The Judge vs. Embrace

Alex Tabarrok recognized the passing of WV Judge Richard Neely on his blog site today. He credits the judge’s candor with getting his first paper published in 2003 in a good journal. His paper, written with Eric Helland, argued:

We argue that partisan elected judges have an incentive to redistribute wealth from out‐of‐state defendants (nonvoters) to in‐state plaintiffs (voters). We first test the hypothesis by using cross‐state data. We find a significant partisan effect after controlling for differences in injuries, state incomes, poverty levels, selection effects, and other factors. One difference that appears difficult to control for is that each state has its own tort law. In cases involving citizens of different states, federal judges decide disputes by using state law. Using these diversity‐of‐citizenship cases, we conclude that differences in awards are caused by differences in electoral systems, not by differences in state law.

But it is the judge’s very own words that confirm his economic motivation in his rulings.

As long as I am allowed to redistribute wealth from out-of-state companies to injured in-state plaintiffs, I shall continue to do so. Not only is my sleep enhanced when I give someone’s else money away, but so is my job security, because the in-state plaintiffs, their families, and their friends will reelect me. (Neely 1988, p. 4).

So what does this have to do with a post I recently wrote about Embrace, a women’s shelter in Wisconsin? The shelter’s director set up a GoFundMe page after she alienated local police by prominently advertising BLM signs around the facility. The goal was to replace $25K in funding that was pulled by the county. As of this morning the kitty is over $100K with a stated goal of $112K. I’m not sure how she picked that number, if there has been some sort of marketing strategy, to keep ratcheting up the goal as long as donors respond.

What I want people to see is the structure of the groups and the motivations for the economic activity between them. (It’s all about the group) In both cases there is a greater federal group. In both cases there is a smaller group; for judge Neely it was comprised of the citizens of WV, for the shelter it is the community which is within their service area. Both the judge and the director are extracting money from the larger group. One is unabashedly leveraging the law for the benefit of his constituents.

I question whether the other is providing full disclosure about the economic transaction that is still underway. Is there an assumption on the part of the greater public that their dollars are supporting an organization which serves a public effected by the concerns of BLM (whereas only a fifteenth of one percent of the population in this county is African American)? Or does the greater group understand they are funding a director who simply shares a similar ideology but has no power to actively contribute to the welfare of BLM?

In order to detect deceit or inefficiencies one must delineate the groups. One must also acknowledge the public nature of the motivations which drives the activity within the group–that anyone within the group receives access to the benefit. The judge, for example, rules in this way for all his constituents who found themselves in a similar conflict. That the services of the shelter are open to anyone within its service area.

Neither the judge nor the director evaluate whether the taking of resources from the greater group harm or diminishes services in some way to other members of the greater group. Their pursuit for funds is fulfilled under the nature of a private transaction, no different than how a corporation pursues funds for their services. This mode of competitive behavior happened recently when states bid against each other for PPE’s in the early days of the covid-19 crisis. Although they work as agents for a public, their obligation for such is only to the inner group.

Judge Neely was one of those confident individuals who scoffed at the traditional method of holding group norms behind a cloak of anonymity. For this we can be thankful, as his words confirm this social economic group structure and the motivation that drives its behavior.