Lee Schruben

If the government wants to insure people spend any future stimulus money “wisely”, don’t send cash, send discount coupons - for specific types of items, with expiration dates. Either the money will be spent as intended to stimulate the economy, or not - and the government would at least still have its money.

For example: spending billions to help American automobile makers PUSH out cars more efficiently won’t help much if local dealers are badly overstocked. Significant new-car discount coupons might help PULL some of those cars off the lots.

The last cash stimulus (100% discounts on anything) did not work all that well. Somewhat smaller, more specific, timed discount coupons might work better.

Lee Schruben is Professor of Industrial Engineering and Operations Research.

Charles Schwartz

The leading research universities, like my own University of California (UC), are having a difficult time with finances. The standard complaint from our administrators is that the governments, state and federal, are not providing enough money and that is why, regrettably, they have to raise student fees so much.

I want to take a different look at the simple question: What do we spend on undergraduate education and what do we spend on other missions? We have become used to answering that question in a misleading way, by relying on an old accounting habit. This habit allows us, effectively, to impute much of the cost of our research enterprise to the specific mission of undergraduate education, thereby giving a basis for increases in the tuition we charge our undergraduates. As part of its program of supporting higher education, the federal government should seize the opportunity to revisit these habits, and demand an honest accounting of the costs of education from the institutions it supports. Continue reading…

Daniel M. Kammen

(originally published as “An American Voice for the Clean Energy Century: The Innovation Agenda,” in Our Planet, Dec. 2008)

Retooling the global economy for a low-carbon and environmentally responsible future must begin immediately - and a major new United States initiative in this area is vital.  The recent downturn in the economy makes this change all the more necessary: energy efficiency and renewable energy can be an engine of dramatic new economic growth and job creation.  It will be up to the incoming president to marshal public and industry sentiment behind such a reinvestment in our future.

We are at last seeing a global explosion of financial and political interest in energy, focused largely – but, ominously, not exclusively - on clean energy.  In addition, to solar, wind and other low-carbon sources, investments in some of the most CO₂-intensive sources are also on the rise.   Innovation is the life-blood of economic growth and renewal.  It has been known for decades that the bulk of new growth results from the invention, and re-invention, of new scientific and technological opportunities. Over 50 years ago Economics Nobel Laureate Robert Solow concluded that over 90% of new economic growth results from public and private sector investments in innovation. Continue reading…

Daniel M. Kammen

(Originally published in the Bulletin of the Atomic Scientists, Jan. 16, 2009)

The United States must begin immediately retooling its economy to build a low-carbon, environmentally sustainable future, which in turn can strongly influence the global economy and geopolitics. With the production and consumption of energy the largest component of the U. S. economy in terms of both the flow of money and the movement of goods, this task will require a well-coordinated, interdisciplinary focus across federal and local governments and the private sector. Our current reliance on fossil fuels–the annual U.S. imported fuel bill is on the scale of the recent $700 billion financial sector bailout–means we start out each year already in the hole.

The recent economic downturn makes it even more politically challenging to launch significant new programs. Yet, a U.S. energy agenda focused on innovation and sustainability could result in significant job creation and stabilized energy costs, and could reposition the United States as a global leader. The focus of the recent congressional economic stimulus package on energy research and the need for expanded investment in the electric grid to enable a low-carbon mix of power options is a strong, positive signal that Capitol Hill is taking the opportunities and needs of the energy sector to heart. This is good news for the economy and the environment. Continue reading…

Bruce Ackerman and Oona Hathaway

(originally posted on The Daily Beast, Dec. 31, 2008)

The Bush administration’s infatuation with presidential power has finally pushed the country over a constitutional precipice. As of New Year’s Day, ongoing combat in Iraq is illegal under US law.

In authorizing an invasion in 2002, Congress did not give President Bush a blank check. It explicitly limited the use of force to two purposes: to “defend the national security of the US from the threat posed by Iraq” and “enforce all relevant UN Security Council resolutions.”

