At the Blog
On Monday, Joel Michaels looked at what we can learn about risk-weighting from the SVB debacle. SVB failed, in part, because it parked its cash in long-term U.S. government bonds. But why were Treasuries so attractive in the first place? One reason is that regulators assign the lowest possible risk-weight to U.S. government bonds. As Michaels shows, however, this favorable weighting does not reflect a neutral assessment of actuarial risk. Rather, it reflects a policy choice to encourage banks to hold government debt. More broadly, risk-weights have long deviated from assessments of actuarial risks to encourage (or discourage) lending to a particular sector. As we move to recast banking regulation to better work for the public good, we should pair discussion about how to shore up the liability side of banks’ balance sheets with greater oversight of what they do on the asset side.
On Tuesday, Rebecca McLennan continued our symposium on carceral labor by untangling the nineteenth-century roots of mass incarceration. While popular historical narratives often trace the origins of penal labor to the post-Civil War South, this familiar story overlooks the vast system of forced penal servitude that took shape in the antebellum North. As she writes, “Although the Thirteenth Amendment underwrote the drive to push convicted freed people back into bondage and hard labor, it also constitutionalized a brutal system of penal involuntary servitude that had been operating in the United States for more than four decades before the Civil War. Indeed, the amendment was as much a capstone as a foundation.” Beyond supplementing the dominant historical narrative of the southern origins of forced prison labor, McLennan also provides a brief historical explanation for the kinds of work that prisoner laborers are currently forced to perform (as detailed in Erin Hatton’s opening post for the series): “Beginning in the 1880s, waged workers and labor organizers, who objected to competing with cheap convict labor, and manufacturers who found it hard to compete against prison contractors in the same line of business, successfully forced state after state to abolish contract prison labor. By 1910 most states had prohibited or ceased both the hiring out of prison workers to private interests and the sale of prison-made goods on the ‘open’ market. New Deal legislation then effectively closed the remaining interstate trade in prison-made goods…. Administrators cobbled together a system that, much like our own, forced prisoners to work, though almost always for the institution or state, in a service capacity, and in such a way that would not compete directly with organized labor.”
And on Thursday, Stephen Wilson, Minali Aggarwal, Jacqueline Groccia, and Lydia Villaronga continued the series by describing The Work and Us, a new research project dedicated to understanding prison labor from the stories and perspectives of imprisoned people. As the authors write, “By recognizing imprisoned people as experts of their own experiences, The Work and Us aims to develop a more nuanced understanding of the issue of labor behind bars. Through this, we can help build better campaigns that are reflective of this diversity, rather than pursuing symbolic or one-size-fits-all legislation. The survey not only provides localized perspectives and insights from underrepresented groups of prisoners but also serves as an intervention, aiming to complicate conversations inside and outside prison walls and expand our imagination with respect to how prison labor relates to the goal of abolition.”
In LPE Land
Coolest job alert: The Law and Political Economy Project (that’s us!) is looking to hire a Deputy Director. The position involves leading or collaborating on specific elements of LPE programming, such as organizing events and conferences, developing partnerships with other organizations, facilitating the growth of the LPE student chapters, and developing LPE NYC, our first regional node. Join us!
What is Green Banking? And are green banks the key to a Just Transition? Saule Omarova and Ilmi Granoff discuss these issues with Columbia’s LPE Society.
Yet more evidence this week that post-Bruen America is going to be awash in guns. Perhaps we shouldn’t sit on our hands until 2065 in hopes of taking back the Court.
In the NYT, Jed Britton-Purdy argued that we should begin politicizing the courts right now. State Supreme Court candidates, for instance, should more aggressively campaign on substantive issues, such as voting rights and reproductive rights, as Judge Janet Protasiewicz recently did in Wisconsin.
And, finally, in case you missed it, we ran a short video (!) explainer about the basis of the Major Questions Doctrine.