About This Blog

Entries beginning with a number are a continuation of the old Judging Crimes blog, which was long focused on the two meanings of its name: the way crimes are judged in America, and the, uh... occasional defalcations and derelictions of the berobed.

Judging Crimes took a long hiatus for some of the reasons explained here.

Entries beginning with Book 'em! are book reviews and commentaries. No attention is paid to the imperatives of book marketing. As Calvin Trillin once pointed out, the average shelf life of a book in a bookstore falls somewhere between milk and yogurt, but in these days of long-tail online marketing that matters less to everyone, and I don't see why it should matter at all to reviewers. Most posts will be about books that have been around long past the time when yogurt would have solidified.

Other entries will be... well, I'm curious to find out what the others will be.

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JoelJacobsen.com

Tuesday
Jan262010

422. Non-Judging Crimes

Immigration judges aren't, as their name might otherwise imply, judges.  They're Department of Justice employees, complete with union

They're not judges in another sense, too, according to a South Florida Sun-Sentinel (in Miami, even the sun needs a sentinel) article posted by Sonia Ansari over at Our Curious Immigration Laws.  They don't have to follow the law but can just indulge their mood swings:

Of South Florida's 26 immigration judges who saw large numbers of asylum seekers, grant rates ranged from 22 percent to 98 percent.

By way of comparison, here's a chart of the rate at which Bernalillo County (i.e., Albuquerque) Metropolitan Court judges dismissed drunken driving charges in 2006.  The rate varied from 20% to 51%, a mere 31% swing.  Amateurs.  Florida's immigration non-judges had a swing two and a half times that.

And then you toss in New York's Immigration (Non-)Judge Margaret McManus, who denied just 9.8% of the petitions presented to her, according to this chart put together by researchers at Syracuse University.

Want to know just how arbitrary and lawless immigration judges can be?  One of them just granted political asylum to a German couple who claimed they were being persecuted by school-attendance laws.  (The story got a lot of ink in the German press last spring when the application was filed, but I don't see any reaction to the ruling yet.)

If even-handed enforcement of democratically-enacted child-welfare laws is political persecution, then what should we call deporting people because a non-judge has an upset stomach?

Back in 2006, the Eleventh Circuit reversed a decision by Immigration (Non-)Judge Bruce Solow (78.2% denial rate) to deny asylum to a Chinese practitioner of Falun Gong, because 

Solow's denial "was based on his own knowledge of Falun Gong, and was not supported by the record."

The Circuit Court's opinion stated that, "The Immigration Judge [found] Zheng's responses to questions regarding the nature of Falun Gong insufficient to show that 'he kn[ew] anything', declaring Zheng's responses to be 'as instructive as opening a fortune cookie' and 'quite off-the-wall.'" ...

Even worse, one of the reasons Judge Solow questioned Zheng's credibility was because he was "sniffling like crazy" during the hearing, even though Zheng had, in Solow's words, practiced Falun Gong because it "fixed him up."

According to the Eleventh Circuit opinion, Solow "commented on Zheng's sniffling twice during the hearing. The second time, he appeared almost hostile about it: 'Still sniffling, huh?... Here, I'll give you a tissue. Yeah. Go ahead, have a nice tissue on the Court. Go ahead.'"

That's from either Frank Houston or Emily Witt, or both, in the Miami New Times news blog from 2006.  The post includes a link to the opinion.

In another case, involving a former cop named Roscoe Campbell from the Bahamas who claimed his life was in danger because he blew the whistle on corrupt ex-colleagues, the Eleventh Circuit affirmed Solow's denial of the asylum petition despite the following:

While it is true that the IJ [more properly, I(N-)J] interrupted Campbell's testimony throughout the hearing, a review of the record indicates the purpose of most [!] of the interruptions was to gain more clarification with regard to his testimony.  The IJ's inappropriate conduct was not limited to Campbell, but was directed toward the government's attorney, too, and, therefore, it does not necessarily show bias against him as much as improper conduct generally.

Oh, if it's just improper conduct generally, that's okay, then.  The Eleventh Circuit added:

While it is true the IJ appeared impatient and annoyed by some of Campbell's responses and made some unnecessary and unprofessional comments at the hearing and in his oral decision, Campbell has not shown that the outcome would have been different in the absence of those comments and interruptions.

How would one show that an outcome would have been different if a judge, or non-judge, had behaved professionally?  Hard to tell if the Eleventh Circuit is being serious in this passage, or when it observes that Campbell's attorney didn't "object[] to the IJ's questions," as if objecting to the judge about the judge's questions in order to obtain a ruling from the judge concerning the judge was an option.

As most of you have probably guessed, the Eleventh Circuit's opinion, while making Solow sound pretty bad, actually downplayed what he'd done.  A complaint Campbell filed with the DOJ's Office of Professional Responsibility,

described Solow's behavior during the Campbell hearing as "abusive and intemperate." The transcript showed, he said, that the judge had "commandeered" the entire direct examination. Campbell's attorney asked only 13 questions but the judge asked more than 200 "in rapid fire fashion -- each time interrupting Mr. Campbell's answer to the previous question." He continually accused Campbell of lying and made mocking jokes, such as asking Campbell whether he spoke to fictional characters from detective novels, for example Zelda Jones (from a series of books by Sharon Duncan), at the U.S. Embassy.

