On the Consumer Financial Protection Bureau

Link to James Freeman’s November 27, 2016 Wall Street Journal Article “Consumer Financial Protection Rewrite: The rogue bureau needs to be reined in if it can’t be killed.”

Election results have created great uncertainty about the future of the Consumer Financial Protection Bureau (CFPB). Having paid close attention to relevant articles, I can say that the editorial board of the Wall Street Journal has displayed a venomous hatred of the CFPB. Below, I will address some genuine constitutional questions about the CFPB, but the Wall Street Journal is wrong about the policy value and policy appropriateness of the CFPB’s actions. 

The Philosophical Basis for Consumer Financial Protection as Part of Limited Government

I can see three principles that can justify consumer financial protection beyond simple contract enforcement: 

Duping people is fraud even if they wouldn’t have been duped had they had infinite time and infinite intelligence. First let me argue that misleading people to their detriment by taking advantage of difficult-to-avoid finite cognition is a form of fraud. (See my post and paper “Cognitive Economics” on the argument that cognition is, in fact, finite and scarce.) Punishing fraud is viewed as a legitimate activity of limited government even in quite libertarian worldviews. For example, I recently read Robert Nozick’s Anarchy, State and Utopia. There, punishing fraud is viewed as something that careful vigilantes can legitimately do (see “Vigilantes in the State of Nature” on Robert Nozick’s views on vigilantes in general), and therefore something that the state can legitimately do. And I don’t think it is ultimately a winning argument to claim that something is not fraud because someone would have realized in advance all the flaws in the product that the seller knew if she or he had spent a wastefully large amount of time investigating something, or had had the acumen of Sherlock Holmes.

Facilitating gain for oneself and harm to others by taking advantage of preexisting confusion is predation of those who are especially vulnerable. A more difficult case than duping people by taking advantage of their finite intelligence and finite time is taking advantage of people who show up already confused. Here the issue is the mental competence of someone to make a particular decision. It is important that people have a decisive way to demonstrate their mental competence so that declaring someone confused doesn’t become a way to sneak in blanket paternalism. Fortunately, economic models identify in their common assumptions what knowledge is crucial for making key decisions. It should be possible to develop online tests of that knowledge that regular people can take (and have a good chance of passing if they are determined to pass) to demonstrate their competence to make complex financial decisions. 

It is legitimate to protect time-slices of people from serious injury by other time-slices of people. In blogging through John Stuart Mill’s On Liberty, I put forward the view that time-slices of individual’s can be viewed as relevant moral units, so that people can be legitimately protected from serious injury by their past selves: 

The analogy I made was to the rules we have for children. Because most parents care deeply about the welfare of their children, the state should ordinarily show great deference to decisions parents make that affect their own children. But occasionally, a parent demonstrates so little concern for her or his own child that the child must be protected from the parent. Similarly, most people care deeply about their future selves, so the state should ordinarily show great deference to decisions people make that affect their future selves. But occasionally, someone is willing to sell her or his future self down the river. The future self, which is not around to defend her or himself, has a right to get help in trying to deter such an injury.

Refuting Specific Allegations by Wall Street Journal Editorialist James Freeman

On November 27, 2016, James Freeman wrote this about the CFPB:

This lack of accountability has led to outrageous abuses, such as its attempts to regulate car dealers though Dodd-Frank expressly said that wasn’t a job for the bureau. Last year Rep. David Scott (D., Ga.) ripped the bureau’s “deceitful” attack on auto lenders for alleged racial bias based on “shamefully flawed” information. The bureau sued banks for discrimination after guessing the race of borrowers based on their last names and addresses. Internal documents reveal that the bureau gang knew their guesses were wildly inaccurate. So they discussed how to keep defendants they were smearing as racists from learning the truth.

Then there is its attack on payday lenders though government research showed borrowers want such services and suffer when they aren’t available. 

