Would a court block Cruz from the presidency?

I argue in Slate that Cruz is ineligible for the presidency. But would a court stop him if someone sued?

Courts employ various devices to avoid deciding uncomfortable, politically charged questions. For example, the political question doctrine deprives courts of jurisdiction over issues that are inherently “political,” meaning that the Constitution grants jurisdiction to other parts of the government to decide the issue, or the issue just is not amenable to judicial evaluation because it requires a “policy” judgment rather than a “legal” judgment. A prominent example is impeachment: if the president is impeached and convicted, a court won’t second-guess the Senate. However, the eligibility rules are different. Imagine that Miley Cyrus is elected president. The Constitution sets the minimum age at 35; would a court block 23-year-old Miley from office? Imaginably, yes. There’s nothing difficult about determining someone’s age or what the constitutional provision means. What if the person is not a “natural born citizen”? Justin Bieber, 14 years hence. Also, imaginably, yes. If so, and if Cruz is found not be a natural born citizen, then yes for Cruz as well?

In 2008, a person named Markham Robinson brought a lawsuit arguing that John McCain could not occupy the White House because McCain was born on a naval base in the Panama Canal Zone. The court dismissed the suit because Robinson—who wanted to become an elector for long-shot candidate Alan Keyes—could not show that he was injured by McCain’s candidacy—and must in any event wait until after the election to bring his lawsuit since the Constitution charges Congress in the first instance with the task of evaluating election results. It’s also not clear that Hillary Clinton or Bernie Sanders could challenge Cruz if he won the election, since the remedy—Cruz stepping down—would give the presidency to his vice-president rather than to Clinton or Sanders. Clinton/Sanders, like Robinson, would not have suffered an injury. However, Cruz might want to choose his vice-president very carefully.

More thoughts on Cruz’s eligibility for the presidency: the history of foreign-born monarchs

A little history that has not yet played a role in the debates:

The founders admired the British system of government, and copied much of it, but they rejected the class society on which it was based. Hence the House of Commons becomes the House of Representatives; the House of Lords becomes the Senate, whose members do not obtain their seats via class lineage. The president was modeled on the king, with elections replacing the British reliance on royal dynastic succession.

The key thing that the founders knew—and we have all forgotten—is that numerous English or British kings were foreign born, indeed, were foreigners. The seventeenth-century kings James I and Charles I were born in Scotland (a foreign country to their subjects in England). William III, who in 1689 initiated the constitutional monarchy that existed at the time of the U.S. founding, was Dutch. The two early eighteenth-century kings, George I and George II, were born in Germany. This was a consequence of the rules of dynastic succession at a time when royal lineages crossed borders .

But the foreign connections of English and British kings were a constant source of political tension. English subjects distrusted the foreigners who occupied the throne. The alleged French sympathies of James II (not foreign born, but a Catholic and cousin of Louis XIV, who spent much of his early adult life abroad) led to the Glorious Revolution. In those days, it was not out of the question for a king to invite a foreign army to come to his aid by invading his own country. Parliament could not ban foreign kings but it did the best it could in the Act of Settlement of 1701, providing that if the Crown “shall hereafter come to any person, not being a native of this Kingdom of England, this nation [shall] not be obliged to engage in any war for the defence of any dominions or territories which do not belong to the Crown of England, without the consent of Parliament.” It also banned from the throne Catholics, and spouses of Catholics—namely, foreigners and native-born people thought to have foreign sympathies, like James II.

Could a foreigner born of an American citizen, possibly a foreign lord flush with cash, come to the United States and bribe his way to the presidency? Such a possibility would not have been far from the minds of the founders. The natural-born citizenship clause solved this problem in a stroke. It ensured that presidents, unlike British kings, would be free of foreign sympathies arising from foreign birth and connections. The founders required that representatives have been a U.S. citizen for seven years, and senators for nine years, before taking office. The “senatorial trust,” explains The Federalist Papers, “ought to be exercised by none who are not thoroughly weaned from the prepossessions and habits incident to foreign birth and education.” The presidency—an infinitely more important office than that of a senator—must be protected all that much more from foreign influence, they believed.