At the close of evidence, said the complaint, the judge stated, "This is so vague and general you could vomit and I could vomit because I can't, he wants me to become a magician here and grant it merely based on this kind of testimony," and "I think this case, quite frankly, I hate to use the word but I think it stinks. It smells bad because there's no way, this is pie in the sky."

Somehow, I get the impression that he didn't really hate using the word "stinks."

The amazing thing is that, after the passage of years, the Board of Immigration Appeals actually came down on Solow, siding with the abused rather than the abuser.  Campbell will get a new hearing before a new non-judge.

Meanwhile, Solow remains on the non-bench.  He's defending himself on the ground that he has absolute discretion to do anything he wants short of taking bribes.  In other words, that the Department of Justice "has no jurisdiction to investigate immigration judges unless there is an allegation of corruption." 

An agency has no jurisdiction to investigate - not adjudge, but investigate - one of its own employees??  The fact that Solow would pursue such a defense might strike some as further proof of his unfitness for office. 

How do people like Solow get appointed in the first place?  The Washington Post answered that question in 2007.  A significant percentage of immigration (Non-)Judges are party loyalists with law degrees who couldn't get approved for real judgeships.

Another significant percentage, doubtless, is composed of dedicated immigration lawyers with the kind of temperament that suits them better for a position behind rather than before the non-bench. 

Solow, I think it's safe to say, doesn't belong in the second group.

Marcia Cole's National Law Journal article adds that "A number of immigration lawyers who have practiced before him for many years insist that is undeserved punishment of a judge who is demanding, compassionate and objective."

But then, if Solow is really as "unprofessional" as the Eleventh Circuit says - meaning nasty,  unreasonable and abusive - and you had to appear in front of him, wouldn't you line up to the be the first to tell the reporter what a gem of a prince of a gentleman and scholar he is?

After all, the very worst judges are the ones most likely to do favors in return to public sycophancy. 

Monday
Jan252010

421. They do things differently over there

Braving the pigeons, thousands of photographers demonstrated in Trafalgar Square against the "stop and search" laws granted British police by a 2000 anti-terrorism law. 

In December Guardian reporter Paul Lewis was stopped and searched while taking pictures of the Gherkin building in London and Grant Smith, an architecture photographer, was apprehended around the corner while photographing Sir Christopher Wren's Christ Church.

Other recent cases include Jeff Overs, a BBC photographer who told the Andrew Marr Show he was stopped under suspicion of terrorism reconnaissance while photographing St Paul's Cathedral, and Andrew White, an amateur photographer questioned by two police community support officers for photographing Christmas lights in Brighton.

Last April two Austrian tourists were forced to delete their shots after being stopped by police in Walthamstow; and Alex Turner, an amateur photographer, was arrested under section 44 after taking images of a fish and chip shop in Kent.

Well, the fish and chip shop, that's understandable.  But the Gherkin Building?  Who'd want to blow that up? 

Tragically, however, the same article 44 stop and search powers are sometimes used to investigator people considerably less suspicious than newspaper photogs.  You can read the act here, starting with paragraph 28, but the Irish Times description gets the idea across:

Under the 2000 Act a senior police officer may issue an authorisation, if he or she considers it “expedient for the prevention of acts of terrorism”, permitting any uniformed police officer within a defined geographical area to stop any person and search him or her and anything carried by him or her.

The authorisation must be confirmed by the Secretary of State within 48 hours. A search can be carried out by a constable in an authorised area whether or not he has grounds for suspicion, but may only be “for articles of a kind which could be used in connection with terrorism”.

The police officer may request the individual to remove headgear, footwear, outer clothing and gloves and place his or her hand inside pockets, feel around and inside collars, socks and shoes and search hair. The search takes place in public and failure to submit to it amounts to an offence punishable by imprisonment or a fine or both.

Of course, the officer on the beat's discretion isn't unfettered.  He's supposed to get authorisation (no zeds, please, they're Brits), and that "may be given only if the person giving it considers it expedient for the prevention of acts of terrorism."

Here's a story about how the stop and search powers operate in real life.  First, let's set the scene: "Between 9 and 12 September 2003 there was a Defence Systems and Equipment International Exhibition (“the arms fair”) at the Excel Centre in Docklands, East London, which was the subject of protests and demonstrations."

Okay, so we have an "arms fair" (bet the cakewalk was something else), an organized demo, and a statute authorizing cops to stop and search when "expedient."  Put them together and turn them over to the testosterone-influenced and, as Gary Larson might have said, there was bound to be trouble brewing.

[Kevin] Gillan was riding a bicycle and carrying a rucksack [on his way to the demonstration] when stopped and searched by two police officers. [Pennie] Quinton, a journalist, was stopped and searched by a police officer and ordered to stop filming in spite of the fact that she showed her press cards.

