Monday, March 29, 2010
Wealth Concentration: As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers)
Estate Tax: Figures on inheritance tell much the same story. According to a study published by the Federal Reserve Bank of Cleveland, only 1.6% of Americans receive $100,000 or more in inheritance. Another 1.1% receive $50,000 to $100,000. On the other hand, 91.9% receive nothing (Kotlikoff & Gokhale, 2000). Thus, the attempt by ultra-conservatives to eliminate inheritance taxes -- which they always call "death taxes" for P.R. reasons -- would take a huge bite out of government revenues for the benefit of less than 1% of the population.
You should read the entire article (click on link above). The charts are especially fascinating.
Sunday, March 21, 2010
Back in the day, Mr. Malkiel's book, A Random Walk Down Wall Street, heavily influenced my financial education (even though I disagreed with his central thesis on EFM). Apparently, this new book is for beginners, but if Mr. Malkiel is involved, it should be fun to read for everyone.
Wednesday, March 17, 2010
Jurors should remember: you don't have all the information in a trial, and you don't know how the legal process works. Just because a lawyer doesn't spend time trashing the other side, it doesn't mean the other side is angelic. Sometimes, we cannot introduce evidence about how bad the other side is, even if he's bashing our side. Sometimes, judges rule that one side can say certain things, and we can't respond in kind. That means if we mention certain things, the judge can declare a mistrial, and we have to do the whole trial over again.
Don't make any assumptions. Just look at the evidence. Don't assume that you're smarter than everyone else, and you're able to see something that isn't actually in front of you in the form of testimony or a document.
Also, if you do rule against a plaintiff, it usually means s/he has to pay the other side's costs. Sometimes, if you're not sure about who's right, the best thing to do is to rule for the plaintiff and give him or her one dollar.
For lawyers: don't assume that a plaintiff will always benefit from a general verdict form instead of a special verdict form. (A special verdict form forces the jury to think hard about each element of the case, while a general verdict form basically asks, "Is he liable for fraud? yes/no.") By giving the jury a simplified general verdict form instead of a special verdict form, jurors were able to avoid thinking hard about the case.
Also, a simplified form allows the foreperson to advance her/his own ideas about the law, even if s/he is completely wrong. Here, we thought the case was already complicated enough, so all of us agreed on a general verdict form to make things easier on the jury. Unfortunately, the general verdict form allowed the jury to bypass thinking analytically about the case and to decide based on their general feelings and the foreperson's own ideas about the law. For example, after the trial, one juror (the foreperson) said, "The other side's conduct wasn't flagrant enough." I was thinking, "Dude, that's not the law. There's no law that says, 'Only flagrant conduct is illegal,' or "The conduct must be flagrant to be illegal.'"
More advice for lawyers: don't always take the high road. If the other side is bashing your client and name-calling, try to find some way of countering without causing a mistrial. Jurors will choose sides based on whom they think is the good guy or the bad guy, regardless of the law. For example, if the other side hasn't bifurcated punitive damages, bring up the value of his home or another large asset if he keeps saying he's judgment-proof. Or bring up his unpaid debts. Or his or her massive wealth. You need something to make the jurors think they're dealing with someone who can handle a judgment or who deserves a judgment.
On the other hand, consider dropping punitive damages if you don't have a slam dunk situation. You won't be able to bring in any evidence of the defendant's net worth or financial information, but the punitive damages portion will probably get bifurcated anyway (thereby preventing you from talking about the other side's financial situation, bad debts, massive wealth, etc.). The upside is that you won't have to prove malice or oppression. If you try to show malice or oppression, jurors may get confused about the burden of proof on the original claim. For example, they may think that negligence requires malice (it doesn't). Lawyers may want to tell a jury in closing argument whether a specific claim requires specific intent.
I am going to need some time to get over this one. I will not be posting for a while.
P.S. Note to judges: if you allow the other side to bring up stuff about atomic bombs or to equate a foreign government's actions with an individual, no matter what the result, one party will think the process was tainted. Telling someone the remedy for any resulting prejudice is a mistrial--where a party and his lawyer have to come back and do everything all over again--is fair but somewhat impractical when one side is pro se and essentially unemployed, and the other side is paying for a lawyer and expert witnesses. I don't want to focus too much on the national origin issue now, but I might write about it later. At the end of the day, I feel the jury treated my client, an educated U.S. citizen of Middle Eastern descent, as not fully American. Why would they do that? Why would they side with the lawyer who had misrepresented facts all week? Could all the talk about atomic bombs and religion have something to do with it? Was it something else? Was it a combination of different factors, some permissible and some impermissible?
