Hoffman and Hwang on Contracts Not Performed Because of Pandemic

David Hoffman and Cathy Hwang have written an article entitled “The Social Cost of Contract,” arguing that the public is a third party to every contract and considering the relevance of that in determining whether courts should enforce contracts whose performance would have been inadvisable given the Covid-19 pandemic. The article is elegantly written, situating specific questions such as the enforceability of force majeure clauses into a broader social context. Although Hoffman and Hwang do not conclude with any absolute recommendations for courts, the thrust of the article is to suggest that courts should not insist on performance of contracts when performance would exacerbate a public health crisis.

I agree with much of what Hoffman and Hwang argue. Hoffman has separately argued (with Eric Lampmann) that nondisclosure agreements suppressing information about sexual harassment ought not be enforced, and Hoffman and Hwang give other examples of contracts that are unenforceable on account of the public interest. Hoffman and Hwang also cite other literature highlighting that contracts are often written in the shadow of regulatory requirements, and more than that, regulators sometimes influence contract terms. “The general public has many reasons to intervene in private contracting–and it does, all the time,” they write (emphasis theirs). As the authors recognize, however, there is a difference between affecting private bargains by rendering certain types of bargains unenforceable ab origine or regulating in ways that affect private contracts (neither of which is much in dispute in the pandemic) and interpreting private contracts or even overriding private contract terms to accomplish public goals.

I have several reservations about the possibility of an active judicial role. First, in many pandemic contexts, performance will not occur as a result of legal restrictions. The resolution of such a case therefore allocates the loss, but won’t affect the parties’ incentives or improve public health. At least when the government bars performance, thus expressing the public interest through regulation, there is little further public interest in judicial allocation of burdens. If a state closes a hotel and so a wedding does not take place, requiring the wedding party to bear the

You can read the rest of this article at: https://reason.com/2020/07/08/hoffman-and-hwang-on-contracts-not-performed-because-of-pandemic/

NBA Player’s Economic Social Justice Message Fails to Get League Approval

The NBA and the National Basketball Players Association reportedly reached an agreement Friday over what social cause messages can be displayed on jerseys when play resumes July 30.

Following the high-profile deaths of young black men such as Trayvon Martin, Eric Garner, and most recently George Floyd, the NBA announced last month it was considering allowing players to use personalized statements—such as “Black Lives Matter” and “I Can’t Breathe”—on jerseys to promote social justice causes.

This week a source told ESPN’s The Undefeated that the following are the list of messages players will be allowed to wear: Black Lives Matter; Say Their Names; Vote; I Can’t Breathe; Justice; Peace; Equality; Freedom; Enough; Power to the People; Justice Now; Say Her Name; Sí Se Puede (Yes We Can); Liberation; See Us; Hear Us; Respect Us; Love Us; Listen; Listen to Us; Stand Up; Ally; Anti-Racist; I Am A Man; Speak Up; How Many More; Group Economics; Education Reform; and Mentor.

FEE readers will notice that one proposed social message is missing from the list: “Trillion.”

That is the message Brooklyn Nets point guard Spencer Dinwiddie sought to include to raise awareness about America’s surging national debt.

“If you’re wondering what I’m gonna put on the back of my jersey it’ll be ‘Trillion,” Dinwiddie tweeted June 28. “A lot of issues at the moment. I think the fact that the country is 26 (ironically) Trillion dollars in debt is high on the list.” (Dinwiddie sports #26 on his jersey.)

As I wrote last week, Dinwiddie was correct that the debt is a serious social cause—especially for young Americans—and one that receives astonishingly little attention even though excessive debt harms the future of young and unborn Americans.

In modern times, the national debt is always growing, because the US government keeps borrowing more than it pays back. It has to do that, because it keeps spending more than it collects in taxes. It’s like the old guy at the bar who runs a tab because every night he buys $200 in drinks but only pays $180, $150, or $190.

But it’s wrong to think of the national debt as an “old people” concern. The truth is, it’s young people who should be especially concerned about the surging federal debt, not the old man at the tavern running up the bill.

Baby boomers and Gen Xers have much less to worry about when it comes to surging debts that will require massive interest payments—$1 trillion annually by 2029, if not sooner—in the coming decades. Most of them also already have lots of job experience and decades of work in the bank. Many have accumulated assets and retirement savings.

The economic futures of young people, however, depend on a vibrant economy that offers similar opportunities—jobs, entrepreneurship, and the chance to get ahead. Unfortunately, that’s going to be much more difficult with a $26 trillion national debt that is rapidly growing.

The old man at the bar doesn’t have much to worry about, of course. The bartender is still pouring him drinks since he’s worked out a deal that the old man’s kids and grandkids will be responsible for payment.

This is a sweet deal for the old man with his nose in a Manhattan each night, but it’s not such a good deal for his children and grandchildren. Let’s be clear: There’s nothing compassionate about saddling future generations with debts they cannot repay.

Dinwiddie on Tuesday announced he would be sitting out the remainder of the season following a second positive test for the coronavirus, so the NBA’s decision is moot, at least as far as the national debt goes.