What does this mean for Cruz? Whatever the merits of his candidacy, it’s unlikely that he would, as president, call for an invasion by the Canadian army. But Cruz, whose campaign website is headed “RESTORE THE CONSTITUTION,” and who has criticized the Supreme Court for “redefining the meaning of common words,” is in a weak position to argue that natural born citizen is something it isn’t.

A debate about campus speech codes

I have completed my debate with Greg Lukianoff and others. I ended up being perplexed about what Lukianoff believes and what his organization, FIRE, stands for. He says the “First Amendment” but the First Amendment protects speech codes in private universities; it doesn’t block them. So he says “in the case of private colleges, First Amendment values.” But he never addresses this conundrum: why would the First Amendment protect speech codes if speech codes undermine First Amendment values? Imagine that a Republican congress, under the leadership of a President Trump, passed a law compelling private universities to abolish their speech codes. Would FIRE defend the private universities against this form of government censorship or congratulate the government for advancing first amendment values on college campuses?

What Legal Authority Does the Fed Need During a Financial Crisis?

A new paper, at SSRN:

The financial crisis of 2007-2008 exposed gaps in the law that authorizes federal agencies to provide emergency liquidity support. This essay describes the ways in which legal constraints hampered response to the crisis, proposes reforms that would make possible a unified and strong response, and criticizes the Dodd-Frank Act for weakening, rather than strengthening, the crisis-response agencies.

Cruz’s eligibility for the presidency and the Naturalization Act of 1790

The Naturalization Act provides:

And the children of citizens of the United States that may be born beyond Sea, or out of the limits of the United States, shall be considered as natural born Citizens: Provided, that the right of citizenship shall not descend to persons whose fathers have never been resident in the United States: Provided also, that no person heretofore proscribed by any States, shall be admitted a citizen as aforesaid, except by an Act of the Legislature of the State in which such person was proscribed.

Michael Ramsey argues that this language “strongly supports” the view that Cruz is a natural born citizen. Congress’ approach is “consistent with the eighteenth-century English parliament’s view that it could define natural born subject as it pleased (and indeed could tinker with the definition for policy reasons).” Or, as he puts it, a “natural born citizen” means “entitled to citizenship by whatever statute was in effect at the time of the person’s birth.”

But this is circular. Under Ramsey’s definition, the Naturalization Act provides that “the children of citizens of the United States [born on foreign soil] … shall be considered as entitled to citizenship by whatever statute was in effect at the time of the person’s birth”—namely, the Naturalization Act itself! The definition swallows its own tail.

The Naturalization Act uses a legal fiction as so many statutes do. Consider the Dictionary Act, which provides that the word “person” includes a corporation unless the context indicates otherwise. The Dictionary Act presupposes that the ordinary meaning of person is someone with a physical body and a beating heart. If the ordinary meaning of the word person encompassed corporation, then the Dictionary Act definition would not be necessary. People would read “person” to mean “corporation” without having to be told to. The Dictionary Act in this way is consistent with, and at some future point could be taken as evidence for, the proposition that the ordinary meaning of person excludes corporations. (By the way, over time courts came to refer to a non-corporate person as a “natural person,” again reinforcing the idea that we put natural before a term to refer to the regular or normal, as opposed to technical, usage.)

Similarly, the Naturalization Act assumes that “natural born citizen” does not include foreign-born children of Americans. That’s why it’s necessary to redefine this term to include foreign-born children. Enacted shortly after the Constitution was ratified, the law assumes that ordinary readers of the Constitution would have interpreted “natural born citizen” to mean only those born on American soil.

Is Cruz eligible for the presidency?

Michael Ramsey, in his excellent article on the meaning of “natural born citizen,” argues that the founders likely used that term with British precedent in mind. In a series of statutes, Parliament redefined the common-law definition of “natural born subject”—which meant born on UK territory, with some minor exceptions—to encompass people born on foreign territory to a British father, a necessary elaboration in an era when large numbers of British subjects spent years abroad roaming around in service of foreign-born British monarchs while spawning offspring. Blackstone discusses this history; the founders read Blackstone; ergo the founders likely had Blackstone in mind when they agreed on the term “natural born citizen,” replacing subject with citizen but preserving the meaning of “natural born.”