(And yes, I did ask the court to exclude testimony and comments about foreign governments and international affairs. The court wasn't sympathetic to my argument that mentioning the Iranian government and current events would result in prejudice. I argued that allowing such comments and testimony would be unduly prejudicial when the media is currently hyping an Iranian nuclear threat and when the primary images of Iranians in the mainstream media are of the much-hated Iranian president. The court wasn't swayed by my argument. The court did exclude evidence of my client's international travels, but the defendant still mentioned it during the trial. The judge stopped the trial, called us over for a sidebar, and warned the defendant that he was in contempt and should not mention excluded evidence again. The defendant went back to calling my client a "professional plaintiff," which was somewhat hilarious to hear from a plaintiff's lawyer. Also, I don't know if this should make me feel better or worse, but I believe the judge was sincerely fair. I still believe we were very lucky to get an excellent judge.)
Update: I forgot to add one more interesting tidbit. After the trial, a judge can ask the jurors how they voted if requested by a party. This is calling "polling" the jurors. According to the one juror who voted in our favor, someone switched her vote during polling. So one juror decided one thing in the jury room and another thing in public. Why would someone switch her vote?
Keep in mind, other than the defendant's/lawyer's own testimony, no other evidence was offered to prove my client had a bad motive for bringing his current lawsuit. The defendant even said at one point, "You're slicing baloney," when I asked him about the alleged conversations between himself and my client. Two other lawyers who were in the room and heard defendant's allegations found them to be totally baseless and indicated the defendant was not believable. Under cross-examination, the defendant testified that he and my client had a 2 to 3 hours conversation about my client's ex-wife, my client's search for an Iranian wife, and Middle Eastern politics. Later, the defendant suddenly added that my client had discussed the Holocaust during this conversation. I asked about the percentage of the conversation dedicated to personal issues, Middle Eastern politics, and the Holocaust. He answered, "50/50." I asked him how three different topics could be "50/50," which spurred his "slicing baloney" comment. During this part of his testimony, the defendant mentioned Iran's conference against the Holocaust and said the Holocaust is called the "Hollow Holocaust" in Iran. No one in the jury appeared fazed at all, perhaps because by that point, they were tired and had been desensitized by the earlier comments about nuclear bombs and government actions. My client is a clean-shaven U.S. citizen who has been living in America since 1978.
Furthermore, the defendant once accused a sitting judge of being anti-Semitic, a claim that was rejected. Defendant's allegation of judicial anti-Semitism occurred in a separate case, and I didn't want to risk a mistrial/contempt by mentioning it after the judge ruled that we could not discuss unrelated cases.
The one juror who voted in our favor on the legal malpractice claim? A retired ex-Air-Force sergeant. Post-trial, when the jurors learned more information about the defendant, they appeared shocked. The retired ex-Air-Force sergeant even angrily exclaimed, "I told you so," to one of the other jurors.
Tuesday, March 16, 2010
[What kind of city is San Jose?] Is it the one that gave police a series of nice little pay boosts after 9/11, bumps that take the average wage to more than $114,000 after five years on the job?
Is it the one that, thanks to an arbitration system it agreed to in the 1980s, is paying cops and firefighters 90 percent of their salary as a pension after 30 years?
In the past nine years, driven by public safety, the city's employee costs — wages and benefits — have increased by 64 percent. That's roughly 7 percent a year. I know I haven't done as well.
Wow. Interesting article.
Monday, March 15, 2010
A new report from the Fair Political Practices Commission — California's elections watchdog — mines years of campaign and lobbyist reports and turns up this nugget:
Over the past decade, 15 special-interest groups have spent more than $1 billion in an all-out bid to influence the state's affairs. They spent that money to sink ballot initiatives and boost candidates. They fed it directly to political parties' war chests. (Democrats came out slightly ahead of Republicans.) And they spent hundreds of millions wining and dining lawmakers and other state officials.