The two brought an action in the European Court of Human Rights, a 7-judge panel of which unanimously sided with them against the English police in an unusually wide-ranging opinion.

So far, nothing too out of the American lawyer's experience.  But then you get to the remedy portion of the opinion:

92.  The applicants submitted that they had felt harassed and intimidated by the police actions and that it would be appropriate for the Court to award compensation of GBP 500 each in respect of non-pecuniary damage.

93.  The Government submitted that, in view of the short duration of the stop and search, no monetary compensation should be awarded.

94.  The Court agrees with the Government that the finding of a violation constitutes sufficient just satisfaction in the circumstances of the present case.

The next paragraphs, it must be said, go on to award attorney's fees in the equivalent of $50,000, roughly a year and a half of the U.K.'s average annual salary.

In America the same net result would be considered, all in all, a victory for the government.

Friday
Jan222010

420. Expanding the Forbidden City

Anyone out there think it's coincidence that the Supreme Court should choose this moment in our political history to declare that insurance companies have a constitutional right to spend unlimited amounts of cash to defeat members of Congress who vote in favor of health care reform?

My Examiner.com column, written for a general audience, explains with as temperate language as I could muster the basic point of yesterday's ruling: some things are too important to be left to democracy.  They must instead be entrusted to our tribal elders, the Council of Wise People.

The Forbidden City in the middle of our public square is engaged in annexing surrounding territory with all the aggressive zeal of a Sun Belt city of the 1970s.  The Supreme Court has now declared that democratic  elections, being essential to our democracy, cannot be allowed to slip into the control of the people acting democratically through their elected representatives.

Instead, elections, being essential to our democracy of more than 300 million people, may only be regulated by any five of a select group of nine federal government workers.

But while you'd have to be exceptionally naive to believe it's coincidence that five Reagan and Bush  appointees should have issued such an opinion during the Obama Administration, I also don't think it's necessarily true they were primarily concerned with the political well-being of anti-reform candidates of their own party.

I think it more likely they were primarily concerned about themselves.  They wanted to make sure their political views carry the day.  Justice Kennedy tipped his hand when he wrote that a prior, marginally more rational opinion of Court

is undermined by experience since its announcement. Political speech is so ingrained in our culture that speakers find ways to circumvent campaign finance laws.

Because restrictions are ineffectual (not least because enforcement efforts are paralyzed by the Supreme Court's random interventions) therefore they're unconstitutional. Because corruption and dishonesty are widespread, therefore it's unconstitutional to attempt to make them less widespread.

This pretty explicitly equates "unconstitutional" with "not a good way of approaching the problem, in my opinion."  For Kennedy, ol' number 3, granted massive power over our government solely on account of his blandness, I think those terms have become interchangeable.

Wednesday
Jan202010

419. Texas [redacted]

The great medical journalist and commentator Atul Gawande published an eye-opening piece about health care costs in McAllen, Texas, last June.  He reported that health costs were twice as high in McAllen, in Hidalgo County down near the Gulf, than in demographically-similar El Paso.  

Although Gawande didn't use the kind of recklessly intemperate language one might expect from, for instance, a blogger, I know for a fact that at least one reader came away from his article believing the explanation was that McAllen's medical establishment was comprehensively corrupt.

It may not have been only the medical establishment.  From today's McAllen Monitor:

Thousands of criminal cases in one of Hidalgo County’s misdemeanor courts were called into question Wednesday with the arrest of two of its employees on bribery charges.

Daniel Vega, the court coordinator in County Court-at-law No. 5, and his assistant Javier Mireles were caught on video offering to dismiss a case in exchange for a $4,000 payment, Hidalgo County Sheriff Lupe Treviño said.

And while their arrests are tied to one specific payment that came from an undercover investigator, authorities believe similar behavior may have been going on for years, affecting hundreds of criminal defendants.

“I don’t believe that this was their first time at bat,” the sheriff said.

Four thousand for a misdemeanor??

But exactly how the pair allegedly engineered the dismissal of the case in question remained unclear Wednesday afternoon. Charging documents — including the probable cause affidavits filed for both their arrests — were sealed to protect the ongoing investigation, [District Attorney Rene] Guerra said. ...

All filings pertaining to the bribery scheme will likely remain barred from public review for the considerable future, said Guerra.

“To be honest, I want to seal them for as long as possible,” he said. “I want to protect the investigation right now.”

Investigating corruption in secrecy seems to be a new Texas tradition.  El Paso as spent five years with a political corruption investigation carefully hidden from the voters

One of the accused in the El Paso case is a former Texas district court judge, the wider-than-he-is-tall Manuel Barraza, who was indicted just three months after taking the bench, apparently based on his alleged pre-swearing-in plans to work out a private and mutually-beneficial deal with an alleged drug dealer.