Nevertheless, Dinwiddie’s message remains important. To be clear, these generations will not be able to repay these debts, the interest of which will soon eclipse $1 trillion annually. If the federal debt were paid down by $1,000 per second, it would take eight centuries to pay off, economist Ant Davies and political scientist James Harrigan calculate.

The discussion on the debt is especially relevant considering that the world is approaching a pivotal moment, with a looming recession and potential global depression. Facing such threats, there will be intense pressure for governments to simply borrow and spend more money to resuscitate a floundering economy.

Nearly 90 years ago, in the midst of the Great Depression, four economists from London University economists—including a young F.A. Hayek who more than 50 years later would win a Nobel Prize in economics—warned about fighting economic depressions with public spending.

“We are of the opinion that many of the troubles of the world at the present time are due to improvident borrowing and spending on the part of the public authorities,” the economists wrote. “The depression has abundantly shown that the existence of public debt on a large scale imposes frictions and obstacles to readjustment very much greater than the frictions and obstacles imposed by the existence of private debt.”

Unfortunately, these economists were not heeded.

Franklin D. Roosevelt, who had been elected on a promise to balance the federal budget and rein in a deficit that had surged to nearly $3,000,000,000, opted to continue deficit spending.

“To balance our budget in 1933 or 1934 or 1935 would have been a crime against the American people,” Roosevelt explained in a 1936 campaign speech in Pittsburgh. “To do so we should either have had to make a capital levy that would have been confiscatory, or we should have had to set our face against human suffering with callous indifference. When Americans suffered, we refused to pass by on the other side. Humanity came first.”

Less than two years later, with the country enduring a “Depression within a Depression,” Roosevelt went even further. In his annual address to Congress, he announced he was seeking massive new spending without tax increases, marking the completion of the government’s shift to Keynesianism.

From 1933-1939, federal expenditures roughly tripled. As a result, the Great Depression was the “longest, deepest, and most widespread” economic depression of the century.

Spencer Dinwiddie is seeking to offer a simple social message: that massive public debt carries consequences. It may not be a trendy cause, but it is one that we neglect at our own economic peril.

Back to School? “No Thanks” Say Millions of New Homeschooling Parents

Next month marks the beginning of the 2020/2021 academic year in several US states, and pressure is mounting to reopen schools even as the COVID-19 pandemic persists. Florida, for example, is now considered the nation’s No. 1 hot spot for the virus; yet on Monday, the state’s education commissioner issued an executive order mandating that all Florida schools open in August with in-person learning and their full suite of student services.

Many parents are balking at back-to-school, choosing instead to homeschool their children this fall.

Gratefully, this virus seems to be sparing most children, and prominent medical organizations such as the American Academy of Pediatrics have urged schools to reopen this fall with in-person learning. For some parents, fear of the virus itself is a primary consideration in delaying a child’s return to school, especially if the child has direct contact with individuals who are most vulnerable to COVID-19’s worst effects.

But for many parents, it’s not the virus they are avoiding by keeping their children home—it’s the response to the virus.

In May, the US Centers for Disease Control and Prevention (CDC) issued school reopening guidelines that called for:

  • Strict social distancing tactics
  • All-day mask wearing for most students and teachers
  • Staggered attendance
  • Daily health checks
  • No gym or cafetaria use
  • Restricted playground access and limited toy-sharing, and
  • Tight controls on visitors to school buildings, including parents.

School districts across the country quickly adopted the CDC’s guidelines, devising their reopening plans accordingly. Once parents got wind of what the upcoming school-year would look like, including the real possibility that at any time schools could be shut down again due to virus spikes, they started exploring other options.

For Florida mother, Rachael Cohen, these social distancing expectations and pandemic response measures prompted her to commit to homeschooling her three children, ages 13, 8, and 5, this fall.

“Mandated masks, as well as rigid and arbitrary rules and requirements regarding the use and location of their bodies, will serve to dehumanize, disconnect, and intimidate students,” Cohen told me in a recent interview.

She is endeavoring to expand schooling alternatives in

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A Culture War Battle Trump Can Win

Shop all books by Pat Buchanan

Speaking at Mount Rushmore on Friday, and from the White House lawn on Saturday, July 4, Donald Trump recast the presidential race.

He seized upon an issue that can turn his fortunes around, and the wounded howls of the media testify to the power of his message.

Standing beneath the mammoth carved images of Presidents Washington, Jefferson, Lincoln and Theodore Roosevelt, Trump declared: “Angry mobs are trying to tear down statues of our founders, deface our most sacred memorials, and unleash a wave of violent crime in our cities.”

These mobs are made up of Marxists, criminals and anarchists. Their cause is a cultural revolution. “Their goal is not a better America. Their goal is the end of America.”

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After reciting the achievements of his four predecessors, Trump added: “No movement that seeks to dismantle these treasured American legacies can possibly have a love of America at its heart.”

Then he put it right into the basement hideaway of Joe Biden: “No person who remains quiet at the destruction of this resplendent heritage can possibly lead us to a better future.”

Trump is calling out Biden’s silence in the face of an onslaught against our heroes and history as manifest political cowardice that makes Biden a moral accomplice of the mobs.

One day, Basement

You can read the rest of this article at: https://www.lewrockwell.com/2020/07/patrick-j-buchanan/a-culture-war-battle-trump-can-win/

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