Racial discrimination by car dealers. As I understand it, the CFPB was put in an almost impossible spot by its originating legislation. (1) A legislative carve-out with no principled justification said it had no authority to prevent car dealers from duping people or taking advantage of their preexisting confusion, except that (2) the CFPB was supposed to investigate and work to prevent racial discrimination by car dealers. Finally, (3) the CFPB was prohibited from collecting information on the race of car buyers. What would you do if you had the job of investigating discrimination by car dealers without being able to ask about the race of car buyers is a very difficult task? You would have to use some kind of proxy for race. Using names and addresses could easily be close to the best you could do. (I have a hard time believing that the CFPB would only use last names, though. First names could be quite helpful in guessing race to provide evidence on racial discrimination.) I may be mistaken in my understanding, but if not, the fact that over quite a few editorials I have read in the Wall Street Journal on exactly this topic (of CFPB investigations of racial discrimination in car-buying), the Wall Street Journal never provided the background above is unconscionable. It make the editorials into hatchet jobs, not serious journalism. 

Payday lending. Many who do payday borrowing are not well-informed about the high frequency of people making their financial situation worse by payday-borrowing. This counts as a preexisting confusion that makes the borrower less than fully competent to undertake the contract. Sometimes payday-lenders have key contract provisions that make a lot of money for them to the detriment of the borrower that they try to get the borrower not to pay attention to. That counts as duping the borrower. And sometimes, a payday borrower is, in all knowledge, selling her or his future self out. In all of these three cases, the borrower might well express a desire for a payday loan. So the fact that people say they “want such services” is only the beginning of the argument. It functions only as a reminder of the gravity of making the decision to regulate the purchase of something.  

Indeed, if people are buying something without a gun to their heads, one already knows that they “want such services” in some sense. So there wouldn’t have been any discussion of regulation in the first place unless there was some reason to think regulation was appropriate even if, in some sense, people “want such services.” To put it even more bluntly, is even the most avid regulator ever even tempted to talk about regulating something that no one wants at all, so that even in the absence of regulation none is purchased? 

Constitutional Issues

Other than the possible issue of almost unfireable regional Fed Presidents who have not been confirmed by the Senate voting on monetary policy, the Fed has passed US constitutional muster. So it seems possible that the CFPB could be governed in a similar way without being unconstitutional. The court case against the CFPB in the article linked at the top suggests that if only the Chair of the Fed could vote, the Fed would be unconstitutional too. If that is, so, there could be more people appointed to govern the CFPB, just like the Fed. But in practice, the way the Fed is governed seems quite different in practice from the usual bipartisan board for government agencies. There is a real danger that with more governors the CFPB would become more like other agencies run by a “bipartisan” board rather than like the Fed. “Bipartisan boards” often seem in practice overly politicized, yet without real political accountability to the public because the party generating a result is obscured by the “bipartisan” nature of the boards. 

To me, the constitutional case should involve a close examination of how well bipartisan boards for government agencies actually function. And it should take into account the value of political accountability in that whatever Richard Cordray, current head of the CFPB does, is something that a Democratic president–Barack Obama–is to an important extent accountable for by virtue of appointing Richard Cordray. 

If there is a change to the CFPB’s governance in order to pass constitutional muster, I think it is better to make the head of the CFPB fireable by the President than to go to a bipartisan board or to put it under some other agency that has some other mission. Then the head or acting head of the CFPB still has some capacity for decisive action in an area that I believe still often needs decisive action and at least the measure of independence that comes from a president’s reluctance to have to go through an additional Senate confirmation process for a replacement.  

