August 31, 2007

The Law: It Keeps Growing and Growing...

A legal working paper claims that judges consistently rule in a manner which expands the scope of the legal profession and the privileged standing of lawyers (HT: Instapundit). A speech by Dennis G. Jacobs, Chief Judge of the Court of Appeals for the Second Circuit, to that effect is transcribed in the May 2007 Fordham Law Review (PDF here).

Are these two documents inconsequential--neither mentioned Warren Burger's bygone warning--or will society begin taking the issue seriously?

Two big legal fish have been hooked recently. Richard Scruggs (tobacco companies) has been indicted for criminal contempt:
(Federal Judge) Acker feels Scruggs did not comply with an injunction in December, refusing to hand over documents from E.A. Renfroe, a claims-handling company working with State Farm, back to the company's attorneys.

Instead, Scruggs gave them to Mississippi Attorney General Jim Hood. Acker recommended to U.S. Attorney Alice Martin that she pursue criminal contempt charges, but she declined. That's when Acker enlisted the special prosecutors.
William Lerach (securities law) has left the firm he founded, which is dropping his name, to defend himself against plaintiff-kickback charges:
Sources familiar with the matter said in June that Lerach and founding partner Melvyn Weiss had rejected an offer from prosecutors to plead guilty and serve prison sentences.
It remains to be seen whether all the above is the beginning of a trend. Skepticism is warranted: Burger's warning made no more difference than did Eisenhower's warning about the military-industrial complex.

Addendum May 31, 2008. The worthy Professor Barton, author of the working paper mentioned above, has written another one, which "argues that the shared characteristics, thought-processes, training, and incentives of Judges and lawyers lead inexorably to greater complexity in judge-made law."

August 26, 2007

China: Westward Ho?

Dinocrat discusses an example of how China's prosperity is migrating inland from the coasts.

Currently China's growth is export-driven. There might come a point at which it is driven by a mandate to bring prosperity to the interior, thereby creating internal markets for Chinese products. Perhaps a Chinese version might emerge of the Turner thesis of the frontier's effect on the American character. (By titling a post 'The Wild West', Dinocrat comes to the verge of this hypothesis. Note that the upgrading of the Chinese interior goes hand-in-hand with urbanization, which was not the case in the USA.)

A growing China has an obvious interest in the energy resources of the Middle East. As it climbs toward its ancient place as the Central Kingdom, might it not 'accept' the obligation to 'assist' its fellow primal civilizations, i.e. might China not concoct its own version of Manifest Destiny? And wouldn't it be ironic if restoring Mideast Christianity were part of the pretext?

August 24, 2007

Should Mortgages Go Back to the Future?

Victor Davis Hanson is usually thought-provoking:
I Guess We Forgot the Laws of the Past

There used to be certain laws about mortgages, wisdom slowly acquired through past boom and bust cycles of American history. You got a fixed, usually 30-year mortgage. You paid 20% down. And you bought a house whose debt payments did not eat up more than 30-40% of your monthly income.

Tales of wild real estate riches and speculative profits, even if true, meant little, since a home was more than just an investment. Somehow all that was forgotten with no or little down payment loans, adjustable-rate or interest only schedules, and excess purchased square footage.

Apparently the idea was either to appreciate yourself into 2nd and 3rd mortgage equity, or to expect interest rates magically to go down and thus lower payments, or to buy and sell/buy and sell yourself into a mansion. So the house of straw is now tragically collapsing, and the old wisdom of the past being relearned.
From the abstract of "Do Households Benefit from Financial Deregulation and Innovation? The Case of the Mortgage Market" (Public Policy Discussion Paper No. 06-6) by Kristopher Gerardi, Harvey S. Rosen, and Paul Willen from the Boston Fed:
The U.S. mortgage market has experienced phenomenal change over the last 35 years. Most observers believe that the deregulation of the banking industry and financial markets generally has played an important part in this transformation...This paper develops and implements a technique for assessing the impact of changes in the mortgage market on individuals and households.

Our analysis is based on an implication of the permanent income hypothesis: that the higher a household’s future income, the more it desires to spend and consume, ceteris paribus. If we have perfect credit markets, then desired consumption matches actual consumption and current spending on housing should forecast future income. Since credit market imperfections mute this effect, we can view the strength of the relationship between housing spending and future income as a measure of the “imperfectness” of mortgage markets. Thus, a natural way to determine whether mortgage market developments have actually helped households by decreasing market imperfections is to see whether this link has strengthened over time.

We implement this framework using panel data going back to 1969. We find that over the past several decades, housing markets have become less imperfect in the sense that households are now more able to buy homes whose values are consistent with their long-term income prospects.
The full text is available at the above link.