But did the population at large? Most people weren’t lawyers, fewer still read Blackstone, and in the current version of originalism—of which Cruz is an enthusiastic adherent—the relevant question is the “public meaning” of the Constitution when it was ratified. I checked Samuel Johnson’s dictionary, which does not contain an entry for “natural” but does include “nature.” The most pertinent of the definitions is “the regular course of things.” Citizenship, in the regular course of things, came to those who were born on U.S. territory. The complex process known as “naturalization”—by which an alien becomes a citizen after jumping through various hoops—reinforces this idea. People who are not citizens in the regular course of things (by birth on U.S. territory) can become citizens through operation of law.

The Constitution withholds the presidency from those who are “naturalized,” reserving the prize only for those whose citizenship is natural. The vast majority of Americans at the time who were not naturalized aliens were citizens of the various states because they were born in the states. Citizenship in “the regular course of things” would mean citizenship by virtue of birth on U.S. territory.

My argument would be strengthened if the practice in the states in the eighteenth century was to require people born abroad whose parents were U.S. (and/or state) citizens apply for naturalization. I am not aware of evidence in either direction.

What do the presidential candidates think are the limits on presidential power?

The major presidential candidates refused to answer Savage’s survey of their views about executive power. Why not? They did in 2011 and 2007. The survey was designed from the beginning to force candidates to acknowledge limits on their power if elected. Savage, like most commentators, has persuaded himself that Americans think that presidents have too much power. He made his name by documenting Bush-era executive-power abuses, and he has just published a book about Obama’s abuses as well. But it seems to be dawning on him that Americans want limits on executive power only when they don’t like the president in office. Today, Republicans complain about presidential power; eight years ago, Democrats complained. The opposition is tactical, skin-deep, which is why serious limitations on executive power—either self-imposed in response to public opinion, or imposed by the other branches—will not take place anytime soon. Americans want a strong president to solve their problems, and the candidates know this.

Bank fees and antitrust

bank ghhiIn Slate, I discuss a new paper by José Azar, Sahil Raina, and Martin Schmalz, which argues that the institutional investors that own banks in common do not want banks to compete over the interest rates they offer to, and fees they charge, depositors. The figure above (from their paper) shows that while bank competition looks fine under the traditional HHI index, their alternative measure–the GHHI, which takes account of common ownership–shows that concentration has increased over the last decade. Like their earlier paper on airline competition, this paper offers evidence of the monopolizing tendencies of capitalism, which offers a higher return to investors who are able to circumvent the incentives to compete.

A number of people have expressed skepticism about the mechanism. How exactly do institutional investors ensure that CEOs do not compete? There are many hypotheses. Their pay structure could reward them; subtle pressures can be brought to bear through communication; there are all kinds of interlocking relationships such as board memberships; and so on.

Below is the trend in bank fees (a similar trend exists for the threshold at which fees are charged). Correlation or causation? The paper uses an instrumental variable approach to claim causation. As always, showing causation is tricky. But more research is justified.

bank fees

Neil Irwin on The Big Short

Irwin praises the film while correctly pointing out that the movie implies that only its heroes foresaw the collapse of housing prices, when in fact many people did. But the movie makes a more serious error: It implies that the heroes foresaw the financial crisis as well as the popping of the bubble. They didn’t. The movie bumbles this important distinction, implying wrongly that the bad guys either also knew that they would cause a financial crisis but didn’t care because they would be bailed out, or were too stupid to anticipate the financial crisis. Both of these claims are wrong. No one anticipated the financial crisis so no one could have expected bailouts; and if no one anticipate the financial crisis, it is a misuse of the word “stupidity” to imply that it encompasses the failure to predict what no one predicted.

However, the distinction does play a small role in the movie. In 2007, the short bets were supposed to pay off. Burry, Lippman, and the others correctly saw that mortgage defaults would increase as housing prices leveled off and ARMs reset to higher interest rates; this should have pushed down the value of mortgage-related assets. But it didn’t, not initially, causing some much-needed drama that the film makers skilfully exploit. The film implies that the “marks” did not move because of fraud on the part of the banks that set them. The banks did not adjust the marks downward because if they did, the banks would have to declare themselves insolvent. They preferred to engage in fraud.