We'll be hearing more about El Paso in coming months.  (Or will we?)  But in the meantime, see if you notice any consistent threads running through the headlines of the most-viewed stories on the El Paso Times website for the past 12 hours:


# Man accused in wife's killing was from El Paso
# Kidnapper testifies Texan was killed in Mexico
# Man allegedly runs former wife off road
# Mexican prison brawl leaves 23 dead
# Student sex case against former Andress coach dismissed
# 3 alleged gang members charged in death of Texas man
# Three teenagers charged in Adam Espinoza murder
# No decisions yet for Marmolejo
# Deaths may be murder-suicide
# Barraza trial: Sheriff's detective initiated investigation of ousted...

Man, I tell you, El Paso belongs in New Mexico, which is where it was administratively lodged for the first couple of centuries of its existence.

Monday
Jan182010

418. The miracle and mystery of the law

Equal Danger, by the great Sicilian novelist Leonardo Sciascia, is set in an unnamed country not, perhaps, entirely unlike Italy.  The hero, Rogas, goes to see President Riches of the Supreme Court.  As tactfully as he can, he suggests judicial error may have resulted in the conviction of an innocent man:

"You are a practicing Catholic?"

"No."

"But Catholic?"

Rogas made a gesture that signified: like everyone else.  And in fact he did believe that all men everywhere were a little bit Catholic.

"Of course, like everyone else," the President interpreted him correctly.  Assuming the posture of a priest at catechism: "Let us take, well, the Mass, the mystery of transubstantiation, the bread and the wine that become the body, blood, soul, and divinity of Christ.  The priest may even be unworthy in his personal life, in his thoughts.  But the fact that he has been ordained means that at each celebration of the Mass the mystery is completed.  Never, I say never, can it happen that the transubstantiation not take place.  And so it is with a judge when he celebrates the law: justice cannot not be revealed, not transubstantiated, not completed.  A judge may torment himself, wear himself out, tell himself, 'You are unworthy; you are full of meanness, burdened by passions, confused in your ideas, liable to every weakness and every error'--but in the moment he celebrates the law, he is so no longer.  And much less so afterward.  Can you imagine a priest who, after celebrating Mass, says to himself, 'Who knows if the transubstantiation took place this time, too?'  There's no doubt; it did take place.  Most assuredly.  I would even say inevitably. Think of that priest who was seized by doubt and who, at the moment of the consecreation, discovered blood on his vestments.  I can say this: no judgment has ever bloodied my hands, has ever stained my robes..."

Without meaning to, Rogas made a sound much like a groan.  The President looked at him with disgust.  And as in a fireworks display, when everything seems to be over, in the stunned silence and darkness one more luminous, elaborate, and thunderous rocket explodes, [President] Riches said, "Naturally, I am not a Catholic.  Naturally, I am not even a Christian."

"Naturally," Rogas echoed.  And indeed he was not surprised.

The President was diappointed and irritated, like someone who has just performed a magic turn only to have a child jump up and say he has understood the trick.  With a note of hysteria, he proclaimed, "Judicial error does not exist."

(As translated by Adrienne Foulke.  The Italian title is Il contesto.  Max von Sydow played President Riches in the 1976 film adaptation Excellent Cadavers - a title that has since been reused.)

If you haven't read Sciascia, start with The Day of the Owl.

Sunday
Jan172010

417. It keeps getting worse in NE Pennsylvania

You and I might think it's a bad thing for a judicial standards board to ignore detailed evidence of wrongdoing by judges on the ground that the wrongdoing is so wrong that the FBI is investigating it.

But that's the difference between you and I and judicial standards boards:

When the [Pennsylvania] state Judicial Conduct Board received an anonymous eight-page complaint in 2006 about alleged wrongdoing by a Luzerne County judge, it reportedly deferred conducting an investigation because there was an ongoing outside criminal probe of the judge.

That judge, Michael T. Conahan, and another, Mark A. Ciavarella Jr., were charged last year by federal authorities with taking $2.8 million in kickbacks to send juveniles to for-profit detention centers in what has become known as the "kids-for-cash" scandal.

This month, the board reaffirmed its discretion to defer with newly adopted operating procedures...

Paul H. Titus, a lawyer retained by the board, said yesterday that "there are very practical reasons for the board deferring to prosecutors." Titus said the board does not have the resources to conduct criminal investigations, especially for something like the Luzerne County probe, which involved federal prosecutors, the FBI, and the IRS over three years.

Of course no "deferring" of any kind was going on.  No one was suggesting the board should conduct criminal investigations, just as no one suggested the FBI should investigate violations of the Pennsylvania Code of Judicial Conduct

The board's explanation for its inaction was gibberish.  I sympathize with Mr. Titus, though.  State judicial standards boards exist to preserve "public confidence in the integrity and impartiality of the judiciary."  A coherent explanation would have defeated that purpose.

But wait!  There are many more sewers left to be explored in the Scranton Wilkes-Barre area:

A northeast Pennsylvania judge who took over a capital murder case from another judge who pleaded guilty to corruption charges has been accused of pushing his wife down and choking her.