Excesses and malfeasances should be corrected and their recurrence should be disincentivized, but let's not throw out the baby with the bathwater.

The possessions that pioneers loaded on their prairie schooners were important--not just for survival, but to create a new and better future. So, too, the lessons of history are important.

August 22, 2007

America, O America...

Lawyers have showed up faster than a fly-by-night mortgage broker would approve a 2% teaser ARM with a balloon payment.
"It's a three-part business cycle now," said Don Lampe, a partner with the law firm Womble Carlyle, whose specialty is mortgage matters. "Boom, bust and recrimination..."
No fan of the bar, I must acknowledge that Mr. Lampe deserves a niche in the historical record for that.

August 17, 2007

A Feminist? Me?

I took the feminist quiz that Dr. Helen linked last week. My rating:
You are a total feminist. This doesn't mean you're a man hater (in fact, you may be a man). You just think that men and women should be treated equally. It's a simple idea but somehow complicated for the world to put into action.
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain inalienable rights... I don't see why believing that makes me a feminist.

August 16, 2007

A Modest Proposal for CBS

Since CBS paid Don Imus to be an abrasive jerk, I'm inclined to believe that he was treated unfairly when CBS fired him for being an abrasive jerk.

It is rumored that Imus is returning to the air, possibly even to his old job.

A better idea for Les Moonves: have Imus replace Katie Couric as anchor of the evening news.

(Having never watched or listened to Couric or Imus afaik, I am objective and unbiased in the matter...)

August 15, 2007

Tin Ears at the Mint

The Sacagawea and Susan B. Anthony dollar coins were not accepted by the public. Presumably in the hope that the third time is the charm, the Mint is trying again with a series of dollar coins commemorating the Presidents. According to the Mint site, the dollar coins are 'historic change'. No comment.

Mint Director Edmund Moy speaks (with an eye on postretirement career options?):
"Vending machine companies are spending up to $1 billion a year in maintenance costs due to paper jams," he said. "More use of dollar coins will mean less in maintenance costs."
Compassionate conservatism in action: when vending machine companies are hurting, the government has got to move.

There is also a First Spouse Coin Program under which gold coins are struck with Presidents on one side and their First Ladies on the other. 'First Spouse' jars my ear: if 'First Lady' offends enlightened sensibilities, how about 'Presidential Spouse'? IMO the upscale PC crew that would insist on 'First Spouse' will not collect these coins, and the term repels traditionalists who might do so.

August 13, 2007

The Next Post Will Be My Fourteenth

I'm triskaidekaphobic, and my prose is too prolix.

August 12, 2007

Collectivist Indoctrination in Seattle Elementary School

This has been kicked around the blogosphere: I saw it at Dinocrat and other places I can't remember. The post title and the links give the gist; I won't recapitulate.

However, I have a small quantitative point to add. Searching the teachers' article for the word liberty yields no hits. Searching for free gives only this passage:
As children finished their drawings, we gathered for a meeting to look at the drawings together. The drawings represented a range of understandings of power: a tornado, love spilling over as hearts, forceful and fierce individuals, exclusion, cartoon superheroes, political power.

During our meeting, children gave voice to the thinking behind their drawings.

Marlowe: "If your parents say you have to eat pasta, then that's power."

Lukas: "You can say no."

Carl: "Power is ownership of something."

Drew: "Sometimes I like power and sometimes I don't. I like to be in power because I feel free. Most people like to do it, you can tell people what to do and it feels good."

Drew's comment startled us with its raw truth. He was a member of the Legotown inner circle, and had been quite resistant to acknowledging the power he held in that role. During this discussion, though, he laid his cards on the table. Would Drew's insight break open new understandings among the other members of the inner circle?
(Boldface mine.) The single free stands bracketed by multiple powers. In fact, searching for power gives 44 (forty-four) hits.


August 11, 2007

Fleeing America

The Euro has appreciated by almost 50% against the dollar on Bush's watch, but that's not the only thing to be concerned about.

I happened to check on a foreign stock I'd once bought on the New York Stock Exchange, but couldn't find it...? Foreign companies, citing high administrative and regulatory costs, are delisting from the NYSE in droves.

Such costs presumably contribute to the decision of many American companies to go private, and to the number of IPOs which are occurring on foreign exchanges rather than in the US. Then there's the situation with securitized American mortgages.

Will the world's financial traffic reroute around America the way the Internet routes around censorship? My guess is that we're not at that point yet, but if it happens it will happen faster than people expect. If the next president is also incompetent, that might be enough to trigger the shift; if the next two are, IMO that should do it.

This ought to be an issue in the next election.