Update: An In-Depth Reaction from a Reader

Here’s another way to put your point about “infinite time and intelligence”: Pitting an ordinary consumer against a large financial firm that can hire the smartest graduates of Harvard or MIT to design their contracts and web interfaces, is like asking an ordinary tennis player to go up against Roger Federer (worse, actually, because unlike playing tennis, participating in financial transactions is unavoidable). Even if both consumer and firm have to abide by the same laws (“the rules of tennis are the same for Federer and his opponent”), it’s still not a fair contest.  Federer starts with enormous talent and then spends all of his time improving that skill (but, if he’s a bank, he can play a hundred million opponents at once). If there were an argument that enormous benefits accrued to society from having the financial firm (Federer) wipe the floor with the consumer, that would be one thing, but if it’s just a transfer from consumer to firm then it’s closer to theft than to commerce. There’s an interaction between this point and your second point about preexisting confusion. What the clever financial firm can do is to construct a “choice architecture” (otherwise known as a website) that deliberately leads people into making decisions that they don’t really need to make, but that are most likely to exploit areas of “preexisting confusion.” Or, even more perniciously, design their websites in ways that make it difficult for consumers to use tools that could help clear up their confusions or enlighten them about alternatives. In this last category, over the last year there has been a big push by many financial firms to make it hard or impossible for their clients to subscribe to services like Mint.com or Yodlee or Check.me; the banks say it is cybersecurity, but it’s very hard not to suspect that the real reason banks don’t want you to use Mint.com is because Mint.com sends you messages saying things like “hey, your bank just charged you a big fat fee that lots of other banks don’t charge.” In my view, this is one of the biggest consumer protection issues out there, but the press coverage of it has been mostly focused on terrifying people about “here’s another cyberthreat for you to worry about – your kindly bank is generously cutting you off from Mint.com so that the Russians won’t steal all your money.” The truth is that there are straightforward technological fixes to the security problems, but those fixes seem to have been deliberately blocked by specific firms who believe that it would hurt their bottom line to fix the security problems.
Finally, on the supposed constitutional issues. For the reasons you mention and others, making the CFPB head fireable by the President is better than a “bipartisan commission” in which the Democrats appoint commissioners from Goldman Sachs and Citibank while the Republicans appoint commissioners from Merrill Lynch and Goldman Sachs (see: Securities and Exchange Commission).  CFPB has been a pioneer in “evidence based” policymaking and in bringing rigorous analysis to its rulemaking and other processes. The really radical proposal would be to say that if there must be a commission, it should require a PhD in some relevant field and a record of relevant publications in academic journals, and a meaningful scholarly reputation.  Work on consumers’ cognitive processes relevant to financial decisions (e.g., risk aversion) has begun to be published not just in economics and finance journals but in Science and Nature, and the increasing availability of big data in consumer finance means it is increasingly possible to do pretty much unimpeachable empirical research. It’s hard to imagine the constitutional argument against requiring commissioners have relevant expertise.  And there are precedents in other branches of government: the National Science Foundation and the National Institutes of Health and the US Geological Survey are not mostly led by former industry lobbyists or congressional staffers or big campaign contributors.  Certainly, the CFPB should not be dominated by commissioners whose prior careers were entirely in the financial industry, or in politics, which is what would likely happen if some of the “reform” proposals currently circulating were to be adopted.

Vigilantes in the State of Nature

Link to the website for the “Vigilante Rick Grimes Deluxe” action figure pictured above, which has the following passage: 

…. as he discovers that there is more than just the undead to worry about,Rick makes the ultimate choice to do whatever it takes to keep his family and friends alive in this less than moral post-apocalyptic world.

McFarlane Toys’ Rick Grimes Vigilante Edition deluxe figure depicts this transformation from a peace keeping deputy to judge, jury, and executioner. This blood splattered 10-inch figure features the exact likeness of the actor, taken from a full 3D scan of the actor himself, Andrew Lincoln.

Two Models of the State of Nature

One of the best ways to better understand Thomas Hobbes’s and John Locke’s notions of the “state of nature” is to watch “The Walking Dead.” Within a few episodes, the zombies become merely backdrop and detail, as the focus shifts to the struggle of human against human. But this is not an amoral struggle: Issues of right and wrong trouble occupy a big share of the screen time, both purely as moral questions and as key factors motivating loyalty in some cases and antipathy in others.   