Almost a fifth of the cash came from one group: the politically powerful California Teachers Association ($211.8 million). The teachers union was followed by an affiliate of the Service Employees Union International ($107.5 million), a pharmaceutical industry group ($104.9 million) and two deep-pocketed Indian tribes ($83.6 million and $69.3 million). Rounding out the top 15 are some other big names, such as Pacific Gas & Electric, Chevron, AT&T and Philip Morris. (For the full report, go to www.fppc.ca.gov/reports/Report38104.pdf.)
So when we talk about special interests influencing state governments, remember: it's the teachers and other unions who have provided the most grease to Sacramento. Is it any wonder Sacramento provides teachers and unions with special benefits unavailable to most private sector workers? I'll end with this gem from the article:
"The conclusion is inescapable," reads the report's executive summary. "A handful of special interests have a disproportionate amount of influence on California elections and public policy."
Saturday, March 13, 2010
Update: my team lost, but all of them had fun. As usual, I had one parent who expected me to be overly tough with his son, even though his son just didn't have the physical development necessary to do certain things. Boys tend to develop in quick spurts, whereas girls seem to have a more steady physical progression. On any given team, one boy could be miles ahead of the other boys in terms of athleticism, while another boy could have major difficulty learning to pivot or even to dribble. In any case, I'm not going to bother a kid on the last day of the season if he's doing something unconventional. He can always refresh his skills the next year, right? Sigh.
On the bright side, two parents left me nice messages thanking me for coaching.
Thursday, March 11, 2010
Wednesday, March 10, 2010
If I could have entertained the slightest apprehension that the Constitution framed by the Convention where I had the honor to preside might possibly endanger the religious rights of any ecclesiastical society, certainly I would never have placed my signature to it; and if I could now conceive that the general government might ever be so administered as to render the liberty of conscience insecure, I beg you will be persuaded that no one would be more zealous than myself to establish effectual barriers against the horrors of spiritual tyranny and every species of religious persecution. For, you doubtless remember, I have often expressed my sentiments that any man, conducting himself as a good citizen and being accountable to God alone for his religious opinions, ought to be protected in worshiping the Deity according to the dictates of his own conscience. While I recollect with satisfaction, that the religious society of which you are members have been, throughout America, uniformly and almost unanimously the firm friends to civil liberty, and the persevering promoters of our glorious revolution, I cannot hesitate to believe that they will be the faithful supporters of a free yet efficient general government. Under this pleasing expectation, I rejoice to assure them that they may rely upon my best wishes and endeavors to advance their prosperity,'
I am, gentlemen, your most obedient servant, GEORGE WASHINGTON.'
"The horrors of spiritual tyranny"? I can't believe I haven't seen those words before. Beautiful language, isn't it?
Tuesday, March 9, 2010
Here is the comment I tried to post on Ebert's blog:
I am agog at how many people have shared their stories and opinions. As for me, I don't have much to say except this: no system will work, including universal or for-profit healthcare, unless people are ethical.
Today, in almost every profession, incentives tend to push people, even good ones, into poor decisions. For example, if you're a doctor who gets reimbursed based on the number of tests you order, why not order an extra one? Does this attitude change under universal healthcare? Of course not. The only difference is who pays for it.
Conservatives understand human nature's tendency to game systems and are afraid that universal healthcare represents a massive opportunity for dishonest people to game the system and pass the buck (literally :-) Liberals, on the other hand, see the poor man in the street dying from a treatable chronic disease, or the cancer patient who can't get treatment, and are outraged. They want things to change. Neither side seems to understand that the incentives in healthcare need to change in order to promote ethics and a sustainable system.
When I see people argue in broad terms, I see no opportunity for real agreement. I am reminded of Yates: "Turning and turning in the widening gyre..."
Monday, March 8, 2010
Love the example about the trillion dollars. Doesn't it seem that "trillion" will be 2010's word of the year?
Friday, March 5, 2010
Both of Colorado's Senators appear to have good financial sense.
Dianne Feinstein seems to have enough job security to vote against the lobby's demands. Sadly, Barbara Boxer voted for the bill and seems to be doing everything she can to lose to Republican Tom Campbell in the next California election.
Russ Feingold did the right thing (he seems to do that a lot).