Displacing America as the world's financial nerve center would be wrenching for all involved. Whatever arrangement followed might become worse than the current one. But the Bush administration--not to mention the Democratic and Republican parties who concocted Sarbanes-Oxley--has flagrantly thumbed its nose at the electorate, and apparently they have not yet learned from the consequences.

Afterthought. Although Oxley has conceded that Sarbanes-Oxley went too far, perhaps the establishment is still in denial about its consequences at the margin. The law enhances upper management's personal responsibility for a public company's financial statements. Combine American civil litigiousness and scalp-hunting criminal prosecutions like the Conrad Black trial--not that Black is a paragon--, and it's not surprising that foreign CEOs decide they don't need the aggravation.

August 7, 2007

Slim and Bill

The world's richest individual may no longer be Bill Gates, but Mexican tycoon Carlos Slim. This Wall Street Journal article is currently free but may eventually go into the pay archive:
The Secrets of the World's Richest Man
Mexico's Carlos Slim makes his billions
the old-fashioned way: monopolies
Mr. Slim's strategy has been consistent over his long career: Buy companies on the cheap, whip them into shape, and ruthlessly drive competitors out of business....

His control of Mexico's telephone system has slowed the nation's development. While telephones have long been standard in any American home, only about half of Mexican homes have them. Only 4% of Mexicans have broadband access. Mexican consumers and businesses also pay above-average prices for telephone calls, according to the Organization for Cooperation and Economic Development.
There is no obvious successor to the patriarch's empire. That gives some Mexican officials hope that one day the state can regulate his companies. Says one high-ranking official: "When Slim dies, we can finally regulate his kids."
I have no problem with this per se.

(In defense of America's cowboy reputation, I assert that if our Mr. Bill were as free to act monopolistically as Carlos Slim is, it would be no contest. Gates is not as free: Microsoft was reined in by the courts.)

Sensible regulation of monopolists presumably benefits our economy. If a titanic illegitimate monopoly damages the Mexican economy, presumably that is no concern of the United States.

However, we are undergoing massive illegal immigration. To what extent is this due to the lack of opportunity in the stifled Mexican economy? Does the situation increase the radical US-unfriendly left's attractiveness to the Mexican electorate?

Is America in effect subsidizing the fortunes of Slim and those like him?

August 5, 2007

Goose Creek, SC...Again

Two foreign Arab students were arrested after a routine traffic stop. Explosives--fireworks, according to the students--were found in the car. See here and here.

They might be terrorists or jihadis: dilettantes or pros. They might be punks. They might be damfool college students. They might be from privileged families and believe that they can disregard American laws.

We're at war. But if the detainees are not terrorists, they should not be tossed onto our ever-expanding flypaper of laws and regulations. If they're jihadis and/or terrorists, treat them accordingly. If they're not, give them a figurative slap on the rear end and deport them or let them go back to school, whichever is prudent.

Wartime authorities should err on the side of caution, but Goose Creek has made itself notorious. After the 2003 drug raid during which police burst into a high school with police dogs and guns drawn, Internet wags were calling the place Goose Step. (The incident has been settled for $1.2M.)

Time may tell.

August 4, 2007

I was tempted to soften on Bush. Then he put himself back in the news.

In 2006, an average of almost 100 motorists died daily in passenger vehicles and large trucks and on motorcycles.
Most significantly, fatalities of occupants of passenger vehicles—cars, SUVs, vans and pickups—continued a steady decline to 30,521, the lowest annual total since 1993...
according to the NHTSA.

May the Minneapolis toll stay comparatively low: under 20, or even 15 or less.

It's bad enough that lawyers are swarming the situation, looking for any deep pocket that can be linked, however peripherally, to the bridge:
Private contractors and the insurance companies that represent them could face hundreds of millions of dollars in legal claims arising from the collapse of the Interstate 35W bridge, attorneys familiar with such cases said Friday.
And the Bushes, both of them, made separate visits to the site while people were working after the accident. Conceivably the rescuers appreciated the visits, but in their place I'd be angry to be interrupted by rigamarole.

From a White House press release:

I'm here with the Secretary of Transportation, because our message to the Twin Cities is, we want to get this bridge rebuilt as quick as possible; that we understand this is a main artery of life here; that people count on this bridge and this highway system to get to work. There's a lot of paperwork involved with government. One of our jobs is to work with the Governor and the Mayor and the senators and the members of the Congress to cut through that paperwork, and to see if we can't get this bridge rebuilt in a way that not only expedites the flow of traffic, but in a way that can stand the test of time.

I make no promises on the timetable. I do promise that Mary Peters, the Secretary of Transportation, is going to be in charge of this project. I do promise she's going to listen to the local authorities to find out what the folks here need. I do promise that when she sees roadblocks and hurdles in the way of getting the job done, she'll do everything she can to eliminate them.

