay The Death of Laissez-Faire, which actually didn’t die despite Keynes best efforts, but lives on in the grifter stylings of Grover Norquist and the rest of the zombie right wing. If Keynes caouldn’t kill it, it is permanent.

4. It is further reinforced by Bronfenbrenner’s suggestion that paradigms in the social sciences are not replaced outright as Kuhn argues, but are met by an antithesis, and eventually fall into a new synthesis. I suggest that Paul Samuelson follows this approach in his textbook, based on the back inside cover. In a Hegelian or Marxian world, this is supposed to represent progress, but I’ve always thought of it a just something different that might or might not be useful in a specific social situation.

5. I laid out the seeds of a paradigm for neoliberal economics in this post. In passing I pointed out that Mankiw’s principles are couched in bland language, but they can easily be interpreted to carry out the neoliberal program. See 8. below. Again in passing, I note that tweaking them, and setting up a slightly different paradigm can produce a better solution to the problems our economy faces. That is an exercise for another day.

6. One crucial problem that arises from the existence of many schools of economics is that each can claim that there are no tests that disprove it. As Kuhn and others point out, that’s because the meaning of facts and truth is determined by the paradigm, and neither facts nor truths are commensurate across paradigms. That’s why the likes of Gary Becker and N. Gregory Mankiw can claim that the Great Crash was not a problem for neoliberal economics. What looks like a failure to a person who got hammered looks like the normal course of events to an ideologue married to a paradigm.

7. The neoliberals recognized the importance of politics in economics long before the liberals. They wrote their views into textbooks, which have a thin veneer of science and a thick veneer of authority, and used them to indoctrinate generations of college grads who only took one or two economics classes. They also arranged to have the basic tenets taught in high school classes mandated in many states on the wonders of capitalism. As Kuhn explains, the textbook is the authoritative teaching tool for creating new scientists and presumably new followers of the dominant school of economics. The tenets of neoliberal economics are taught as if they were the only way to understand capitalism, and any other set of ideas are communist or socialist, by which we are to understand they are evil.

8. One factor Blyth doesn’t discuss is why neoliberal economics has such a hold on the populace. Certainly a big part of that is the domination of authoritative discourse through the textbook process in point 7. Another crucial point is that without quite saying so, Mankiw’s principles of economics play directly to the prejudices of the a large segment of the voting public. Take the first one as an example: People face trade-offs. Some people face the trade-off between summering in the Hamptons or on Martha’s Vineyard. Others face trade-offs between rent and food. These are the same thing to neoliberals, who sneak in a bunch of outmoded Benthamite utility. And these are also the same for a huge number of conservatives. Suck it up and pick. It’s your fault for not being rich.

The rich people who dominate elections and the public discourse in general can rely on those principles in anodyne form to pacify the liberals while dog-whistling to their base of conservatives.

9. As a result, the voices of authority on economic matters don’t have to listen to anyone who disagrees with them. They have a base of voters who think it’s great to screw the poor and don’t even necessarily want to accept anything that comes from the government.

10. We need to focus attention on the political nature of economic paradigms. Neoliberal economics failed. We need to hammer home the failure, to undermine the authority of neoliberals on economic matters.

UPDATE
Here are links to the posts in this series with a note about each.

1. The Two Prongs of the Neoliberal Project. This is a justification of the inclusion of economics at this blog. It is also a general introduction to neoliberal economic theory.

2. Paradigms in Economics. This is an introduction to Kuhn’s theory of scientific revolutions and an introduction to a theory of paradigms in economics.

4. Paradigm Change in Science and Economics. This is a discussion of Kuhn’s explanation for paradigm change in science, and begins the discussion of the comparable problem in economics.

5. A Possible Paradigm for Neoliberal Economics. N. Gregory Mankiw’s textbook lists 10 principles of economics. This post takes those and a simple methodology as a possible paradigm for neoliberal economics. In passing, I discuss an actual paradigm change that seems to meet the requirements of Kuhn’s analysis.

6. Pragmatic Aspects of Paradigm Change According to Kuhn. This addresses Kuhn’s argument that even in the hard sciences, paradigm change requires persuasion, because the superiority of an alternative paradigm cannot be tested inside a different paradigm. This idea is applied to economics, and specifically to textbooks.