Five years after the fall of Saddam Hussein, the government of Iraq no longer poses a threat. Our continuing intervention has been based on the second clause of Congress’ grant of war-making power. Coalition troops have been acting under a series of Security Council resolutions authorizing the continuing occupation of Iraq. But this year, Bush allowed the UN mandate to expire on December 31 without requesting a renewal. At precisely one second after midnight, Congress’ authorization of the war expired along with this mandate. Continue reading…

Chris Jay Hoofnagle

Identity theft affects millions of Americans annually, and our research points to an increase in incidence of the crime in 2008. Despite the scope and severity of the crime, consumers have few tools to avoid it. For instance, consumers lack information to enable a comparison of banks’ relative performance in preventing identity theft and other frauds. A light touch regulatory approach could spark a revolution in the prevention of fraud if institutions were required to publicly report aggregate statistics describing the number of identity theft incidents suffered or avoided; the forms of identity theft attempted and the financial products targeted; and the amount of loss suffered or avoided. Significant benefits would accrue to consumers, banks, and regulators if basic identity theft reporting were mandated. Such an intervention would have to be made at the federal level, because preemption has reduced states’ role in ensuring consumer protection in financial services. Continue reading…

Holly Doremus

The outgoing Bush administration leaves in its wake a systemic problem at key federal environmental agencies. Career scientists are thoroughly demoralized. The morale problem will be helped by case-by-case reversal of some of the most extreme Bush-era anti-environmental actions, but morale will not be fully restored until institutional systems are in place to make better use of scientific evidence and scientific personnel. That sounds easy, but it will take more than simply declaring a commitment to scientific integrity. The Obama Administration should draft an executive order on scientific integrity that highlights the roles of science and politics in policy decisions and provides mechanisms for separating the two. Continue reading…

A Proposal for the Design of the Successor to the Kyoto Protocol

Larry Karp and Jinhua Zhao

We recommend that the successor to the Kyoto Protocol (”Kyoto II”) impose mandatory ceilings on rich countries’ greenhouse gas emissions and that it promote the participation of developing countries. Our proposal requires two major changes to the current Protocol: the use of an escape clause and the potential use of trade restrictions. The agreement must be seen as fair to developing nations. These countries will be subject to disciplines preventing them from undermining the agreement in the short run, and they will be required to accept the principle of mandatory emissions reductions in the longer run. International trade in emissions permits plays a modest role in our proposal. The agreement should not attempt to prescribe the national policies (e.g. cap and trade or taxes) used to achieve reductions. Continue reading…

David Sklansky

Law is the basic medium of government; that is why it is nearly impossible to imagine a good and effective Presidential administration without a good and effective Department of Justice. The past eight years have taken a sorry toll on the morale, prestige, and influence of the Justice Department, and few tasks facing the incoming Administration will be more important than repairing and restoring the federal government’s chief law office.In November Berkeley Law and the Berkeley Center for Criminal Justice brought together a select group of scholars from across the country, several of them Justice Department alumni, for a one-day symposium on DOJ’s future. (Papers from the symposium will be published online early next year in Issues in Legal Scholarship, a peer-reviewed journal edited at Berkeley Law.) A striking degree of consensus emerged on three points. Continue reading…

Jacob S. Hacker

(originally published in The New Republic, Dec. 31, 2008)

As we move deeper into the recession, most economists are urging President-elect Obama to spend big money right away in order to stimulate and prop up the economy. The sticking point for a lot of people, however, is the long-term budget picture, especially given that Obama is planning to keep most of his predecessor’s tax cuts. How are we going to drop huge sums of money on job creation and fiscal stimulus right now without continuing to suffer through yawning budget deficits years down the road?In fact, we have a magic bullet for short-term spending and long-term saving–health care reform. During the campaign, skeptics complained that a health care overhaul would involve a lot of upfront costs and that the saving would only come later. But that’s exactly what we need right now. Health care involves major spending in the near future, but, more than other initiatives, it will put a brake on federal outlays in the far future. Continue reading…

Barry Eichengreen

(originally published in Swiss Business Week, Nov. 24, 2008)

In the wake of the “Second Bretton Woods Conference,” expectations have fallen to earth. It should now be possible to discard overheated rhetoric about the end of Anglo-Saxon capitalism and get to work. The work in question should center on strengthening the financial system. The G20 summit on November 15th and even more the crisis that caused that summit to be convened remind us that purely national regulation is inadequate. The cross-border spillovers and negative externalities thrown off by subpar (one is tempted to say “subprime”) regulation are simply too great. At the same time there is no appetite for a global regulator, as President Bush and a series of “unnamed Treasury officials” reminded us in the run-up to November 15th. We will get a global regulator at about the same time we get a global army and a global police force.

Given that neither national nor supranational regulation is feasible, the challenge is to carve out something in between. This is where the intellectual challenge and interesting issues lie. What has been done along these lines to date – the Basel Committee of Banking Supervisors and the Financial Stability Forum – is not enough or we wouldn’t be in the current mess. Nor is it obvious that a College of Supervisors along the lines suggested by the members of the European Union will differ significantly from the status quo. The idea and its name will make the academics among us think of department meetings in our own colleges where every member of the faculty gets a say and at the end of which nothing much is decided. Continue reading…

Frank Zimring

I do not believe that criminal justice deserves high priority in the first year of a new national administration. In part this is a function of the abundance of more pressing concerns in other areas. In part it is also a result the limited role of the national government in crime and punishment. But it is also true that most of the problems in federal and state criminal justice are chronic rather than acute, and historically a sense of emergency is almost never helpful in framing national criminal justice policy.

