Category Archives: Economic Crisis

New Article: “Implicit Legislative Bias: The Case of the Mortgage Interest Deduction”

New Article: Leigh Osofsky and Kathleen DeLaney Thomas, Implicit Legislative Bias: The Case of the Mortgage Interest Deduction, 56 UC Davis L. Rev. 1 (2022). Abstract below:

The home mortgage interest deduction is over 100 years old. The deduction has been subject to increasing and, at times, withering criticism from commentators. Scholars have argued that the mortgage interest deduction may be a particularly ineffective and regressive way to subsidize homeownership. Other scholars have made the important point that the mortgage interest deduction has a disparate racial impact: homeowners are disproportionately white, so the deduction disproportionately benefits white people at the expense of people of color. Yet, the mortgage interest deduction has retained remarkable and costly staying power despite all the critiques.

How has the mortgage interest deduction persisted over a century, despite extensive critique? We argue that an underappreciated part of the story of the mortgage interest deduction is how its very creation arose out of implicit racial bias and other cognitive biases. First, scholars and policymakers ignored the racialized history of homeownership in the United States and relied on racist tropes in studying the potential economic benefits of the deduction. After such associations occurred, policymakers misattributed to homeownership benefits that were really, at least in part, benefits that flowed from whiteness. Perceiving positive benefits from homeownership, legislators viewed it as a good worth subsidizing through the tax system. Cognitive biases such as confirmation bias then made it unlikely that, once in place, the mortgage interest deduction would be substantially changed.

This understanding of the mortgage interest deduction should upset any future attempts to characterize the deduction as a neutral, albeit flawed, way to subsidize desirable values. More generally, this case study illustrates a phenomenon that merits more attention in the legal literature: how implicit racial bias and other cognitive biases in the legislative process make flawed legislation, like the mortgage interest deduction, more likely to be made and more difficult to upend. We conclude by offering suggestions for minimizing bias in future legislation and for reforming existing legal policy that already reflects such bias.

New White House Report: “President Biden Announces New Actions to Ease the Burden of Housing Costs”

As President Biden said last week, tackling inflation is his top economic priority. Today, President Biden is releasing a Housing Supply Action Plan to ease the burden of housing costs over time, by boosting the supply of quality housing in every community. His plan includes legislative and administrative actions that will help close America’s housing supply shortfall in 5 years, starting with the creation and preservation of hundreds of thousands of affordable housing units in the next three years. When aligned with other policies to reduce housing costs and ensure affordability, such as rental assistance and downpayment assistance, closing the gap will mean more affordable rents and more attainable homeownership for Americans in every community. This is the most comprehensive all of government effort to close the housing supply shortfall in history.

New Article: “Taxation of Long-term Unemployment in the Digital Economy: Facing the Twenty-First Century Challenges”

New Article: Limor Riza, Taxation of Long-term Unemployment in the Digital Economy: Facing the Twenty-First Century Challenges, 70 Cath. U. L. Rev. 421 (2021). Abstract below:

The article examines the policy of taxing long-term unemployment. We claim that tax systems should not tax the unemployed regardless of whether they reenter the labor market. Unemployment is a socioeconomic problem. The fear of expanding unemployment increases due to COVID-19 that shut down large sectors of the economy for a long period and also due to the digital economy. As early as the 1930s, Keynes expressed his fear of the economic challenges his grandchildren’s generation would face, coining the term “technological unemployment.” Several contemporary economists substantiate this fear by showing that some occupations are bound to disappear. Unemployment insurance is part of social law aimed at granting financial security during unemployment. This article focuses on security benefits paid out of unemployment insurance programs to unemployed who become chronically so. In many countries it is common to tax unemployment benefits, but tax laws do not distinguish between short-and long-term unemployed taxpayers. Given that the future of the occupational security of the unemployed is dubious, taxation should take into consideration the future “dimension” of equity. In order to assess the proper taxation of the long-term unemployed, the article adopts the reciprocity principle, which is reinforced by lifecycle theory. Equity cannot be measured over a single year, but over a longer period, during which we should examine whether the unemployed has become chronically so–one who cannot find a job even after exhausting his rights to unemployment insurance. The article proposes three taxation periods reflecting reciprocal relationships between a taxpayer and society–employment, regular unemployment, and chronic unemployment–and the reciprocity between two adjacent periods is then examined. Since unemployment insurance programs are well rooted in many countries, the article’s recommendations are practically universal.