7. Keynes on Paradigm Change. John Maynard Keynes calls for the death of laissez-faire, especially in its virulent form of demanding that government do nothing. Economic ideas don’t die.

8. Paradigm Change Through Authority and Arguments about Truth. This is a discussion of a more sophisticated approach to changes in economics paradigms through a paper by Mark Blyth. Blyth offers a grounded approach to the problem of change as a result of authority and persuasion.

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Pragmatic Aspects of Paradigm Change According to Kuhn

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You’d think that in the sciences, paradigm change would be quick and painless. But Thomas Kuhn shows that it isn’t so in The Structure Of Scientific Revolutions. Most significant changes in physics, chemistry and astronomy, the examples Kuhn discusses, happen over a significant period of time. Kuhn discusses the problem at length. One factor is that there can be no proof of a scientific theory inside the existing paradigm, or inside the new one for that matter. As Kuhn says:

The premises and values shared by the two parties to a debate over paradigms are not sufficiently extensive for that. As in political revolutions, so in paradigm choice—there is no standard higher than the assent of the relevant community. To discover how scientific revolutions are effected, we shall therefore have to examine not only the impact of nature and of logic, but also the techniques of persuasive argumentation effective within the quite special groups that constitute the community of scientists. P. 93.

Kuhn identifies several methods of persuasion. First, there is the possibility that the new paradigm allows solutions to problems that the old one doesn’t. This would be highly persuasive, but it is rare. Normally it takes quite a while to work out the parameters of the new paradigm before it begins to yield better solutions to most problems. He also discusses the aesthetic aspects of solutions. Some, as the mathematicians say, are more elegant, more intellectually pleasing. That is attractive to some scientists, who begin to work in the area, and establish the conditions for more complete articulation of the new paradigm that produces better results and eventually persuades others to take up the new paradigm.

How do these observations apply to economics? Neoliberal ideas do not prescribe solutions to problems that were unsolvable by other schools of economics. Mankiw tells us that “The study of economics has many facets, but it is unified by several central ideas.” P. 4. Mankiw’s 10 Principles of Economics as the beginnings of a paradigm, as I discuss here, I don’t see anything particularly insightful or aesthetically pleasing. Here they are again:

  1. People face tradeoffs
  2. The cost of something is what you give up to get it
  3. Rational people think at the margin
  4. People respond to incentives
  5. Trade can make everyone better off
  6. Markets are usually a good way to organize economic activity
  7. Governments can sometimes improve market outcomes
  8. A country’s standard of living depends on its ability to produce goods and services
  9. Prices rise when the government prints too much money
  10. Society faces a short-run tradeoff between Inflation and unemployment

On close examination, they seem like an ad hoc collection of aphorisms based on a highly reductive view of human beings, and trite observations with little intellectual content (people face trade-offs?). More importantly, they have a strong ideological content: the solutions and the policy directions that they will support can easily be inferred. A different set of principles would produce a different set of solutions and policies.

As an example, look at number 8. It seems ambiguous. Perhaps Mankiw is talking about the production of goods and services for sale in the private sector. Does a counter-example spring to mind? China? They have a huge capacity to produce goods and services, and they have a low standard of living compared to the US, which has substantially reduced its capacity to produce goods other than food and lately and, at enormous environmental cost, petroleum.

Besides, what is the measure of standard of living? And when did it become an explicit goal of US economic policy? If standard of living includes health care, a decent environment and a functional infrastructure, how can we even say we or the Chinese have an acceptable standard of living? Can we think of alternatives to production of goods and services to produce a good standard of living? How about conquest and rapine? It worked for centuries and still does today.

Well, it turns out Mankiw meant that if the productivity of workers rises, then their standard of living improves. P. 13, Principles of Macroeconomics, Sixth Ed., 2011. This isn’t true in the US today, if it ever was and the proof generally offered is just nonsense from the Natural Law. In a 2006 blog post, Mankiw acknowledges that the labor share has been dropping while productivity was rising, for reasons he can’t quite explain. He remains untroubled, and includes this stuff in his book years later in the face of years of evidence to the contrary. It doesn’t sit well with his claim that economists are objective like scientists. P. 22.