Before the rise of the zombies in “The Walking Dead,” one of the most vivid pictures of the Hobbesian and Lockian state of nature is the picture most of us have in our minds of the American Wild West. In movies about the Wild West, and in the historical reality of the Wild West, people had a keen sense of right and wrong, often enforced by vigilantism, since formal law courts were often far away and slow to act. Compare that picture of the Wild West to section 7 of John Locke’s  2d Treatise on Government: “On Civil Government”:

And that all men may be restrained from invading others rights, and from doing hurt to one another, and the law of nature be observed, which willeth the peace and preservation of all mankind, the execution of the law of nature is, in that state, put into every man’s hands, whereby every one has a right to punish the transgressors of that law to such a degree, as may hinder its violation: for the law of nature would, as all other laws that concern men in this world, be in vain, if there were nobody that in the state of nature had a power to execute that law, and thereby preserve the innocent and restrain offenders. And if any one in the state of nature may punish another for any evil he has done, every one may do so: for in that state of perfect equality, where naturally there is no superiority or jurisdiction of one over another, what any may do in prosecution of that law, every one must needs have a right to do.

John Locke’s train of logic is:

  1.  There is right and wrong, even in the equivalent of the Wild West or in the Zombie Apocalypse, 
  2. Right and wrong must be somehow enforceable,
  3. In the equivalent of the Wild West or the Zombie Apocalypse, everyone starts out equal, so in principle, anyone could be justified in enforcing the rules of right and wrong. 

Right and wrong, according to John Locke, focuses on this principle:

[Each] may not, unless it be to do justice on an offender, take away, or impair the life, or what tends to the preservation of the life, the liberty, health, limb, or goods of another.

(See “The Religious Dimension of the Lockean Law of Nature.”) That is, Locke, focuses on the wrongness of directly killing, injuring and stealing.

Robert Nozick on Vigilantism

Inspired in important measure by John Locke, Robert Nozick discusses right and wrong in the state of nature, and what he considers the fundamentally identical issues of right and wrong in more organized states of society in Anarchy, State and Utopia. Robert Nozick views vigilantes “taking the law into their own hands” as fundamentally no different from the government “taking the law into its own hands.” The issues in both cases is whether enforcement decisions are taken in accordance with what is right and wrong, not who does that enforcement. Of course, certain ways of organizing things may be more conducive to enforcement decisions being taken in accordance with what is right and wrong, but it is the decisions themselves that must be right, regardless of who makes them. If an enforcement action is wrong, the fact that the government did it does not make it OK. If an enforcement action is right, the fact that a private individual did it does not make it morally wrong. 

Robert Nozick does recognize the right to insist that if one does not know whether someone is guilty or innocent, that person be judged by a procedure likely to be accurate. But an insistence that people not use a procedure that might or might not be accurate would require compensating those eager to impose such justice. Then Robert Nozick argues that because of the value to people of having some means of enforcing their rights, compensating someone for a prohibition against an inexpensive mode of imposing justice of somewhat questionable accuracy will typically involve providing to them another mode of imposing justice in a way that is affordable to them.  To Robert Nozick, this is the moral justification for a the minimal state, which enforces rights to life and limb and property for everyone. 

But one of the key implications of freedom is that people may not be prohibited from using an alternative form of justice that is known to be at least as accurate as that use by the dominant form of justice in an area. In this view, a government only has legitimacy as the main form of justice that people choose to be protected by. It differs from other forms of justice only in (a) being the most popular choice and (b) by having the raw power to enforce its own view about what, in fact, are accurate modes of delivering justice. A government has no right to a monopoly of justice if someone comes into the market providing a close substitute of equal accuracy in dispensing justice that the government knows to be of equal accuracy to the government’s own procedures.  

Nozick often speaks of a minimalist government as “the dominant protective agency.” In addition to being a reminder that the government has no right to a monopoly of justice, that view also implies that the government has no absolute duty to protect the rights of someone who does not pay the government to protect herhis rights, except to the extent that government is preventing that person from using an alternative mode of justice. That is, if person A does person B wrong, then the government either needs to let person A hire someone else to punish B and get redress, or it needs to itself punish B and get redress for A.    