But here things get complex. Alone among the banks, Goldman does reduce its marks. So was Goldman a good guy? Not in the movie. The explanation is that Goldman was acting in its “self-interest,” having figured out what the heroes figured out and shorted the market–in fact, acting identically to them in all relevant respects except in expressing anguish. Everyone acted in his (perceived) self-interest. Someone was right and someone was wrong–who?

The problem was that no one knew how to value the assets. Because they had stopped trading, it was impossible to “mark them to market.” Accounting rules allow banks to depart from market  values in just such  circumstances. Otherwise, panic-driven fire-sale prices get transmitted onto the balance sheets of firms that could otherwise survive a liquidity crisis and imply that the banks are insolvent when they remain sound. However, in the absence of a market, no one really knows how to  mark the assets. It was this uncertainty about market values–not the housing bust itself, which everyone expected to be self-contained–that led to the financial crisis. Goldman was subsequently criticized for marking down values too aggressively, which could have exacerbated the crisis and forced healthy firms into bankruptcy, but enriched our friends, Burry et al.

Meanwhile, we know that our heroes did not anticipate the financial crisis because if they had, the last thing they would have done is to make deals with investment banks. A brilliant bet against housing is worth nothing at all if the counterparty is Lehman. Burry and others were supremely lucky that the federal government bailed out Bear and provided life support for the other investment banks. Their investors–depicted in the movie as dumb suits–had good reason to worry.

Stone on ISIS and freedom of speech

In the Huffington Post, Geof Stone criticizes my argument that Congress should consider a law that prohibits people from accessing ISIS websites and ISIS-related recruitment social media posts. Geof argues that history shows that the government overreacts to security threats, either succumbing to or exploiting public panic. He makes this argument in greater length in his fine book, Perilous Times. While I have read his book and others like it, I remain unconvinced, for the following reasons:

  1. It ‘s too easy when looking at historical examples to succumb to hindsight bias. While today it is obvious with the benefit of hindsight that the Red Scare prosecutions and deportations were wildly excessive, it was hardly obvious at the time. In our own memory, we have 9/11, and most of us remember very clearly that it was almost impossible to evaluate the enormous range of possible countermeasures that could have been implemented in the aftermath of the attacks.
  2. The basic logic of emergency response points toward what will seem excessive later on. The reason is that an inadequate response will cost lives, whereas an excessive response will result in infringements of civil liberties like speech, which–as Geof points out–are almost always temporary. There is a view among many civil libertarians that every time the government introduces a new security measure, civil liberties are irretrievably lost. The ratchet is invoked as a metaphor. Yet the First Amendment is far stronger today than it was ever in the past; today, it is a wrecking ball used not only against security measures, but against campaign finance rules, consumer protection laws, labor laws, anti-pornography laws, and many other rules that in the past were considered constitutionally sound.
  3. Geof’s best example of an overreaction is the internment of Japanese Americans, which government officials apparently believed was not necessary even at the time. Conceded. But I don’t think it’s fair to argue that Lincoln overreacted in the midst of a civil war, or even that the Alien and Sedition Acts were–at the time, 1798–unjustified given the standards of the time, the existence of a quasi-war, and the extreme political instability as well as vulnerability of the early Republic. It’s simply too hard to put ourselves back into that historical setting.
  4. It’s also too easy to blame “fear” or “panic.” When the government enhances security measures after an attack, critics almost always say that the government is “panicking” or exploiting public panic. The problem with this argument is that enhanced security measures are also a logical response to an attack. The mere fact that the government enhances security measures therefore does not tell us whether the response was panic-driven or reasonable.
  5. In fact, it is quite common for the government to consider and then reject harsh measures. A recent example is the proposal to ban all Syrian refugees. The House passed a bill to this effect but the bill was rejected by the Senate, which has instead supported a more reasonable-sounding enhanced inspection regime for visa applicants. So did the government panic or not?
  6. Finally, the government cannot just ignore public fears; it must address them. Critics who complain about “security theater” in airports just don’t understand that the government cannot wave a magic wand and make fear vanish; it must respond. When it doesn’t, people legitimately complain that the government doesn’t take their interests seriously.
  7. I don’t think we can do better than to consider the costs and benefits of a proposed security measure on the merits. As history recedes, it can provide as much misguidance as guidance.

