Overlawyered: Chronicling The High Cost Of Our Legal System

Archive for October, 2012

“What Could Possibly Go Wrong?”


From Reason.tv, and new to us, at least, if not exactly new, with vignettes on reef reconstruction, ethanol subsidies, and child health insurance (via Hodak Value). And from Mark Perry, “Some Great Examples of Unintended Consequences from Wikipedia’s Listing for ‘Perverse Incentives.'” An example, from an economics text by James Gwartney and Richard Stroup:

In the former Soviet Union, managers and employees of glass plants were at one time rewarded according to the tons of sheet glass produced. Not surprisingly, most plants produced sheet glass so thick that one could hardly see through it. The rules were changed so that the managers were rewarded according to the square meters of glass produced. The results were predictable. Under the new rules, Soviet firms produced glass so thin that it was easily broken.

Don’t miss the rat-farming and dinosaur-bone examples, either.

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“Parents Face Jail Time For Kids’ Drinking Parties”

Following a lobbying campaign by Mothers Against Drunk Driving, 28 states (up from 18 seven years ago) now assign criminal penalties to property owners when underage drinking occurs on their property, with no need to show that the parents or other owners actually furnished alcohol, and whether or not any accident or other injury resulted. [ABA Journal] Liability is sometimes based on hazy “should have known” or negligence concepts, and a MADD brochure (PDF) explains that criminal liability can extend to “Parents away from home when their teens host a party; Parents who are present but deny knowledge of drinking on their property; Owners and/or tenants of rural property; Owners of vacant property.”

In 2005 we covered a Virginia appeals court’s ruling upholding the sentencing of a father and mother to 27 months in jail — originally eight years, before a sentence reduction — for allowing drinking at a 16-year-old’s birthday party. (& Alkon)

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A CALPERS power grab for private pensions?

Coyote has some questions about a sweeping yet underpublicized new California law.

P.S. Josh Barro writes via Twitter (adapted), “I don’t buy this. Worker participation is voluntary, and if it looks like they’re paying into a slush fund, they’ll withdraw. I’d worry more that CALPers will start offering a tax-backed defined benefit to private workers, atop public promises. I think it would be a fine idea to let people participate in the CALPers investment fund, with the participant bearing all risk. Big pension funds do have real administrative cost advantages over 401(k)s. The problem is they get in the risk-shifting business. The bill says California must ‘secure private underwriting and reinsurance to manage risk and insure the retirement savings rate of return.’ I think that means there’s no reliance on a taxpayer guarantee — risk must be borne by a private firm and therefore priced right.”

P.P.S. Scott Shackford at Reason has further analysis, calling attention to “guaranteed return” language as well as to the AP’s description of the program’s must-make-an-effort-to-get-out structure: “The program directs employers to withhold 3 percent of their workers’ pay unless the employee opts out of the savings program, which can be done every two years.”

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