The limitations on the government’s duty to protect everyone’s rights when the government is viewed as simply the dominant protective agency opens up an interesting possibility for punishment in doubtful cases that was highly relevant to the Wild West. Suppose there is not enough evidence to punish someone directly for a crime that they in fact committed with some substantial probability. The government or dominant protective agency could deal with  this situation of some evidence but not enough for direct punishment by refusing to provide any more protective services to that person, except in specific cases where the government directly blocks that person from enforcing herhis own rights through some other agency or by self-help. These “outlaws” (not yet convicted, but deprived of the services of the dominant protection agency), would have to use methods of rights enforcement against other outlaws that could not take advantage of all the economies of scale the dominant protective agency has. In practice, they might also be subject to procedures that were not as accurate as those of the dominant protective agency–procedures the dominant protective agency could legitimately stop, but chooses not to. 

There is, of course, the potential problem of a dominant protective agency choosing to treat someone as an outlaw simply because poverty meant they couldn’t pay the fee; let me leave that discussion for another day. Here, I am talking about the dominant protective agency refusing to serve someone because of a strong and well-justified suspicion of wrongdoing, not sufficient to warrant direct punishment. This seems to me to be a phenomenon that was quite common in the Wild West. Most people in the Wild West did not get too upset if plausibly bad actors were killed by other plausibly bad actors. And according to Nozickian logic, maybe that fact wasn’t so terrible. 

What would be illegitimate are the many cases in the Wild West, when the government did not have enough evidence to punish person A directly, vigilante B attacked A without any more evidence, the government refused to deliver justice against vigilante B and prevented A from pursing herhis own vigilante justice against vigilante B. That just isn’t fair given the limited knowledge of A’s actual guilt or innocence. 

Spencer LeVan Kimball on Duty and Commitment

“Andrew bequeathed to my father, unaltered, that sense of commitment to unqualified performance of religious duty at any personal sacrifice. The sense of duty and commitment descended in part to my generation and even to my children’s generation, but as the generations changed, the sense of duty was often transformed in its nature and in its object.”
— Spencer LeVan Kimball (son of Spencer Woolley Kimball, oldest brother of Edward Lawrence Kimball and uncle of Miles Spencer Kimball) in his autobiography A Tale That is Told 

Harvard 35th Reunion Profile: Miles Kimball

Link to Wikipedia article “Miles Kimball”

It is hard to believe that this Spring it will be 35 years since I earned a Bachelor’s degree from Harvard. I did a profile for the 35th reunion report which you might find of some interest. (It had notes about my children Diana and Jordan at the top.) Here it is: 

My religious journey has been a big part of my life. In 2000, at the age of 40, I left Mormonism to become a Unitarian-Universalist. My Mormon background left me with a strong sense of mission, which has become a desire to make a difference in the world that is no longer connected to any belief in the supernatural.

In 2012, I began my blog “Confessions of a Supply-Side Liberal,” which has a personal dimension, in addition to talking about economics, politics and religion. I also began tweeting in earnest under my own name @mileskimball.

In 2016, after 29 years teaching at the University of Michigan in Ann Arbor, I moved to the University of Colorado Boulder as Eugene D. Eaton Jr. Professor of Economics. My wife Gail and I now live in Superior, Colorado, with stunning views of the Front Range.

Professionally, I continue to pursue broad interests in macroeconomics, the economics of risk and cognitive economics, but my most important efforts are working toward restoring the power of monetary policy by working out the details for effective negative interest rate policy and designing well-being indices that can improve policy-making not only for national and regional governments but also for non-governmental organizations. My research has become a very social activity as I work with a large circle of coauthors and research assistants. Technology has made long-distance collaboration easier and easier.

My Dad

Edward Lawrence Kimball, September 23, 1930–November 21, 2016

Edward Lawrence Kimball, September 23, 1930–November 21, 2016

Link to Wikipedia article on “Edward L. Kimball”

Link to the Deseret News article on Edward Lawrence Kimball’s death (source of the photo above)

Other than the fictional Clark Kent, my Dad is the only person who has ever made me think spontaneously of the adjective “mild-mannered.” My Mother explained why my Dad took almost no part in disciplining his children, by saying he was too much of a marshmallow. But in intellectual matters, my Dad had a spine of steel. He was not willing to say anything he did not believe, and he was not willing to believe anything he did not think through.