The Big Short

The Big Short teaser poster.jpgI was wondering whether this film would really be able to explain collateralized debt obligations, cdo-squareds, credit default swaps, and all the rest, as the reviews suggested. When I explain these things to students, I need to write out diagrams showing cash flows, and then spend more time explaining why people created them, how they worked, and what went wrong. It takes a long time and is pretty boring. The movie’s approach was to put a woman in a bubble bath who spends 10 seconds explaining what one of these instruments was (I forget which one–the woman in the bubble bath was distracting), and to use a Jenga set as a prop for a CDO. Occasionally, celebrities were brought out to explain things. Anthony Bourdain says that a CDO-squared has something to do with reusing old Halibut in a fish stew. Even Dick Thaler, who makes an appearance, let me down. He says that the hot hand fallacy explains the financial crisis (it doesn’t–and apparently it has been debunked anyway). I suspect Thaler was happy enough to read the script, whatever it happened to say, so he could appear in a movie and meet Selena Gomez.

The movie’s creators faced a problem. How do you make a compelling story about the financial crisis for moviegoers who wouldn’t know a CDO from a cabbage. The brilliant solution was to pretend to explain what these concepts were rather than to explain them, so that the viewer would not be distracted from the glittering images and sharp dialogue by the nagging sense that he has no idea what is going on. The violation of the normal customs of movie making–including the breaking of the fourth wall by the actors–would enhance the viewers’ sense that what they were seeing was really true, and not only true but important enough to risk a collapse in verisimilitude which is normally maintained by keeping the fourth wall intact.

The relationship between the movie and reality is bewildering. The movie is based on Lewis’ nonfiction book, but only loosely–with most (but not all) of the characters’ names changed so as, I suspect, to allow the film makers to invent colorful details about them (various humanizing traumas, etc.). Lewis’ book itself, while apparently accurate in the details, gives a deeply misleading interpretation of the financial crisis that fits his crowd-pleasing template of eccentric outsiders versus complacent suits. If Lewis’ book was misleading, the movie is a CDO-squared version. Short it.

More on anti-propaganda laws

My piece in Slate advocating an anti-propaganda law garnered little enthusiasm. A few themes emerged. Some critics deny that ISIS poses a serious threat. That may well be true, as I acknowledged. One wouldn’t want to pass laws that counter a threat that does not exist. Others warned that it is easy to overreact, as I also acknowledged. However, my major concern was not ISIS but the new technology environment in which we live. The question, which no one seems to want to address, is whether social media and other forms of Internet-based communication create opportunities for radicalization that pose a threat to public safety. People have finally gotten around to admitting that the Internet poses a threat to privacy. I think in a few years the radicalization risks posed by the Internet will be too obvious to ignore. (Incidentally, law enforcement does not ignore the risks, nor do people who think about security for a living.)

Otherwise, the critics fall back on three generic arguments. One is that people who are sufficiently determined will be able to evade the anti-propaganda law that I proposed. The generic version of this argument is that no law that can be evaded is worth enacting. If the argument were accepted, then no laws would be enacted. While it’s true that some laws are ineffectual because they contain loopholes or rely on vague definitions, that’s hardly a reason for abandoning the effort altogether. It is in the nature of radicalization that at an early stage a person does not yet believe the doctrines to which he later commits himself. The purpose of an anti-propaganda law is to catch people at this early stage, before they find it worthwhile to take steps to conceal their identities. For that reason, evasion is not as serious a problem as it is in most other areas of the law.

The second is that it is simply impossible to draw a line between propaganda and legitimate political speech. That’s why I argued that the law should ban relatively concrete actions like linking to websites that are sponsored by or otherwise closely associated with ISIS. Line-drawing is a ubiquitous problem in legal regulation. The unavoidable arbitrariness of drawing lines has never been an argument against doing so, not even in the area of freedom of expression, where line-drawing is ubiquitous.