The federal government has been doing a bad job in many of the criminal justice functions. But much of the problem has been a matter of personnel rather than any programmatic details. New leadership in a variety of DOJ and research settings is job one for a new administration; the new leadership can then generate programmatic proposals in the next years of a first term. So again, there is no pressing sense that immediate programmatic work is required.

One part of the “infra-structure” stimulus package needs attention relating to criminal justice - and that is programmatic priorities and limits.  A police force initiative is one national priority (for cities and counties). Prison construction programs should probably be excluded, even in crowding situations, although the boundaries between facility upgrading and capacity expansion are hard to define and police.

Frank Zimring is the William G. Simon Professor of Law  and Wolfen Distinguished Scholar

Laurel Fletcher and Eric Stover

As part of his pledge to close Guantánamo, President-elect Obama has committed to reviewing the individual files of the remaining prisoners to determine whether to release them or to charge them with criminal conduct. This process will take months to complete. In the meantime, the new President could take immediate steps that would reverse some of the most troubling aspects of Bush Administration detention policies and send a swift and reassuring message that President Obama is serious about regaining America’s moral stature in the world.

First, President Obama should close immediately all secret prisons and transfer remaining prisoners in U.S. custody to the brig at Fort Leavenworth. The establishment and maintenance of “black site” facilities by the Bush Administration is a national embarrassment. Despite the shroud of secrecy, what has become known about the abuse and, in some cases, torture of detainees in these camps violates international and domestic law. Closing these facilities will signal that the United States will no longer “disappear” terrorism suspects—a familiar practice of authoritarian dictators. Continue reading…

Christopher Kutz

(originally published in the San Jose Mercury News, Nov. 27, 2008)

There has been much blame for the market meltdown in recent weeks on reckless bankers, brokers, and investors. Demands for reduction in executive pay have stemmed from the huge costs to taxpayers. The poster-child is AIG, which planned to pay out $630 million in managerial compensation, even as it drew on its federally-funded $122 billion credit line. States and the Treasury Department have proposed rules to freeze bonus payments for executives.

The crisis has shown that there is a need for greater regulation. Even Alan Greenspan has acknowledged limits to the market’s ability to self-correct. But there may also be room for a market-based reform – moreover, a reform that cuts more deeply than the Treasury proposal to limit the pay of the three most highly paid executives. Continue reading…

Daniel Farber

Given past and current emission levels, the planet is already on the path of significant climate change. Strong efforts to restrict emissions can limit the harm but cannot prevent some serious impacts, particularly in vulnerable areas such as the arid western United States. Other concerns nationally include heat wave deaths, flood damage from intensified storm systems, and ecosystem harm. Adaptation planning requires an assessment of how the climate will affect human activities and how to respond to those changes. These assessments flip current practices in environmental law around: instead of asking how human activities impact the environment, we instead begin by asking how environmental change will impact humans. Continue reading…

John Quigley

The foreclosure crisis is at the heart of the more general economic crisis. Protecting homeowners at risk of foreclosure is therefore an obvious priority. Here I outline a plan to ameliorate the foreclosure crisis, using the FHA’s mortgage authority to force lenders to recognize the actual values of homes and thus to restructure loans accordingly. The plan has four basic elements.

1) All those who purchased homes after a specified date are eligible, period. There is no distinction between those in arrears and those current in payment. There is neither time nor reason for a fight about moral hazard.

2) Participating homeowners will pay a small amount to register and receive an appraisal of current house value from the Federal Government.

3) If the household is able to make payments on a new first mortgage with a 40 year term for this appraised value, using standard underwriting criteria, then the household will be offered a new FHA mortgage. This new mortgage will be structured as interest-only for an initial period of years. This mortgage will be guaranteed, and premiums will be paid into the existing Mutual Insurance Fund administered by FHA.

The mortgage under these new terms will be reported to the master servicer, who will replace the existing contract with the new contract. Servicers will inform the owners of securities in any pool containing parts of the previous mortgage, and servicers will continue to pass on payments made by homeowners under the new contract to owners of existing mortgage pools or other securities.

4) In addition, when the new contracts mature or are terminated, any capital gain, net of costs, will be divided, with a small fraction accruing to the homeowner. The residual gain, net of costs, will be transmitted to the servicer who will distribute it to the owners of securities or pools in which the mortgage is bundled.

Continue reading…