My Dad had an unwavering belief in a universe that makes sense. He rejected the idea that the universe is dead set against us. And while he recognized that people sometimes do terrible things, he always started with the assumption that people would act reasonably if not needlessly antagonized.

My Dad was an example of putting loyalty to the truth first and foremost, without neglecting other loyalties. He could do both because he knew the limits of his own knowledge, and gave people the benefit of the doubt. And because of both that intellectual humility and his tendency to give people the benefit of the doubt, he didn’t turn away by even a hair’s breadth from his friends and relatives whose views differed from his.   

My Dad knew well the complexity of Mormon history, but he believed in Mormonism until his last breath. In his last four years, after my Mother died, I had many conversations with my Dad about religion. He was genuinely curious about my beliefs and had me read to him many of my religion posts and Unitarian-Universalist sermons. In our discussions he homed in on the common threads in my beliefs and his.  

My Dad, like my Mother, was ambitious for his children. But neither of my parents ever pushed me in a particular career direction. And at moments when I had some success, my Dad made a point of reminding me it was more important to be good than to be successful.  

When my Dad was 56 years old, and his Mother followed his Dad in death, he spoke of himself as an orphan. In that same sense, at the age of 56, I am now an orphan. And the world, too, has lost a man it could ill afford to lose. 

Update, December 3, 2022: It has been a little over four years since my Dad died. Googling him today, I saw Peggy Fletcher Stack’s excellent obituary for him. See the image below. Here is the link.

We Are Who We Are Because of Our Ancestors

“We are who we are in large measure because of our ancestors. In addition to shaping who we are within, by their collective strivings, they made the world a much better place than it otherwise would have been. May we do as well in improving the world for our descendants, and act in such a way that if they try to be like us, we would be proud.”
— Miles Spencer Kimball

John T. Harvey: Five Reasons You Should Blame The Economics Discipline For Today's Problems →

Like John Harvey, I do think that the economics profession bears an important part of the blame for the state the world is in. To a failure of most economists to recognize the fragility of the financial system, I would add slowness in developing monetary policy tools powerful enough to counteract the aggregate demand effects of any elevation of risk premia. Beyond that, what I would add to John Harvey’s discussion is: 

1. The word “model” itself has become a reflection of the problem. Logic and reasoning behind a given argument are partly dismissed by saying “You didn’t have a model.” This really means “You didn’t have a [very particular type of] model.” And the limitation to that very particular type of model is often exactly what is interfering with understanding of a problem.  

(In passing, let me say that I am not impressed with the realism of the models currently being used in polite circles with great frequency to model financial frictions.) 

2. John Harvey is too enamored of heterodox schools. By the nature of heterodoxy, many economists who “think outside of the box” will be sui generis, not belonging to any school at all. (If they are really good, they may eventually they gather disciples who then constitute a school. But they may not belong to any school when they first break out of the mold.)  

3. I see the blogosphere as a partial antidote to the dysfunctionality of the economics journals. If one includes the robust and wide-ranging discussion of the real world and real-world policy in the economic blogosphere, things look much better. From that angle, the dysfunction in economics overall can be reduced if more and more people take the blogosphere seriously.  

The Religious Dimension of the Lockean Law of Nature

The desire for equality has been used to justify quite heavy-handed action by states. But John Locke, in his  2d Treatise on Government: “On Civil Government” section 6, reasons from the equality of all to natural rights. To John Locke, equality means a starting place in which no one is under the thumb of anyone else, and those who are not under the thumb of anyone else are free. In John Locke’s view, beyond a prohibition on suicide reflecting his view of our relationship to God, the key bound on that freedom is that one is not allowed to “take away, or impair … the life, the liberty, health, limb or goods of another”: 