Perry County Senior Judge C. Joseph Rehkamp has been charged with simple assault and harassment.

State police say Rehkamp and his wife were arguing Saturday night at their home in Plymouth Township when another person broke them up. Police say Rehkamp fled.

You can see Judge Rehkamp's official photo at the Citizens' Voice website.  It could pass a mug shot but for the wood paneling background with the obligatory flag.  The paper describes the circumstances of the unpleasantness with the circumspection of the libel-shy:

The argument turned physical, and police said Rehkamp pushed the victim down, slamming her into a chair, then placed both hands on her neck and began choking her until a third party interrupted. Rehkamp then fled the scene.

The argument turned physical, mind you.  That's better than a person becoming violent. 

I think we can accept as a given that Judge Rehkamp will skate, unless he's made some particularly ill-advised choices about his personal enemies.

Oh, and the big murder case Rehkamp was slated to preside over?  It had to do with a husband accused of killing his wife.  And even that story has an angle that shines yet more light on the spectacularly dysfunctional court system of northeastern Pennsylvania, according to newspaper stories posted over at Family Court Crisis.

Sunday
Jan172010

416.  Responsibility

Food, Inc. is a documentary about the concentration of market power in the United States responsible for the sameness and mediocrity of our chain restaurants, radio stations ("chain radio stations" is very nearly redundant), newspapers, beer, and food suppliers.

Food, Inc. is better known as agitprop about food, but I think the "inc." part of the title has still-broader significance.  Among other things, the film describes the gigantic increase in food poisoning in America since the 1960s, an increase that has happened gradually enough that outbreaks and "meat recalls" no longer strike us as unusual.

When I was a kid, way back in the last century, I loved the (non-alcoholic) eggnog my mother made, with the shake of cinnamon on the froth.  Nowadays she'd be arrested for child abuse after my second trip to the ER with samonella poisoning.

Food poisoning is efficient, and not just in the sense documented by Food, Inc.: because the massive concentrations of livestock and raw food utilized by factory farming present wonderful opportunities for pathogens to thrive.

It's also efficient in the sense that it shifts the burden of ensuring food safety from the producer to the consumer.  Economic efficiency of the type first idealized and then fetishized by our judges (see post 414) is why we've gotten so used to reading food safety tips.  As the big four meatpackers consolidated their hold over the market, they were able to externalize a significant portion of the cost of food safety. 

The last pathogens will always be the hardest to eradicate, and the big meatpackers, like the big vegetable and fruit growers, have assigned that job to us.  They've deliberately - efficiently - made themselves less good at producing safe food.  Mediocrity is the only rational strategy, once one's market dominance is secure.

Food, Inc. depicts chicken farmers under the thumb of the big poultry packing companies.  And that's the half-hidden theme running through the series of four posts that started with post 413 and ends with this one.

Antitrust law was never about economics, as the arrogantly ignorant professor-judges claimed and may actually have believed.  (See post 414.)  Still less was it about economics as understood by lawyers and judges who couldn't work their way through an 8th grade algebra book with the help of a tutor.  Antitrust is all about power.

Market power, obviously, but also political power, as the Washington scenes of Food, Inc. make clear.  Unfortunately, that's the least interesting sequence of the movie, because it doesn't tell us anything we don't already know.

Attempting to regulate the meatpacking industry is as difficult as attempting to regulate financial markets (see post 415) for the same reason: because market concentration produces vast wealth, and vast wealth buys political influence.

The vast concentration of wealth was facilitated by our judges when they jumped on the fad of refusing to enforce antitrust law, relying on the studiedly unworldly theory that market concentration benefits consumers.  (See post 414.) 

The political clout of the big-asseted corporations was immeasurably helped by the Supreme Court's refusal to allow the American people to maintain democratic control over their own election laws, based on the justices' epically fatuous theory that because money talks, it's speech

The Supreme Court almost always rules in favor of itself.  Its members predictably vote for the result that concentrates the maximum power in themselves, in the federal courts, and in the judiciary generally (in order of priority).

Shooting down executive branch attempts to enforce laws against market concentration and manipulation, like shooting down legislative branch attempts to control corruption in elections, makes the judiciary more powerful directly, in a bwana-and-lion way. 

But it also has that effect indirectly, by weakening the other branches.  The Supreme Court benefits from a weakened Congress, as Stuart Taylor, Jr. points out.  De-legitimizing democracy is useful for those who would prefer what Taylor calls "judicial despotism." 

"Politics," "economics" and "law" aren't separate categories of life.  Their separation exists only in the abstract.  In the concrete they're all just ways of controlling the lives of ordinary people.  Saying that monopolistic and market-dominating corporations have political influence over Congress, a point made in Food, Inc., is only another way of saying that they have more power than individual members of Congress.

"Too big to fail" is just a modern term for the concentration of power in the hands of actors with no responsibility to the people whose lives they alter.  It's an acknowledgment that we're privatizing - "outsourcing" might be a better term - the right of self-government.