To Bernie Sanders from Vermont, who sponsored the bill: you need to go back and re-take basic math. No cost-of-living adjustment means there was no significant reported inflation. If prices in general didn't go up, why do benefits for senior citizens have to go up? We already expanded prescription drug coverage under the Bush administration, and senior citizens are eligible for Medi-care. What, exactly, is the problem, as long as senior citizens don't spend excessively? If you have a beef with the reported inflation numbers, then you go and address that issue, but please don't run straight to the taxpayers every time you get a harebrained idea.
Thursday, March 4, 2010
Tuition at Dalton [Kindergarten]...is rising 3.5 percent to $35,300 for the 2010-11 school year. If you ask me, these kids would do just as well if they went to a private Montessori school.
RIP Theresa Pfeiffer.
Wednesday, March 3, 2010
Correct me if I'm wrong, but California's Constitution still requires that public schools receive first crack at any state revenues, right?:
From all state revenues there shall first be set apart the moneys to be applied by the State for support of the public school system and public institutions of higher education.
So when you refer to "cuts," you mean that in the midst of a recession, tax revenue declined across the board, right? Not just for teachers, but for most government programs, right? (The less taxes/revenue a state receives, the less money it has to fund all government programs, including education.) That means in order to maintain education spending at the same levels as last year or the year before, some other government program has to be cut, right? So if you really think about it, anyone complaining about "cuts" to education is really asking people outside the public education sector to give public school teachers and public schools preferential treatment, even when the money to maintain other government programs and services doesn't exist.
Without spending cuts, including cuts to education, California has only two other options: raising prices (i.e., UC tuition increases); or forcing other people to pay more taxes (e.g., the higher sales tax, which disproportionately hurts the poor). Am I missing something here? I'm sure we all wish we could fund wonderful government programs, including education programs, but if the money isn't there, then what do we do? How much more can we expect individual taxpayers in California to pay so that teachers, schools, and teachers' unions benefit?
FYI: according to the California Budget Project, "In 2007, more than four-ﬁfths (82.9 percent) of statewide spending for schools went to pay for the salaries and beneﬁts of teachers and other staff."
Another example: let's assume like the state of California, I have no savings. If I make less money in 2009 than I did in 2008, and I want to maintain the same level of spending I had in 2008, what do I need to do? I have to borrow money, i.e., use my credit cards. A state, however, has no credit cards. If it wants money, it has to issue bonds, sell assets, or get loans to raise revenue. Unfortunately, California is in the hole $20 billion, and it can't sell $20 billion worth of assets. It needs to borrow money, which is another way of saying it needs to borrow against the future income of its residents, namely, the kids.
When educators say they want more money to help the kids or to invest in children, remember: they are actually saying they want to take money away from the next generation of kids to help themselves. When someone says, "Think of the children," you should say, "Darn right, we need to think of the children. That's why we need to cut spending, so we don't have to borrow money from our kids to fund government programs." I'm just sayin'.
Counterpoint: California Spends Less on its Students.
Tuesday, March 2, 2010
We’ve spent the last seventy years increasing the hidden overhead and downside risks associated with hiring a worker — which meant the minimum revenue-per-employee threshold below which hiring doesn’t make sense has crept up and up and up, gradually. This effect was partly masked by credit and asset bubbles, but those have now popped. Increasingly it’s not just the classic hard-core unemployables (alcoholics, criminal deviants, crazies) that can’t pull enough weight to justify a paycheck; it’s the marginal ones, the mediocre, and the mildly dysfunctional.
If that doesn’t scare the crap out of you, you’re not paying attention. It’s a recipe for long-term structural unemployment at European levels of 10%, 15%, and up. What’s even crazier is that the Obama administration wants to respond to this problem by…raising taxes and piling more regulatory burden on employers.Raise the cost of something fungible, and demand usually falls. Raise the cost of hiring someone, and unemployment usually rises.
Monday, March 1, 2010
Personal experiences are no substitute for detailed investigation, but they sometimes provide a useful reality check. Since the early 1990s, I’ve lived in Silicon Valley, a region in which people of white European ancestry are a relatively small minority, separately outnumbered by both Asians and Hispanics, with many of the latter quite poor and often here illegally. On any given day, more than half of the people I encounter in Palo Alto are Hispanics from immigrant backgrounds. Yet my area of the country has exceptionally low crime rates and virtually no serious ethnic conflict. This confounds the expectations of many of my East Coast friends.
You should click on the link above and read the whole thing.