Free Book: “The Foreclosure Echo: How the Hardest Hit Have Been Left out of the Economic Recovery”

51jdFx5TTWL._SX331_BO1,204,203,200_This book has been out since 2019 but it is now posted on SSRN in its entirety so I thought I should highlight it (esp. since I missed it in 2019): Linda E. Fisher & Judith Fox, The Foreclosure Echo: How the Hardest Hit Have Been Left out of the Economic Recovery (Cambridge University Press, 2019). Overview below:

This book tells the story of the foreclosure crisis from a new perspective – that of ordinary people who experienced it. This angle has not been thoroughly communicated before now. The authors are legal academics who have worked for decades defending low- to moderate-income people from foreclosure and challenging predatory lending practices. They have a wealth of experience representing people whose American Dream was shattered when they were threatened with losing their homes. Using actual experiences – often examined through a legal lens – supplemented by economic, social science and legal research, The Foreclosure Echo explains how people experienced the crisis and how their lenders and public institutions let them down. The book also details the lingering effects of the crisis – such as vacant and abandoned buildings – and how these effects have magnified inequality. Finally, the book suggests reforms that could help avoid another crisis.

New Mini-Report: Economic Outcomes For Indigenous Peoples In The United States Following The Great Recession

New Mini-Report: Randall Akee, Economic Outcomes For Indigenous Peoples In The United States Following The Great Recession, IRP Focus on Poverty, Mar. 2022.

New Article: Criminalizing Property Rights: How Crime-Free Housing Ordinances Violate the Fifth Amendment

New Article: Laura Flint, Criminalizing Property Rights: How Crime-Free Housing Ordinances Violate the Fifth Amendment, 70 Emory L. J. 1369 (2021). Abstract Below:

Crime-free housing ordinances allow municipalities to force private landlords to evict tenants who have committed crimes or allowed a guest who has committed a crime into their home, regardless of the tenant’s knowledge. These ordinances have proliferated throughout the country since the turn of the century and pose interesting questions about landlord and tenant rights under the Constitution. This Comment explores a new strategy for landlords and tenants attempting to confront these ordinances—challenging them under the Fifth Amendment. The Supreme Court has recognized two types of takings that are due just compensation under the Fifth Amendment: possessory and regulatory takings. This Comment argues that compulsory evictions, as mandated by crime-free housing ordinances, qualify as possessory and regulatory takings for tenants, but not for landlords. While the landlord’s property rights have only been circumscribed because he or she has to find a new tenant and has lost the revenue from the original tenant, the tenant loses all of his or her property rights in the tenant’s leasehold estate after eviction under a crime-free housing ordinance. Additionally, government actors may engage in physical invasions to effectuate the eviction and “total taking” of the property. The taking is for the public purpose of reducing and preventing crimes, and the tenant is owed just compensation under the Takings Clause. Compulsory evictions under crime-free housing ordinances are unconstitutional without just compensation under the Fifth Amendment.

New Symposium and Publication: American Journal of Law and Equality and the Symposium on Michael Sandel’s The Tyranny of Merit

New Symposium and Publication: American Journal of Law and Equality, Symposium on Michael Sandel’s The Tyranny of Merit, 1 Am. J. L. Equal. (2021). List of Articles Below:

New Article: “Disparate Recoveries: Wealth, Race, and the Working Class after the Great Recession”

New Article: Fenaba R. Addo & William A. Darity, Jr., Disparate Recoveries: Wealth, Race, and the Working Class after the Great Recession, The ANNALS of the American Academy of Political and Social Science, Aug. 2021.

New Article: Millions Face Loss of Jobless Aid: ‘Without It, I’m Dead in the Water’

New Article: Ben Casselman, Millions Face Loss of Jobless Aid: ‘Without It, I’m Dead in the Water’,

As many as 13 million people are receiving payments under the programs, which Congress created last spring to expand and extend the regular unemployment system during the coronavirus pandemic. Leaders of both major parties have expressed support for renewing the programs in some form, but Congress has been unable to reach a deal to do so. It remains unclear how the results of last week’s election will affect prospects for an agreement.

New Article: Recession With a Difference: Women Face Special Burden

New Article: Patricia Cohen, Recession With a Difference: Women Face Special Burden, N.Y. Times (Nov. 19, 2020).

Hit hard by job losses and the pandemic’s effect on schooling and child care, American women face short-term difficulties and long-term repercussions. For millions of working women, the coronavirus pandemic has delivered a rare and ruinous one-two-three punch.