Kuhn talks about textbooks at some length. They are essentially summaries of the scientist’s paradigm, detailed statements of things the scientific community agree are true at a point in time. He asserts that textbooks introduce the student to the conclusions of the community of scholars in a field, and enable the student to master the techniques necessary to progress from the more or less well-solved problems in the textbook to the problems at the edge of agreed results.

I think textbooks are important in economics, too. They introduce the student to the dominant ideas at a point in time. They implicitly assert that those ideas have the same degree of certainty that the equations for the Lorentz–FitzGerald contraction have. That certainty stays with students whether or not they go on in the field. Thus, economics education is one of the reasons for the hegemony of the neoliberal school of economics. And it’s not an accident. The rich contribute heavily to teaching this ideology in colleges and high schools. When people believe in a set of “principles” like those taught by Mankiw to the nation’s elites-in-training at Harvard, it’s difficult to change their minds as they age. So that’s one reason economists don’t change anything. They don’t have to. There is no demand from the elites for anything new.

Kuhn argues that textbooks disguise the actual process of changes in the dominant paradigms, by reconstructing the history of change.

From the beginning of the scientific enterprise, a textbook presentation implies, scientists have striven for the particular objectives that are embodied in today’s paradigms. One by one, in a process often compared to the addition of bricks to a building, scientists have added another fact, concept, law, or theory to the body of information supplied in the contemporary science text. P. 140.

You can see echoes of that view in the various writings I’ve discussed in this series, including Stigler, and it’s open in Samuelson and Nordhaus, who include a chart showing something like that on the back inside cover of Economics, 18th ed, 2005. You see it in both the textbooks I’ve mentioned, which pay little attention to the origins of the ideas they contain, whether the French Physiocrats, the Natural Law adherents, or the Benthamites. These ideas persist, they are not rooted out of the textbooks and continue to infect our public discourse. I’m sure those ideas would be much less persuasive if people understood that they arose from ideas like Natural Law.

This leaves the process of change in the paradigm to the experts in the field, the economists themselves. They don’t seem troubled by their failures, but they are fully insulated, both in their wallets and in their tenure, and are supported by wealth. So there is no reason to expect them to change on their own.

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The FISC Purportedly Continues to Have Problems with “Relevant” and “All”

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Amid posts bewailing Rand Paul because the Senator’s substantial discussions of the problems with EO 12333 and Section 702 spying aren’t the substantial discussions he wants (I’ll return to these once more pressing matters have passed), Steve Vladeck has returned to the USA F-ReDux topic on which he doesn’t keep contradicting himself: the amicus.

As he notes (and I noted here), Mitch McConnell is (as we speak) attempting to water down the already flimsy FISC amicus via amendment. And Vladeck — as he has before — exposed the false claims that the objections to the amicus comes from the judiciary, this time as represented in the letter from Director of the Administrative Offices of US Courts James Duff.

Why is such a radical amendment to a provision in the House bill that was negotiated very carefully so necessary? According to the memo, “Amendment 1451 is responsive to the judiciary’s continual opposition to the amicus structure of the USA Freedom Act,” as manifested in “a letter to Congress from the director of the Administrative Office of the U.S. Courts.”

[snip]

I don’t mean to belabor the point. If anything, as I suggested yesterday, section 401 of the House-passed USA FREEDOM Act is a terribly weak version of what should have been a very good (and unobjectionable) idea–allowing a security-cleared outside lawyer to participate in the tiny percentage of cases before the FISC that involve applications for anything besides individualized warrants (you know, the cases in which adversarial participation is already authorized).Part of why section 401 is so weak is because members of Congress have consistently allowed themselves to be snookered by (or have found it convenient to hide behind) the objections of the “judiciary.”

On the merits, though, these objections are patently unavailing. And they certainly aren’t the objections of the “judiciary.”

I’ve also tracked how others, like James Clapper, have been using these purported judiciary concerns to undercut the “advocate” that President Obama used to pretend to want.

What’s particularly interesting, however, is one of the recurrent problems the “judges” seem to keep having. Duff emphasizes that one problem with amici is the Executive would lie to the FISC if telling the truth might risk revealing useful information to an amici. And as one part of that, he focuses on USA F-ReDux’s intent to get

Designated amici are required to have access to “all relevant” legal precedent, as well as certain other materials “the court determines are relevant.