The third generic argument is that once one makes an exception to broad protections for freedom of speech, the camel’s nose is under the tent, we have stepped onto a slippery slope, etc. These clichés are as dry as dust and not even true. Courts have constructed countless exceptions to the First Amendment’s apparent unconditional protection for speech, including exceptions for defamation, child pornography, copying, fraud, and more—and yet none of these exceptions have expanded to swallow up the rule. Time, place, and manner restrictions could easily be expanded into a regime of effective censorship, but never are. To the contrary, protections for freedom of speech have never been stronger. If there is a slippery slope, it has gone in the other direction, with a conservative Supreme Court strengthening freedom of expression in areas like campaign finance and commercial activity in the last several decades, building on protections for political and artistic expression that were created by a liberal Supreme Court in the 1960s. If we could ban slippery slope arguments, the quality of public debate would be vastly greater.

Has Obama paved the way for President Trump’s anti-Muslim immigration order?

I was asked this question by a reporter, who wrote this story. Although the answer is “no” in any direct sense, the question reflects a low-level uneasiness I have noticed among Obama supporters who have praised (or rationalized) his aggressive executive unilateralism (especially as reflected in his immigration orders) but worry that it may set a precedent that future Republican presidents will take advantage of.

But it’s not clear whether presidents set precedents or, if they do, how it works, and when it is good or bad. Consider some possibilities.

  1. When a president engages in an action that is legally questionable, future presidents will find it easier to engage in the same action, but it must be the same action. For example, President Obama’s deferral order sets a precedent for just that—deferral orders in the immigration context. President Trump can do the same thing, but why would he?
  1. Future presidents will be able to engage in roughly comparable actions in different settings. President Trump will be able to defer action against corporate tax law violators, for example. But how would this work? If Trump said that he can defer action against corporate tax law violators because Obama deferred action against immigration law violators, would anyone really say, “well, then, okay”?
  1. Future presidents will be able to engage in executive actions that are unrelated. President Trump will be able to impose the death penalty on cop killers, as he has proposed, even though this is not deferral of prosecution or any other executive action that is supported by precedent, but an affirmative act that would violate deeply rooted constitutional norms. This is even less plausible than #2.
  1. Or—future presidents will not obtain any additional power whatsoever, or will even lose power. Some commentators claim that George Bush’s national security-related executive actions (surveillance, torture) provoked a backlash, making it more difficult rather than easier for future presidents to stretch the law in the area of national security. If a Republican president says he can defer action because Obama did, won’t people say—but you said that Obama acted illegally?

No one understands how unwritten constitutional norms develop. A common idea is that norms of reciprocity prevail throughout the political system. If Democratic Senators obstruct a Republican president’s appointments, then Republican Senators will obstruct appointments when a Democratic president comes to power—and vice versa. But are these norms of reciprocity powerful or weak?

Another theory is that it may be easier, as a political matter, to defend an action—like a military intervention without congressional support—if the president can point to a like action of an earlier president, especially an earlier president of the opposite party. But are these arguments really effective? Hard to know.

By the way, Democrats should consider one other possibility—that the next president (or the next several presidents) will be a Democrat. If that is the case, then Obama’s actions that expand executive power will benefit Democrats, not Republicans, in the near future. And a last thought: you might think that a Congress of either party or a divided party might cause mischief relative to even a Republican president. To evaluate Obama’s precedent-setting actions, you need to take all of these factors into account.

Legal realism and the driverless car

From Bloomberg View:

Turns out, though, their accident rates are twice as high [for driverless cars] as for regular cars, according to a study by the University of Michigan’s Transportation Research Institute in Ann Arbor, Michigan. Driverless vehicles have never been at fault, the study found: They’re usually hit from behind in slow-speed crashes by inattentive or aggressive humans unaccustomed to machine motorists that always follow the rules and proceed with caution.

Kirkland and Ellis Distinguished Service Professor, University of Chicago Law School