There's a lot of paperwork involved with government. Republican Bush states this as a given. Even Jimmy Carter did better.
One of our jobs is to work with the Governor and the Mayor and the senators and the members of the Congress to cut through that paperwork,... The people who are responsible for the stifling unnecessary paperwork mug for the cameras as they offer to help with it. ...and to see if we can't get this bridge rebuilt in a way that etc. So the most powerful man in the world flies halfway across the continent and says he's going to "see if we can't get the bridge rebuilt." I do promise that Mary Peters, the Secretary of Transportation, is going to be in charge of this project. He puts the Secretary of Transportation in charge of building a single bridge in the upper Midwest. I do promise...I do promise...I do promise... None of these promises involves anything for which he is accountable.

Minnesota's Republican governor let it be known that he's open to a tax increase. Times are good, and Minnesota is a prosperous state. If a rainy-day fund hasn't been established for this kind of emergency, the political establishment is irresponsible, to put it as kindly as possible.

Naturally, Congress has gotten into the act.

More from Republican governor Pawlenty:
While the searchers continue their work, efforts are under way to build a replacement bridge. Congress and the President are expected to provide $250 million for a new structure. Minnesota Gov. Tim Pawlenty says that's appreciated, but there may be a need for more federal money.

"We view the 250 as a wonderful gesture and a very, very meaningful step. But we also may be asking them, will be asking them for additional help," Pawlenty said.

Bridge industry analysts say the cost of building a new Interstate-35W bridge could be as high as $350 million. During a news conference in the park by the old Stone Arch Bridge in Minneapolis, Pawlenty said he wants the new bridge finished as quickly as possible. While the governor spoke a steady stream of people walked by to view what they could see of the collapsed bridge.
Hey, fiscally responsible Republican governor, maybe you won't need to raise taxes because you can get money from the federal government, in whose coffers it spontaneously materializes.

This wasn't Hurricane Katrina. Prosperous Minnesota has about 5 million people, 3 million of whom are in Minneapolis-St. Paul. $350M divided among 5M people comes to $70 each. Spread over say 20 years, that's hardly overwhelming even after interest is added. Although Minnesota has a AAA credit rating and the economic outlook was just upgraded from stable to positive, I don't want to be mean (in either sense) or doctrinaire. If the state asked the feds to cover the interest on a bond or for a no-interest loan, I wouldn't dismiss the idea out of hand. But when the federal government gives a blank check, the state has no incentive to control costs. (Maybe that's the point: the money may serve to increase the "role" of the federal a civilian bridge.)

"The President protects you from other people's Congressmen."

"The Democrats are the mommy party and the Republicans are the daddy party."

Yeah, right.

August 3, 2007

NC Flag-Desecration Charges Dropped

See here for background. In brief, a NC couple provocatively prominently displayed an upside-down American flag in front of their home to express their political concerns. Apparently incited by local National Guardsmen (!), a lout with a badge newbie county deputy told them to stop and, according to witnesses, broke into their house when they refused. Police swarmed the property and arrested the husband.

I can't stand sanctimonious obnoxious goo-goos. I wouldn't have condoned scrawling a nastygram on the
Kuhns' sidewalk or TPing the house, but it wouldn't have perturbed me very much either.

However, illegal use of force by law enforcement, egged on by members of the armed forces, overrides my distaste for the victims. The responsible officer should be fired and perhaps charged and, although I grit my teeth to write this, the Kuhns should get a fat settlement from the county.

August 2, 2007

Today's Date: August 2, 2001?

Dinocrat notes that the recent increase in consumer confidence returns it to its pre-9/11 level.

I have not felt so anomic about the future since the Carter administration.

Objectively, things are much better today than they were then. However, back then I drew on the invisible psychic capital that comes with youth. What would I be thinking if things today were as bad as they were under Carter? I hope not to find out.

Parasitic(?) Lawyers

There's been a kerfuffle in the blogosphere about the social value of lawyers. Ward Farnsworth's guest post at the Volokh site apparently started it, Classical Values and others joined in, and Instapundit linked.

Nowhere in my (unthorough) scanning of these posts and comments did I notice a reference to Warren Burger's warning:
We may well be on our way to a society overrun by hordes of lawyers, hungry as locusts, and brigades of judges in numbers never before contemplated.
I gather that Burger is not regarded as an eminent Chief Justice, but you'd think that his position alone would give his comment classic status among anti-lawyer critics.

Maybe Burger is anathema to Republicans because he presided over Roe v. Wade, and anathema to Democrats because he was a Republican.

Addendum 20091127. The Time cover about lawyers is here; the cover story is here.