[snip]

We are concerned that a lack of parallel construction in proposed clause (6)(A)(i) (apparently differentiating between access to legal precedent as opposed to access to other materials) could lead to confusion in its application.

This is what Clapper seemed to be going after last September.

Clapper signals he will make the amicus curiae something different. First, he emphasized this amicus will not interfere with ex parte communications between the court and the government. That may violate this passage of Leahy’s bill, which guarantees the special advocate have access to anything that is “relevant” to her duties.

(A) IN GENERAL.—If a court established under subsection (a) or (b) designates a special advocate to participate as an amicus curiae in a proceeding, the special advocate—

[snip]

(ii) shall have access to all relevant legal precedent, and any application, certification, petition, motion, or such other materials as are relevant to the duties of the special advocate;

Given that in other parts of 50 USC 1861, “relevant” has come to mean “all,” it’s pretty amazing that Clapper says the advocate won’t have access to all communication between the government and the court.

But the really interesting thing — the reason McConnell’s as-we-speak attempt to gut the amicus further — is that the House already fixed some of this. In a manager’s amendment presented as technical clarifications (but which, on this issue, were not), Bob Goodlatte rewrote this passage:

(i) shall have access to all relevant legal precedent, and any application, certification, petition, motion, or such other materials that the court determines are relevant to the duties of the amicus curiae;

To read like this, to directly address one of Huff’s stated concerns:

(i) shall have access to any relevant legal precedent, and application, certification, petition, motion, or such other materials that the court determines are relevant to the duties of the amicus curiae;

That is, Goodlatte already gave the court complete discretion over what the amicus could access, up to and including underlying legal precedents.

Of course, all that assumes the courts will get all the information they need, which they have a long history of not doing.

Here’s the real takeaway though. The President likes to claim he supports this reform. But he has already made it clear he didn’t really want an advocate at the FISC, but would instead like the FISC to remain a rubber stamp.

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Help Me U of M, You’re Our Only Hope, Softball Trash Talk

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As luck and airplane schedules and Senate debate would have it, Jim missed all of U Florida’s extra time win over Auburn. And I missed all of U Michigan’s “shorter than a cloture vote” game against LSU.

That means Monday night, our softball teams square off for all the marbles. Female Babe Ruth (she just hit 70 home runs, pitching wins, and player of the year) Lauren Haegar takes on bad-ass Sierra Romero and a whole lot of hitting oomph.

There were a few Pac-12 teams in the World Series, but it was really UM against the SEC, singlehandedly.

Which is why you should all root for UM, cause it’s the only thing standing between you and SEC overlordism.

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1,800 Day Old DOJ IG Report Working Thread: “Gigabytes of Metadata and Other Electronic Information”

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As I noted, DOJ’s Inspector General has finally liberated the report on Section 215 use through 2009 that it finished almost a year ago. The key takeaway is that FBI continued to blow off privacy protections required by Congress in 2006 until 2013.

This will be a working thread on the rest of the report. Page numbers will be PDF.

For ease of access, here’s my table on Section 215 orders by year.

215 tracker

PDF 7: There was some double digit number of requests withdrawn.

PDF 7: The report breaks out how many were submitted by other agencies and how many by the FBI.

PDF 7: FBI was already getting a lot of Internet collex in 2009.

PDF 7: 3 reasons why the numbers of USPs is not the same affected: those who weren’t subjects of investigation, those who fit into weird def of USP, and those who were incidental.

PDF 7: FBI is clearly getting a lot of this voluntarily.

PDF 7: As you read the blacked out numbers of non-FBI requests, remember that the number of phone dragnet orders for that period is public: 15. If they just had one other bulk collection program (the Western Union CIA one?) that would be another 15 orders.

PDF 9: I think I’ll start to call Section 215 the “Gigabytes of Metadata and Other Electronic Information” program.

PDF 11: Report notes that NSD submits all applications to get around the statutory gig.

PDF 15: It’s clear the government at first told IG that no one had ever challenged an order, but the modified that (presumably after Snowden).

PDF 16: They use the “FISA Management System” to apply. Which probably means that’s where the data goes in?

PDF 16: “Some Section 215 requests originate from FBI Headquarters.” This may mean they use requests to parallel construct something else, as stuff that arises there often does.

PDF 19: Big redaction on USP data that exists in NSI guidelines. May mean default non-USP, same way 702 MPs work.

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