In a democratic nation, the opposite of "government" isn't freedom, regardless of what the bumper sticker says.  The opposite of democratic government is non-democratic government.  When economic power is so concentrated that economic actors exercise power over Congress, they have become part of our government: their actions govern the way we live our lives.

By manipulating the law to concentrate political power in their own hands, judges have succeeded in concentrating both economic and political power in the private organizations that control the details of our daily lives.

If we took our judicial system as seriously as it deserves, it wouldn't occur to anyone to question judges' responsibility for the planned mediocrity and increasingly-privatized government that has come to envelop the nation like Beijing air.

Saturday
Jan162010

415. No tomorrow

From the Stanford alumni magazine:

Shortly after she was named to head the Commodity Futures Trading Commission in 1996, Brooksley E. Born was invited to lunch by Federal Reserve chairman Alan Greenspan.

The influential Greenspan was an ardent proponent of unfettered markets. Born was a powerful Washington lawyer with a track record for activist causes. Over lunch, in his private dining room at the stately headquarters of the Fed in Washington, Greenspan probed their differences.

“Well, Brooksley, I guess you and I will never agree about fraud,” Born, in a recent interview, remembers Greenspan saying.

“What is there not to agree on?” Born says she replied.

“Well, you probably will always believe there should be laws against fraud, and I don’t think there is any need for a law against fraud,” she recalls. Greenspan, Born says, believed the market would take care of itself.

Greenspan denies he said that, and as proof cites his after-the-fact self-justifying book.  One fact remains, though: he fought (along with Robert Rubin and Lawrence Summers) against regulation of the derivatives market. 

Oh, and a second fact, too: unless Greenspan has grown comfortable with the idea that history will remember him as a buffoon servicing villains, his incentive for lying is approximately 100,000 times greater than Born's.

Of course, Greenspan was right, in one way: the market is taking care of itself, with a severe recession.  Why, in another half-century, 2008-10 will be just a distant memory.

Unfortunately, I think it's possible that Greenspan and most of the Wall Streetish brain trust of the Bush and Clinton administrations misunderstood the market involved. It wasn't a derivatives market.

Once Wall Street bonuses reached a certain astronomical level, they became a market.  Derivatives and other ways of packaging dog shit (sorry, I just couldn't resist showing off my mastery of Wall Street lingo) were methods for maximizing returns in the bonus market.

As soon as annual bonuses topped the $10 million mark - and they topped it by a lot -- the market incentives were clear: grab with both hands and you'll be set for life

The future of the company, and even of one's own career, was pretty meaningless compared to that.  After all, if you don't need more money, you don't need a Wall Street career.

So the Wall Street types naturally, rationally, behaved like there would be no tomorrow.  No going into the office tomorrow was the whole idea.

Second verse, same as the first?  Here's a story from another profession:

Candlewood [Timber Group] retained Debevoise & Plimpton after it brought the case. But about eight months later, with trial only two months away, Candlewood became unhappy with Debevoise's work and brought in Susman Godfrey to try the case, with Debevoise staying on in a secondary role.

Despite the secondary role,

"Over a 10-month pertrial and trial period--during which time D&P had the assistance of BM&F and later Susman--D&P managed to bill for more than 15,000 hours, the equivalent of 10 lawyers working full-time for the ten-month period," Candlewood's counterclaim alleges.

That's right, counterclaim.  Debevoise & Plimpton started the fight by suing Candlewood for $6 million in unpaid legal bills.  Six million dollars for second-chairing a trial on what, by big-firm standards, was a rocket docket.

Those excerpts are from the Am Law Litigation Daily.  Here's a little more, as one would expect, from Above the Law:

[Debevoise] assembled a team of between 87 and 119 time-billers (the bills are so obfuscatory that even the number of people who billed time cannot be determined with accuracy) and missed crucial aspects of the case.

It shouldn't be a surprise that a team of so many time-billers would miss crucial aspects of the case.  Each of the 87-119 couldn't hope to acquire even as much perspective as a blind man investigating an elephant.  They were so many blind ants crawling over the case files.

But then, why would any of the 87-119 want to acquire  perspective on the case?  What would be the point?  Each time-biller was competing in the firm's own internal market.  In good years (Candlewood's case went to trial in 2006) that was a market offering promotion, prestige and compensation galore.  The time-billers were racking up points toward their year-end bonuses. 

Take a look at Debevoise's would-be dignified response to the humiliation it brought upon itself.  There's something almost sublime about the way the press release sounds the two notes most characteristic of parasitical law: inflated self-regard combined with an utter lack of self-respect.  That seemingly-paradoxical combination of attributes is well-known to all legal practitioners, shovelers and shovelees alike. 

Still, it must be acknowledged that the combined fees of the 87-119 didn't even add up to an  investment banker's year-end bonus during those get-out-while-the-getting's-good years.  As economic parasites, lawyers are strictly minor league.

To circle back to Greenspan, fraud of one kind or another - not necessarily, or even primarily, the kind of fraud that our courts are prepared to recognize as tortious or criminal - isn't an irregularity in the smooth operation of markets.  It's the market operating smoothly.