But though this be a state of liberty, yet it is not a state of license: though man in that state have an uncontroulable liberty to dispose of his person or possessions, yet he has not liberty to destroy himself, or so much as any creature in his possession, but where some nobler use than its bare preservation calls for it. The state of nature has a law of nature to govern it, which obliges every one: and reason, which is that law, teaches all mankind, who will but consult it, that being all equal and independent, no one ought to harm another in his life, health, liberty, or possessions: for men being all the workmanship of one omnipotent, and infinitely wise maker; all the servants of one sovereign master, sent into the world by his order, and about his business; they are his property, whose workmanship they are, made to last during his, not one another’s pleasure: and being furnished with like faculties, sharing all in one community of nature, there cannot be supposed any such subordination among us, that may authorize us to destroy one another, as if we were made for one another’s uses, as the inferior ranks of creatures are for ours. Every one, as he is bound to preserve himself, and not to quit his station wilfully, so by the like reason, when his own preservation comes not in competition, ought he, as much as he can, to preserve the rest of mankind, and may not, unless it be to do justice on an offender, take away, or impair the life, or what tends to the preservation of the life, the liberty, health, limb, or goods of another.

Other “natural law” doctrines view people’s freedom as limited by more than just a ban on suicide and not harming others (who are not themselves offenders). Why is it that John Locke views our freedom as so extensive? There is a clue in saying that each of us is sent into the world by God and “about his business.” In effect, John Locke views us each as the one in the best position on Earth to make the ultimate judgement for what God wants each of us to do. Although, presumably, people sometimes fail to do what God sent them to Earth to do, many beautiful things that God did send someone to do might not happen if that person’s freedom of action is blocked.  

From a less theistic perspective, the point is that if someone is given freedom, they may do something wonderful that no one else would have thought to have them do. Giving each individual a chance to do that something wonderful that perhaps no one else would have thought of is figuratively giving that individual a chance to fulfill her or his mission in life. 

The view that John Locke scorns is the idea that “we were made for one another’s uses.” We were made for greater ends than that. And the final judgment on those greater ends cannot be made by another. 

Timothy Sandefeur: The Presumption of Freedom

“If a judge put the burden of proof on the defendant to show that he did not commit the crime, the judge would be loading the dice against him. Even if the defendant proved he did not own the gun used to commit the murder, well, perhaps he borrowed it! To disprove that, he must now prove that he did not know the gun’s owner. But perhaps he paid that person to lie! – and so forth, infinitely. Every disproof only creates a new speculation, which must again be disproved. These speculations might seem silly, but they are not logically impossible, and requiring the defendant to prove his innocence – imposing the Devil’s proof on him – would require him to disprove even such bizarre conjectures. Every accused person would find himself in a hall of mirrors, forced to prove himself innocent of an endless series of baseless accusations, without regard for the rules of logic. As a procedural matter, presuming innocence is preferable, because an erroneous conviction is harder to fix than an erroneous finding of innocence. And as a substantive matter, the presumption of innocence is better because a wrongfully convicted person suffers a different, more personal harm than the public experiences if a guilty person goes free. Likewise, there are an indefinite number of speculative reasons that might defeat anyone trying to prove that he should not be deprived of freedom, just as there are an infinite number of ‘what ifs’ that the ‘Devil’ could use against a defendant who tries to prove he did not commit a crime, or a person who tries to disprove the existence of an invisible teapot: What if a person abuses his liberty? What if he doesn’t know how to use it wisely? What if he turns out to be a psychopath – or perhaps his children or grandchildren turn out to be psychopaths? What if there are top-secret reasons of state that warrant imprisoning him – reasons no judge may be allowed to see? Wary of the Devil’s proof, logicians place the burden on the person who asserts a claim, because that is the only logically coherent way to think. Likewise, the presumption of freedom requires those who would take away our liberty to justify doing so, because that is the only logically workable way to think about politics and law.”
— Timothy Sandefeur, The Permission Society: How the Ruling Class Turns Our Freedoms into Privileges and What We Can Do About It

Next Generation Monetary Policy: The Video

Starting at the 20:30 mark in this Mercatus Center video is my presentation “Next Generation Monetary Policy.” Here is a link to the Powerpoint file for the slides I used.

This was at a September 7, 2016 Mercatus Center conference on “Monetary Rules in a Post-Crisis World.” You can see the other sessions here. (Note the 1/5 in the upper left corner of the video. Click on that to access session 1 of 5, 2 of 5, etc.)