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McCauliff on Financial Regulation & Distributive Justice

By Lawrence Solum

Catherine M.A. McCauliff (Seton Hall University - School of Law) has posted Didn't Your Mother Teach You to Share?: Wealth, Lobbying and Distributive Justice in the Wake of the Economic Crisis (Rutgers Law Review, Vol. 62, 2010) on SSRN. Here is the abstract:

My article entitled, Didn't Your Mother Teach You to Share?: Wealth, Lobbying and Distributive Justice in the Wake of the Economic Crisis, deals with change in financial regulation. Whether legislative or technological, change is always difficult to envision and accomplish. True high-speed rail and the fastest internet, available in parts of Europe and Asia, are variously estimated to be from fifteen to fifty years away for the United States as a consequence of cultural barriers. Similarly, legislative reform should be immanent in both the disclosure and substantive terms of financial investments and consumer credit cards, mortgages and other instruments. Cultural barriers again hinder implementing legislation. This article focuses on one analysis of, and justification for, the needed changes: the jurisprudence of distributive justice. The meaning and understanding provided by a jurisprudential analysis may inform policy and legislation.

The article also examines the obstacles to passing reform legislation. The cultural habits of secrecy and extreme profits on Wall Street are fiercely held and well financed. The continued culture of outsize profits is produced by taking unwarranted investment risks. The desire to mold legislation through lobbying is also designed to keep that culture of wealth in place. Such self-serving behavior raises "deep and unsettling questions" about this numerically very small culture of Wall Street which nevertheless dominates regulation and tax legislation relative to protecting its extraordinary profits. Even if legislative change does not fully come about now, this article addresses the academic's duty "to expose the patterns of risk and denial" after "a bubble of false prosperity and [continued] excessive materialism."

Full post as published by Legal Theory Blog on March 19, 2010 (boomark / email).