The problem is that in the smoothly-operating market, the timber company becomes the timber.

Monday
Jan112010

414.  Mediocrization

John Cassidy's "Letter from Chicago" in the January 11 New Yorker makes a good case for the proposition that the harm done by the pseudo-Nobel for Economics has outweighed all the good done by the prizes actually established by Alfred Nobel's will.

It makes the case just by mentioning in passing all the various pseudo-Nobels rung up by University of Chicago economists.

The Chicago School economists are the ones who explained, with impressive mathematical formulae and even more impressive condescension, that the financial collapse of the past 18 months couldn't happen.  Cassidy reveals that many are still prepared to show us that our fears remain as ignorantly foolish today as ever.

Eugene Fama, the Robert R. McCormick Distinguished Service Professor Finance (why aren't professors in general embarrassed by Ruritanian titles like that? – and why isn't Fama, in particular, embarrassed to be associated with "the Colonel"?),  tells Cassidy: "I don't know what a credit bubble means.  I don't even know what a bubble means.  These words have become popular.  I don't think they have any meaning."

Cassidy finds it necessary to add: "Fama wasn't kidding."  Fama wasn't kidding because he "propounded the efficient-markets hypothesis, which underpinned the deregulation of the banking system championed by Alan Greenspan and others."  

Fama and his acolytes can explain that when a market rises precipitously, it's evidence of its efficiency.  More evidence of its efficiency is provided by the equally-precipitous collapse in which everyone suffers except those who caused the collapse, provided they had the larcenous sense to cash out in time.  

That's why Cassidy errs in referring to the "efficient-market hypothesis."  A hypothesis is falsifiable.  But efficient-market dogma can only be proved right and right again.  It's an improvement on actual knowledge.

In a blog entry accompanying his article, Cassidy refers to Richard Posner, the federal judge/professor/author/object of envy who even gets his own unflattering full-color caricature in The New Yorker.  Cassidy writes of "Posner, who recently converted to Keynesianism..."

"Converted" is the right word.  Posner went from absolute certainty in one faith to absolute certainty in another, like the post-Trotskyite-neocons or sad old David Horowitz, still Mau-Mauing university authorities 40 years on.  Some people just need an external structure of belief, and it almost doesn't matter what it is.

Before his conversion, though, Posner was, with Robert Bork, the great champion of the theory that antitrust laws harm competition and that everyone would be better off if we just let economic actors go at it.  Here it is from his days of being insufferably arrogant on the other side, squaring off against retired Justice Potter Stewart.

From a legal point of view, Stewart mops the floor with Posner, but Posner wins the day: he wasn't interested in law, but in correcting the ignorant, which, being a professor and appellate judge, he was especially well-situated to do: he'd never had any occasion to doubt his expertise.

I read Bork's The Antitrust Paradox: A Policy at War with Itself, but he lost me in the chapter that explained how predatory pricing could never happen.  You know, like a big airline reducing fares to undercut a low-price rival until the rival is forced to abandon the route or is driven out of business.  Bork explains how that could never happen.

Bork was a federal appellate judge, too, just like Posner.  Both were appointed by President Reagan.  And both consciously set about altering antitrust law, which is to say, altering the structure of the American economy and the relationship of ordinary Americans to the biggest corporations.

Amazon's "product information" describes Bork's book this way: "Shows how antitrust suits adversely affect the consumer by encouraging a costly form of protection for inefficient and uncompetitive small businesses."  That was the goal: efficiency, by rooting out the smaller competitors, actually improves things for consumers.

Bork's and Posner's ideas carried the day and, beginning with the administration of the president that appointed them both to the federal appellate bench, the federal judiciary stopped enforcing antitrust laws.  Inefficient and uncompetitive small businesses were driven from the market and, in the happy world they helped produce, consumers enjoyed....

...Microsoftness.  (See post 413.)   Efficiency serves the purpose of acquiring a commanding position in the market, but Microsoft-style mediocrity is the only rational strategy for any company that has achieved that position.

Consider, for example, K-Mart, which not so long ago towered over its puny rival Wal-Mart, and GM, which as recently as 1979 sold just about half of all cars bought in the U.S. 

K-Mart and GM engineered their own downfalls carefully, with no shortage of highly-paid of MBAing.  Rather than trying to produce a good shopping experience or good car, they tried to produce good-enough ones.  They followed Microsoft's 85% rule, trying to exert the least effort necessary to maintain market share.  (See post 413.)  

That was efficient, and Bork and Posner and their many judicial groupies assured us that efficiency would make life better for American consumers. In fact, they proved it, to their own satisfaction, with the words of their opinions.  And the only argument against their assurance was reality, which never counts for much inside the courtroom.

Outside the courtroom, however, the thriving little businesses shuttered by the arrival of K-Mart didn't spring back to life as K-Mart embraced its identity as National Lampoon's Swill-Mart.   The legendary Roger Smith's helmsmanship at GM didn't, as theory would have predicted, open the door for nimbler competitors to revive the American car industry.

I'm sure Bork and pre-conversion Posner could have explained why their theories were not to blame.  Reality plays dirty.  I'm confident they, and the teams of University of Chicago economists who supplied them with their theories, would have rejected any hint of responsibility for the creeping mediocrity that, since their accession to power, has spread across the country like a leaf blight.

It's hard to think of any aspect of American life that hasn't been made worse by the market concentration of the post-Bork, post-Posner years.  Chain restaurants have done for quirky little local restaurants.  Most cities have seen their second-largest newspapers shut down.  Radio?  Turned into a sonic billboard.  (See post 18.)  And what is "too big to fail" but another name for excessive market concentration?

Big-box retail stores, with their ruthless "inventory control," stock only products that predictably sell quickly.  That's why, as Calvin Trillin once said, the shelf life of an average book is somewhere between milk and yogurt.  And that's why you only miss your local hardware store when you want one of those out-of-the-ordinary things -- one of those doohickeys that fall into the slow-moving 15% of a hardware store's inventory.  It would be foolish for Home Depot to clutter up its shelves with an item like that.

That's what making a fetish of efficiency leads to.  Efficiency is not giving the consumer what she wants, but forcing her to accept what's offered.  That's how you keep costs under control.

I don't think Posner and Bork, and the legions of smitten federal judges who took up the fad they started for unfalsifiable theory, bear sole responsibility for the creeping mediocrization of American life.  They don't even bear primary responsibility.  They just bear only a great big fat share of it.

Sunday
Jan102010

413.  Microsoftness

Since post 412 my PC has made two more trips to the ER.  The docs couldn't find anything wrong.  I've begin to worry they think I'm a psychosomatic complainer, or worse yet afflicted with a computer version of Munchhausen's by proxy syndrome

The basic symptom is that plugging in the iPod makes the mouse stop working.  That's a problem when you run (or try to run) a Microsoft operating system entirely dependent on that miracle of anti-ergonomic design, the computer mouse, for basic functions. 

The techs called me up and asked me to bring in those two components, but they were unable to recreate the problem on the bench.   Their best guess is that yet another USB device – the keyboard, printer or scanner – somehow interacts with the iPod to disable the mouse.  (Or could the problem lie with my incessant muttering under my breath?)

So now I've given up on fixing the PC and concentrate instead on managing its failures.  The black box now sits sideways beside my desk, giving me easy access to the USB ports (who passed the law requiring them to be located on the back?), so I can pull and plug the cords like an old phone exchange operator, making sure never more than the barest minimum number of devices are connected at a time.

Time to buy a new PC?  Ah, compadre, the pity of the thing is that this is a new PC, at least in its essentials.  I purchased it in increments last summer by sinking a couple hundred into trying to get my last one to continue working past its third birthday.  The techs salvaged the disk drives and sound card from that one and transplanted them into a new box with a new motherboard, new USB ports, and a brand new copy of a Microsoft operating system….

That last clause pretty much sums up the source of the problem, I'm afraid.  Steve Ballmer, the pudgy CEO of Microsoft, explained why last year, in a roundabout way, when he described Safari's and Chrome's market share as "rounding errors."

Market share.  That's what Microsoft is about.  Or, in the language of another era, monopoly.  As Ballmer told us, Microsoft's goal is to maintain its market position.  That means its goal is to make products good enough to maintain a monopoly market share.

Not good products.  Good-enough ones. 

People, and especially IT managers, won't switch to a competitor as long as Microsoft's operating system, browser, email program, etc., is just good enough that switching seems not quite worth the hassle. After many years of using Microsoft products, I've concluded the company has pegged the good-enough point at 85% of a really good product. 

If Microsoft made a 100% good operating system -- say, one that could run five different USB devices simultaneously without unpredictably freezing and losing its ability to re-start -- it would have wasted all the resources needed to get to that point from 85%. 

The reason Microsoft products are so consistently mediocre isn't that Microsoft doesn't know what it's doing, but exactly the opposite. Mediocrity is the only rational strategy for a monopolist.  Anything else is throwing away money.

Of course, Microsoft's strategic mediocrity means that American businesses are running computer systems that are only about 85% of what they could be.  Does the mediocrity of their computer systems affect their productivity?  Does gravity?  How about oxygen?

The cost of the missing 15% is paid by all of us in lost productivity and the familiar hair-tearing frustration, which has so aptly been termed Microsoftness, a word that deserves to be in everyday use.

Micosoftness is a development cost Microsoft has successfully avoided paying by shifting it to PC users.  It's a hidden cost, not so obvious as the Apple price tag, but I think it's steeper.

Still, I recognize that in one way it's unfair to pick on Microsoft.  They're only one particularly conspicuous (to a blogger) example of what it means to be living in this  second age of monopoly.  The next post will look at some other monopoliess, ones that, unlike Microsoft's strangehold, haven't had quite such a direct effect on the continuity of this blog.  And we'll get into the law of it, or rather lawlessness.

Until then, this is Ernestine, logging off.